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Diaz v. Mi Mariachi Latin Restaurant, Inc.

United States District Court, D. Maryland, Southern Division

February 11, 2019




         Plaintiff Ubaldo Cruz Diaz alleges 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 et seq., and the Maryland Wage Payment and Collection Law, (MWPCL), Md. Code Ann., Lab & Empl. §§ 3-501 et seq., against Defendants Mi Mariachi Latin Restaurant, Inc. and the restaurant's owner Raul Lopez. ECF No. 1. Pending before the Court is Plaintiff's Motion for Default Judgment. ECF No. 10. No hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the following reasons, Plaintiff's Motion for Default Judgment will be granted in part and denied in part.

         I. BACKGROUND[1]

         Plaintiff worked as a cleaner at Defendant Mi Mariachi from approximately September 19, 2016 until September 17, 2017. ECF No. 1 ¶ 9. Throughout Plaintiff's employment at the restaurant, Defendant Lopez owned and operated Mi Mariachi. Id. ¶ 20. In this role, Defendant Lopez had the power to hire, first, suspend, and otherwise discipline Plaintiff; he controlled Plaintiff's work duties, schedule, and rate and method of pay; and he oversaw the restaurant's day-to-day operations. Id.

         Plaintiff worked an average of forty-three hours per week, but Defendants paid Plaintiff only $100 per week. Id. ¶¶ 10-11. As a result, Plaintiff's hourly rate of pay was approximately $2.33 throughout his employment. Id. 12. Defendants did not pay Plaintiff one-and-one-half times his regular rate for hours worked more than forty during a single workweek. Id. ¶ 17.

         From the beginning of Plaintiff's employment until June 30, 2017, the Maryland minimum wage was $8.75 per hour. Md. Code Ann., Labor & Employ., § 3-413(c). From July 1, 2017 until the end of Plaintiff's employment, the Maryland minimum wage was $9.25 per hour. Id.

         On March 2, 2018, Plaintiff filed suit against Defendants to recover damages under the FLSA, the MWHL, and the MWPCL. ECF No. 1. On March 9, 2018, Plaintiff served both Defendants with process. ECF Nos. 3, 4. However, Defendants failed to file an answer or responsive pleading to Plaintiff's Complaint. On April 24, 2018, pursuant to Federal Rule of Civil Procedure 55(a), Plaintiff filed a Motion for an Order of Default against both Defendants. ECF No. 5. The Court entered default as to both Defendants on June 1, 2018. ECF No. 6. Plaintiff then filed a Motion for Default Judgment on August 10, 2018. ECF No. 10.

         Although the Complaint alleges that throughout Plaintiff's employment, Defendants paid Plaintiff $100 per week, ECF No. 1 ¶ 11, Plaintiff asserts in his Motion for Default Judgment and supporting declaration that he was not paid at all during the final three months of his employment, ECF No. 10 ¶ 9 & ECF No. 10-2 ¶ 5. Plaintiff also asserts in his Motion for Default Judgment and supporting declaration that he had to borrow money for basic living expenses because of Defendants' underpayments. ECF No. 10 ¶ 15; ECF No. 10-2 ¶ 6.


         “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 Shakti Carp., No. DKC-11-0438, 2011 WL 5118328 at * 2 (D. Md. Oct. 25, 2011) (citing Dow v. Jones, 232 F.Supp.2d 491, 494 (D. Md. 2002)). Although “[t]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.” S.E.C. 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” the amount pled 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. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (citing S.E.C. v. Management Dynamics, Inc., 515 F.2d 801, 814 (2d Cir. 1975); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)).

         The FLSA requires that employers pay nonexempt employees at least the federal minimum wage for all hours worked and overtime pay for hours worked beyond forty hours per week. 29 U.S.C. §§ 206, 207. “The MWHL similarly requires that employers pay the applicable minimum wage” and “that they 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, ” meaning Plaintiff's MWHL claim “stands or falls on the success of” his FLSA claim. Brown v. White's Ferry, Inc., 280 F.R.D. 238, 242 (D. Md. 2012) (quoting Friolo v. Frankel, 819 A.2d 354, 361 (Md. 2003); Turner v. Human Genome Sci., Inc., 292 F.Supp.2d 738, 744 (D.Md.2003)). Separately, the MWPCL requires an employer to pay all wages due for work that an employee performed. Md. Code Ann., Lab. & Empl. § 3-501 et seq.

         In addition to unpaid wages, Plaintiff requests liquidated damages under the FLSA. ECF No. 1 at 5. Courts have routinely held that there is a presumption in favor of an award of liquidated damages when it is determined that an employer violated the FLSA and, simultaneously, the MWHL. Rogers v. Sav. First Mortg., LLC, 362 F.Supp.2d 624, 637-38 (D. Md. 2005) (quoting Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 707-08 (1945)); see also Lanza v. Sugarland Run Homeowners Assoc., Inc., 97 F.Supp. 2d. 737, 739 n.9 (E.D. Va. 2000). Specifically, unless an employer can demonstrate that it acted in good faith and had reasonable grounds for believing it paid its employee all wages legally owed, an employer who fails to pay wages required by the FLSA or the MWHL is liable to the employee for liquidated damages in an amount equal to the unpaid wages. See id.; see also 29 U.S.C. §§ 216(b) & 260; Md. Code Ann., Labor & Employ., § 3-427(d). The employer bears the “plain and substantial burden of persuading the court by proof that his failure to obey the statute was both in good faith and predicated upon reasonable grounds that it would be unfair to impose upon him more than a compensatory verdict.” Wright v. Carrigg, 275 F.2d 448, 449 (4th Cir. 1960).

         “[A]n employee's statement under oath ‘as to his recollection of the hours he worked and the pay he received, if considered credible by the trier of fact, is sufficient to establish a prima facie case of wages owed,' and if the employer does not successfully rebut the employee's statement, ‘[t]he Court may award damages based on Plaintiffs' testimony even though the amounts claimed are only approximated and not perfectly accurate.'” ...

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