United States District Court, D. Maryland
NEEMIAS E. CRUZ, et al. Plaintiffs,
HOME & GARDEN CONCEPTS, LLC, et al. Defendants.
REPORT AND RECOMMENDATION
WILLIAM CONNELLY UNITED STATES MAGISTRATE JUDGE
Report and Recommendation addresses Plaintiffs Neemias E.
Cruz, Santos Aristides Majano Reyes, Eleazar Cruz Zavala and
Marvin A. Hernandez (hereinafter "Plaintiffs")'
Request for Judgment by Default. ECF No. 7. Defendants Home &
Garden Concepts, LLC and Sanoj Dhamindranath (hereinafter
"Defendants") have not filed a response and the
deadline for their response elapsed on April 4, 2016.
See Loc. R. 105.2.a. Having reviewed the filings, no
hearing is deemed necessary. See Loc. R. 105.6. For
the reasons stated herein, the undersigned recommends that,
following the time to object to this Report and
Recommendation, Plaintiffs' Motion for Default Judgment
FACTUAL AND PROCEDURAL HISTORY
E. Cruz, Santos Aristides Majano Reyes, Eleazar Cruz Zavala
and Marvin A. Hernandez are adult residents of Maryland. ECF
No. 1 at 2 (Compl. ¶ 3). Defendant Home & Garden
Concepts, LLC ("Home & Garden"), a Maryland
corporation, has forfeited its status and presently is
not in good standing. See Home & Garden Concepts LLC,
Maryland Corporates-Company Profiles of Maryland,
(last visited June 6, 2016). Home & Garden is owned by
Defendant Sanoj Dhamindranath. ECF No. 1 at 2 (Compl. ¶
Sanoj Dhamindranath controlled the daily operations of Home &
Garden. He supervised directly or indirectly the Plaintiffs.
He had the power to hire, suspend, discipline or fire the
Plaintiffs. The Plaintiffs' work schedules were directly
or indirectly set and controlled by Defendant Sanoj
Dhamindranath, or he had the power to do so. The rate and
method of the Plaintiffs' pay were directly or indirectly
set and determined by Defendant Sanoj Dhamindranath, or he
had the power to do so. Id. ¶¶ 10-14.
Defendant Sanoj Dhamindranath and Defendant Home & Garden are
employers within the meaning of the Fair Labor Standards Act
of 1938 ("FLSA"), 29 U.S.C. § 201, et
seq., the Maryland Wage & Hour Law ("MWHL"),
Md. Code Ann., Lab. & Empl. § 3-401, et
seq., and the Maryland Wage Payment and Collection Law
("MWPCL"), Md. Code Ann., Lab. & Empl.
§ 3-501, et seq. At all times relevant,
Defendants have at least two or more employees engaged in
commerce or "handling, selling, or otherwise working on
goods or materials that have been moved in or produced for
commerce by any person[.]" 29 U.S.C. §
203(s)(1)(A)(i). "Defendants negotiate and purchase from
producers and suppliers who operate in interstate commerce
and serve customers in interstate commerce." ECF No. 1
at 3 (Compl. at ¶ 8). At all times relevant,
Defendants' annual gross volume of sales made or business
done is not less than $500, 000.00. Id. ¶ 6.
Further, at all times relevant, Defendants constituted an
"enterprise" as defined by 29 U.S.C. § 203(r).
Neemias E. Cruz was employed as a project manager by the
Defendants from September 1, 2011 through February 8, 2013.
Mr. Cruz was paid $2, 500.00 per month. Defendants did not
pay Mr. Cruz for hours worked during his final four months of
employment, October 2012 through January 2013. For this
period of time the Defendants owe Mr. Cruz $10, 000.00 in
unpaid wages which Defendants withheld absent a bona fide
dispute. See ECF No. 1 at 4 (Compl. ¶¶
18-20); ECF No. 7-1 at 2 (Cruz Decl.).
Santos Aristides Majano Reyes was employed as a carpenter by
the Defendants for approximately one year and two months. Mr.
Reyes was paid an hourly rate of $12.00. He worked an average
of fifty-seven (57) hours per week. Mr. Reyes was never
compensated at the required overtime rate (1.5 times his
regular hourly rate) for those hours he worked in excess of
forty (40) hours per week. He seeks the difference between
the overtime rate for sixty (60) weeks (one year and two
months) he should have been paid minus the regular hourly
rate he was paid. Further, for his last few weeks of
employment Defendants failed to pay Mr. Reyes for 160 hours
of work. Mr. Reyes is owed $1, 920.00 for unpaid wages at his
regular hourly rate (160 hours x $12.00/hour). Defendants owe
him $6, 120.00 in unpaid overtime wages. This amount is
derived as follows: $12.00/hour x 1.5 equals $18.00/hour. The
difference between $18.00/hour and $12.00/hour is $6.00/hour.
Mr. Reyes routinely worked 57 hours per week, or 17 hours per
week overtime. The difference in the overtime rate is
calculated as follows: 17 hours x $6.00/hour equals $102.00.
Sixty (60) weeks x $102.00 equals $6, 120.00. See
ECF No. 1 at 4 (Compl. ¶¶ 21-24); ECF No. 7-2 at 2
Marvin A. Hernandez was employed as a carpenter by the
Defendants for fifty-three (53) weeks. Mr. Hernandez was paid
an hourly rate of $12.00. He routinely worked 57 hours per
week on average. Mr. Hernandez was never compensated at the
required overtime rate (1.5 times his regular hourly rate)
for those hours he worked in excess of 40 hours per week. He
seeks the difference between the overtime rate he should have
been paid minus the regular hourly rate he was paid.
See computation supra. Mr. Hernandez
routinely worked 57 hours per week, or 17 hours per week
overtime. See computation supra.
Fifty-three (53) weeks x $102.00 equals $5, 406.00.
See ECF No. 1 at 5 (Compl. ¶¶ 25-27); ECF
No. 7-3 at 2 (Hernandez Decl.).
Eleazar Cruz Zavala was employed as a carpenter by the
Defendants for fifty-two (52) weeks. Mr. Zavala was paid an
hourly rate of $12.00. He routinely worked 57 hours per week
on average. Mr. Zavala was never compensated at the required
overtime rate (1.5 times his regular hourly rate) for those
hours he worked in excess of 40 hours per week. He seeks the
difference between the overtime rate he should have been paid
minus the regular hourly rate he was paid. See
computation supra. Mr. Zavala routinely worked 57
hours per week, or 17 hours per week overtime. See
computation supra. Fifty-two (52) weeks x $102.00
equals $5, 304.00. See ECF No. 1 at 5 (Compl.
¶¶ 28-30); ECF No. 7-4 at 2 (Zavala Decl.).
January 23, 2015 the Plaintiffs filed a Complaint against the
Defendants alleging the Defendants willfully violated clear
and well-established straight time wages and overtime
provisions of the FLSA, MWHL, and MWPCL. ECF No. 1. The
Plaintiffs seek compensatory and statutory damages as well as
attorneys' fees and costs.
Court's jurisdiction is based on federal question, 28
U.S.C. § 1331, as this civil action arises under
"the Constitution, laws, or treaties of the United
States." See 29 U.S.C. § 216(b) ("An
action to recover the liability prescribed . . . may be
maintained against any employer . . . in any Federal or State
court of competent jurisdiction by any one or more employees
for and in behalf of himself or themselves and other
employees similarly situated."). This Court exercises
supplemental jurisdiction over the state (Maryland) law
claims in accordance with 28 U.S.C. § 1367(a) ("in
any civil action of which the district courts have original
jurisdiction, the district courts shall have supplemental
jurisdiction over all other claims that are so related to
claims in the action within such original jurisdiction that
they form part of the same case or controversy under Article
III of the United States Constitution.").
January 27, 2015 a summons and a copy of the Complaint were
issued by the Clerk of Court. ECF No. 2. Almost three months
later, on April 22, 2015, Murray A. Kivitz, Esq. filed an
Affidavit of Acceptance of Service acknowledging he accepted
the service of the Complaint and Writ of Summons issued to
Home & Garden Concepts, LLC and Sanoj Dhamindranath on April
15, 2015. ECF No. 3. The Defendants' Answers were due May
6, 2015. Neither Defendant filed an Answer by this deadline.
31, 2015 the Plaintiffs moved for Clerk's entry of
default for want of answer or other defense against the
Defendants. ECF No. 4. The deadline for Defendants'
response in opposition was August 17, 2015. No response in
opposition was filed by either Defendant by the deadline.
September 1, 2015 the Clerk's Entry of Default was
docketed against both Defendants. ECF No. 5. Approximately
six months elapsed without any apparent activity. On an
undisclosed date the parties attempted to reach a settlement
of this case. The case was not settled but Defendants made
certain partial payments.
Accordingly, the following amounts should be deducted from
the judgment. Five Thousand Two Hundred and Seventy ($5,
270.01) Dollars 01/100 in attorney fees and Nine Thousand
Seven Hundred and Twenty-Nine ($9, 729.99) 99/100 Dollars to
Plaintiffs totaling Fifteen Thousand ($15, 000.00) 00/100
ECF No. 7 at 4 ¶ 26.
March 11, 2016 Judge Hazel issued an Order directing the
Plaintiffs, within thirty (30) days, to file and serve by
mail on the Defendants a motion for default judgment, or
submit a report explain why such a motion would be
inappropriate. ECF No. 6. Five days later, the Plaintiffs
moved for default judgment. ECF No. 7. On April 20, 2016
Judge Hazel referred the case to the undersigned for a report
and recommendation. ECF No. 8.
Rule of Civil Procedure 55(b) governs the entry of default
judgments. Pursuant to Rule 55(b), the clerk may enter a
default judgment "[i]f the plaintiff's claim is for
a sum certain or a sum that can be made certain by
computation, " and the defendant is in default for
failing to appear and is "neither a minor nor an
incompetent person." Fed.R.Civ.P. 55(b)(1).
Additionally, when a defendant is an individual, the
plaintiff must certify or declare to be true under penalty of
perjury whether the defendant is in military service. 50
U.S.C. app. § 521(b)(1) ("In any action or
proceeding covered by this section, the court, before
entering judgment for the plaintiff, shall require the
plaintiff to file with the court an affidavit-(A) stating
whether or not the defendant is in military service and
showing necessary facts to support the affidavit; or (B) if
the plaintiff is unable to determine whether or not the
defendant is in military service, stating that the plaintiff
is unable to determine whether or not the defendant is in
entry of default judgment is a matter within the discretion
of the Court. SEC v. Lawbaugh, 359 F.Supp.2d 418,
421 (D. Md. 2005) (citing Dow v. Jones, 232
F.Supp.2d 491, 494 (D. Md. 2002)). As the Court noted in
Disney Enterprises, Inc. v. Delane, 446 F.Supp.2d
402 (D. Md. 2006), "[t]he United States Court of Appeals
for the Fourth Circuit has a ‘strong policy that cases
be decided on the merits.'" Id. at 405
(quoting United States v. Shaffer Equip. Co., 11
F.3d 450, 453 (4th Cir. 1993)). Nonetheless, "default
judgment is available when the ‘adversary process has
been halted because of an essentially unresponsive
party.'" Id. (quoting Lawbaugh,
359 F.Supp.2d at 421).
determining whether to award a default judgment, the Court
takes as true the well-pleaded factual allegations in the
complaint, other than those pertaining to damages. Ryan
v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir.
2001) ("The defendant, by his default, admits the
plaintiff's well-pleaded allegations of fact, is
concluded on those facts by the judgment, and is barred from
contesting on appeal the facts thus established."
(citation and internal quotation marks omitted));
see Fed. R. Civ. P. 8(b)(6) ("An
allegation-other than one relating to the amount of
damages-is admitted if a responsive pleading is required and
the allegation is not denied."). It remains, however,
"for the court to determine whether these unchallenged
factual allegations constitute a legitimate cause of
action." Agora Fin., LLC v. Samler, 725
F.Supp.2d 491, 494 (D. Md. 2010); 10A Charles Alan Wright et
al., Fed. Prac. and Proc. Civ. § 2688 (3d ed.
1998) ("[L]iability is not deemed established simply
because of the default . . . and the court, in its
discretion, may require some proof of the facts that must be
established in order to determine liability.");
id. (explaining that the court must "consider
whether the unchallenged facts constitute a legitimate cause
of action, since a party in default does not admit mere
conclusions of law").
Court finds that "liability is established, [it] must
then determine the appropriate amount of damages."
Samler, 725 F.Supp.2d at 494 (citing Ryan,
253 F.3d at 780-81). This is so because "an allegation
‘relating to the amount of damages' is not deemed
admitted based on a defendant's failure to deny in a
required responsive pleading." Hartford Fin. Servs.
Grp. Inc. v. Carl J. Meil, Jr., Inc., No. WDQ-10-2720,
2011 WL 1743177, at *7 (D. Md. May 5, 2011) (quoting
Fed.R.Civ.P. 8(b)(6)); Trs. of the Elec. Welfare Trust
Fund v. MH Passa Elec. Contracting, LLC, No.
DKC-08-2805, 2009 WL 2982951, at *1 (D. Md. Sept. 14, 2009)
("Upon default, the well-pled allegations in a complaint
as to liability are taken as true, although the allegations
as to damages are not."); Int'l Painters &
Allied Trades Indus. Pension Fund v. Metro Glass & Mirror,
Inc., No. ELH-11-2389, 2012 WL 893262, at *2 (D. Md.
Mar. 14, 2012) ("The court does not accept factual
allegations regarding damages as true, but rather must make
an independent determination regarding such
the Court must make two determinations. First, the Court must
decide "whether the unchallenged facts in
plaintiff['s] complaint constitute a legitimate cause of
action[.]" Samler, 725 F.Supp.2d at 494.
Second, if the Court finds that liability is established, it
must "make an independent determination regarding the
appropriate amount of damages." Id.
year and three months have elapsed since Defendants Home &
Garden and Sanoj Dhamindranath were served with the
Plaintiffs' Complaint, yet the Defendants have not
pleaded or otherwise asserted a defense by filing an Answer.
As a result, all of the factual allegations made in the
Plaintiffs' Complaint not pertaining to damages are
deemed admitted. Fed.R.Civ.P. 8(b)(6); Ryan, 253
F.3d at 780.
Plaintiffs moved for a default judgment on March 16, 2016 and
the Defendants have not responded. It is within the
Court's discretion to grant default judgment when a
defendant is unresponsive. See Park Corp. v. Lexington
Ins. Co., 812 F.2d 894, 897 (4th Cir. 1987) (upholding a
default judgment awarded where the defendant lost its summons
and did not respond within the proper period); Disney
Enterprises, 446 F.Supp.2d at 405-06 (finding
appropriate the entry of default judgment where the defendant
had been properly served with the complaint and did not
respond, despite repeated attempts to contact him).
Accordingly, the Court should grant default judgment on the
Complaint if the Plaintiffs establish the Defendants'
accepting as true the Plaintiffs' well-pleaded
allegations, the undersigned finds the Plaintiffs have proven
a. Defendant Home & Garden is a Maryland corporation;
b. Defendant Sanoj Dhamindranath is the owner of Home &