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Pizzella v. Peters

United States District Court, D. Maryland

September 30, 2019

LOIS PETERS, et al., Defendants.


          George L. Russell, III United States District Judge

         THIS MATTER is before the Court on Defendants Lois Peters, Frank Dickerson, International Health Care Consultants, Inc. (“IHC Consultants”), Cedar Lane Senior Assisted Living Facility, Inc. (“Cedar Lane”), and Ashleigh's Senior Assisted Living, Inc.'s (“Ashleigh's”) Defendants' Motion to Dismiss the Secretary's Complaint (ECF No. 10). The Motion is ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2018). For the reasons outlined below, the Court will deny the Motion.

         I. BACKGROUND [2]

         Peters is a registered nurse, the president of IHC Consultants, and the owner and manager of four group homes that provide assisted-living services to the elderly in Maryland. (Compl. ¶ 2, ECF No. 1). The group homes are: (1) Astoria House in Fulton, Maryland; (2) Astoria II in Columbia, Maryland; (3) Golden Years Assisted Living in Mount Airy, Maryland; and (4) Ashleigh's Place in Columbia, Maryland. (Id.). Dickerson is vice president of IHC Consultants and, like Peters, manages the group homes. (Id. ¶ 3). Both Peters and Dickerson hire and fire employees, set their work schedules and compensation, distribute weekly payroll, and supervise employees day-to-day. (Id. ¶¶ 7- 8). Peters “regularly” visits the group homes, while Dickerson visits them “several times each week to check on their books [and tell] the employees how to perform their work.” (Id.). IHC, whose registered office is a house in Clarksville, Maryland, operates the group homes. (Id. ¶ 4). Cedar Lane, whose registered office is a house in Columbia, Maryland and was incorporated by Peters in October 2017, operates Astoria II. (Id. ¶ 5). Ashleigh's, whose registered office is a house in Columbia and was incorporated by Peters in October 2017, operates Ashleigh's Place. (Id. ¶ 6).

         Defendants employed at least twenty-seven people from September 19, 2015 through at least September 20, 2017 as Caregivers and Medication Technicians. (Id. ¶ 11; id. Sched. A [“Employee List”]). Defendants paid the Caregivers and Medication Technicians a day rate “purportedly for twelve hours of work per day, typically from 6:00 a.m. to 6:00 p.m., or from 7:00 a.m. to 7:00 p.m.” (Id. ¶ 12). Defendants paid some employees $65.00 per day and others $80.00 per day. (Id.). Defendants “required many of the Caregivers and Medication Technicians to stay overnight at the group homes, scheduling them for shifts ranging from five to fifteen consecutive days, e.g., Monday at 6am through Saturday at 6am.” (Id. ¶ 13). During the overnight shifts, the employees had to “respond to the needs of the elderly residents, many of whom suffered from dementia, whenever such needs arose, ” which meant they were interrupted several times each night. (Id.). Defendants did not provide private space for the employees when they stayed overnight, which prevented them from getting adequate sleep or enjoying private leisure activities. (Id.). During these overnight shifts, the employees were not paid beyond the day rate. (Id.). When they worked more than forty hours per week, they were not paid at a higher overtime rate. (Id. ¶¶ 14-15).

         On September 21, 2018, Plaintiff U.S. Secretary of Labor Alexander Acosta (the “Secretary”) sued Defendants. (ECF No. 1). The Secretary alleges that from September 19, 2015 through at least September 20, 2017, Defendants willfully: (1) failed to compensate employees at the statutory hourly minimum required by Section 6 of the Fair Labor Standards Act (“FLSA” or the “Act”), 29 U.S.C. § 201 et seq. (2018); (2) failed to compensate employees at the proper overtime rate for hours worked in excess of forty hours per week pursuant to Sections 7 and 15(a)(2) of the Act; (3) failed to provide any compensation for mandatory overnight shifts; and (4) failed to make, keep, and preserve adequate and accurate records of employee hours pursuant to Sections 11(c) and 15(a)(5) of the Act. (Id. ¶¶ 11-17). The Secretary seeks unpaid minimum wage and overtime compensation, as well as liquidated damages, pursuant to Section 16(c) of the Act and an injunction to prevent Defendants from further violating the FLSA pursuant to Section 17 of the Act. (Id. at 7-8).

         On November 21, 2018, Defendants filed their Motion to Dismiss the Secretary's Complaint. (ECF No. 10). On December 19, 2018, the Secretary filed an Opposition. (ECF No. 18). On January 16, 2019, Defendants filed a Reply. (ECF No. 19).


         A. Standard of Review

         The purpose of a Rule 12(b)(6) motion is to “test[ ] the sufficiency of a complaint, ” not to “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” King v. Rubenstein, 825 F.3d 206, 214 (4th Cir. 2016) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)). A complaint fails to state a claim if it does not contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), or does not “state a claim to relief that is plausible on its face, ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). Though the plaintiff is not required to forecast evidence to prove the elements of the claim, the complaint must allege sufficient facts to establish each element. Goss v. Bank of America, N.A., 917 F.Supp.2d 445, 449 (D.Md. 2013) (quoting Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012)), aff'd sub nom., Goss v. Bank of America, NA, 546 Fed.Appx. 165 (4th Cir. 2013).

         In considering a Rule 12(b)(6) motion, a court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe the factual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of Comm'rs, 407 F.3d 266, 268 (4th Cir. 2005) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). But, the court need not accept unsupported or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979), or legal conclusions couched as factual allegations, Iqbal, 556 U.S. at 678.

         B. Analysis

         Defendants argue that the Complaint, or some part thereof, should be dismissed for several reasons, including that it fails to meet the pleading standard under Twombly and Iqbal because its allegations are conclusory and not specific enough. The Secretary counters that he has pleaded enough details to allow the Court to infer Defendants are liable. The Court will examine the arguments in turn.

         1. Single Enterprise and Covered Employer

         Defendants argue that they are not a single enterprise or a covered employer under the Act, whereas the Secretary argues that Defendants are. The Court agrees with the Secretary.

         Under the FLSA, an “enterprise” consists of “the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units . . . .” 29 U.S.C. § 203(r)(1) (2018). For separate entities to qualify as a “single enterprise” under the Act, they must make a three-part showing: (1) “the entity or entities must engage in ‘related activities'”; (2) “performed through ‘unified operation' or ‘common control'”; (3) “for a common business purpose.” Dole v. Odd Fellows Home Endowment Bd., 912 F.2d 689, 692 (4th Cir. 1990) (citing Brock v. Hamad, 867 F.2d 804, 806 (4th Cir. 1989) (per curiam)).

         Here, the Complaint alleges Defendants all operate group homes that provide assisted living services for elderly residents, meeting the “related activities” prong of the Fourth Circuit's test. Next, the Complaint alleges that Peters owns and manages the Corporate Defendants and the group homes and that Dickerson is intimately involved in the management of the group homes, their employees, and their finances. Third, per the pleadings, Defendants have the common business purpose of operating the group homes. Accordingly, Defendants constitute a single enterprise under FLSA.

         The FLSA provides that a covered employer is one that “is engaged in the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, or the mentally ill or defective who reside on the premises of such institution.” 29 U.S.C. § 203(s)(1)(B). While Defendants argue that the Secretary merely mimicked the statutory language, the Complaint sufficiently establishes that the Defendants “operate ‘group homes that provided assisted living services to elderly ...

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