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Guzman v. Mahjoub

United States District Court, D. Maryland

May 23, 2019

EDIN GUZMAN, Plaintiff,
v.
MASOUD MAHJOUB, et al., Defendants.

          MEMORANDUM OPINION

          Date Paula Xinis, United States District Judge.

         Pending before the Court is Plaintiff Edin Guzman's motion for default judgment. ECF No. 21. Defendants Masoud Mahjoub, Matthew Mahjoub and SHAAD, LLC (collectively, “Defendants”) have not responded, and the time for doing so has passed. See Loc. R. 105.2. Pursuant to Local Rule 105.6, a hearing is not necessary. For the following reasons, Plaintiff's motion for default judgment is GRANTED IN PART and DENIED IN PART.

         I. BACKGROUND

         Masoud Mahjoub and his son Matthew Mahjoub are the “owners and members” of SHAAD, LLC, a Maryland limited liability company formed “for the operation of a restaurant, ” Matt's House of Kabob. ECF No. 11 ¶ 4; see also ECF No. 21-2 ¶ 2. Plaintiff Edin Guzman worked at Defendants' restaurant as a “non-exempt kitchen employee” for several years until April 28, 2017.[1] ECF No. 11 ¶ 7.

         During his employment, Guzman estimates he worked 60 hours or more each week.[2] Id. Guzman earned $9 per hour until approximately December 31, 2015, when his pay increased to $11 per hour. Id. ¶ 13. Guzman avers that Defendants paid him by check for 40 hours of regular pay per week, but paid Guzman in cash for any overtime work. Id. ¶ 14. Rather than the requisite “time and a half” pay for overtime, Defendants continued to pay Guzman at the base hourly rate for work exceeding 40 hours. Id. As a result, Guzman asserts that he was deprived of full compensation for overtime work throughout his employment. Id. ¶¶ 16-17. Moreover, for the last two weeks of his work at the restaurant in April of 2017, Guzman asserts he was not paid at all. Id. ¶ 18.

         Guzman filed suit against Masoud Mahjoub and SHAAD, LLC on June 9, 2017. See ECF No. 1. After the Defendants were properly served and failed to respond, Guzman moved for entry of default, which the Clerk entered on December 12, 2017. See ECF Nos 3, 10. On August 30, 2017, Matthew Mahjoub informed the Court in writing that “the correct action would be for the lawsuit to be against me . . . since I am the owner of Shaad LLC.” ECF No. 6. Guzman amended his Complaint to include Defendant Matthew Mahjoub. See ECF No. 11. After Matthew Mahjoub was served and failed to timely respond, Guzman moved for Clerk's entry of default pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, which was entered on October 24, 2018. See ECF Nos. 17, 18.

         Now Guzman moves for Default Judgment under Rule 55(b) for the Defendants' violations of the Fair Labor Standards Act (“FLSA”); the Maryland Wage and Hour Law (“MWHL”); and the Maryland Wage Payment and Collection Law (“MWPCL”). [3] ECF No. 11 ¶¶ 29, 35, 42. As relief, Guzman asks this Court to award damages for unpaid regular and overtime wages, enhanced damages, and attorneys' fees and costs under the three statutes. ECF No. 21 ¶¶ 29, 35, 42.

         II. STANDARD OF REVIEW

         Rule 55 governs default judgments which must be entered “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise.” Fed.R.Civ.P. 55(a). The Court may then enter default judgment at the plaintiff's request and with notice to the defaulting party. Fed.R.Civ.P. 55(b)(2). Although courts maintain “a strong policy that cases be decided on the merits.” United States v. Schaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), the Court may exercise its discretion in granting default judgment when the “adversary process has been halted because of an essentially unresponsive party.” S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005).

         When considering the propriety of default judgment, the Court takes as true the well-pleaded factual allegations of the complaint, other than those pertaining to damages. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001); 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.”). The Court applies the pleading standards announced in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), in the context of default judgments. See Balt. Line Handling Co. v. Brophy, 771 F.Supp.2d 531, 544 (D. Md. 2011). A complaint that avers bare legal conclusions or “naked assertion[s] devoid of further factual enhancement, ” is insufficient to award default judgment. Russell v. Railey, No. DKC 08-2468, 2012 WL 1190972, at *3 (D. Md. Apr. 9, 2012) (quoting Iqbal, 556 U.S. at 678); see, e.g., Balt. Line Handling Co., 771 F.Supp.2d at 545 (“The record lacks any specific allegations of fact that ‘show' why those conclusions are warranted.”).

         If the complaint avers sufficient facts from which the court may find liability, the Court next turns to damages. See Ryan, 253 F.3d at 780-81. Damages are circumscribed by that which is requested in the complaint. See 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.”). The damages request must be supported by evidence introduced either at a hearing or by affidavit or other records. See Fed. R. Civ. P. 54(c); Lawbaugh, 359 F.Supp.2d at 422.

         III. DISCUSSION

         A. Liability

         Guzman avers that Defendants are liable, jointly and severally, under the FLSA, MWHL, and MWPCL. A necessary precondition to establishing liability under all three statutes is showing that an employment relationship existed between the parties. See Coles v. Von Paris Enterprises, Inc., No. PJM 14-450, 2014 WL 6893861, at *3 (D. Md. Dec. 3, 2014). Whether an individual or entity is an “employer” within the meaning of the FLSA, MWHL, and MWPCL 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, ...


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