Cruz v. N.V. & Sons Builders Incorporated

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Sergio Cruz, No. CV-24-02128-PHX-DJH 10 Plaintiff, ORDER 11 v. 12 N.V. & Sons Builders Incorporated, Nick Vulaj, Nikolla Vulaj, Unknown Vulaj, 13 Ciara Vulaj, and Fila Vulaj, 14 Defendants. [15] Plaintiff Sergio Cruz (“Plaintiff”) moves for the entry of default judgement against [16] Defendants N.V. & Sons Builders, Inc., Nick Vulaj, Ciara Vulaj, Nikolla Vulaj, and Fila [17] Vulaj (collectively, “Defendants”). (Doc. 31). The Motion is unopposed, and the time to [18] file a response has passed. See LRCiv 7.2(c). For the following reasons, the Court grants [19] Plaintiff’s Motion. [20] I. Background [21] Defendants Nick Vulaj, Ciara Vulaj, Nikolla Vulaj, and Fila Vulaj are owners of [22] Defendant N.V. § Sons Builders, Inc., a construction company doing business in the [23] Phoenix metropolitan area. (Doc. 18 at ¶¶ 14, 16, 32). Plaintiff began working for [24] Defendants in July of 2024 as a manual laborer performing drywall-related work. (Id. at [25] ¶ 33). He was compensated at an hourly rate of $24.00. (Id. at ¶ 34). Plaintiff claims that [26] he was misclassified as an independent contractor, when he was actually an employee. (Id. [27] at ¶ 36). In support of his employee status, Plaintiff asserts that he, among other things, [28] used equipment owned by Defendants; Defendants had the exclusive right to hire and fire 1 him; he was hired for a nondurational period; and he had no right to refuse the work 2 Defendants assigned to him. (See id. at ¶¶ 38–40). 3 Plaintiff alleges that he performed 32 hours of work during his final week of 4 employment with Defendants. (Id. at ¶ 43). However, Plaintiff claims that he was not 5 compensated for any of this work. (Id. at ¶ 46). On August 20, 2024, Plaintiff filed suit 6 against Defendants N.V. & Sons Builders, Inc., Nick Vulaj, Nikolla Vulaj, Jane Doe Vulaj 7 I, and Jane Doe Vulaj II. (See Doc. 1). The Complaint alleged claims under the Fair Labor 8 Standards Act (“FLSA”), 29 U.S.C. § 206 , the Arizona Minimum Wage Act (“AMWA”), 9 A.R.S. § 23-363, and Arizona Wage Act (“AWA”), A.R.S. §23-350. (See generally 10 Doc. 1). 11 The Complaint was later amended to reflect the identities of the Jane Doe 12 Defendants—Fila Vulaj and Ciara Vulaj—but the First Amended Complaint otherwise 13 maintained the same FLSA, AMWA, and AWA claims. (See generally Doc. 18). The 14 First Amended Complaint was then properly served on all Defendants. (See Docs. 23-27). 15 After receiving no answer or responsive pleading, Plaintiff filed an Application for Entry 16 of Default (Doc. 29), prompting the Clerk to enter default against each Defendant on 17 December 19, 2024. (Doc. 30). Plaintiff filed a Motion for Default Judgment on January 6, 18 2025 (Doc. 31); Defendants did not file a response. 19 II. Legal Standard 20 Federal Rule of Civil Procedure 55(b)(2) governs applications for default judgment. 21 The Court possesses discretion whether to enter a default judgment. Aldabe v. Aldabe, 616 22 F.2d 1089 , 1092 (9th Cir. 1980). Before analyzing the merits of a motion for default 23 judgment, the Court “has an affirmative duty to look into its jurisdiction over both the 24 subject matter and the parties.” In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (citing 25 Williams v. Life Sav. and Loan, 802 F.2d 1200, 1203 (10th Cir. 1986)). 26 If jurisdiction is established, the Court then considers: [27] (1) the possibility of prejudice to the plaintiff, (2) the merits of 28 the plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the 1 possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong [2] policy underlying the Federal Rules of Civil Procedure 3 favoring decisions on the merits. [4] Eitel v. McCool, 782 F.2d 1470 , 1471–72 (9th Cir. 1986). “The general rule of law is that [5] upon default the factual allegations of the complaint, except those relating to the amount [6] of damages, will be taken as true.” Geddes v. United Fin. Grp., 559 F.2d 557 , 560 (9th [7] Cir. 1977) (citing Pope v. United States, 323 U.S. 1, 12 (1944)). [8] III. Discussion [9] The Court will first assess whether it has subject matter jurisdiction over the case [10] and personal jurisdiction over Defendants. The Court will then evaluate the merits of [11] Plaintiff’s Motion for Default Judgment under the Eitel factors. [12] A. Jurisdiction [13] Federal courts have jurisdiction under 28 U.S.C. § 1331 when civil actions arise [14] under the Constitution, laws, or treaties of the United States. Federal courts also have [15] jurisdiction over state law claims when they are so related to claims over which the Court [16] has subject matter jurisdiction that they form part of the same case or controversy under [17] Article III of the United States Constitution. See 28 U.S.C. § 1367 . Plaintiff brings a FLSA [18] federal law action, giving the Court federal question jurisdiction under 28 U.S.C. § 1331 . [19] This lends the Court supplemental jurisdiction over Plaintiff’s AMWA and AWA state law [20] claims because they are part of the same case or controversy. See 28 U.S.C. § 1367 (a). [21] The Court must now determine whether it has personal jurisdiction over Defendants. [22] “It is the plaintiff’s burden to establish the court’s personal jurisdiction over a defendant.” [23] Donell v. Keppers, 835 F. Supp. 2d 871, 876 (S.D. Cal. 2011) (quoting Doe v. Unocal [24] Corp., 248 F.3d 915 , 922 (9th Cir. 2001)). “For an individual, the paradigm forum for the [25] exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an [26] equivalent place, one in which the corporation is fairly regarded as at home.” Goodyear [27] Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). [28] Defendant N.V. & Sons Builders, Inc. is a corporation duly licensed in Arizona and, 1 at all material times, does business, has offices, and/or maintains agents for the transaction 2 of its customary business in Maricopa County, Arizona. (Doc. 18 at ¶ 11). As to the 3 individual Defendants, Plaintiff alleges that they are the owners of Defendant N.V. & Sons 4 Builders, Inc., which operates in the Phoenix Metropolitan Area, and caused the events 5 giving rise to Plaintiff’s claims. (Id. at ¶¶ 14, 16). Thus, the Court finds that it has personal 6 jurisdiction over Defendants. 7 B. Eitel Factors 8 Having found jurisdiction, the Court will assess the Eitel factors to determine the 9 merits of Plaintiff’s Motion for Default Judgment. 10 1. Possible Prejudice to Plaintiff 11 Here, the first factor weighs in favor of granting Plaintiff’s Motion because Plaintiff 12 will be prejudiced if this case remains unresolved. The record reflects that Defendants 13 were properly served (Docs. 23–27) but have not responded to this action. If the motion is 14 not granted, Plaintiff “will likely be without other recourse for recovery.” See PepsiCo, 15 Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). 16 2. Merits of Plaintiff’s Claim and Sufficiency of the Complaint 17 “Under an Eitel analysis, the merits of plaintiff’s substantive claims and the 18 sufficiency of the complaint are often analyzed together.” Dr. JKL Ltd. v. HPC IT Educ. 19 Ctr., 749 F. Supp. 2d 1038, 1048 (N.D. Cal. 2010). The second and third Eitel factors 20 favor default judgment when the complaint sufficiently states a claim for relief upon which 21 the plaintiff may recover. See Danning v. Lavine, 572 F.2d 1386 , 1388–89 (9th Cir. 1978); 22 Pepsico, Inc., 238 F. Supp. 2d at 1175 . “Upon entry of default, the facts alleged to establish 23 liability are binding upon the defaulting party.” Danning, 572 F.2d at 1388 . “However, it 24 follows from this that facts which are not established by the pleadings of the prevailing 25 party, or claims which are not well-pleaded, are not binding and cannot support the 26 judgment.” Id. 27 Plaintiff brings claims for unpaid wages under the FLSA, AMWA, and AWA. The 28 Court will examine each claim in turn. 1 a. FLSA Claim 2 To establish a minimum-wage violation of the FLSA, a plaintiff must establish three 3 elements: (1) they were an employee of Defendants, (2) they were covered under the FLSA, 4 and (3) the defendant failed to pay them minimum wage. Smith v. Nov. Bar N Grill LLC, [5] 441 F. Supp. 3d 830 , 834 (D. Ariz. 2020) (citing 29 U.S.C. §§ 206 (a), 207(a)). Here, 6 Plaintiff alleges Defendants violated the FLSA by failing to pay him for his final week of 7 work. (Doc. 18 at 62–63). Plaintiff alleges that he was an employee of the Defendants. 8 (Id. at ¶¶ 36–40). In his employment, Plaintiff performed drywall-related work for 9 Defendants. (Id. at ¶ 33). Plaintiff also alleges that, at all relevant times, he was a covered 10 employee within the FLSA’s meaning and that he was employed by an enterprise engaged 11 in commerce that had annual gross sales of at least $500,000. (Id. at ¶¶ 20, 27–28); see 29 12 U.S.C. § 203 (s)(1)(A). Lastly, Plaintiff claims that Defendants are employers under the 13 FLSA. (Id. at ¶ 22). Therefore, because the First Amended Complaint’s allegations are 14 deemed true upon default, Plaintiff has demonstrated that Defendants violated the FLSA. 15 See Geddes, 559 F.2d at 560 (stating that allegations in the complaint, unrelated to 16 damages, are taken as true upon default). 17 b. AMWA Claim 18 To bring an AMWA claim, a plaintiff must demonstrate that they were 19 “(1) employed by the defendant, and (2) the defendant failed to pay minimum wage.” 20 Verduzco v. Value Dental Centers Mesa West AZ LLC, 2021 WL 4222005 , at *2 (D. Ariz. 21 Sept. 16, 2021) (citing A.R.S. § 23-363). Plaintiff alleges that, by failing to pay him any 22 wages for his final week of work, Defendants violated the AWMA. (Doc. 18 at 66–67). 23 Plaintiff alleges that, at all relevant times, he was an employee of the Defendants as defined 24 by the AMWA. (Id. at ¶ 24–26). Plaintiff also alleges that he is a covered employee within 25 the meaning of the AMWA. (Id. at ¶ 53). Taking the First Amended Complaint’s 26 allegations as true, Plaintiff has accordingly demonstrated that Defendants failed to pay 27 him Arizona’s mandated minimum wage. (Id. at ¶ 66). Thus, Plaintiff has shown that 28 Defendants violated the AWMA. 1 c. AWA Claim 2 The AWA requires “[e]ach employer, on each of the regular paydays, shall pay to 3 the employees all wages due to the employees up to that date[.]” A.R.S. § 23-351(C). 4 Unlike the FLSA and the AMWA, the AWA “does not . . . authorize individual liability 5 against the owners, officers, and directors of a corporate employer in a case where the claim 6 is for the employer’s wholesale failure to pay wages.” Rosen v. Fasttrak Foods LLC, 2021 7 WL 2981590 , at *5 (D. Ariz. July 15, 2021). Accordingly, Plaintiff’s AWA claim is only 8 brought against Defendant N.V. & Sons Builders, Inc. To establish his AWA claim, 9 Plaintiff alleges that he is a covered employee for the purposes of the AWA. (Doc. 18 at 10 ¶ 54). He alleges that he completed work for Defendant N.V. & Sons Builders, Inc. and 11 that N.V. & Sons Builders, Inc. failed to pay him his owed wages. (Id. at ¶¶ 47, 72). Based 12 on these allegations, Plaintiff has demonstrated that Defendant N.V. & Sons Builders, Inc. 13 violated the AWA. 14 3. Sum of Money at Stake 15 Regarding the fourth factor, the Court considers the amount of money at stake in 16 relation to the seriousness of a defendant’s conduct. See Pepsico, 238 F. Supp. 2d at 1176 . 17 “If the sum of money at stake is completely disproportionate or inappropriate, default 18 judgment is disfavored.” Twentieth Century Fox Film Corp. v. Streeter, 438 F. Supp. 2d 19 1065, 1071 (D. Ariz. 2006). 20 Plaintiff seeks the unpaid minimum wages and liquidated damages he is owed under 21 the FLSA and AMWA. He also seeks trebled unpaid wages damages under the AWA. 22 Plaintiff asserts he is entitled to a total of $2,304.00 in damages along with reasonable 23 attorneys’ fees. (Doc. 32 at 4–6, 8–10). The Court finds the requested amount is reasonable 24 and proportional to the Defendants’ failure to pay wages as required by federal and state 25 law. 26 4. Potential Disputes of Material Fact 27 There are no disputes of material fact. Defendants were properly served and failed 28 to defend this matter. They did not respond to either the Application for Default or Motion 1 for Default Judgment and consequently did not dispute the claims made therein. The fifth 2 factor therefore supports entry of default judgment. 3 5. Excusable Neglect 4 The sixth factor, likewise, supports entry of default judgment because there is no 5 evidence that Defendants’ default was due to excusable neglect. Rather, the record reflects 6 that Defendants were properly served and provided ample time to answer. (Docs. 23–27). 7 They failed to do so. There is no evidence of excusable neglect for Defendants’ failure to 8 defend this case. 9 6. Policy Favoring Decisions on the Merits 10 Finally, the Court considers the public policy that cases should be tried on the merits 11 whenever possible. Eitel, 782 F.2d at 1472 . Rule 55(b), however, indicates that this policy 12 is not absolute. PepsiCo, Inc, 238 F. Supp. 2d. at 1177. Defendants’ failure to defend this 13 matter and abide by Court Orders makes a decision on the merits impossible. See e.g., Dr. 14 JKL Ltd., 749 F. Supp. 2d at 1051 (finding defendants’ “failure to comply with the judicial 15 process makes a decision on the merits likely impossible”). The Court is mindful of the 16 preference for resolving cases on their merits, but such a resolution is not available here. 17 Therefore, the Court finds this factor weighs in favor of granting default judgment. 18 Overall, the Court finds the Eitel factors support entry of default judgment in favor 19 of Plaintiff. 20 IV. Damages 21 Because the entry of default judgment is proper, the Court must now determine 22 Plaintiff’s damages. In contrast to the other allegations in a complaint, allegations 23 pertaining to damages are not automatically taken as true. TeleVideo Sys., Inc., 826 F.2d 24 at 917–18. “The plaintiff is required to provide evidence of its damages, and the damages 25 sought must not be different in kind or amount from those set forth in the complaint.” 26 Amini Innovation Corp. v. KTY Int’l Mktg., 768 F. Supp. 2d 1049, 1054 (C.D. Cal. 2011); 27 Fed. R. Civ. P. 54(c). “The Court may enter a default judgment without a 28 damages hearing when . . . ‘the amount claimed is a liquidated sum or capable of 1 mathematical calculation.’” Capitol Specialty Ins. Corp. v. Chaldean LLC, 2022 WL 2 2953062, at *6 (D. Ariz. July 26, 2022) (quoting HTS, Inc. v. Boley, 954 F. Supp. 2d 927 , 3 947 (D. Ariz. 2013)); Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). 4 Here, the First Amended Complaint sought payment of minimum wage and unpaid 5 wages, an additional amount for liquidated damages, interest, as well as an award of 6 attorney fees and costs. (Doc. 18 at 10–14). Plaintiff’s Motion for Default Judgment seeks 7 the same damages as initially demanded in the First Amended Complaint. (Compare 8 Doc. 18 at 10–14 with Doc. 32 at 8–11). Additionally, the requested damages are supported 9 by the Declaration of Plaintiff Sergio Cruz. (Doc. 31-1). See Doe v. United States, 2018 10 WL 2431774 , at *8 (D. Ariz. May 30, 2018) (“In determining damages, a court can rely on 11 declarations submitted by the plaintiff[.]”) (citing Philip Morris USA, Inc. v. Castworld 12 Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal 2003)). 13 When an employer is found liable under the FLSA for failure to pay minimum and 14 overtime wages, the employee is entitled to “unpaid minimum wages, [] unpaid overtime 15 compensation . . . and in an additional equal amount as liquidated damages.” [16] 29 U.S.C. § 216 (b). Double damages are the norm, and single damages are the exception. 17 See Alvarez v. IBP, Inc., 339 F.3d 894, 910 (9th Cir. 2003). Courts shall also allow “a 18 reasonable attorney’s fee to be paid by the defendant, and costs of the action.” 29 U.S.C. 19 § 216(b). Similarly, when an employer is found liable under the AMWA for failure to pay 20 minimum wages, the employee is entitled to “the balance of the wages . . . including 21 interest thereon, and an additional amount equal to twice the underpaid wages . . . . A 22 prevailing plaintiff shall be entitled to reasonable attorney’s fees and costs of suit.” 23 A.R.S. § 23-364(G). When an employer is found liable under the AWA for failure to pay 24 wages, “the employee may recover . . . an amount that is treble the amount of the unpaid 25 wages.” Id. § 23-355(A). 26 Plaintiff states that he was not paid wages for 32 hours of work performed for 27 Defendants. (Doc. 31-1 at ¶¶ 8–9). He calculates his unpaid federal minimum wages to 28 be $232.00 ($7.25 multiplied by 32 hrs.) and his total liquidated damages under the FLSA 1 to be $464.00. Plaintiff calculates his unpaid Arizona minimum wages to be $459.20 2 ($14.35 multiplied by 32 hrs.). By adding his Arizona minimum wages to an amount equal 3 to twice the underpaid wages, his total liquidated damages under AMWA are $1,377.60. 4 As to his AWA claim, Plaintiff asserts that his wage rate was $24.00 (Id. at ¶ 7), his unpaid 5 wages total to $764.00 ($24.00 multiplied by 32 hrs.), and therefore his trebled damages 6 are $2,304.00. Cognizant of potential double recovery, Plaintiff acknowledges that his 7 minimum wage damages under the FLSA and the AMWA are engulfed by his $2,304.00 8 in AWA damages. 9 In all, the Court agrees with Plaintiff’s damages calculation and finds that the 10 damages are definite and adequately supported by Plaintiff’s Declaration. The Court will 11 enter default judgement in the amount of $2,304.00 against N.V. & Sons Builders, Inc., 12 and, of that $2,304.00, Defendants N.V. § Sons Builders, Inc., Nick Vulaj, Ciara Vulaj, 13 Nikolla Vulaj, and Fila Vulaj are jointly and severally liable for $1,377.60 (Plaintiff’s 14 AMWA damages). The Court will also award post-judgment interest at the applicable 15 federal rate per 28 U.S.C. § 1961 (a) (“Interest shall be allowed on any money judgment in 16 a civil case recovered in a district court”) and allow Plaintiff to file a motion for attorney 17 fees. 18 Accordingly, 19 IT IS HEREBY ORDERED that Plaintiff Sergio Cruz’s Motion for Entry of 20 Default Judgment (Doc. 31) is GRANTED. The Clerk of Court is kindly directed to enter 21 judgment under Federal Rule of Civil Procedure 54(b) as follows: judgment in favor of 22 Plaintiff Sergio Cruz in the amount of $926.40 against Defendant N.V. & Sons Builders, 23 Inc., and judgment in favor of Plaintiff in the amount of $1,377.60 against all Defendants 24 N.V. § Sons Builders, Inc., Nick Vulaj, Ciara Vulaj, Nikolla Vulaj, and Fila Vulaj, jointly 25 and severally. 26 IT IS FURTHER ORDERED that Plaintiff is awarded post-judgment interest at 27 the applicable federal rate pursuant to 28 U.S.C. 1961(a). 28 IT IS FINALLY ORDERED that Plaintiff may file a motion for costs and 1 || attorneys’ fees within fourteen (14) days of the entry of this Order pursuant to Local Rule of Civil Procedure 54.2. 3 Dated this 22nd day of September, 2025. 4 ( ZL ee S norable' Diang/4. Hunfetewa 6 United States District Fudge [28] -10-