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Medrano v. Elmer'S Painting and Remodeling, Inc.

United States District Court, D. Maryland

August 2, 2017

GRISELDA MEDRANO, Plaintiffs,
v.
ELMER'S PAINTING AND REMODELING, INC., Defendants.

          REPORT AND RECOMMENDATION

          WILLIAM CONNELLY, UNITED STATES MAGISTRATE JUDGE

         This Report and Recommendation addresses Plaintiffs Griselda Medrano and Oscar Ivan Ravelo Ramirez's (hereinafter “Plaintiffs”) Motion for Entry of Default Judgment, filed on November 29, 2016. ECF No. 7.[1] Defendants Elmer's Painting and Remodeling, Inc. and Elmer Melgar (hereinafter “Defendants”) have not filed a response and the deadline for their response elapsed on December 13, 2016. See D. Md. Local R. 105.2.a (2016). Having reviewed the filings, no hearing is deemed necessary. See D. Md. Local 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 Entry of Default Judgment be GRANTED.

         I. FACTUAL AND PROCEDURAL HISTORY

         Plaintiff Griselda Medrano (“Medrano”) is an adult resident of the District of Columbia. Plaintiff Oscar Ivan Ravelo Ramirez (“Ramirez”) is an adult resident of Maryland. ECF No. 1 at 2 (Compl. ¶¶ 3-4). Defendant Elmer's Painting and Remodeling, Inc. (“Elmer's Painting”), a Maryland corporation, has forfeited its status[2] and presently is not in good standing.[3] See Maryland Business Express, https://egov.maryland.gov/businessexpress (last visited Apr. 24, 2017). Elmer's Painting[4] is owned by Defendant Elmer Melgar (“Melgar”).[5] ECF No. 1 at 2 (Compl. ¶ 6).

         Defendant Melgar controlled the daily operations of Elmer's Painting. 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 Melgar, 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 Melgar, or he had the power to do so. Id. ¶¶ 11-15.

         Defendants Melgar and Elmer's Painting 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, the Defendants had 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). At all times relevant, the Defendants' annual gross volume of sales made or business done is not less than $500, 000.00. ECF No. 1 at 2 (Compl. ¶ 6). Further, at all times relevant, the Defendants constituted an “enterprise” as defined by 29 U.S.C. § 203(r). See ECF No. 1 at 2-3 (Compl. ¶¶ 7-10).

         Plaintiff Medrano was employed as a painter, remodeler, and cleaner by the Defendants from September 1, 2012 through January 20, 2015. Medrano was paid a regular hourly rate of $10.00 from September 1, 2012 through June 30, 2013. For the remainder of her employment, she was paid a regular hourly rate of $12.00. Medrano worked approximately sixty-six (66) hours per week. She was never paid the required overtime rate of one and a half times her regular hourly rate for those hours in excess of forty (40) per week. See ECF No. 1 at 4 (Compl. ¶¶ 18-21).

         Plaintiff Ramirez was employed as a painter, remodeler, and cleaner by the Defendants from January 1, 2012 through January 20, 2015. He was paid a regular hourly rate of $15.63 throughout this employment period. Ramirez worked approximately sixty-six (66) hours per week. He was never paid the required overtime rate of one and a half times his regular hourly rate for those hours in excess of forty (40) per week. See ECF No. 1 at 4 (Compl. ¶¶ 18, 23-25).

         On May 5, 2015, the Plaintiffs filed a Complaint against the Defendants alleging the Defendants willfully violated clear and well-established overtime provisions of the FLSA, MWHL, and MWPCL. ECF No. 1 at 2. The Plaintiffs seek compensatory and statutory damages for all unpaid overtime compensation as well as attorneys' fees and costs.

         This 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) 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.”).

         On May 6, 2015, a summons and a copy of the Complaint were issued by the Clerk of Court. ECF No. 2. The summonses were served on May 17, 2015 and returned to the Court as executed on May 19 and 29, 2015. ECF Nos. 3, 6. The Defendants' Answers were due June 8, 2015. Id. Neither Defendant filed an Answer by this deadline. Defendant Melgar however filed a June 1, 2015 notice disputing the case, which was received by the Court on June 15, 2015. ECF No. 7. Defendant Melgar noted he lacked sufficient funds to hire an attorney. Id.

         On June 16, 2015, Judge Chuang ordered the Plaintiffs to “file and serve by mail on Defendants a Motion for Entry of Default by the Clerk and a Motion for Default Judgment, or show cause as to why such motions would be inappropriate, within 14 days of this Order.” ECF No. 8. Eight days later, on June 24, 2015, the Plaintiffs moved for Clerk's entry of default for want of answer or other defense against the Defendants. ECF No. 9. Meanwhile, in light of Defendant Melgar's notice disputing the case, on July 1, 2015, Judge Chuang granted the Defendants an additional 21 days from the date of the Order to file an Answer or responsive pleading. ECF No. 10. No Answer or responsive pleading was filed. On July 29, 2015, the Clerk's Entry of Default was docketed against the Defendants. ECF No. 11.

         Over fifteen (15) months elapsed without any apparent activity. On November 15, 2016, Judge Chuang issued an Order stating in pertinent part,

A default was entered on July 29, 2015. ECF No. 10. To date, Plaintiffs have not moved for a judgment of default, nor have they made any additional filings since the June 24, 2015 Motion for Clerk's Entry of Default. This action has therefore been dormant for more than nine months. Accordingly, it is hereby ORDERED that within 14 days of the date of this Order, Plaintiffs must show cause as to why this case should not be dismissed without prejudice for want of prosecution. See D. Md. Local R. 103.3(b) (2016).

ECF No. 12.

         Fourteen days later, on November 29, 2016, the Plaintiffs moved for default judgment. ECF No. 13. On March 28, 2017, Judge Chuang referred the case to the undersigned for a report and recommendation. ECF No. 14.[6]

         II. DISCUSSION

         Federal 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 military service.”).[7]

         The 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).

         In 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, 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”).

         If the 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 allegations.”).

         In sum, 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.

         A. Liability

         More than two years have elapsed since Defendants Melgar and Elmer's Painting 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.

         The Plaintiffs moved for a default judgment on November 29, 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' liability.

         That accepting as true the Plaintiffs' well-pleaded allegations, the undersigned finds the ...


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