Rodriguez v. Pride Dealer Services Incorporated

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Mayra Rodriguez, No. CV-23-01955-PHX-ROS 10 Plaintiff, ORDER 11 v. 12 Pride Dealer Services Incorporated, 13 Defendant. [14] 15 Plaintiff has filed a Motion for Default Judgment against Defendant. (Doc. 15). 16 Defendant has not filed a response. For the following reasons, the Court will grant the 17 Motion and direct entry of default judgment against Defendant Pride Dealer Services 18 Incorporated in the amount of $47,639.00. 19 BACKGROUND 20 Plaintiff filed this action for the recovery of unpaid minimum and overtime wages 21 under the Fair Labor Standards Act (“FLSA”), the Arizona Minimum Wage Act 22 (“AMWA”), and the Arizona Wage Act (“AWA”) on September 18, 2023. (Doc. 1, 23 “Compl.”). Defendant is a Florida corporation that operates a car reconditioning business 24 in Arizona. Id. at ¶ 9. Plaintiff asserts Defendant routinely failed to pay her owed overtime 25 wages and required her to work hours off the clock for which she was not compensated. 26 Id. at ¶¶ 17-22. After five unsuccessful attempts to personally serve Defendant (Doc. 7-1), 27 Plaintiff served Defendant via certified mail on November 17, 2023 (Docs. 9, 10-1). 28 Defendant did not file an answer or otherwise participate in the action. The Clerk of Court 1 entered default against Defendant pursuant to Fed. R. Civ. P. 55(a) on December 14, 2023. 2 (Doc. 11). On January 26, 2024, Plaintiff filed a motion for default judgment pursuant to 3 Fed. R. Civ. P. 55(b)(2). (Doc. 15, “Mot.”). 4 JURISDICTION 5 When a party seeks default judgment “against a party who has failed to plead or 6 otherwise defend, a district court has an affirmative duty to look into its jurisdiction over 7 both the subject matter and the parties.” In re Tuli, 172 F.3d 707, 712 (9th. Cir. 1999). 8 Because Plaintiff’s Complaint invokes a federal cause of action under the FLSA, the Court 9 has subject matter jurisdiction over Counts One and Two. See 28 U.S.C. § 1331 . The 10 Court has supplemental jurisdiction over the Arizona state law claims, Counts Three and 11 Four, because they are “part of the same case or controversy” as Plaintiff’s federal law 12 claim. 28 U.S.C. § 1367 (a). The Court also has personal jurisdiction over Defendant. 13 Plaintiff’s claims arise from Defendant’s business activities in Arizona and its alleged 14 failure to comply with federal and state employment laws during those activities. 15 Compl. at ¶¶ 7–68; Picot v. Weston, 780 F.3d 1206, 1211 (9th. Cir. 2015). 16 DEFAULT JUDGMENT 17 Once default is entered, the Court may enter default judgment under Rule 55(b). 18 Deciding to grant default judgment is discretionary and the Court must consider: (1) the 19 possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) 20 the sufficiency of the complaint; (4) the amount in controversy; (5) the possibility of factual 21 dispute; (6) whether the default was due to excusable neglect; and (7) the strong preference 22 to decide cases on the merits. Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986). 23 I. Possible Prejudice to Plaintiffs 24 Continuation of this action despite Defendant’s failure to answer or otherwise 25 participate would prejudice Plaintiff by precluding a judicial resolution of his claims. This 26 factor weighs in favor of granting default judgment. See Constr. Laborers Tr. Funds for 27 S. California Admin. Co. v. Anzalone Masonry, Inc., 316 F. Supp. 3d 1192, 1198 (C.D. 28 Cal. 2018 ). 1 II. Merits of the Claim and Sufficiency of the Complaint 2 The second and third Eitel factors, taken together, require courts to consider whether 3 a plaintiff has stated a claim on which they may recover. See PepsiCo, Inc. v. Cal. Sec. 4 Cans, 238 F. Supp. 2d 1172, 1175 (C.D. Cal. 2002); Danning v. Lavine, 572 F.2d 1386 , 5 1388–89 (9th Cir. 1978). In considering these factors, the complaint’s factual allegations 6 are taken as true, but the plaintiff must establish all damages sought. Geddes v. United 7 Fin. Group, 559 F.2d 557 , 560 (9th Cir. 1977). 8 To bring a minimum wage claim under the FLSA, a plaintiff must allege they were 9 not paid applicable minimum wages. Landers v. Quality Commc’ns, Inc., 771 F.3d 638 , 10 646 (9th Cir. 2014); see also 29 U.S.C. § 206 . And to bring an FLSA claim for unpaid 11 overtime wages, a plaintiff must allege at least one workweek when they worked more than 12 forty hours and was not paid overtime wages for those hours. Landers v. Quality 13 Commc’ns, Inc., 771 F.3d 638, 646 (9th Cir. 2014); see also 29 U.S.C. § 207 . An employee 14 can be covered under the FLSA through (i) enterprise coverage if the employer has annual 15 gross sales or business done greater than $500,000; or (ii) individual coverage if the 16 employee is “engaged in commerce or in the production of goods for commerce.” 29 17 U.S.C. §§ 203 (s)(1)(A), 206(b); see also Zorich v. Long Beach Fire Dep’t & Ambulance 18 Serv., Inc., 118 F.3d 682, 686 (9th Cir. 1997). An individual can be subject to liability 19 under the FLSA when she “exercises control over the nature and structure of the 20 employment relationship, or economic control over the relationship.” Boucher v. Shaw, [21] 572 F.3d 1087, 1091 (9th Cir. 2009). To bring a claim under the AMWA, a plaintiff must 22 allege they were not paid the applicable minimum wage for hours worked. A.R.S. § 2323 363(A). To bring a claim under the AWA, a plaintiff must allege the Defendant failed to 24 pay wages due to the plaintiff. A.R.S. § 23-355. 25 Plaintiff has alleged she typically worked “seven days per week from 5 a.m. until 9 26 p.m.” from “June 14, 2023 until August 28, 2023,” was not “paid for all the overtime hours 27 she worked” and was not paid “at the proper overtime rate,” and was not paid the applicable 28 minimum wage for certain “regular hours she worked.” Compl. at ¶¶ 14, 19, 21-22, 31. 1 Plaintiff also alleges Defendant’s enterprise “at all relevant times has been engaged in 2 interstate commerce” and has “gross annual volume of sales made or business done [] 3 greater than $500,000.” Id. at ¶ 9. Plaintiff also alleges he was an employee of Defendant 4 and Defendant was his employer as defined by A.R.S. § 23-362. Id. at ¶¶ 10-11. 5 Because Plaintiff’s well-pled factual allegations must be taken as true, Plaintiff has 6 stated a plausible claim for relief against Defendant under the FLSA, AMWA, and the 7 AWA. These factors support entering default judgment. 8 III. Amount in Controversy 9 This factor requires the court to consider the amount of money at stake in relation 10 to the seriousness of Defendant’s conduct. PepsiCo, 238 F. Supp. 2d at 1176 . Plaintiff 11 seeks $49,591.64 in trebled unpaid wages and liquidated unpaid overtime wages. 12 Mot. at 11. This requested amount is reasonable and proportional to Defendant’s failure 13 to pay applicable minimum and overtime wages under federal and state law. This factor 14 supports entering default judgment. 15 IV. Dispute Over Material Facts 16 No genuine dispute of material facts prevents granting Plaintiff’s motion given the 17 sufficiency of Plaintiff’s complaint and Defendant’s default. See PepsiCo, 238 F. Supp. 2d 18 at 1177 . This factor supports entering default judgment. 19 V. Excusable Neglect 20 Plaintiff executed proper service against Defendant in this action, (Docs. 9, 10-1), 21 and there is nothing indicating Defendant’s failure to answer is due to excusable neglect. 22 This factor supports entering default judgment. 23 VI. Policy Favoring Decisions on the Merits 24 Although there is a strong preference for decisions on the merits whenever 25 reasonably possible, Eitel, 782 F.2d at 1472 , the existence of Rule 55(b) indicates this 26 preference is not dispositive, PepsiCo, 238 F. Supp. 2d at 1177. Since Defendant has failed 27 to appear and respond, a decision on the merits is not possible. This factor supports 28 entering default judgment. 1 VII. Conclusion 2 All the Eitel factors support entering default judgment in this case. This Court will 3 grant Plaintiff’s Motion and enter default judgment accordingly. 4 DAMAGES 5 Under the FLSA, an employer is liable for the employee’s “unpaid minimum 6 wages,” their “unpaid overtime compensation,” and “in an additional equal amount as 7 liquidated damages.” 29 U.S.C. § 216 (b). Under the AMWA, an employee may recover 8 “an amount that is treble the amount of the unpaid wages.” A.R.S. § 23-355. And under 9 the AWA, an employer is “required to pay the employee the balance of the wages” owed, 10 with interest, “and an additional amount equal to twice the underpaid wages.” 11 A.R.S. § 23-364. During Plaintiff’s employment with Defendant culminating in December 12 2022, the applicable federal minimum wage was $7.25 per hour, 29 U.S.C. § 206 (a)(1)(C), 13 and the applicable state minimum wage was $13.85 per hour, A.R.S. § 23-363(B); Arizona 14 Industrial Commission: Minimum Wage.1 15 Plaintiff submitted an affidavit stating she typically worked “112 hours per week” 16 over her approximately eleven workweeks working for Defendant at an agreed rate of $25 17 per hour. (Doc. 15-1 at ¶¶ 3, 5, 9). Plaintiff states Defendant routinely failed to pay her at 18 the overtime rate for hours worked above forty hours in a workweek and routinely required 19 her to work off-the-clock hours she was not compensated for. Id. at ¶¶ 6-7; see also Compl. 20 at ¶¶ 21-22, 31. Plaintiff provides an accounting of her unpaid wages in her affidavit, using 21 her estimated 112 hours per week for most workweeks and her estimated 79 hours worked 22 during her final pay period. (Doc. 15-1 at ¶¶ 15, 20, 22, 24). But Plaintiff’s accounting in 23 both her motion and affidavit contains errors. 24 First, Plaintiff claims she worked 79 hours (including 10.267 overtime hours) during 25 her final pay period, for which she was only paid for 28 hours at $25 per hour. Id. After 26 subtracting the 28 paid hours, Plaintiff is left with 51 unpaid hours, 10.267 of which are 27 overtime hours. Plaintiff includes the 10.267 unpaid overtime hours in one table claiming [28] 1 https://www.azica.gov/labor-minimum-wage-main-page (last accessed Jan. 3, 2024). 1 her overtime rate of $37.50 for those hours, see id. at ¶ 20, then includes the full 51 unpaid 2 hours in her unpaid wages table, claiming her $25 rate for those hours, see id. at ¶ 24. This 3 accounting double counts the 10.267 overtime hours, effectively claiming an owed wage 4 for those hours of $62.50 rather than the proper $37.50 overtime rate. Plaintiff is, as she 5 suggests in the overtime table, see id. at ¶ 20, owed $385.01 for the 10.267 unpaid overtime 6 hour. But she is not owed her $25 rate for those same hours, so her calculation for unpaid 7 wages owed during her final pay period should be based on 40.733 hours worked rather 8 than the full 51 hours, yielding unpaid regular wages of $1,018.33—$256.67 less than the 9 $1,275 she claims for this period. 10 Second, Plaintiff claims unpaid minimum wage damages for her final pay period, 11 as the $700 she was paid for her 79 hours worked works out to $8.86 per hour—less than 12 Arizona’s $13.85 minimum wage. Id. at 26. While it is true that Plaintiff is entitled to 13 minimum wage damages for this discrepancy under the AMWA, these damages ($4.99 per 14 hour) are engulfed by her unpaid wage and unpaid overtime claims for these same hours. 15 Plaintiff may not “stack” these damages to recover both minimum wage and unpaid wage 16 or unpaid overtime wages damages for the same hours. See Gen. Tel. Co. of the Nw. v. 17 Equal Emp. Opportunity Comm’n, 446 U.S. 318, 333 (1980) (“[C]ourts can and should 18 preclude double recovery by an individual.”); Acosta v. Pindernation Holdings LLC, 2023 19 WL 3951222 , at *4–5 (D. Ariz. Mar. 1, 2023), report and recommendation adopted, 2023 20 WL 3951211 (D. Ariz. Mar. 23, 2023) (finding Arizona law does not authorize stacked 21 awards under the FLSA, AMWA, and AWA). The Court finds Plaintiff’s claimed 22 minimum wage damages are improper as duplicative and will not be awarded. 23 After discounting the 10.267 double-counted wage and overtime wage hours 24 described above, Plaintiff claims 550.698 hours of unpaid overtime for off-the-clock work 25 at the overtime rate of $37.50 per hour; 107.716 of unpaid overtime hours at the overtime 26 premium of $12.50; and 48.583 hours of unpaid work at the rate of $25. (Doc. 15-1). 27 Plaintiff’s unpaid overtime damages under the FLSA are $21,997.63,2 plus an equal [28] 2 550.698 * $37.50 + 107.716 * $12.50 1 || amount in liquidated damages for a total of $43,995.26. Plaintiff's unpaid wage damages 2|| under the AWA are $1,214.58,> plus statutory trebling of damages for a total of $3,643.74. 3 Since the damages sought by Plaintiff are provided for by statute and—after slight modification from the Court as outlined above—Plaintiff s affidavit is sufficiently detailed to permit the requisite statutory calculations, the Court will grant Plaintiff $47,639 in || damages. The Court will also award post-judgment interest at the applicable federal rate 7\| pursuant to 28 U.S.C. § 1961 (a). The Court defers an award of attorneys’ fees pending the 8 || filing of a motion in accordance with Local Rule of Civil Procedure 54.2. 9 Accordingly, 10 IT IS ORDERED Plaintiff's Motion for Default Judgment (Doc. 15) is 11 || GRANTED. The Clerk of Court is directed to enter judgment in favor of Plaintiff and against Defendant in the amount of $47,639.00 in damages and liquidated damages under 13 || the FLSA and AWA. This amount shall be subject to post-judgment interest at the applicable federal rate pursuant to 28 U.S.C. § 1961 (a). 15 IT IS FURTHER ORDERED Plaintiff may file a motion for reasonable attorneys’ 16 || fees and costs in accordance with Local Rule of Civil Procedure 54.2. 17 IT IS FURTHER ORDERED the Clerk of Court shall close this case. 18 Dated this 6th day of May, 2024. 19 fo . 20 C | . ES . 21 Honorable slyn ©. Silver 02 Senior United States District Judge [28] 348.583 * $25.00 -7-