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Carrillo v. Borges Construction, LLC

United States District Court, D. Maryland, Southern Division

September 30, 2016

JUAN PABLO CARRILLO, et al., Plaintiffs,
v.
BORGES CONSTRUCTION, LLC et al., Defendants.

          MEMORANDUM OPINION

          GEORGE J. HAZEL, UNITED STATES DISTRICT JUDGE

         In this action, Juan Pablo Carrillo, Julio Cesar Sanchez, Luis David Castro, Enrique Patricio Correa, Roger A. Ramos, Carlos Humberto Calderon and Melvin Omar Lemus (collectively, ”Plaintiffs”) allege violations of the Fair Labor Standards Act ("FLSA") 29 U.S.C. §§ 201 et seq., the Maryland Wage and Hour Laws, ("MWHL"), Md. Code Ann., Lab & Empl. §§ 3-401 el seq., and the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code Ann., Lab & Empl. §§ 3-501 et seq., against their former employer, Borges Construction, LLC; its successor corporations, Lu-Ma Construction, LLC, Deco Inc., and LMS Contractors Inc.; and the officers of said corporations, Silvestre Borges, Maria Nicoladle, and Salomon Nicolalde in their individual capacities (collectively, "Defendants"). ECF No. 45. This Memorandum Opinion and accompanying Order address Plaintiffs' Motion for Default Judgment. ECF No. 56. A hearing is unnecessary. See Loc. R. 105.6 (D. Md.). For the reasons stated herein. Plaintiffs Motion will be granted in part, and denied, in part.

         I. BACKGROUND

         Defendant Borges Construction is a waterproofing and construction contractor and subcontractor, performing services in Maryland, Virginia and the District of Columbia. ECF No. 45 ¶ 12. It is a Maryland limited liability company with its principal place of business located in Gaithersburg, Maryland. Id. ¶ 3, During the relevant time period, Defendants Silvestre Borges, Maria Nicoladle, and Salomon Nicolalde were officers and active owners of Borges Construction. Id. ¶ 8. Plaintiffs worked for Defendants as constructions workers and laborers from 2010 through 2013.[1] See ECF Nos. 56-3 through 56-8, 60-1 ¶ 2. Plaintiffs' hours varied, working an average of 52 hours each week. ECF No. 56-1 at 9-18[2]; see also e.g. ECF Mo. 56-3 ¶ 4. During their employment, Plaintiffs allege that Defendants "willfully and systematically directed and forced Plaintiffs" to underreport the hours they worked each week on preliminary and postliminary work duties. ECF No. 45 ¶¶ 55 - 60. According to the Third Amended Complaint, each morning, Defendants required Plaintiffs to arrive at Defendants' place of businesses and load Defendants' work trucks before proceeding to the job location. Id. ¶ 56. Similarly, at the conclusion of Plaintiffs' work duties at the job site. Defendants required Plaintiffs to drive Defendants' equipment back to Defendants' place of business and return the equipment to a secure location. Id. ¶ 57. Plaintiffs allege that these work duties, including driving time, were performed by the Plaintiffs primarily for the benefit of Defendants and with Defendants' knowledge. Id. ¶¶ 58-59. Plaintiffs attest that these duties accounted for approximately seven additional unreported hours each week. ECF No. 56-1 at 10-18. Plaintiffs maintain that they were never paid overtime wages for these duties, calculated at one and one half time their regular wages. ECF No. 45 ¶ 62.

         Plaintiffs further allege that Defendants sought to shield themselves from liability by creating a series of successor corporations. Id. ¶¶ 64- 67. Plaintiffs state that around the time of the commencement of this lawsuit Defendants ceased or substantially limited their operations as Borges Construction and began operating through the entity of Defendant Lu-Ma Construction, a Maryland limited liability company with its principal place of business in Gaithersburg, Maryland. Id. ¶¶ 4, 64. Furthermore, on or about May 20. 2013, Plaintiffs' allege that Defendants ceased or substantially limited their operations as Lu-Ma Construction, LLC and began operating through the entity of Defendant Deco Inc., also a Maryland corporation with its principal place of business in Rockville, Maryland. Id. ¶¶ 5, 65. Finally, in or about February 2014. in an alleged further attempt to limit their liability. Defendants ceased or substantially limited their operations as Lu-Ma Construction. LLC. Deco Inc.. and Borges Construction and began operating through the entity of Defendant LMS Contractors Inc.. also a Maryland corporation with its principal place of business in Rockville. Maryland. Id. ¶¶ 6, 66. Plaintiffs allege that all of the above referenced corporate defendants share a common identity of officer. director and stockholders; hold themselves out to the public as identical or near identical businesses and the entities perform the same or similar services for the same clientele. Id. ¶¶ 64 -67.

         At all times during the period of Plaintiffs" employment, Plaintiffs claim that Defendants were their "employers" for the purposes of the FLSA. MWHL and MWPCL. Id. ¶ 22. Furthermore.. Plaintiffs' allege that Defendants were engaged in commerce or in the production of goods within the meanings of Section 3(s)(1) of the FLSA, 29 U.S.C. § 203(s)(1). Id. ¶ 23. Finally. Plaintiffs state that they were employees who engaged in commerce or the production of good for commerce, under the FLSA, 29 U.S.C. § 207. Id. ¶ 24.

         On February 28. 2013. Plaintiffs filed a Complaint for unpaid wages, liquidated damages and reasonable attorney's fees under the FLSA. MWHL. and MWPCL, ECF No. 1. which they have subsequently amended three times. ECF Nos. 3, 19 and 45. On August 17. 2016. Plaintiffs filed a Motion for Clerk's Entry of Default. ECF No. 54. and the presently pending Motion for Default Judgment was filed the next day. ECF No. 56. An Order of Default was entered by the Clerk of the Court against Defendants on September 8, 2016. ECF Nos. 57-59.

         II. STANDARD OF REVIEW

         "A defendant's default does not automatically entitle the plaintiff to entry of a default judgment: rather, that decision is left to the discretion of the court." Choice Hotels Intern.. Inc. v. Savannah Shakli Carp., No. DKC-I1-0438, 2011 WL 5118328 at * 2 (D. Md. Oct. 25, 2011) (citing Dow v. Jones, 232 F.Supp.2d 491, 494 (D. Md. 2002)). Although "ft]he Fourth Circuit has a 'strong policy' that 'cases be decided on their merits, '" id. (citing United States v. Shaffer Equip. Co., 11 F.3d 450. 453 (4th Cir.1993)).. "default judgment may be appropriate when the adversary process has been halted because of an essentially unresponsive party[.]" Id. (citing S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005)).

         "Upon default, the well-pled allegations in a complaint as to liability are taken as true, although the allegations as to damages are not." SEC. v. Lawbaugh, 359 F.Supp.2d 418, 422 (D. Md. 2005). Rule 54(c) of the Federal Rules of Civil Procedure limits the type of judgment that may be entered based on a party's default: "A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings." In entering default judgment, a court cannot, therefore, award additional damages "because the defendant could not reasonably have expected that his damages would exceed th[ej amount [plead in the complaint]." In re Genesys Data Techs.. Inc., 204 F.3d 124, 132 (4th Cir. 2000). Where a complaint does not specify an amount, "the court is required to make an independent determination of the sum to be awarded." Adkins v. Texeo, 180 F.Supp.2d 15. 17 (D.D.C. 2001) (citing S.E.C. v. Management Dynamics. Inc., 515 F.2d 801, 814 (2nd Cir. 1975); An Bon Pain Corp. v. Artect. Inc., 653 F.2d 6L 65 (2nd Cir. 1981)). While the Court may hold a hearing to prove damages, it is not required to do so; it may rely instead on "detailed affidavits or documentary evidence to determine the appropriate sum." Adkins. 180 F.Supp.2d at 17 (citing United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979)); see also laborers' District Council Pension, et al. v. E.G.S.. Inc., No. WDQ-09-3174, 2010 WL 1568595, at *3 (D. Md. Apr. 16, 2010) C'[O]n default judgment, the Court may only award damages without a hearing if the record supports the damages requested.").

         In considering a Motion for Default Judgment, the Court accepts as true the well-pleaded factual allegations in the Complaint as to liability, but nevertheless "must determine whether [those] allegations .. . support the relief sought in th[e] action." Int'l Painters & Allied Trades Indus. Pension Fund v. Capital Restoration & Painting Co., 919 F.Supp.2d 680, 685 (D. Md. 2013) (citation and internal quotation marks omitted).

         III. DISCUSSION

         A. Preliminary and Postliminary Activities as Compensable Work under the FLSA

         Here, Plaintiffs allege that Defendants failed to pay them overtime pay for compensable preliminary and postliminary work duties they completed, as required under the FLSA and MWHL. The FLSA requires that an employee must receive compensation "at a rate not less than one and one-half times the regular rate at which he is employed" for any hours worked in excess of forty hours per week. 29 U.S.C. § 207(a)(1). "The MWHL similarly requires that employers pay ...an overtime wage of at least 1.5 times the usual hourly wage for each hour worked in excess of forty hours per week." McFeeley v. Jackson St. Entm't. LLC, 47 F.Supp.3d 260, 275-76 (D. Md. 2014) (internal quotation marks and citations omitted). "The MWHL is the State parallel to the FLSA, and the requirements of that provision mirror those of the federal law. Thus, Plaintiffs' claim[s] under the MWHL stand[] or fall[] on the success of their claims under the FLSA.'" Brawn v. White's Ferry, Inc., 280 F.R.D. 238, 242 (D. Md. 2012) (internal citation and quotations omitted). "To prove a prima facie violation of this provision, a plaintiff must show the following: (I) that the plaintiff worked overtime hours for the employer and did not receive the prescribed compensation; (2) the number of overtime hours worked; and (3) that the employer had actual or constructive knowledge that the plaintiff worked those hours." See Orellana v. Cienna Properties, LLC, No. CIV.A. JKB-11-2515, 2012 WL 203421, at *2 (D. Md. Jan. 23, 2012)

         As Plaintiffs claims rest upon the allegation that Defendants "willfully and systematically directed and forced Plaintiffs" to underreport the hours they worked each week on "preliminary and postliminary work duties, " ECF No. 45 ¶¶ 55 - 60, the Court must first determine whether such activities properly constitute compensable work.

         The Portal-to-Portal Act, 29 U.S.C. § 254, was passed by Congress to clarify the meaning of "work, " left undefined under the FLSA. See Integrity Staffing Sols.. Inc. v. Busk, 135 S.Ct. 513, 516-17 (2014). Among other things, the Portal-to Portal Act "exempted employers from liability for future claims based on... activities which are preliminary to or postliminary to said principal activity or activities...which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities." Id. at 517(internal quotations omitted).

         Liability under the FLSA thus turns on whether or not an activity can be defined as a "principal activity" under the Portal-to-Portal Act. See Jones v. Hoffberger Moving Servs. LLC, 92 F.Supp.3d 405, 410 (D. Md. 2015). "The Supreme Court has interpreted the term 'principal activity' to 'embrace[ ] all activities which are an integral and indispensable part of the principal activities/" Id. (internal citation omitted). Recently in Integrity Staffing, the Supreme Court held that an activity is integral and indispensable "if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities." Integrity Staffing Sols.. Inc., 135 S.Ct. at 519 (2014).

         Plaintiffs contend that Defendants violated the FLSA by requiring Plaintiffs to arrive at Defendants' place of businesses and load Defendants' work trucks before proceeding to the job location and to drive Defendants' equipment back to Defendants' place of business at the end of the day. ECF No. 45 ¶¶ 56-57. Plaintiffs were employed by Defendants as day laborers and construction workers, work that could not been completed without access to the appropriate tools. Thus, the employers could not have disposed of the disputed activity, here the loading and unloading of equipment and tools; "without impairing their employee's ability to perform the work they were employed to perform." Cf. Jones, 92 V. Supp. 3d at 410 (discussing example where employer could dispose of the disputed activity). Indeed, several district courts, post-Integral Staffing, have held that similar preliminary equipment loading is considered "integral and indispensable" to an employees' work activities. See. e.g.. Gaytan v. G&G Landscaping Constr.. Inc., 145 F.Supp.3d 320, 325 (D.N.J. 2015)(holding that "loading trucks with necessary tools and materials" for landscaping jobs is compensable time under the FLSA); Jones, 92 F.Supp.3d at 412 (D. Md. 2015)(holding that time spent loading trucks with moving equipment at company's warehouse was integral and indispensable to Plaintiffs' principal activities of loading and unloading Defendants' trucks at job sites). Thus, the Court finds that Plaintiffs' work loading and unloading equipment from Defendants' work trucks is integral and indispensable to their principal activity as laborers and construction workers and Plaintiffs should have been compensated accordingly.[3]

         Having established that Plaintiffs are owed compensation for their preliminary and postliminary work activities, the Court next turns to whether or not those hours consisted of overtime work. Here, Plaintiffs allege that they worked an average of 52 hours per week, ECF Nos. 56-3 through 56-8 ¶¶ 2-4 and ECF No. 60-1 ¶¶ 2-4, including approximately seven hours of preliminary and postliminary work duties for which they were never compensated. ECF Nos. 56-3 through 56-8 ¶ 8; ECF No. 60-1 ¶ 8. Plaintiffs also allege that at all times during their employment, Defendants Silvestre Borges, Maria Nicoladle and Salomon Nicoladle were the owners of Borges Construction, LLC and had the power to set their work schedules. Id. at ¶¶ 10, 12. They also allege that Defendants "willfully and systematically directed and forced Plaintiffs" to underreport the hours they worked each week on "preliminary and postliminary work duties." ECF No. 45 ¶¶ 55 ...


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