Villa v. Express Truss & Framing Systems LLC

[5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 Ismael Villa, ) No. CV-24-01890-PHX-ASB ) 9 ) Plaintiff, ) REPORT AND RECOMMENDATION 10 ) ) v. 11 ) ) 12 Express Truss & Framing Systems ) LLC, et al., ) 13 ) ) 14 Defendants. ) ) [15] 16 TO HON. STEPHEN M. MCNAMEE, SENIOR UNITED STATES DISTRICT JUDGE: 17 Before the Court is Plaintiff’s Motion for Default Judgment Against Defendants 18 Express Truss Framing Systems, LLC, Express Truss, LLC, and William Keshishi and 19 Linet Mirzakanian (Doc. 23). No Response was filed to the Motion. For the reasons below, 20 undersigned recommends the Motion be granted and default judgment be entered as to 21 Defendants Express Truss Framing Systems, LLC; Express Truss, LLC; and William 22 Keshishi and Linet Mirzakanian. 23 A. Procedural History 24 On July 30, 2024, Plaintiff filed a Complaint against Defendants Express Truss & 25 Framing Systems LLC; Express Truss LLC; William Keshishi and Linet Mirzakanian, a 26 married couple; and Caleb Riley and Shannon O’Neil, a married couple. (Doc. 1.) All 27 defendants were served. (See Docs. 9-14.) Defendants Riley and O’Neil (collectively, the 28 “Riley Defendants”) filed an Answer. No other defendants filed a responsive pleading. 1 After an Order to Show Cause issued regarding Plaintiff’s failure to prosecute the 2 remaining defendants, Express Truss & Framing Systems LLC; Express Truss LLC; 3 William Keshishi and Linet Mirzakanian (collectively, the “Express Truss Defendants”), 4 Plaintiff filed an Application for Entry of Default as to the Express Truss Defendants. 5 (Docs. 19-20.) The Clerk of Court entered default as to the Express Truss Defendants 6 (Doc. 21). The Court then issued a second Order to Show Cause for failure to prosecute 7 as to the Express Truss Defendants. (Doc. 22.) This Motion followed, and the Court set 8 its Order to Show Cause aside. (Docs. 23-24.) 9 B. Legal Standard 10 Once default has been entered against a party, the Court has discretion to enter 11 default judgment against that party. See Fed. R. Civ. P. 55(b)(2); Aldabe v. Aldabe, 616 12 F.2d 1089 , 1092 (9th Cir. 1980). “When entry of judgment is sought against a party who 13 has failed to plead or otherwise defend, a district court has an affirmative duty to look into 14 its jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 707 , 712 15 (9th Cir. 1999). 16 After the Court has been satisfied that it has personal and subject matter jurisdiction, 17 the Court must consider the factors enumerated by the Ninth Circuit in Eitel v. McCool, [18] 782 F.2d 1470, 1471-72 (9th Cir. 1986) when deciding whether to grant default judgment. 19 Those factors are: “(1) the possibility of prejudice to the plaintiff, (2) the merits of 20 plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at 21 stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether 22 the default was due to excusable neglect; and (7) the strong policy underlying the Federal 23 Rules of Civil Procedure favoring decisions on the merits.” Id. Upon default, and thus 24 when applying the Eitel factors, “the factual allegations of the complaint, except those 25 relating to the amount of damages, will be taken as true.” Geddes v. United Fin. Grp., 559 26 F.2d 557, 560 (9th Cir. 1977). In its default judgment analysis, the Court “is not required 27 to make detailed findings of fact.” Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th [28] 1 Cir. 2002). 2 C. Analysis 3 The Court has considered the record of these proceedings, including Plaintiff’s 4 Declaration in Support of Motion for Entry of Default Judgment (Doc. 23-1). The Court 5 finds that Plaintiff has complied with the requirements of Rule 55 of the Federal Rules of 6 Civil Procedure. The Court therefore considers jurisdiction. 7 1. Jurisdiction 8 Subject matter jurisdiction is present because Plaintiff has brought certain claims 9 under 29 U.S.C. §§ 206-07 . See 28 U.S.C. § 1331 . Personal jurisdiction exists, as 10 Defendants are either organized in, or are residents of, this District, and the record 11 establishes service was effectuated upon Defendants. 12 Because jurisdiction is proper, the Court next considers the Eitel factors. 13 2. Eitel factors 14 In deciding whether to grant default judgment, the Court must weigh “(1) the 15 possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) 16 the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the 17 possibility of a dispute concerning material facts; (6) whether the default was due to 18 excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil 19 Procedure favoring decisions on the merits.” Eitel, 782 F.2d at 1471-72 . 20 A. Factor 1 21 The Court finds the first factors weighs in Plaintiff’s favor. Plaintiff has faithfully 22 prosecuted this case since its inception. The Express Truss Defendants have not 23 participated in this matter at all. Plaintiff has no alternative means to resolve his claims in 24 his Complaint against the Express Truss Defendants. Thus, there is a strong possibility of 25 prejudice to Plaintiff if default judgment is not entered. See Ramirez v. Unique Transitional 26 Homes Staffing LLC, No. CV-23-01882-PHX-DGC, 2024 WL 1740020 , at *2 (D. Ariz. 27 Apr. 23, 2024) (finding the same in an action for unpaid wages because the plaintiff would [28] 1 be without recourse or redress if default judgment were denied). 2 B. Factors 2 and 3 3 Given the interplay of the second and third factors, the Court considers them 4 together. See Eitel, 782 F.2d at 1472 . Here, both factors weigh in favor of granting default 5 judgment. The Court finds the Complaint contained great detail regarding the Express 6 Truss Defendants’ alleged violations of federal and state wage statutes. (See Doc. 1.) The 7 allegations are taken as true. Geddes, 559 F.2d at 560. 8 First, the Court considers the second and third factors as they pertain to the federal 9 wage statute. Plaintiff alleges both minimum wage and overtime wage violations under 10 the Fair Labor Standards Act (FLSA). (Doc. 1 at 13-16.) “The FLSA requires employers 11 to pay their employees a minimum hourly wage and additional overtime wages for any 12 time spent working in excess of a forty-hour workweek (not less than one and a half times 13 the hourly wage).” Ramirez, 2024 WL 1740020 , at *2 (citing 29 U.S.C. §§ 206 (a), 207(a)). 14 “To establish a minimum wage or overtime violation of the FLSA, Plaintiff must establish 15 three elements: (1) []he was an employee of Defendants, (2) []he was covered under the 16 FLSA, and (3) Defendants failed to pay h[im] minimum wage or overtime wages.” Smith 17 v. Nov. Bar N Grill LLC, 441 F. Supp. 3d 830 , 834 (D. Ariz. 2020). The FLSA defines an 18 “employee” as “any individual employed by an employer” and an “employer” as “any 19 person acting directly or indirectly in the interest of an employer in relation to an 20 employee[.]” 29 U.S.C. § 203 (d), (e)(1). “An individual can be subject to liability under 21 the FLSA as an employer if they ‘exercise control over the nature and structure of the 22 employment relationship, or economic control over the relationship.’” Avila v. JBL 23 Cleaning Servs. LLC, No. CV-23-00398-PHX-DJH, 2024 WL 863710 , at *3 (D. Ariz. Feb. 24 29, 2024) (quoting Boucher v. Shaw, 572 F.3d 1087, 1091 (9th Cir. 2009)). In his 25 Complaint, Plaintiff alleges he was an employee of the Truss Defendants at all relevant 26 times and they exercised control over his work and wages. (Doc. 1, ¶ 31.) Taking those 27 factual allegations as true, Plaintiff has established he was an employee of the Express [28] 1 Truss Defendants, and that the Express Truss Defendants were employers under the FLSA. 2 “To bring an FLSA claim for unpaid minimum wages, a plaintiff must ‘allege facts 3 showing that there was a given week in which [she] was entitled to but denied minimum 4 wages.’” Avila, 2024 WL 863710 , at *4 (quoting Landers v. Quality Commc’ns, Inc., 771 5 F.3d 638, 645 (9th Cir. 2014)). “To bring an FLSA claim for unpaid overtime wages, a 6 plaintiff must allege at least one workweek in which she worked in excess of forty hours 7 and [was] not paid overtime wages.” Id. (citing Landers, 771 F.3d at 646). In his 8 Complaint, Plaintiff alleges he routinely worked in excess of 40-hour workweeks, and that 9 he was not paid for his final 12 workweeks. (Doc. 1, ¶¶ 52-59.) Those allegations are 10 further accepted as true, and Plaintiff has stated plausible minimum wage and overtime 11 wage claims under the FLSA. 12 The Court next turns to the second and third Eitel factors as they relate to Plaintiff’s 13 claim under the Arizona minimum wage statute (A.R.S. § 23-364, or AMWA). (See Doc. 14 1 at 16-17.) “The AMWA establishes the minimum wage an employer must pay an 15 employee in Arizona.” Avila, 2024 WL 863710 , at *4; A.R.S. § 23-363. “Like the FLSA, 16 the AMWA defines an ‘employee’ as ‘any person who is or was employed by an 17 employer.’” Id. § 23-362(A). The AMWA goes on to define an “employer” as “any 18 corporation proprietorship, partnership, joint venture, limited liability company, trust, 19 association, political subdivision of the state, [and] individual or other entity acting directly 20 or indirectly in the interest of an employer in relation to an employee.” A.R.S. § 23-362(B). 21 Here, Plaintiff has sufficiently alleged that the Express Truss Defendants (which are either 22 limited liability companies or individuals) are employers under the AMWA; that Plaintiff 23 was their employee; and that Plaintiff was not paid for the hours he worked during the last 24 12 workweeks of his employment. (See Doc. 1 at 3-12.) Thus, Plaintiff has stated a 25 colorable claim under the AMWA. 26 Accordingly, after taking the allegations in the Complaint as true, undersigned 27 concludes Plaintiff has stated claims upon which he may recover under both the Fair Labor [28] 1 Standards Act ( 29 U.S.C. § 201 , et seq.) and Arizona’s wage statutes (A.R.S. § 23-363, et 2 seq.). 3 C. Factor 4 4 Under the fourth factor, the Court considers the amount of money at stake in relation 5 to the seriousness of Defendants’ conduct. See PepsiCo., Inc. v. Cal. Sec. Cans, 238 6 F.Supp.2d 1172, 1176 (C.D. Cal. 2002). In the case at bar, Plaintiff seeks total damages in 7 the amount of $80,220.00 against Express Truss Framing Systems, LLC, Express Truss, 8 LLC, jointly and severally; and of that, $66,320.40 against Express Truss Framing 9 Systems, LLC, Express Truss, LLC and William Keshishi and Linet Mirzakanian, jointly 10 and severally.1 (Doc. 23 at 12, Doc. 23-1 at 4-5.) He also seeks leave to file a motion for 11 attorney’s fees and costs. (Doc. 23 at 12.) Given the number of hours Plaintiff has alleged 12 that he worked without compensation, the Court finds the amount of sought damages to be 13 reasonable. This factor weighs in favor of default judgment. 14 D. Factor 5 15 The fifth factor requires the Court to consider the possibility of dispute concerning 16 the material facts. This factor favors default judgment, as the Express Truss Defendants 17 have failed to participate in this matter since being served. Since that time, they have made 18 no effort to meaningfully challenge Plaintiff’s Complaint or engage in the discovery 19 process, despite Plaintiff’s diligent efforts to communicate with them. 20 E. Factor 6 21 Sixth, the Court considers whether the default was due to excusable neglect. The 22 record is devoid of any indication that the Express Truss Defendants’ failure to participate 23 in this case or otherwise defend against the Complaint since July 2024 is the result of 24 excusable neglect. The Express Truss Defendants were duly served with this lawsuit. 25 (Docs. 9-12.) They are therefore fully aware of the pendency of this matter and their [27] 1 The Court considers infra the sufficiency of Plaintiff’s evidence regarding sought 28 damages. 1 attendant obligations. No evidence to indicate the Express Truss Defendants have 2 excusably neglected this matter is before the Court. Thus, the factor weighs in favor of 3 default judgment. 4 F. Factor 7 5 Finally, the Court is mindful of “the general rule that default judgments are 6 ordinarily disfavored,” and that matters “should be decided upon their merits whenever 7 reasonably possible.” Eitel, 782 F.2d at 1472 . However, the Express Truss Defendants 8 have essentially abandoned their defense of this lawsuit, despite their knowledge that it is 9 ongoing. The Express Truss Defendants’ conduct has rendered impossible the decision of 10 this case on its merits, as it relates to them. 11 After considering and weighing the Eitel factors, undersigned finds default 12 judgment is appropriate and recommends to the District Judge that default judgment be 13 entered against the Express Truss Defendants. 14 3. Damages 15 When considering the amount of damages, the Court does not take the factual 16 allegations contained in the Complaint as true. See Geddes, 559 F.2d at 560; TeleVideo 17 Sys., Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir.1987). Rather, Plaintiff is required to 18 prove up the damages he sought in his Complaint. Philip Morris, U.S.A. v. Castworld 19 Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003). Further, “a default judgment must not 20 differ in kind from, or exceed in amount, what is demanded in” Plaintiff’s Complaint. Fed. 21 R. Civ. P. 54(c). “In determining damages, a court can rely on the declarations submitted 22 by the plaintiff or order a full evidentiary hearing.” Philip Morris, 219 F.R.D. at 498 (citing 23 Fed. R. Civ. P. 55(b)(2)). 24 Undersigned has carefully reviewed the Complaint (Doc. 1) and Plaintiff’s 25 Declaration (Doc. 23-1). Although the Complaint did not include a specific dollar amount 26 of sought damages, the Complaint provided sufficient detail regarding the relief sought as 27 to each of the three claims he pled. In his Complaint, Plaintiff pled the federal overtime [28] 1 and minimum wage claims, and an Arizona minimum wage claim. (See Doc. 1 at 13-17.) 2 In support of those claims, Plaintiff’s Complaint contained the amount of days and hours 3 Plaintiff typically worked, alleged that Plaintiff was not paid overtime, contained Plaintiff’s 4 hourly wage as determined by Defendants, and alleged that Plaintiff was not paid for his 5 last 12 workweeks. (See id. at 8-10.) Plaintiff’s Declaration included a detailed calculation 6 of wages that aligns with the allegations contained in his Complaint. (Doc. 23-1 at 1-4.) 7 First, Plaintiff reasonably estimates he is owed $4,698.00 in unpaid federal 8 minimum wages for Plaintiff’s last 12 workweeks and $8,974.80 in unpaid Arizona 9 minimum wages for that same period. (Doc. 23-1, ¶ 11.) “When an employer is found 10 liable under the FLSA for failure to pay minimum and overtime wages, the employee is 11 entitled to ‘unpaid minimum wages, [ ] unpaid overtime compensation ... and in an 12 additional equal amount as liquidated damages.’” Avila, 2024 WL 863710 , at *6 (citing 29 13 U.S.C. § 216 (b) and adding emphasis). “Double damages are the norm, and single damages 14 are the exception.” Id., citing Alvarez v. IBP, Inc., 339 F.3d 894 , 910 (9th Cir. 2003)). 15 Thus, Plaintiff’s unpaid federal wages are doubled to $9,396.00. Similarly, under 16 Arizona’s minimum wage law, “Any employer who fails to pay the wages or earned paid 17 sick time required under this article shall be required to pay the employee the balance of 18 the wages or earned paid sick time owed, including interest thereon, and an additional 19 amount equal to twice the underpaid wages or earned paid sick time.” A.R.S. § 23-364(G). 20 Thus, Plaintiff’s Arizona minimum wage damages are doubled to $17,949.60. 21 The Court notes that Plaintiff, in his Motion and Declaration, seeks trebled Arizona 22 damages of $26,924.40. (Doc. 23 at 10; Doc. 23-1, ¶ 15, 17.) In support of that claim, 23 Plaintiff cites in his Motion and Declaration to A.R.S. § 23-355. (Doc. 23 at 10; Doc. 2324 1, ¶ 15.) A review of the Complaint, however, shows that Plaintiff did not cite to A.R.S. § 25 23-355; rather, he cited only to A.R.S. §§ 23-363, -64 (the AMWA). (Doc. 1 at 16-18.) 26 This difference is important, as the Arizona Minimum Wage Act upon which Plaintiff’s 27 claim is based allows for only doubled damages. See A.R.S. § 23-364(G). The AMWA [28] 1 falls under a different statutory provision (A.R.S. §§ 23-363, -364) than the Arizona Wages 2 Act, which allows for trebled damages under A.R.S. § 23-355. Plaintiff failed to plead a 3 claim under the Arizona Wages Act in his Complaint. (See Doc. 1.) “A default judgment 4 must not differ in kind, or exceed in amount, what is demanded in the pleadings.” Fed. R. 5 Civ. P. 54(c); see Fong v. United States, 300 F.2d 400 , 413 (9th Cir. 1962) (stating that a 6 default judgment may not be different in kind from or exceed in amount that prayed for in 7 the complaint). Therefore, undersigned does not recommend a trebled award under A.R.S. 8 § 23-355 as Plaintiff requests. Rather, undersigned recommends a doubled award under 9 the AMWA, which is cited in the Complaint; such an award would amount to $17,949.60.2 10 Because double recovery is prohibited, see Avila, 2024 WL 863710 , at *6 (citing 11 Gen. Tel. Co. of the Nw., Inc. v. EEOC, 446 U.S. 318, 333 (1980)), undersigned agrees 12 with Plaintiff that a larger, trebled Arizona award “engulfs” the federal minimum wage 13 damages of $9,396.00. (See Doc. 23-1, ¶ 18.) Therefore, as to minimum wage statutory 14 damages, Plaintiff has established an award of $17,949.60. 15 Next, Plaintiff represents he was never paid overtime and that he should have been 16 paid $19,698.00 in overtime wages. (Doc. 23-1, ¶¶ 13-14.) Undersigned finds that to be a 17 reasonable estimate, given the number of hours worked by Plaintiff and the overtime rate 18 as calculated. (See id.) As discussed above, 29 U.S.C. § 216 (b) requires doubling of 19 overtime damages. Thus, the total amount to federal overtime damages is $33,396.00. 20 Therefore, the total amount of statutory damages that undersigned will recommend 21 be awarded is $51,345.60 ($17,949.60 + $33,396.00), against Defendants Express Truss 22 Framing Systems, LLC, Express Truss, LLC, and William Keshishi and Linet 23 Mirzakanian, jointly and severally. Consequently, to the extent that Plaintiff’s total [25] 2 For the same reason, undersigned recommends that the sought amount of “fully 26 trebled, unpaid regular wage damages” of $40,824.00 be denied. (Doc. 23-1, ¶ 19.) Indeed, Plaintiff’s Motion seems to assume there was a AMWA claim and an unpaid wages (i.e., 27 Arizona Wages Act) claim pled, as Plaintiff breaks out his analysis between the two statutes. (See Doc. 23 at 9-10.) But Plaintiff failed to plead A.R.S. § 23-355 in his 28 Complaint. Thus, there is no statutory basis for trebling that has been properly pled. 1 damages request exceeds $51,345.60, undersigned recommends the request be denied. 2 Finally, Plaintiff requests leave to file a motion for attorney’s fees (Doc. 23 at 11). 3 Undersigned will recommend that the District Judge order such a motion be filed within 4 14 days of the District Judge’s Order. 5 D. Conclusion 6 For the foregoing reasons, 7 IT IS THEREFORE RECOMMENDED: 8 1. That Plaintiff’s Motion for Default Judgment Against Defendants Express Truss 9 Framing Systems, LLC, Express Truss, LLC, and William Keshishi and Linet 10 Mirzakanian (Doc. 23) be granted in part and denied in part, specifically: 11 a. That the Motion for Default Judgment be granted insofar as Plaintiff is 12 awarded statutory damages in the amount of $51,345.60 against Defendants 13 Express Truss Framing Systems, LLC, Express Truss, LLC, and William 14 Keshishi and Linet Mirzakanian, jointly and severally; and 15 b. That the Motion for Default Judgment be denied as to any damages requested 16 by Plaintiff exceeding $51,345.60. 17 2. That the Court order any motion for attorney’s fees be filed no later than 14 days 18 from the date the District Judge’s Order is filed. 19 This recommendation is not an order that is immediately appealable to the Ninth 20 Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of 21 Appellate Procedure, should not be filed until entry of the district court’s judgment. The 22 parties shall have 14 days from the date of service of a copy of this recommendation within 23 which to file specific written objections with the Court. See 28 U.S.C. § 636 (b)(1); Fed. 24 R. Civ. P. 6(a), 6(b) and 72. Thereafter, the parties have 14 days within which to file a 25 response to the objections. 26 Failure to timely file objections to the Magistrate Judge’s Report and 27 Recommendation may result in the acceptance of the Report and Recommendation by the [28] 1| district court without further review. See United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (th Cir. 2003). Failure to timely file objections to any factual determinations of the 3| Magistrate Judge will be considered a waiver of a party’s right to appellate review of the 4| findings of fact in an order of judgment entered pursuant to the Magistrate Judge’s 5 | recommendation. See Fed. R. Civ. P. 72. 6 Dated this 14th day of May, 2025. 7 nv 9 _ ee 10 Honorable Alison S. Bachus United States Magistrate Judge