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Perez v. Cheng

United States District Court, D. Maryland, Southern Division

December 23, 2019

BYRON MARTINEZ PEREZ AND NESTOR SANCHEZ GUEVARRA, Plaintiffs,
v.
CRYSTAL HNI CHENG, Defendant.

          MEMORANDUM OPINION

          GEORGE J. HAZEL UNITED STATES DISTRICT JUDGE

         Plaintiffs Byron Martinez Perez (“Martinez Perez”) and Nestor Sanchez Guevarra (“Sanchez Guevarra”) allege that Defendant Crystal Hni Cheng (“Defendant”) violated the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., the Maryland Wage and Hour Law (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., by underpaying Plaintiffs when they worked at her restaurant, House of Fortune. ECF No. 1. Pending before the Court is Plaintiffs' Motion for Default Judgment. ECF No. 8. No. hearing is necessary. See Loc. R. 105.6 (D. Md.). For the following reasons, Plaintiffs' motion will be granted in part and denied in part.

         I. BACKGROUND[1]

         Plaintiffs are residents of Montgomery County, Maryland. ECF No. 1 ¶¶ 5-6. Defendant is a resident of Maryland who exercises exclusive control over the operations of the Germantown, Maryland restaurant House of Fortune, which she operates without use of a corporate form. Id. ¶¶ 7-8. Plaintiff Sanchez Guevarra worked at House of Fortune as a “kitchen hand” from May 1, 2015 to July 31, 2016. Id. ¶¶ 10-11. Plaintiff Martinez Perez worked in the same role from February 20, 2017 to August 16, 2018. Id. Plaintiffs' duties consisted of preparing food, packing food orders, handling deliveries, washing dishes, and cleaning. Id. ¶ 12. Plaintiffs typically worked 6 days per week, which entailed 67.0 hours per week for Plaintiff Sanchez Guevarra and 66.0 hours per week for Plaintiff Martinez Perez. Id. ¶¶ 13-15.

         Throughout their employment by Defendant, Defendant paid Plaintiffs on a semimonthly basis. Id. ¶ 15. Defendant paid Plaintiff Sanchez Guevarra a semimonthly salary of $900.00 from October 1, 2015 to March 31, 2016 and $1, 000.00 from April 1, 2016 to July 1, 2016. Id. ¶ 18.[2]Plaintiff Martinez Perez's semimonthly salary was $1, 000 from February 20, 2017 to July 31, 2017; $1, 100 from August 1, 2017 to January 31, 2018; $1, 125 from February 1, 2018 to July 31, 2018; and $1, 150 from August 1, 2018 to August 16, 2018. Id. ¶ 17. Defendant paid Plaintiffs exclusively in cash. Id. ¶ 19. Defendant did not pay Plaintiffs overtime wages. Id. ¶ 22.

         In her role as the operator of House of Fortune, Defendant personally hired Plaintiffs, set their schedules and rates of compensation, and tendered their pay. Id. ¶¶ 26-29. Defendant held the power to hire and fire Plaintiffs, to control their work schedules, to supervise and control their work, and to set their rate and manner of pay. Id. ¶¶ 30-33. Though Defendant was aware that she was legally required to pay Plaintiffs one and one-half times their regular rate for hours worked in excess of 40 hours in any one workweek, she did not pay Plaintiffs overtime wages. Id. ¶ 22, 34. Defendant also was aware that she was legally required to pay Plaintiffs the applicable minimum wage, but nonetheless failed to do so. Id. ¶¶ 23, 35.

         From October 1, 2015 to June 30, 2016, the Montgomery County, Maryland minimum wage was $9.55 per hour; it increased to $10.75 per hour on July 1, 2016, to $11.50 per hour on July 1, 2017, and $12.00 per hour on July 1, 2018. Id. ¶ 37.[3] However, Defendant paid Plaintiff Sanchez Guevarra effective hourly rates of $6.20 from October 1, 2015 until March 31, 2016 and $6.89 from April 1, 2016 until July 1, 2016. Id. ¶ 18. Defendant paid Plaintiff Martinez Perez effective hourly rates of $6.99 from February 20, 2017 until July 31, 2017, $7.69 from August 1, 2017 until January 31, 2018, $7.87 from February 1, 2018 until July 31, 2018, and $8.14 from August 1, 2016 until August 16, 2018. Id. ¶ 17.

         Plaintiffs filed this action against Defendant on October 30, 2018 to recover damages under the FLSA, the MWHL, and the MWPCL. ECF No. 1. On October 31, 2018, Plaintiff served Defendant with process. ECF No. 3. Defendant failed to file an answer or responsive pleading to Plaintiffs' Complaint. On November 27, 2018, pursuant to Federal Rule of Civil Procedure 55(a), Plaintiffs filed a motion for entry of default by the Clerk of the Court. ECF No. 4. The Clerk entered an Order of Default on January 2, 2019. ECF No. 5. Plaintiff then filed the pending Motion for Default Judgment on May 3, 2019. ECF No. 8.

         II. DISCUSSION

         In considering a motion for default judgment, the Court accepts as true the well-pleaded factual allegations in the Complaint as to liability, but nevertheless “must determine ‘whether [those] allegations . . . support the relief sought in th[e] action.'” Int'l Painters & Allied Trades Indus. Pension Fund v. Capital Restoration & Painting Co., 919 F.Supp.2d 680, 685 (D. Md. 2013) (quoting Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001)). “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.” Educ. Credit Mgmt. Corp. v. Optimum Welding, 285 F.R.D. 371, 373 (D. Md. 2012). Although “[t]he Fourth Circuit has a ‘strong policy' that ‘cases be decided on their merits, '” Choice Hotels Int'l, Inc. v. Savannah Shakti Corp., No. DKC-11-0438, 2011 WL 5118328, at *2 (D. Md. Oct. 25, 2011) (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.” Lawbaugh, 359 F.Supp.2d at 422; see also Ryan, 253 F.3d at 780 (noting that “[t]he defendant, by [its] default, admits the plaintiff's well-pleaded allegations of fact, ” which provide the basis for judgment). Upon a finding of liability, “[t]he court must make an independent determination regarding damages . . . .” Int'l Painters & Allied Trades Indus. Pension Fund, 919 F.Supp.2d at 684. Federal Rule of Civil Procedure 54(c) 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.” While the Court may hold a hearing to prove damages, it is not required to do so; it may rely instead on “affidavits or documentary evidence in the record to determine the appropriate sum.” Int'l Painters & Allied Trades Indus. Pension Fund, 919 F.Supp.2d at 684 (citing Monge v. Portofino Ristorante, 751 F.Supp.2d 789, 794-95 (D. Md. 2010)).

         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) (quoting Roman v. Guapos III, Inc., 970 F.Supp.2d 407, 412 (D. Md. 2013)).

         The MWHL is “‘the State parallel' to the FLSA.” 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)). “The requirements under the MWHL mirror those of the federal law; as such, Plaintiffs' claim under the MWHL stands or falls on the success of their claim under the FLSA.” Turner v. Human Genome Sci., Inc., 292 F.Supp.2d 738, 744 (D. Md. 2003). Finally, the MWPCL “requires an employer to pay its employees regularly while employed, and in full at the termination of employment.” Peters v. Early Healthcare Giver, Inc., 97 A.3d 621, 625 (Md. 2014) (citing Md. Code Ann., Lab. & Empl. §§ 3-502, 3-505). Both the MWHL and the MWPCL “are vehicles for recovering overtime wages.” Id. at 625-26.

         In addition to unpaid wages, Plaintiffs here request liquidated damages under the FLSA and MWHL. ECF No. 1 ¶¶ 49, 57. There is a presumption in favor of awarding liquidated damages when it is determined that an employer violated the FLSA and MWHL. Rogers v. Sav. First Mortg., LLC, 362 F.Supp.2d 624, 637-38 (D. Md. 2005) (citing Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 707-08 (1945)); Lanza v. Sugarland Run Homeowners Ass'n, Inc., 97 F.Supp.2d 737, 739 n.9 (E.D. Va. 2000); Md. Code Ann., Lab. & Empl., § 3-427(d). Specifically, unless an employer who fails to pay wages required by the two statutes can demonstrate that it acted in good faith and had reasonable grounds for believing it paid its employee all wages legally owed, the employer is liable to the employee for liquidated damages in an amount equal to the unpaid wages. See Rogers, 362 F.Supp.2d at 638; see also 29 U.S.C. §§ 216(b), 260; Md. Code Ann., Lab. & Empl., § 3-427(d). The employer bears the “plain and substantial burden of persuading the court by proof ...


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