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Jahn v. Tiffin Holdings, Inc.

United States District Court, D. Maryland

February 13, 2019

KYLE E. JAHN Plaintiff,


          Ellen Lipton Hollander United States District Judge

         On June 18, 2018, plaintiff Kyle E. Jahn filed suit against Tiffin Holdings, Inc.; Tiffin Athletic Mats, LLC; Daniel Tiffin; and Linda Tiffin.[1] ECF 1 (“Complaint”). Plaintiff alleges that defendants willfully and unlawfully failed to compensate him properly for his earned wages. ECF 23, ¶ 1. In particular, plaintiff alleges violations of the following statutes in connection with unpaid minimum wages: the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201 et seq.; the Maryland Wage Payment and Collection Law (“MWPCL”), Md. Code (2016 Repl. Vol., 2017 Supp.), §§ 3-501 et seq. of the Labor and Employment Article (“L.E.”); and the Maryland Wage and Hour Law (“MWHL”), L.E. §§ 3-401 et seq. ECF 23, ¶ 2. Plaintiff seeks compensatory and treble damages. Id. at 12.

         On December 14, 2018, plaintiff filed, with leave of the Court (ECF 22), an amended complaint (ECF 23, “Amended Complaint”), adding Gerald Stringer as a defendant.

         Plaintiff provided returns of service for all five defendants. ECF 6; ECF 10; ECF 26. Kyle and Linda have responded to the suit. Because Stringer was served on January 31, 2019, he may still timely respond to the suit prior to February 21, 2019. See ECF 26. However, defendants Tiffin Holdings, Inc. and Tiffin Athletic Mats, LLC (together, the “Corporate Defendants”) did not respond to the suit. See Docket. Therefore, pursuant to a request by plaintiff (ECF 14), the Clerk entered a default as to the Corporate Defendants on September 22, 2018. ECF 15.

         On October 5, 2018, plaintiff filed a Motion for Entry of Default Judgment (ECF 16, the “Motion”) as to the Corporate Defendants, supported by an exhibit. ECF 16-1. The Motion requests entry of judgment against the Corporate Defendants in the amount of $14, 640. ECF 16 at 6. In particular, plaintiff seeks the $4, 880 in damages for the four weeks of unpaid wages, trebled because the Corporate Defendants have not offered evidence of a bona fide dispute and plaintiff has suffered consequential damages as a result of the lost income. Id. at 4-5. In the alternative, plaintiff seeks payment of at least $1, 202.50 for the four-week period at the then-applicable minimum wage, trebled to $3, 607.50. Id.

         No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I will deny the Motion as premature, and without prejudice.

         I. Legal Standard

         Rule 55(b) of the Federal Rules of Civil procedure governs default judgments. In particular, Rule 55(b)(1) provides that the clerk may enter a default judgment if the plaintiff's claim is “for a sum certain or a sum that can be made certain by computation.”[2] But, “[a] plaintiff's assertion of a sum in a complaint does not make the sum ‘certain' unless the plaintiff claims liquidated damages; otherwise the complaint must be supported by affidavit or documentary evidence. Monge v. Portofino Ristorante, 751 F.Supp.2d 789, 794 (D. Md. 2010) (Grimm, M.J.).[3]

         To be sure, the United States Court of Appeals for the Fourth Circuit has a “strong policy that cases be decided on the merits.” United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993); see Tazco, Inc. v. Director, Office of Workers' Compensation Program, 895 F.2d 949, 950 (4th Cir. 1990). But, that policy is not absolute. Default judgment “‘is appropriate when the “adversary process has been halted because of an essentially unresponsive party.'” Entrepreneur Media, Inc. v. JMD Entertainment Group, LLC, 958 F.Supp.2d 588, 593 (D. Md. 2013) (quoting SEC v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005)).

         Upon the entry of default against a party, the court must determine whether the undisputed factual allegations constitute a legitimate cause of action. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001); see also 10A Wright, Miller & Kane, Federal Practice and Procedure § 2688 (3d ed., 2010 Supp.) (“[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.”).

         If the court is satisfied that liability has been established, it must then determine the appropriate amount of damages. Ryan, 253 F.3d at 780-81. Allegations “relating to the amount of damages” are not deemed admitted based on a defendant's failure to respond to a suit. Fed R. Civ. P. 8(b)(6); see Ryan, 253 F.3d at 780 (“‘[D]efault is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover'”) (citation omitted); Monge, 751 Supp. 2d at 794; Trs. of the Elec. Welfare Trust Fund v. MH Passa Elec. Contracting, Inc., 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.”); Pentech Fin. Servs., Inc. v. Old Dominion Saw Works, Inc., No. 6:09cv00004, 2009 WL 1872535, at *1 (W.D. Va. June 30, 2009) (“Upon default judgment, Plaintiff's factual allegations are accepted as true for all purposes excluding determination of damages.”).

         Rather, the court must make an independent determination regarding allegations as to damages. See Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 154 (2d Cir. 1999). In so doing, the court may conduct an evidentiary hearing. Fed.R.Civ.P. 55(b)(2). However, the court may also make a determination of damages without a hearing, so long as there is an adequate evidentiary basis in the record to support an award of the requested damages. See Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (“[T]he court may rely on detailed affidavits or documentary evidence to determine the appropriate sum.”); see also Trustees of the Nat'l Asbestos Workers Pension Fund v. Ideal Insulation, Inc., ELH-11-832, 2011 WL 5151067, at *4 (D. Md. Oct. 27, 2011) (determining that, in a case of default judgment against an employer, “the Court may award damages without a hearing if the record supports the damages requested”); Monge, 751 F.Supp.2d at 795 (same); Pentech Fin. Servs., Inc., 2009 WL 1872535, at *2 (concluding that there was “no need to convene a formal evidentiary hearing on the issue of damages” after default judgment because plaintiff submitted affidavits and records establishing the amount of damages).

         Notably, under Fed.R.Civ.P. 54(c), “[a] default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” See In re Genesys Data Techs, Inc., 204 F.3d 124, 132 (4th Cir. 2000) (“When a Complaint demands a specific amount of damages, courts have generally held that a default judgment cannot award additional damages.”). This is meant to enable the defendant to decide whether to expend the resources to defend the action. Monge, 751 F.Supp.2d at 796.

         II. ...

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