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Radfar v. Rockville Auto Group, LLC

United States District Court, D. Maryland, Southern Division

February 8, 2019

FARHAD RADFAR, Plaintiff,
v.
ROCKVILLE AUTO GROUP, LLC, et al., Defendant.

          MEMORANDUM OPINION

          GEORGE J. HAZEL UNITED STATES DISTRICT JUDGE.

         Plaintiff Farhad Radfar seeks to recover unpaid wages under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (FLSA), and the Maryland Wage and Hour Law, Md. Code Ann., Lab. & Empl. § 3-501 et seq. (MWHL), from Defendants Rockville Auto Group, LLC, Abdullah Razaq, and Toba Hamidi.[1] Pending before the Court is Defendants' Motion for Summary Judgment. ECF No. 22. No. hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the following reasons, Defendants' Motion for Summary Judgment is denied.

         I. BACKGROUND[2]

         Plaintiff Farhad Radfar worked at Defendant Rockville Auto Group between September 2014 and May 2016. ECF No. 24-3 ¶ 1. Plaintiff and his wife Mozghan Rezaei also agreed to lend Rockville Auto and Defendant Abdullah Razaq $57, 000. Id. ¶¶ 14-17; ECF No. 22-3.

         When Plaintiff began working for Defendants he was told that if he lent Razaq a no-interest loan, Razaq would use the loan to buy cars and Plaintiff would be entitled to be repaid the balance of the loan as well as half the profit of each car purchased with the loan's assistance and resold to customers. ECF No. 24-3 ¶ 14. Plaintiff discussed this proposal with his wife Rezaei and the two agreed to lend Rockville Auto and Razaq money as part of a loan agreement, which would supplement Plaintiff's regular income from Rockville Auto. Id. ¶ 15.

         The parties (borrowers, Razaq and Rockville Auto, and lenders, Radfar and Rezaei) then signed a Promissory Note memorializing their agreement. ECF No. 22-3. The Note explains that the borrowers would use the lender's $57, 000 loan to purchase vehicles for resale and entitled the lenders to 50% of the net profit for each vehicle. Id. at 1. Defendants claim that based on the loan agreement, Plaintiff entered a business relationship with Rockville Auto and had “space to operate his own business, ” ECF No. 22-2 ¶ 3, however nothing in the Note suggested that the lenders would play a role in purchasing or selling vehicles on behalf of Rockville Auto or that the Note authorized Radfar or Rezaei to conduct any business on behalf of Rockville Auto. ECF No. 22-3 at 1; see also ECF No. 24-3 ¶ 18-19. Additionally, the Note did not discuss the terms of Radfar's employment with Rockville Auto. ECF No. 22-3. Although Defendants characterize Plaintiff as an investor, ECF No. 22-2 ¶ 2, Plaintiff was not a Rockville Auto shareholder and he did not hold a security interest in the business, ECF No. 24-6 at 32; ECF No. 22-3.

         According to Plaintiff, during his employment with Rockville Auto, Defendants Abdullah Razaq and Toba Hamidi served as his managers. ECF No. 24-3 ¶¶ 7, 9, 12, 13. Razaq supervised Radfar's day-to-day tasks, id. ¶¶ 9-10, and as the sole owner of the Rockville Auto Group, Hamidi had authority over Plaintiff's schedule and pay, id. ¶¶ 12-13; see also 24-4.

         Throughout his tenure, Radfar worked approximately fifty-five hours each week, performing tasks such as attending car auctions with Razaq, transporting vehicles between lots, vendors, and mechanics, and delivering purchased vehicles to customers. ECF No. 24-3 ¶¶ 2, 3, 4. Radfar did not have the right to purchase vehicles on Rockville Auto's behalf when he attended car auctions with Razaq nor was he responsible for selling cars. Id. ¶ 10.

         Until January 2016, when Defendants began providing Plaintiff with paystubs and classified him as a W-2 employee, Defendants issued Plaintiff payments as a 1099 employee and did not withdraw state and federal taxes from his paycheck. Id. ¶ 5; ECF No. 24-7. For a certain time, Defendants compensated Plaintiff $300 each week for approximately fifty-five hours of work-an hourly rate of $5.45. ECF No. 24-3 ¶ 5; ECF No. 24-10 at 1, 3. Later, Defendants compensated Plaintiff $400 for his approximately fifty-five-hour workweek, an average hourly wage of $7.27. ECF No. 24-3 ¶ 5; ECF No. 24-10 at 4-10, 13-17.

         Not distinguishing between Plaintiff's employee income and Plaintiff's income based on the loan agreement, Defendants assert that during Plaintiff's 20-month working relationship with Rockville Auto, Plaintiff received about $120, 000 in net profits from sales of automobiles, weekly fixed payments, and other payments. ECF No. 22-2 ¶ 5. However, according to Plaintiff, he received $4, 469.32 from Rockville Auto in 2014, ECF No. 24-7 at 1, $17, 728.00 in 2015, id. at 2, and $8, 900 for 2016, id. at 3-a total of $31, 097.32.

         After Plaintiff's relationship with Rockville Auto ended, Plaintiff brought this federal and state wage law case on September 6, 2016, alleging that Defendants failed to pay him minimum wage and overtime wages in violation of the FLSA and the MWHL.

         II. STANDARD OF REVIEW

         Summary judgment is proper if there are no issues of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Francis v. Booz, Allen & Hamilton, Inc., 452 F.3d 299, 302 (4th Cir. 2006). A material fact is one that “might affect the outcome of the suit under the governing law.” Spriggs v. Diamond Auto Glass, 242 F.3d 179, 183 (4th Cir.2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, (1986)). A dispute of material fact is only “genuine” if sufficient evidence favoring the non-moving party exists for the trier of fact to return a verdict for that party. Anderson, 477 U.S. at 248-49. However, the nonmoving party “cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another.” Beale v. Hardy, 769 F.2d 213, 214 (4th Cir.1985). The Court may rely on only facts supported in the record, not simply assertions in the pleadings, to fulfill its “affirmative obligation . . . to prevent ‘factually unsupported claims or defenses' from proceeding to trial.” Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987). When ruling on a motion for summary judgment, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255.

         III. ...


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