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Sankoh v. Gold Street Capital Fund

United States District Court, D. Maryland

April 6, 2018

GOLD STREET CAPITAL FUND, et al., Defendants.


          Paula Xinis United States District Judge

         This Memorandum Opinion and Order addresses Plaintiff Mohamed Sankoh's Motion for Default Judgment, ECF No. 9. Defendants Gold Street Capital Fund LP, Money Back Taxx LLC, USA Debt Solutions LLC, and Lovet Ako have not filed a response or entered their appearance, and the time for doing so has passed. See Loc. R. 105.2.a. Pursuant to Local Rule 105.6, a hearing is not necessary. For the reasons stated herein, Plaintiff's Motion for Default Judgment is GRANTED.

         I. BACKGROUND

         Plaintiff Mohamed Sankoh (“Sankoh”) is a citizen of the State of Maryland and former employee of Defendants Gold Street Capital Fund, LP (“GSCF”), Money Back Taxx, LLC (“Money Back”), USA Debt Solutions, LLC (“USA Debt Solutions”), and Lovet Ako (“Ako”). ECF No. 1 at ¶ 12. GSCF is a Delaware corporation which conducts substantial business in Maryland; Money Back and USA Debt Solutions are Maryland corporations with their principal place of business in Maryland. ECF No. 1 at ¶¶ 14-15. Ako is a resident of Maryland and the sole proprietor and owner of all corporate Defendants. Id. at ¶¶ 16-17.

         From around April 3 through July 18, 2017, Sankoh worked for Defendants in Silver Spring, Maryland. Id. at ¶ 21-23. As part of his duties, Sakoh performed a wide variety of tasks for corporate Defendants, including entering client information, amending tax forms, fixing computers, and drafting abstracts of stock-market related analysis. Id. Defendant Ako hired Sankoh, and supervised his work for all corporate Defendants. Id. at ¶¶ 24-25.

         Defendants promised Sankoh an annual salary of $50, 000, paid biweekly. Id. at ¶¶ 26- 28. However, throughout Sankoh's employment, he was not been paid timely, nor did he receive all owed wages. Id. at ¶ 32. On or about June 23, June 26, June 27, and July 14, 2017, Sankoh complained to Defendant Ako that it was illegal to withhold earned wages. Id. at ¶¶ 33-34, 38, 42. On June 26, 2017, Ako gave Sankoh a check for $1, 000, written on a Money Back Taxx, LLC check, and did not provide Sankoh a paystub. Id. at ¶¶35-37. When Sankoh again complained on July 14, 2017, that Ako's failure to pay employees was illegal, Ako stated that he did not want to pay Sankoh his owed wages. Sankoh was then escorted out of Ako's office, immediately suspended, and then terminated for complaining about unpaid wages on July 18, 2017. Id. at 47-48. In total, Sankoh received only $1, 000 during his employment. Id. at ¶¶ 29- 31.

         On August 9, 2017, Sankoh filed claims for unpaid wages and retaliation in violation of the Maryland Wage Payment and Collection Law (“MWPCL”) and the Fair Labor Standards Act (“FLSA”), asserting federal question jurisdiction. ECF No. 1. All Defendants were served on August 28, 2017. ECF Nos. 2-6. Defendants failed to enter their appearance or otherwise respond, and an Order of Default was entered on October 18, 2017. ECF No. 8. Sankoh moved for default judgment on December 5, 2017.


         Federal Rule of Civil Procedure 55(b) governs the entry of default judgments, which may be entered “[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. Fed.R.Civ.P. 55(b)(1). For “all other cases, ” in which the sum is neither certain nor ascertainable through computation, Rule 55(b)(2) provides. “[T]he party must apply to the court for a default judgment . . . . The court may conduct hearings or make referrals-preserving any federal statutory right to a jury trial- when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter.” 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)).

         Although “the Fourth Circuit has a ‘strong policy that cases be decided on the merits, '” Disney Enters. v. Delane, 446 F.Supp.2d 402, 405 (D. Md. 2006) (quoting United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993)), “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). Default judgment is proper when a defendant is unresponsive. See Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987) (upholding a default judgment awarded where the defendant lost its summons and did not respond within the proper period); Disney Enters., 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).

         When considering a motion for default judgment, the Court takes as true all well-pleaded factual allegations in the complaint, other than those pertaining to damages. Fed.R.Civ.P. 8(b)(6); 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.”). In this Circuit, district courts analyzing default judgments apply the pleading standards announced in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), to determine whether allegations within the complaint are “well-pleaded.” See, e.g., Balt. Line Handling Co. v. Brophy, 771 F.Supp.2d 531, 544 (D.Md. 2011); Russell v. Railey, No. DKC-08-2468, 2012 WL 1190972 at *2-*3 (D. Md. Apr. 9, 2012); U.S. v. Nazarian, No. DKC-10-2962, 2011 WL 5149832 at *2-*3 (D. Md. Oct. 27, 2011); Bogopa Serv. Corp. v. Shulga, No. 3:08cv365, 2009 WL 1628881, at *1-2 (W.D. N.C. June 10, 2009). Where a complaint offers only “labels and conclusions” or “naked assertion[s] devoid of further factual enhancement, ” the allegations therein are not well-pleaded and, consistent with the Court's discretion to grant default judgment, relief should be denied. See, e.g., Balt. Line Handling Co., 771 F.Supp.2d at 544 (internal quotation marks omitted) (“The record lacks any specific allegations of fact that ‘show' why those conclusions are warranted.”).

         III. ANALYSIS

         a. Liability

         Sankoh filed suit against Defendants for violations of the FLSA and MWPCL, alleging that Defendants failed to pay promptly the wages owed to him, and when he complained, Defendants fired him. The Complaint sets forth an adequate factual basis to determine liability.

         A necessary precondition to establishing liability under the FLSA and MPCWL is showing that an employment relationship existed between the parties. See Falaiye v. CCA Academic Resources, LLC, No. PX-16-2887, 2017 WL 2537026, at *2 (D. Md. June 12, 2017)); Coles v. Von Paris Enterprises, Inc., No. PJM-14-450, 2014 WL 6893861, at *3 (D. Md. Dec. 3, 2014); Butler v. PP & G, Inc., No. WMN-13-43, 2013 WL 4026983, at *4 (D. Md. Aug. 6, 2013). Whether an individual or entity is an “employer” under the FLSA and MPCWL is determined by applying the “economic reality” test. See Schultz v. Capital Int'l Sec., Inc., 466 F.3d 298, 304 (4th Cir. 2006); Rollins v. Rollins Trucking, LLC, No. JKB-15-3312, 2016 WL 81510, at *4 (D. Md. Jan. 7, 2016) (“[C]ourts in Maryland and in this District have applied the economic-reality test to claims arising under the MWPCL.”) (citing cases). An “employer” is one who (1) has the authority to hire and fire employees; (2) supervises and controls work schedules or employment ...

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