Jimenez v. Terrific Tree Trimmer LLC

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] Mario J imenez, ) No. CV-22-01787-PHX-SPL ) [9] ) 10 Plaintiff, ) ORDER vs. ) ) [11] ) Terrific Tree Trimmer, LLC, et al., ) [12] ) 13 Defendants. ) ) 14 ) 15 Before the Court is Plaintiff Mario Jimenez’s (“Plaintiff”) Motion for Default 16 Judgment (Doc. 12) against Defendants Terrific Tree Trimmer, LLC, (“Terrific Tree”), 17 John Doe Corporation doing business as Triple Crown Landscaping, LLC, (“Triple 18 Crown”), and Eric Behring and Jane Doe Behring (collectively “Defendants”). No response 19 to the Motion has been filed. Having reviewed Plaintiff’s Motion, the supporting 20 documents, and the record in this matter, the Court will grant the Motion. 21 I. BACKGROUND 22 On October 18, 2022, Plaintiff filed a Complaint against Defendants Terrific Tree, 23 Triple Crown, Eric Behring, and Jane Doe Behring. (Doc. 1). The Complaint has three 24 counts: (1) Failure to pay minimum wage, in violation of the Fair Labor Standards Act 25 (“FLSA”), 29 U.S.C. § 206 (a); (2) Failure to pay minimum wage, in violation of the 26 Arizona Minimum Wage Act (“AMWA”), A.R.S. § 23-363; and (3) Failure to pay wages 27 due and owing, in violation of the Arizona Wage Act (“AWA”), A.R.S. § 23-350, et seq. 28 (See Doc. 1 at 10–12). 1 Defendants were served on December 31, 2022, and the deadline to answer or 2 otherwise respond to the Complaint was January 21, 2023. (Docs. 8, 9-1). Defendants 3 failed to answer or respond to the Complaint and have not otherwise appeared in this action. 4 On February 14, 2023, Plaintiff filed an Application for Entry of Default against 5 Defendants pursuant to Federal Rule of Civil Procedure (“FRCP”) 55(a). (Doc. 9). On 6 February 15, 2023, the Clerk of Court entered default as to Defendants. (Doc. 10). On April 7 13, 2023, Plaintiff filed a Motion for Default Judgment pursuant to FRCP 8 55(b)(2) requesting an entry of default judgment and relief—the Motion presently before 9 this Court. (Doc. 12). 10 Plaintiff seeks $720 in liquidated damages and leave to file a motion for attorneys’ 11 fees and costs following the award of a default judgement. (Id. at 10). Plaintiff further seeks 12 all amounts augmented by post-judgement interest pursuant to 28 U.S.C. § 1961 , and costs 13 and attorneys’ fees incurred by Plaintiff in the collection of the amounts awarded. (Id.). 14 Defendants have not responded to Plaintiff’s Motion. 15 II. LEGAL STANDARD 16 FRCP 55(a) provides that the clerk of the court must enter a party’s default “[w]hen 17 a party against whom a judgment for affirmative relief is sought has failed to plead or 18 otherwise defend, and that failure is shown by affidavit or otherwise.” Fed. R. Civ. P. 55(a). 19 Once a party has been defaulted, a court may enter a default judgment. Fed. R. Civ. P. 20 55(b). In determining whether to grant a default judgment, “[t]he general rule of law is that 21 upon default the factual allegations of the complaint, except those relating to the amount 22 of damages, will be taken as true.” Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915 , 917– 23 918 (9th Cir. 1987) (citation and quotations omitted). Although a plaintiff must prove 24 damages when seeking a default judgment, this evidentiary burden is “relatively lenient.” 25 Elektra Ent. Grp., Inc. v. Bryant, No. CV 03-6381GAF(JTLX), 2004 WL 783123 , at 26 *2 (C.D. Cal. Feb. 13, 2004). In determining damages, the Court can properly rely on 27 declarations submitted by the Plaintiff. Fed. R. Civ. P. 55(b)(2). 28 /// 1 III. DISCUSSION 2 A. Subject Matter Jurisdiction, Personal Jurisdiction, and Service of Process 3 When default judgment is sought against a non-appearing party, a court has “an 4 affirmative duty to look into its jurisdiction over both the subject matter and the parties.” 5 In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (“To avoid entering a default judgment that 6 can later be successfully attacked as void, a court should determine whether it has the 7 power, i.e., the jurisdiction, to enter the judgment in the first place.”). A court has a similar 8 duty with respect to service of process. See Fishman v. AIG Ins. Co., No. CV 07-05899 PHX-RCB, 2007 WL 4248867 , at *3 (D. Ariz. Nov. 30, 2007) (“Because defendant has 10 not been properly served, the court lacks jurisdiction to consider plaintiff’s motions for 11 default judgment.”). These considerations are “critical because ‘[w]ithout a proper basis 12 for jurisdiction, or in the absence of proper service of process, the district court has no 13 power to render any judgment against the defendant’s person or property unless the 14 defendant has consented to jurisdiction or waived the lack of process.’” Id. at *1 (quoting 15 S.E.C. v. Ross, 504 F.3d 1130 , 1138–39 (9th Cir. 2007)). 16 First, as to subject-matter jurisdiction, this Court may exercise subject-matter 17 jurisdiction because Plaintiff has stated a claim under the FLSA, which states that “[a]n 18 action to recover the liability . . . may be maintained against any employer . . . in any 19 Federal or State court of competent jurisdiction.” 29 U.S.C. § 216 (b). As to Plaintiff’s 20 remaining state-law claims—failure to pay minimum wage, in violation of the AMWA and 21 failure to pay wages due and owing, in violation of the AWA—this Court exercises its 22 supplemental jurisdiction because the claims arise out of the same case or controversy, i.e., 23 Defendants’ failure to pay wages. 28 U.S.C. § 1367 (a) (“[T]he district courts shall have 24 supplemental jurisdiction over all other claims that are so related to claims in the action 25 within such original jurisdiction that they form part of the same case or controversy under 26 Article III. . . .”); see also Kuba v. 1-A Agric. Ass’n, 387 F.3d 850 , 855–56 (9th Cir. 2004) 27 (citation and quotations omitted) (“Nonfederal claims are part of the same ‘case’ as federal 28 claims when they derive from a common nucleus of operative fact and are such that a 1 plaintiff would ordinarily be expected to try them in one judicial proceeding.”). 2 Next, as to personal jurisdiction, this Court has personal jurisdiction over 3 Defendants because Defendants are citizens of Arizona and because Defendants were 4 properly served. See Pennoyer v. Neff, 95 U.S. 714, 722 (1877) (noting that “every State 5 possesses exclusive jurisdiction and sovereignty over persons and property within its 6 territory”); Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986) (noting that a federal court 7 lacks personal jurisdiction over defendant unless defendant properly served). According to 8 the Complaint, Defendant Terrific Tree “was a limited liability company duly licensed to 9 transact business in the State of Arizona” and “[a]t all material times, . . . does business, 10 has offices, and/or maintains agents for the transaction of its customary business in 11 Maricopa County, Arizona.” (Doc. 1 at 3). Defendant Triple Crown “at all material times 12 was a company duly licensed to transact business in the State of Arizona” [and] “has 13 offices, and/or maintains agents for the transaction of its customary business in Maricopa 14 County, Arizona.” (Id. at 4). Defendants Eric Behring and Jane Doe Behring are owners of 15 Triple Crown and were at all relevant times Plaintiff’s employers. (Id. at 5). With respect 16 to service, Defendants were properly served the required documents on December 17 31, 2022, via alternative means. (Doc. 8 at 2). This Court finds that service in this case was 18 proper under the relevant federal and state rules, which authorize service of limited liability 19 companies and individuals within the district by alternative means. See Fed. R. Civ. P. 4(e), 20 4(h)(1)(A); see also Ariz. R. Civ. P. 4.1(k). 21 With preliminary considerations of jurisdiction and service of process out of the 22 way, this Court turns to whether default judgment is appropriate. 23 B. Default Judgment Analysis: Eitel Factors 24 A court has the discretion to enter a default judgment after a defendant’s default. 25 Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). In exercising this discretion, a court 26 must consider the seven “Eitel factors”: (1) the possibility of prejudice to the plaintiff; 27 (2) the claim’s merits; (3) the complaint’s sufficiency; (4) the sum of money at stake; 28 (5) the possibility of a dispute concerning material facts; (6) whether the default was due 1 to excusable neglect; and (7) the policy favoring decisions on the merits. Id. at 1471–72. 2 In applying these factors, the Complaint’s factual allegations, except those pertaining to 3 the amount of damages, will be taken as true. Geddes v. United Fin. Grp., 559 F.2d 557 , 4 560 (9th Cir. 1977). 5 i. The First, Fifth, Sixth, and Seventh Eitel Factors 6 The first, fifth, sixth, and seventh factors weigh in favor of or are neutral about 7 default judgment in cases in which the defendants have not participated in the litigation at 8 all. Zekelman Indus. Inc. v. Marker, No. CV-19-02109-PHX-DWL, 2020 WL 1495210 , at 9 *3 (D. Ariz. Mar. 27, 2020) (D. Ariz. Mar. 26, 2020) (“In cases like this one, in which 10 Defendants have not participated in the litigation at all, the first, fifth, sixth, and seventh 11 factors are easily addressed.”) Regarding the first factor, which considers the possibility of 12 prejudice to the plaintiff, Plaintiff here will be left without recourse and would therefore 13 suffer prejudice in the absence of default judgment. Id. As to the fifth factor, which 14 considers the possibility of a dispute regarding material facts, Defendants’ failure to 15 participate means there is no dispute of material fact. Id. at *4 . The sixth factor considers 16 whether the default was due to excusable neglect. Id. Here, Defendants’ failure to 17 participate after being personally served does not indicate that default was due to excusable 18 neglect. Id. Lastly, the seventh factor—which considers the policy favoring decisions on 19 the merits—would typically weigh against an entry of default judgment. Id. However, this 20 consideration is not dispositive, as default judgments exist to deal with wholly 21 unresponsive parties. Id. Here, a decision on the merits is impossible, given that Defendants 22 failed to appear. 23 In sum, the first, fifth, sixth, and seventh factors weigh in favor of default judgment. 24 ii. The Second and Third Eitel Factors 25 The second and third Eitel factors consider the claim’s merits and the complaint’s 26 sufficiency. Eitel, 782 F.2d at 1471 . Courts frequently consider these to be the two most 27 important factors. Zekelman, 2020 WL 1495210 , at *5 (citing Viet. Reform Party v. Viet 28 Tan - Viet. Reform Party, 416 F. Supp. 3d 948 , 962 (N.D. Cal. 2019)). These factors are 1 generally thought to require a plaintiff to state a claim on which he may recover. PepsiCo, 2 Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1175 (C.D. Cal. 2002). 3 Taking Plaintiff’s factual allegations as true, this Court finds that the Complaint 4 sufficiently states a claim for relief against Defendants for a violation of the FLSA. Section 5 206 of the FLSA requires employers to pay a minimum wage to employees “who in any 6 workweek [are] engaged in commerce or in the production of goods for commerce, or [are] 7 employed in an enterprise engaged in commerce or in the production of goods for 8 commerce.” 29 U.S.C. § 206 (a). “To establish a minimum-wage . . . violation of the FLSA, 9 Plaintiff must establish three elements: (1) [he] was an employee of Defendants; (2) [he] 10 was covered under the FLSA; and (3) Defendants failed to pay [his] minimum wage.” 11 Smith v. Nov. Bar N Grill LLC, 441 F. Supp. 3d 830 , 834 (D. Ariz. 2020) (citing 29 U.S.C. 12 §§ 206(a), 207(a)). As to the first element, Plaintiff alleges in the Complaint that he was an 13 employee of Defendants as defined by the FLSA. (Doc. 1 at 6, 8). Plaintiff also meets the 14 second element because he alleges the FLSA applies to Defendants and that he was a non15 exempt employee. (Id. at 6, 9). Finally, as to the third element, Plaintiff alleges Defendants 16 failed to pay him any wages for his shift, let alone the federally mandated minimum wage. 17 (Id. at 9). Plaintiff submitted well-pled factual allegations—that Defendants failed to pay 18 Plaintiff the mandated minimum wage for his shift—that, taken as true upon default, show 19 Defendants violated the FLSA. (Id. at 7–11). 20 This Court also finds that Plaintiff’s well-pled factual allegations—taken as true 21 upon default—show Defendants violated the AMWA. To state a claim under the AMWA, 22 the defendant must be an employer under the statute, the plaintiff must be a qualified 23 employee of the defendant, and “the plaintiff must allege that [he] was not paid the 24 applicable minimum wage for hours worked.” Coe v. Hirsch, No. CV-21-00478-PHX25 SMM (MTM), 2021 WL 5634798 , at *2 (D. Ariz. Dec. 1, 2021) (citing A.R.S. § 23-363). 26 Under this statute, an employer includes any corporation, limited liability company, or 27 individuals “acting directly or indirectly in the interest of an employer in relation to an 28 employee.” A.R.S. § 23-362(B). In order to qualify as an employer, the corporation or 1 limited liability company must generate no less than $500,000 in gross annual revenue. See 2 A.R.S. § 23-362(C) (defining “small business” as any corporation or limited liability 3 company with less than $500,000 in gross annual revenue and noting that such small 4 businesses are exempt from minimum wage requirement). This statute holds that an 5 employee “means any person who is or was employed by an employer but does not include 6 any person who is employed by a parent or a sibling, or who is employed performing 7 babysitting services in the employer’s home on a casual basis.” A.R.S. § 23-362(A). 8 According to Plaintiff’s factual allegations, Defendants qualify as employers because they 9 are limited liability companies or individuals “acting directly or indirectly in the interest of 10 an employer in relation to an employee” and their enterprise had annual gross sales of at 11 least $500,000. (Doc. 1 at 7). Plaintiff was an employee for purposes of the AMWA 12 because he was an employee of Defendants and did not fall into any of the statute’s 13 exemptions. (Id.). As stated above, Plaintiff alleges he was not paid any wages, let alone 14 the mandated minimum wage, for his shift. (Id. at 9). Plaintiff’s well-pled factual 15 allegations—which claim Defendants failed to pay Plaintiff the state-mandated minimum 16 wage for his shift—taken as true, show Defendants violated the AMWA. (Id. at 7–10, 12– 17 13). 18 Finally, this Court finds that Plaintiff adequately pled facts to establish AWA claims 19 against Defendants Terrific Tree and Triple Crown, but that Plaintiff cannot establish 20 claims against the other Defendants because they are not “employers” for purposes of 21 AWA liability. The AWA defines employers as “any individual, partnership, association, 22 joint stock company, trust or corporation, the administrator or executor of the estate of a 23 deceased individual or the receiver, trustee or successor of any of such persons employing 24 any person.” A.R.S. § 23-350. This definition does not provide individual liability against 25 owners or agents of a corporation or other business entity. See Rosen v. Fasttrak Foods 26 LLC, No. CV-19-05292-PHX-DWL, 2021 WL 2981590 , at *5 (D. Ariz. July 15, 2021); 27 see also Channel v. Home Mortg., Inc., No. CV 03-00100-PHX-ROS, 2005 WL 8160525 , 28 at *14 (D. Ariz. Sept. 21, 2005). Indeed, Plaintiff’s Motion for Default Judgment only seeks 1 judgment against Defendants Terrific Tree and Triple Crown on the AWA claim. (Doc. 2 12 at 9). To establish a violation of the AWA, a plaintiff “must prove that [d]efendants did 3 not timely pay all wages due as required under the AWA.” Grabda v. IMS Acquisition LLC, 4 No. CV-20-00117-TUC-MSA, 2020 WL 5544366 , at *2 (D. Ariz. Sept. 16, 2020) (citing 5 A.R.S. § 23-351(A), (C)). Plaintiff alleges that for his only pay period of work, Defendants 6 paid him no wages whatsoever. (Doc. 1 at 9, 13). Thus, with respect to Defendants Terrific 7 Tree and Triple Crown, the Plaintiff’s well-pled factual allegations—that Defendants failed 8 to pay Plaintiff all wages due—show Defendants violated the AWA. 9 In sum, this Court finds that Plaintiff’s Complaint alleges sufficient facts that, taken 10 as true, show that all Defendants violated the FLSA and AMWA, and that Defendants 11 Terrific Tree and Triple Crown violated the AWA. Therefore, the second and third Eitel 12 factors support an entry of default judgment on all three Counts against their respective, 13 appropriate defendants. 14 iii. The Fourth Eitel Factor 15 This Court finds the amount of money at stake in this action does not weigh against 16 default judgment. An entry of default judgment is discouraged when the sum of money at 17 stake is substantial or unreasonable. See Bd. of Trs. v. Core Concrete Constr., Inc., No. C 18 11-02532 LB, 2012 WL 380304 , at *4 (N.D. Cal. Jan. 17, 2012), report and 19 recommendation adopted, No. C 11-02532 JSW, 2012 WL 381198 (N.D. Cal. Feb. 20 6, 2012); see also Eitel, 782 F.2d at 1472 (sought relief of $3 million discouraged a default 21 judgment). However, default judgment may be appropriate when the amount at stake is 22 proportional to the defendants’ misconduct, supported by evidence, or required by statute. 23 See Bd. of Trs., 2012 WL 380304 , at *4. 24 Here, Plaintiff seeks a total of $720 in relief, exclusive of attorneys’ fees. (Doc. 25 12 at 10). This Court does not find this amount to be so “substantial or unreasonable” as to 26 discourage default judgment. Plaintiff was employed by Defendants for $20 per hour. 27 (Doc. 1 at 8). Plaintiff asserts that Defendants failed to pay him for 12 hours of work. (Id. 28 at 8). Thus, Plaintiff’s requested amount accurately represents the amount of wages— 1 trebled, as prescribed by the AWA—that Defendants allegedly failed to pay Plaintiff, and 2 this Court has no reason to believe that it is excessive. A.R.S. § 23-355(a). Moreover, 3 Plaintiff supports the requested amount with evidence—that is, with his own sworn 4 declaration. (See Doc. 12-1). All told, given the supporting documentation and the overall 5 reasonableness of Plaintiff’s requested relief, the Court finds that the fourth factor weighs 6 in favor of default judgment. 7 C. Relief Sought 8 Unlike the Complaint’s other factual allegations, those pertaining to damages are 9 not taken as true upon default. Geddes, 559 F.2d at 560. Rather, a plaintiff “is required to 10 prove all damages sought in the complaint.” Tolano v. El Rio Bakery, No. CV-18-0012511 TUC-RM, 2019 WL 6464748 , at *6 (D. Ariz. Dec. 2, 2019) (internal quotations omitted) 12 (quoting Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal. 13 2003)). A plaintiff must “provide evidence of its damages, and the damages sought must 14 not be different in kind or amount from those set forth in the complaint.” Fisher Printing 15 Inc. v. CRG LTD II LLC, No. CV-16-03692-PHX-DJH, 2018 WL 603299 , at *3 (D. Ariz. 16 Jan. 22, 2018) (quoting Amini Innovation Corp. v. KTY Int’l Mktg., 768 F. Supp. 2d 1049 , 17 1054 (C.D. Cal. 2011)). Courts may rely on declarations submitted by the plaintiff in 18 determining appropriate damages. Tolano, 2019 WL 6464748 , at *6 (citing Philip Morris 19 USA, Inc., 219 F.R.D. at 498 ). 20 Here, Plaintiff submitted a sworn declaration asserting that for his only pay period 21 of 12 hours, Defendants failed to compensate Plaintiff altogether, let alone compensate him 22 at his agreed-upon hourly rate of $20.00 per hour. (Doc 12-1 at 2–3). Based on these 23 figures, Plaintiff asserts he is owed $240 total in unpaid minimum wages and other wages 24 under the FLSA and Arizona laws. (Id.). Additionally, Plaintiff notes that he is entitled to 25 double damages under the FLSA and treble damages under the AMWA and AWA. (Id.). 26 Indeed, the FLSA provides for double damages when an employer violates 29 U.S.C. 27 § 206. See 29 U.S.C. § 216 (b). Likewise, the AMWA and AWA provide for treble damages 28 when an employer fails to pay an employee the required minimum wage or other wages 1 due. A.R.S. §§ 23-364(G), -355(a). Using the highest treble-damages penalty, Plaintiff 2 seeks statutory damages of $720.1 (Doc. 12 at 7–9). Plaintiff’s requested relief accurately 3 calculates the damages he is statutorily entitled to and is supported by Plaintiff’s 4 declaration. Therefore, this Court finds it appropriate to award Plaintiff $720 in liquidated 5 damages. 6 Additionally, Plaintiff intends to file a motion to recover his attorneys’ fees and 7 costs incurred in this action upon entry of a default judgment. (Id. at 10). The FLSA 8 provides that a court shall allow reasonable attorneys’ fees and costs to be paid by the 9 defendant in unpaid minimum wages judgments awarded to a plaintiff. 29 U.S.C. § 216 (b). 10 This award is mandatory, but the amount of reasonable attorneys’ fees to be granted is 11 within the court’s discretion. Alzate v. Creative Man Painting LLC, No. CV-13-0212912 PHX-BSB, 2015 WL 789727 , at *3 (D. Ariz. Feb. 25, 2015). To the extent Plaintiff 13 requests attorneys’ fees in the motion for default judgment, the Court directs Plaintiff to 14 file a motion for attorneys’ fees and costs in accordance with FRCP 54(d), LRCiv 54.1, 15 and LRCiv 54.2. 16 IV. CONCLUSION 17 Having reviewed Plaintiff’s Motion and supporting documents in light of the Eitel 18 factors, this Court concludes that the entry of default judgment is appropriate with respect 19 to Counts One and Two against all Defendants and Count Three against Defendants 20 Terrific Tree Trimmer, LLC, and Triple Crown Landscaping, LLC. 21 Accordingly, 22 /// 23 /// 24 /// 25 /// [26] 27 1 Plaintiff’s Motion identifies the total unpaid wages award as $7,500. (See Doc. 12 at 9). This appears to be an error by Plaintiff, however, as this Court finds that $720 is the 28 correct trebled amount. 1 IT IS ORDERED: 2| 1. That Plaintiff's Motion for Default Judgment (Doc. 12) is granted. Default judgment, 3 pursuant to FRCP 55(b)(2), is entered in favor of Plaintiff on Counts One (FLSA 4 violation claim) and Two (AMWA violation claim) against all Defendants. Default 5 judgment is entered in favor of Plaintiff on Count Three (AWA violation claim) 6 against Defendants Terrific Tree Trimmer, LLC, and John Doe Corporation, doing 7 business as Triple Crown Landscaping, LLC. 8 | 2. That Count Three is dismissed to the extent it was brought against Defendants Eric 9 Behring and Jane Doe Behring. 10| 3. That Defendants shall pay, jointly and severally, $460.80 in liquidated damages 11 pursuant to A.R.S. § 23-364. 12| 4. That Defendants Terrific Tree Trimmer, LLC, and John Doe Corporation, doing 13 business as Triple Crown Landscaping, LLC, shall pay, jointly and severally, $259.20 14 in liquidated damages pursuant to A.R.S. § 23-355. 5. That Plaintiff shall have until no later than July 5, 2023, to file an application for 16 attorneys’ fees and costs. Plaintiff is advised that such application will be denied unless 17 it fully complies with FRCP 54(d), LRCiv. 54.1, and LRCiv. 54.2. 18 | 6. That the Clerk of Court shall enter judgment accordingly and terminate this action. 19 Dated this 21st day of June, 2023. [20] 7 United States District kudge