Opinion
CV 23-00443 PHX CDB
11-16-2023
Tillman Robinson, Plaintiff, v. Beyond Food LLC, Santiago Cota, Jane Doe Cota, Defendants.
THE HONORABLE STEPHEN M. McNAMEE
REPORT AND RECOMMENDATION
Camille D. Bibles United States Magistrate Judge
Plaintiff has consented to the exercise of magistrate judge jurisdiction over this matter. No Defendant has appeared or consented to the exercise of magistrate judge jurisdiction. Before the Court is Plaintiff's motion for judgment by default against Defendant Beyond Food LLC. (ECF No. 15).
I. Background
Plaintiff obtained summons for all three Defendants. (ECF Nos. 2 & 4). Plaintiff served Defendant Beyond Food LLC through its statutory agent on March 22, 2023. (ECF No. 10). Defendant Beyond Food LLC did not answer or otherwise respond to the Complaint, and Plaintiff moved for the entry of default against Defendant Beyond Food LLC on April 25, 2023. (ECF No. 11). The Clerk of the Court entered the default of Defendant Beyond Food LLC on April 25, 2023. (ECF No. 12). In response to an order to show cause issued October 17, 2023, Plaintiff noticed the voluntary dismissal of Defendants Santiago Cota and Jane Doe Cota prior to service, pursuant to Rule 41 of the Federal Rules of Civil Procedure (ECF No. 14), and moved for judgment by default with regard to Defendant Beyond Food LLC (hereinafter “Defendant”). (ECF No. 15).
Plaintiff seeks damages from Defendant, a limited liability corporation, for unpaid minimum wages, liquidated damages, attorneys' fees, costs, and interest under the Fair Labor Standards Act (“FLSA”); unpaid minimum wages under the Arizona Minimum Wage Act (“AMWA”); and unpaid wages under the Arizona Wage Act (“AWA”). As relevant to Plaintiff's claims against Defendant, Plaintiff contends Defendant owned and operated “Comicx,” a restaurant and comic book store doing business in Maricopa County, Arizona. Plaintiff further alleges:
27. Plaintiff was hired by and began working for Defendants on approximately April, 2021 [sic].
28. At all relevant times, Plaintiff worked for Defendants for approximately four months and left in approximately July 2021.
29. At all relevant times, in his work for Defendants, Plaintiff worked as a cook for Defendants.
30. Defendants, in their sole discretion, paid, or were supposed to pay, Plaintiff an hourly rate of $18.
31. Defendants classified Plaintiff as W-2 employee.
32. In his work for Defendants, Plaintiff was paid, or supposed to be paid, on a weekly basis.
33. In his work for Defendants, Plaintiff was a non-exempt employee.
34. Plaintiff's final two workweeks were on or about June 28, 2021, through July 4, 2021, and July 5, 2021, through July 11, 2021, respectively.
35. Plaintiff worked each of his final two workweeks for Defendants.
36. On or about July 13, 2021, Defendants fired Plaintiff via a text message from their chef, Andrew (last name unknown). That text stated “Good morning sir! After some deliberation, me and Scott thought it best to go ahead and terminate your employment here with us at comicx.. .Good luck with your future endeavors!”
37. Defendants never paid Plaintiff any wage whatsoever for the final two workweeks of his employment with them.
38. On or around November 3, 2021 [approximately three months and three weeks after being fired], Plaintiff requested his unpaid final paychecks from Defendants' chef, Andrew (last name unknown).
39. In response, Defendants' chef, Andrew (last name unknown), said the checks would be sent to Plaintiff.
40. However, Plaintiff's final two paychecks were never sent to him.
41. Eventually, in or around May 2022 [approximately nine months after being fired and six months after requesting his final pay], Plaintiff went to Defendants' restaurant, Comicx, to retrieve his checks, and someone who worked for Defendants gave him his final paycheck, but the paycheck provided had long since expired, and Defendants did not issue a new paycheck to Plaintiff.
42. Accordingly, Defendants declined to pay Plaintiff for the work he performed in his final two workweeks with them.
43. Therefore, for the final two workweeks that Plaintiff worked for Defendants, Defendants paid Plaintiff no wages whatsoever.
44. To date, Defendants have still paid no wages whatsoever to Plaintiff for such hours worked.(ECF No. 1 at 6-7). Approximately ten months after retrieving his expired paycheck, on March 14, 2023, Plaintiff filed his Complaint seeking an award of his “unpaid minimum wages,” an “additional amount as liquidated damages,” his reasonable attorney's fees and costs, and pre and post-judgment interest. (ECF No. 1 at 9-11).
Attached to the motion for default judgment is Plaintiff's declaration under penalty of perjury, which is not notarized and is e-signed via Adobe Acrobat, averring:
5. I worked for Defendant as a cook from approximately April 1, 2021, through approximately July 11, 2021.
6. Defendants hired me to be a full-time employee, and my rate of pay while working for Defendants was supposed to be $18 per hour.
7. I worked for Defendants performing non-exempt cooking-related duties for Defendants' restaurant.
8. During my final workweeks with Defendant, I worked approximately 80 hours. At 80 hours, my unpaid federal minimum wages for my final two workweeks of employment are $580 ($7.25 * 80). At 80 hours, my unpaid Arizona minimum wages for my sole [sic] workweek of employment are $972.80 [sic] ($12.15 * 80).
9. Since the 2021 Arizona minimum wage of $12.15 engulfs the federal minimum wage of $7.25, $972.80 [sic] is the appropriate applicable minimum wages damages total.
10. To summarize, in total, I believe I am owed $972 in unpaid minimum wages under federal and Arizona law.
11. Additionally, I am owed additional statutory damages pursuant to 29 U.S.C. § 216(b), which provides for an additional equal amount of damages, attorneys' fees, and costs; ARS § 23-364, which provides for an
additional amount equal to twice the unpaid wages, attorneys' fees, and costs; and ARS § 23-355, which provides for trebling of the unpaid wages.
12. Accordingly, I am owed a total of $1,160 ($580 * 2) in fully liquidated, unpaid federal minimum wages.
13. Accordingly, I am owed a total of $2,916 ($972 * 3) in fully liquidated, unpaid Arizona minimum wages.
14. Since the $2,916 engulfs the $1,160, $2,916 is the appropriate fully liquidated minimum wages award.(ECF No. 15-1 at 1-3).
II. Governing Law
Rule 55 of the Federal Rules of Civil Procedure provides that if “a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party's default.” Fed.R.Civ.P. 55(a). After a default has been entered and the defendant fails to appear or move to set aside the default, the Court may, on the plaintiff's motion, enter a default judgment. Fed.R.Civ.P. 55(b)(2). Rule 55 does not require the entry of judgment against a defaulting party and the entry of a judgment by default is completely within the Court's discretion. See, e.g., DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 852 (9th Cir. 2007); Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Default judgments are disfavored because public policy favors the resolution of civil cases on their merits. NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016); Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
When exercising its discretion in the context of a default judgment, the Court generally considers a variety of factors, including:
(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.Eitel, 782 F.2d at 1471-72, quoted in Newgen, LLC, 840 F.3d at 616.
[A motion for judgment by default] should be a fully-fleshed motion that enables the Court to grant relief. Szabo v. Sw. Endocrinology Assocs. PLLC, 2021 WL 3411084, *1 (D. Ariz. 2021). To prevail on a motion, the moving party must apply the law to the facts of the case. LRCiv 7.2(b) (the moving party must “set[] forth the points and authorities relied upon in support of the motion”). A motion for default judgment is a case-dispositive motion which requires the Court to undertake an in-depth analysis.Norris v. Shenzhen IVPS Tech. Co. Ltd., 2021 WL 4844116, at *1 (D. Ariz. Oct. 18, 2021). See also Long v. Okopny, 2021 WL 3410916, at *1 (D. Ariz. July 27, 2021).
When determining whether judgment by default should be granted, the Court must take as true all factual allegations in the complaint, except for those related to the amount of the plaintiff's damages. NewGen LLC, 840 F.3d at 617; Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977); Twentieth Century Fox Film Corp. v. Streeter, 438 F.Supp.2d 1065, 1070 (D. Ariz. 2006). A defendant's default functions as their admission of the complaint's well-pleaded allegations of fact. DIRECTV, Inc., 503 F.3d 854; Cripps v. Life Ins. Co., 980 F.2d 1261, 1267 (9th Cir. 1992). Facts necessary to establish each element of the cause of action stated in the complaint that are not themselves stated in the complaint, and claims that are legally insufficient, are not established by a defendant's default. See DIRECTV, Inc., 503 F.3d 854; Cripps, 980 F.2d at 1267.
To establish a violation of 29 U.S.C. § 206, the minimum-wage provision of the FLSA, a plaintiff must establish they were an employee of the defendant, they were covered under the FLSA, and the defendant failed to pay them minimum wages for the hours worked. E.g., Smith v. November Bar N Grill LLC, 441 F.Supp.3d 830, 834 (D. Ariz. 2020), cited in Davis v. Shri Hari Hotels LLC, 2022 WL 3139861, at *3 (D. Ariz. Aug. 5, 2022) and Nichol v. On Point Solar Power LLC, 2022 WL 2159051, at *3 (D. Ariz. June 15, 2022). The Court may exercise supplemental jurisdiction over Plaintiff's state-law based claims. See 28 U.S.C. § 1367(a); Kuba v. 1-A Agric. Ass'n, 387 F.3d 850, 855-56 (9th Cir. 2004). To state a claim under the Arizona Minimum Wage Act (“AMWA”), the defendant must be an “employer” under the statute, the plaintiff must be a qualified employee of the defendant, and the plaintiff must allege that they were “not paid the applicable minimum wage for hours worked.” Coe v. Hirsch, 2021 WL 5634798, at *2 (D. Ariz. Dec. 1, 2021), citing Ariz. Rev. Stat. Ann. § 23-363. See also Nichol, 2022 WL 2159051, at *3. The Arizona Wage Act (“AWA”) provides for an award of damages if an “employer” or former “employer” fails to pay wages due any employee within a specified time; a discharged employee must be paid within seven days of discharge or the end of the next regular pay period, whichever is soon. See Ariz. Rev. Stat. Ann. §§ 23353 & 23-355.
Article 8 of Chapter 2 of Title 23 of the Arizona Revised Statutes, “Minimum Wage and Employee Benefits,” §§ 23-362 to 23-365, effective January 1, 2007; the enforcement provision is § 23-364.
Article 7 of Chapter 2 of Title 23 of the Arizona Revised Statutes, “Payment of Wages,” §§ 23-350 to 23-362, enacted in 1980. Section 23-355 is titled as “Action by Employee to Recover Wages.”
Plaintiff is entitled only to the maximum amount of damages under either state or federal law. E.g., Stamper v. Freebird Logistics Inc., 2022 WL 2316317, at *6 (D. Ariz. June 28, 2022); Grabda v. IMS Acquisition LLC, 2020 WL 5544366, at *3 (D. Ariz. Sept. 16, 2020); Sao v. Pro-Tech Prod. Inc., 2019 WL 6909566, at *8 (D. Ariz. Dec. 19, 2019) (“As Plaintiff states, he would not be entitled to both liquidated and treble damages, just the higher of the two,” i.e., damages under either the FLSA or the state statute).
III. Analysis of Eitel Factors
A. The prejudice to Plaintiff if default judgment is denied
Plaintiff will be prejudiced if default judgment is denied. Defendant has not appeared nor defended this matter. There is no indication in the record that Defendant will make any appearance or defend against the claims stated in the Complaint. Plaintiff will be prejudiced, in the form of accruing additional attorneys' fees, by any further delay in resolving these claims. If Plaintiff's motion for judgment by default is denied, Plaintiff will be prejudiced because he will likely be without other recourse for recovery. See Zekelman Indus. Inc. v. Marker, 2020 WL 1495210, at *3 (D. Ariz. Mar. 27, 2020), citing PepsiCo, Inc. v. California Sec. Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002).
B. The merits of Plaintiff's substantive claim
The AWA and the AMWA are distinct causes of action intended to provide a remedy in distinct situations, as evidenced by their enactment at separate times by separate acts of the Legislature, their separate and different statutory definitions of defendants amenable to suit, and their different statutory provisions for the applicable remedy. The purpose of the AMWA is to compensate the employee is entitled to “the balance of the wages” they are owed, in addition to what has been paid. Ariz. Rev. Stat. Ann. § 23-355 (emphasis added). It is logical that where no payment of wages has been timely made or made at all, the proper statute to apply is the AWA, as the issue in an AWA suit is not whether the employer owes the plaintiff additional funds (to make-up the difference between what was paid and the minimum wage), but that the plaintiff was to be paid at or above the minimum wage and was not tendered any wages or such wages were not timely made. See Sao, 2019 WL 6909566, at *4-5. See also Stamper, 2022 WL 2316317, at *6; Grabda, 2020 WL 5544366, at *2 (“To succeed on Count Three, Plaintiff must prove that Defendants did not pay her the minimum wage as required under the AMWA. [] To succeed on Count Four, Plaintiff must prove that Defendants did not timely pay all wages due as required under the AWA.”). Taking the facts alleged in the Complaint as true, Plaintiff has plausibly alleged Defendant did not pay all wages due within seven days of terminating Plaintiff's employment, in violation of the AWA.
C. The sufficiency of the complaint
The Complaint sufficiently alleges jurisdiction over the parties and the subject matter at issue in this suit. The Complaint sufficiently alleges a factual predicate for the relief sought. The Complaint names an eligible defendant. The Complaint is verified and the motion for judgment by default is accompanied by an affidavit.
D. The sum of money at stake in this action
The Court must consider the amount of money at stake in relation to the seriousness of Defendant's conduct. See HTS, Inc. v. Boley, 954 F.Supp.2d 927, 941 (D. Ariz. 2013); Pepsico, Inc., 238 F.Supp.2d at 1176. Plaintiff alleges Defendant failed to pay Plaintiff for 80 hours of work, for which Plaintiff seeks payment at Arizona's minimum wage of $12.15 per hour, for a total of $972. Plaintiff asks the Court to award damages in an amount triple to actual damages, per state law.
Unlike a complaint's other factual allegations, those pertaining to damages are not taken as true upon the defendant's default. Geddes, 559 F.2d at 560. Thus, a plaintiff “is required to prove all damages sought in the complaint.” Tolano v. El Rio Bakery, 2019 WL 6464748, at *6 (D. Ariz. Dec. 2, 2019) (internal quotations omitted), quoting Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003). A plaintiff must provide evidence of their damages, “'and the damages sought must not be different in kind or amount from those set forth in the complaint. '” Fisher Printing Inc. v. CRG LTD II LLC, 2018 WL 603299, at *3 (D. Ariz. Jan. 22, 2018), quoting Amini Innovation Corp. v. KTY Int'l Mktg., 768 F.Supp.2d 1049, 1054 (C.D. Cal. 2011). The Court may, but is not required to, rely on declarations submitted by the plaintiff in determining appropriate damages. Tolano, 2019 WL 6464748, at *6, citing Philip Morris USA, Inc., 219 F.R.D. at 498. In this matter Plaintiff's declaration in support of the motion for judgment by default simply repeats the allegations in the Complaint. Compare Rosen v. Fasttrak Foods LLC, 2021 WL 9098239, at *2 (D. Ariz. Sept. 2, 2021); City Drinker, Inc. v. Kodali, 2015 WL 12832126, at *2 (C.D. Cal. Feb. 17, 2015) (“Generally, while allegations as to liability are deemed admitted in a motion for default judgment, allegations in the operative complaint regarding damages are not.”).
Plaintiff has plausibly alleged he was due payment for 80 hours of work at minimum wage. However, Plaintiff seeks treble damages pursuant to the AWA. The AWA provides: “If an employer, in violation of the provisions of this chapter, shall fail to pay wages due any employee, such employee may recover in a civil action against an employer or former employer an amount which is treble the amount of the unpaid wages.” Ariz. Rev. Stat. Ann. § 23-355 (emphasis added). An award of treble damages under the AWA is discretionary. See, e.g., Crum v. Maricopa Cnty., 190 Ariz. 512, 51415 (1997) (collecting cases). “The Arizona courts have described the treble damages provision of § 23-355 as a punitive measure that is warranted when employers seek to delay payment without reasonable justification or to defraud employees of wages earned.” Id., 190 Ariz. at 516.
There is insufficient evidence in this matter which would allow the Court to conclude Defendant sought to delay payment without reasonable justification or to entirely defraud Plaintiff of wages, the standard for awarding treble damages. By construction of Plaintiff's own alleged facts, Defendant never “refused” to pay Plaintiff. Plaintiff avers he was paid weekly, but does not explain why he did not collect the prior week's paycheck during his final week of work. Plaintiff believed his final paycheck would be mailed, but when he purportedly did not receive the check he did not actively pursue payment of his final wages for approximately three months after being fired. When Plaintiff finally inquired, Defendant agreed to issue a check or replacement check and apparently did so, but Plaintiff did not retrieve the check for another six months, at which time the check had expired. Plaintiff does not assert he then requested Defendant reissue the check and Defendant refused to do so. Although, taking the alleged facts as true, Defendant did not ensure that Plaintiff received due wages within seven days of notifying him that his employment was terminated, the facts as pled indicate Defendant did act to pay Plaintiff the wages due him, and Plaintiff was negligent in retrieving the check for a period of eight months, by which time the check had expired. Given the facts pled by Plaintiff, a just exercise of the Court's discretion would be to award him an amount of double, rather than triple, his actual damages, i.e., $1944, as Plaintiff fails to provide any plausible evidence that Defendant delayed payment without reasonable justification or sought to defraud him of his wages.
E. The possibility there would be a dispute concerning material facts if the case were to proceed
It is possible, but unlikely, that there would be a dispute concerning material facts if this case proceeds. Other than his own declaration, Plaintiff provides no evidence that he was employed by Defendant, or the number of hours worked, or his hourly wage; Plaintiff asserts he was to be paid $18 per hour but he seeks damages only in the amount of Arizona's minimum wage. Plaintiff does not provide paycheck stubs from the weeks he did receive pay from Defendant, or the expired check reflecting his “unpaid wages” that he requested in November of 2021 and finally retrieved in May of 2022, or a W-2 issued by Defendant for the work performed in 2021.
F. Whether the default was due to the defendant's excusable neglect
There is no indication that Defendant's default in this matter is due to excusable neglect.
G. The strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits
The entry of default judgment is disfavored. The Court should not enter a default judgment if Defendant would be entitled to have the default judgment set aside pursuant to Rule 60(b), Federal Rules of Civil Procedure. See, e.g., Educational Servs., Inc. v. Maryland State Bd. for Higher Educ., 710 F.2d 170, 177 (4th Cir. 1983); Martin v. Coughlin, 895 F.Supp. 39, 42 (N.D.N.Y. 1995).
Once default judgment has been entered, relief is governed by Rule 60(b). Where a defendant seeks relief under Rule 60(b)(1) based upon “excusable neglect,” the court applies the same three factors governing the inquiry into “good cause” under Rule 55(c). Mesle, 615 F.3d at 1091. Those factors, which courts consistently refer to as the “Falk factors,” are:
(1) whether the plaintiff will be prejudiced, (2) whether the defendant has a meritorious defense, and (3) whether culpable conduct of the defendant led to the default.
Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). The determination of what conduct constitutes “excusable neglect” under Rule 60(b)(1) and similar rules “is at bottom an equitable one, taking account of all relevant
circumstances surrounding the party's omission.” Pioneer Inv. Svcs. Co. v. Brunswick Assoc. Ltd., 507 U.S. 380, 395 [] (1993).Brandt v. American Bankers Ins. Co. of Fla., 653 F.3d 1108, 1111 (9th Cir. 2011). A defendant's conduct is culpable if they received actual or constructive notice of the filing of the action and failed to answer. Price v. Seydel, 961 F.2d 1470, 1473 (9th Cir. 1992); Meadows v. Dominican Rep., 817 F.2d 517, 521 (9th Cir. 1987).
It is presumed that because service was returned as executed on Defendant's statutory agent, Defendant received actual notice of the filing of this action and failed to answer or otherwise respond to the Complaint.
IV. Conclusion
Plaintiff is entitled to judgment by default against Defendant for minimum wage for 80 hours of work during the last two weeks Plaintiff worked for Defendant prior to Defendant terminating Plaintiff's employment, pursuant to the FLSA and the AWA, in the amount of $972. Because Plaintiff fails to establish Defendant delayed payment without reasonable justification or sought to defraud him, and Plaintiff's own statements indicate he was dilatory in initially seeking his final wages and that he failed to retrieve a check until after it expired, IT IS RECOMMENDED that the Court grant the motion for judgment by default, and in an exercise of its discretion award Plaintiff damages in the amount of $1944.