United States District Court, W.D. North Carolina, Asheville Division
STELLA ANDREWS, individually and on behalf of similarly situated persons, Plaintiff,
AMERICA'S LIVING CENTERS, LLC, et al., Defendants.
MEMORANDUM OF DECISION AND ORDER
REIDINGER UNITED STATES DISTRICT JUDGE.
MATTER is before the Court on the Plaintiff's
Motion for Default Judgment [Doc. 77].
Plaintiff Stella Andrews first filed suit on June 4, 2010,
against the Defendants America's Living Centers, LLC
(“ALC”) and Kenneth Hodges (“Hodges”)
(collectively, “Defendants”),  asserting claims under the
Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201,
et seq. (“FLSA”). [Civil Case No.
1:10-cv-00114-MR-DLH, Doc. 1]. On July 29, 2010, the
Defendants moved to dismiss pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure. [Id., Doc. 15].
Before the motion was ruled on, the Plaintiff decided to
voluntarily dismiss her action pursuant to Federal Rule of
Civil Procedure 41(a)(1), and she immediately filed the
present action. [Doc. 1]. Shortly after the Plaintiff
re-filed her action, three additional employees --Betty Dean
Gosnell, Sheila Annette Barnard, and Sherry Marie Hensley
--filed notices indicating their consent to opt in and become
party plaintiffs. [Docs. 20, 23].
Defendants moved to stay this action pending the
Plaintiff's payment of costs of the prior action pursuant
to Federal Rule of Civil Procedure 41(d). [Doc. 26]. The
Court granted the Defendants' motion and ordered the
Plaintiff to pay an award of attorneys' fees and other
expenses that had been incurred by the Defendants in
defending the first action. [Docs. 30, 36].
Plaintiff appealed to the Court of Appeals. That appeal was
dismissed because the amount of the award had yet to be
determined. [Doc. 41]. On remand, this Court awarded $13,
403.75 in attorneys' fees to the Defendants and stayed
the case pending payment. [Doc. 50]. The Plaintiff did not
pay the costs, but before the case was dismissed for
nonpayment, she filed a second appeal. [Doc. 51]. After oral
argument before the Fourth Circuit, the Plaintiff moved to
voluntarily dismiss the appeal, which motion was granted.
[Doc. 57]. In the interim, counsel for the Defendants moved
to withdraw. This motion was granted on May 22, 2015, leaving
both Defendants unrepresented. [Docs. 61, 62].
10, 2015, the Court dismissed this action for failure of the
Plaintiff to pay the awarded attorneys' fees. [Doc. 63].
The Plaintiff then appealed for a third time. On June 28,
2016, the Court of Appeals vacated the award of
attorneys' fees and remanded the case for further
proceedings. [Doc. 69]. The Court of Appeals' mandate
issued on July 20, 2016. [Doc. 70].
the last remand, none of the Defendants filed an Answer. The
Plaintiff, however, made no effort to prosecute the case. On
August 24, 2016, the Court ordered the Plaintiff to file an
appropriate motion or otherwise take further action with
respect to each Defendant within fourteen (14) days of entry
of the Order, or the Court would dismiss this action. [Doc.
71]. The Plaintiff subsequently moved for an entry of default
against the Defendants. [Doc. 75]. On September 7, 2016, the
Clerk entered default against the Defendants. [Doc. 76]. On
September 20, 2016, the Plaintiff filed the present motion
for default judgment on behalf of herself and the
“opt-in” plaintiffs. [Doc. 77]. In her motion,
the Plaintiff specifically requested that the Court not set
an evidentiary hearing. Instead, the Plaintiff requested a
period of sixty (60) days to assemble the necessary
documentation to support her and the “opt-in”
plaintiffs' claims for damages. [Doc. 77 at 2]. The
Plaintiff filed a supplemental memorandum and supporting
documentation in support of her claims and that of opt-in
plaintiff Betty Gosnell on November 22, 2016. [Doc. 78].
matter is now ripe for disposition.
STANDARD OF REVIEW
of the Federal Rules of Civil Procedure provides for the
entry of a default when “a party against whom a
judgment for affirmative relief is sought has failed to plead
or otherwise defend.” Fed.R.Civ.P. 55(a). Once a
defendant has been defaulted, the plaintiff may then seek a
default judgment. If the plaintiff's claim is for a sum
certain or can be made certain by computation, the Clerk of
Court may enter the default judgment. Fed.R.Civ.P. 55(b)(1).
In all other cases, the plaintiff must apply to the Court for
a default judgment. Fed.R.Civ.P. 55(b)(2).
defendant, by his default, admits the plaintiff's
well-pleaded allegations of fact . . . .” Ryan v.
Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir.
2001) (quoting Nishimatsu Constr. Co., Ltd. v. Houston
Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). A
defendant, however, “is not held . . . to admit
conclusions of law.” Ryan, 253 F.3d at 780
(quoting Nishimatsu, 515 F.2d at 1206). The Court
therefore must determine whether the facts as alleged state a
claim. GlobalSantaFe Corp. v. Globalsantafe.com, 250
F.Supp.2d 610, 612 n.3 (E.D. Va. 2003).
PLAINTIFF'S FACTUAL ALLEGATIONS
well-pleaded factual allegations of the Plaintiff's
Complaint having been deemed admitted by virtue of the
Defendants' default, the following is a summary of the
Plaintiff was employed as a “Supervisor in
Charge” at the Transylvania Living Center
(“TLC”), one of multiple “family care
owned and operated by the Defendants, from January 15, 2006
to June 30, 2009. [Complaint, Doc. 1 at ¶¶ 5-6, 80;
Declaration of Stella Andrews (“Andrews Decl.”),
Doc. 78-1 at ¶ 14].
sole member/manager of ALC, Hodges exercised complete control
over all compensation, policy, and personnel decisions for
ALC. [Id. at ¶¶ 61, 74-78]. Hodges
personally signed many of the checks issued to the Plaintiff
for payroll, for expenses that she incurred when she was
required to purchase household goods for the facility, and
for reimbursement to the Plaintiff for the payment of utility
bills that the Plaintiff paid out of her account on the
promise that she would be reimbursed for such expense. The
checks signed by Hodges were written from an account under
the name of “Hodges & Associates.”
[Id. at ¶ 60].
the Plaintiff's job title was that of “Supervisor
in Charge, ” she did not have any authority to
supervise, fire, or hire other employees or to enter into
contracts with third parties on behalf of the Defendants.
[Id. at ¶¶ 91, 93-95]. Rather, the
Plaintiff's job duties were defined in writing, and a
manual maintained on site set forth procedures for the
day-to-day operation of the facility. [Id. at
¶¶ 92, 97]. Deviation from these procedures carried
the threat of disciplinary action by the Defendants.
[Id. at ¶ 98; Andrews Decl., Doc. 78-1 at
¶ 12]. The Plaintiff's job duties included: (1)
keeping track of the expenses of the home to which she was
assigned; (2) paying bills when cut off notices were received
in the mail for the home to which she was assigned; (3)
purchasing groceries and household supplies for the home; (4)
notifying ALC of the need for maintenance at the home to
which she was assigned; (5) assisting with the intake of new
clients; (6) preparing meals for those clients residing at
the home to which she was assigned; (7) performing
housekeeping duties in the home to which she was assigned;
(8) doing laundry for the clients assigned to her care; (9)
preparing medications (four or more times a day) for the
clients assigned to her; (10) distributing such medication;
(11) tracking the inventory of such medication; (12)
maintaining records of the distribution of each client's
medication; (13) contacting the appropriate pharmacy or
physician to ensure an adequate supply of medication was on
hand for each client; (14) transporting clients to physician
appointments and/or social functions when transportation was
not available from ALC; and (14) coordinating clients'
doctor and all service providers' appointments. [Doc. 1
at ¶ 82]. The Plaintiff estimates that she spent between
thirty percent (30%) and fifty percent (50%) of her time per
week on domestic duties, such as cooking, cleaning, laundry,
transporting residents, and administering medications.
[Id. at ¶ 104].
order to perform her duties of providing care to the
residents of TLC, the Plaintiff was required to reside at the
facility. [Id. at ¶ 86]. She had to provide her
own substitute in the event that she needed to leave TLC.
[Id. at ¶¶ 88-89]. She was on duty
twenty-four hours a day, seven days a week, and was regularly
awakened during the night to administer medication to
residents or to prevent residents from leaving the facility
without permission. [Id. at ¶¶ 87, 108,
109]. As a result, the Plaintiff rarely received more than
five hours of uninterrupted sleep on any given night.
[Id. at ¶ 111]. No agreement existed between
the Plaintiff and the Defendants regarding the
Plaintiff's sleep, rest, or meal periods. [Id.
at ¶¶ 107, 110].
her employment, the Plaintiff was classified as an
independent contractor and was paid a straight salary of
between $500 and $600 per week. [Id. at ¶¶
83-84, 118]. The Plaintiff's salary did not vary,
regardless of how many hours she worked or whether she was on
duty. [Id. at ¶ 116]. When the Plaintiff
requested an IRS Form 1099 from the Defendants, she was told
to create her own document. [Id. at ¶ 115].
the Defendants' failure to pay her minimum wage and
overtime as required by the FLSA, the Plaintiff calculates
that she was underpaid by $86, 044.08 over the course of her
employment. [Doc. 78 at 1]. She seeks that amount in
compensatory damages and an equal amount of liquidated
damages. [Id. at 2]. She also seeks an award of $45,
496.23 in attorneys' fees and costs. [Id. at 3].
Claims of the Opt-In Plaintiffs
Plaintiff brought this suit for violations of the FLSA's
minimum wage and overtime requirements on behalf of herself
as well as “all other similarly situated
employees.” [Doc. 1 at ¶ 39]. FLSA collective
actions are distinct from Rule 23 class actions in that class
members in a FLSA collective action must affirmatively
“opt-in, ” that is, consent to become parties to
the action. See 29 U.S.C. § 216(b).
order for other employees to join a FLSA action, the Court
must certify the collective action. Courts generally follow a
two-step process to certify a collective action under the
FLSA. First, at the notice stage, the court may conditionally
certify the class and direct that notice be given to
potential class members so that they may opt in. Purdham
v. Fairfax Cty. Pub. Schs., 629 F.Supp.2d 544, 547 (E.D.
Va. 2009), aff'd, 637 F.3d 421 (4th Cir. 2011);
Parker v. Rowland Express, Inc., 492 F.Supp.2d 1159,
1164 (D. Minn. 2007). Once members have opted in and
substantial discovery has been completed, the court can then
make a factual determination as to whether the collective
action members are “truly ‘similarly
situated.'” Purdham, 629 F.Supp.2d at 547;
Parker, 492 F.Supp.2d at 1164.
there was no certification, conditional or otherwise, of any
collective action prior to the entry of default against the
Defendants, and the Plaintiff did not move for a
certification of the collective action with her motion for
default judgment. See Davis v. Precise Commc'n
Servs., Inc., No. 1:07-CV-3128-JOF, 2009 WL 812276, at
*1 (N.D.Ga. Mar. 27, 2009) (noting that conditional
certification was still required despite defendant's
default). Because no determination has been made that the
proposed members of the collective action are
“similarly situated, ” an entry of a default
judgment, if appropriate at all, is proper only as to the
named Plaintiff, Stella Andrews. See id.; see
also Partington v. Am. Int'l Specialty Lines Ins.
Co., 443 F.3d 334, 340 (4th Cir. 2006) (where class not
certified under Fed.R.Civ.P. 23, default judgment order binds
only named plaintiffs and not putative class members);
Skeway v. China Nat. Gas, Inc., 304 F.R.D. 467, 472
(D. Del. 2014) (“in cases in which the district courts
have entered a default judgment against a defendant and no
class has been certified [under Fed.R.Civ.P. 23], only named
plaintiffs can recover damages”). Accordingly, the
Court will dismiss the claims of the putative collective
action members without prejudice and will address the motion
for default judgment with respect to the claims of the
Plaintiff Stella Andrews only.
Plaintiff's FLSA Claims
Plaintiff asserts claims for unpaid minimum wages and unpaid
overtime compensation under the FLSA, 29 U.S.C. §§
206, 207. The FLSA requires covered employers to pay their
employees a minimum wage, which is currently set at $7.25 per
hour. 29 U.S.C. § 206(a). Covered employers also must
also pay their employees an overtime rate of 1½ times
the regular rate of pay for each hour worked in excess of
forty hours per week. 29 U.S.C. § 207(a)(1).
order to determine whether the Plaintiff has adequately
stated a claim under the FLSA for unpaid minimum wage and
overtime compensation, the Court first must determine whether
the named Defendants are “employers” subject to
the provisions of the FLSA. Assuming the Defendants are
covered employers, the Court must then determine whether the
Plaintiff is an “employee” who is not otherwise
exempt from FLSA protection. The Court will address each of
these issues in turn.
Are the Defendants' Plaintiff's
Plaintiff alleges that both Hodges and ALC qualify as her
FLSA defines “employer” broadly to include
“any person” other than a labor organization who
“act[s] directly or indirectly in the interest of an
employer in relation to an employee.” 29 U.S.C. §
203(d). An individual may be liable for FLSA violations,
despite the corporate structure of the employing business, if
the individual had extensive managerial responsibilities and
“substantial control of the terms and conditions of the
work of [plaintiff] employees.” Falk v.
Brennan, 414 U.S. 190, 195 (1973); see also Brock v.
Hamad, 867 F.2d 804, 808 n.6 (4th Cir. 1989) (imposing
FLSA liability on individual who “hired and directed
the employees who worked for the enterprise”);
Bonham v. Wolf Creek Acad., 767 F.Supp.2d 558, 571
(W.D. N.C. 2011) (noting that “veil piercing” is
not required to attach FLSA liability to an individual behind
a corporate employer). Here, the Plaintiff's factual
allegations, which are deemed admitted, are sufficient to
establish that Hodges was the sole member/manager of ALC and
thus controlled all aspects of the business, including all
personnel decisions. As Hodges had “substantial
control” over the terms and conditions of the
Plaintiff's employment, Falk, 414 U.S. at 195,
the Court concludes that the Plaintiff has established that
both Hodges and ALC were her “employers” for the
purpose of imposing FLSA liability.
determined that both Defendants employed the Plaintiff, the
Court now turns to whether her employers are covered by the
FLSA. To recover for minimum wage or overtime violations
under the FLSA, a plaintiff must show that either (1) her
employer is an “enterprise engaged in commerce or in
the production of goods for commerce” or (2) the
plaintiff herself has “engaged in commerce or in the
production of goods for commerce” in her capacity as an
employee. 29 U.S.C. § 203(s)(1)(A)(i). Here, the
Plaintiff has alleged that the Defendants are engaged in the
operation of “family care homes” for adults who
are frail due to age or who suffer from physical or mental
infirmities such that they are unable to live by themselves.
[Doc. 1 at ¶¶ 48, 50]. Section 203 of the FLSA
defines an “enterprise engaged in commerce or in the
production of goods for commerce” as including an
enterprise that “is engaged in the operation of ... an
institution primarily engaged in the care of the sick, the
aged, or the mentally ill or defective who reside on the
premises of such institution.” 29 U.S.C. §
203(s)(1)(B). The Plaintiff has sufficiently alleged that
Hodges and ALC constitute an “enterprise” within
the meaning of that provision. Accordingly, the Court
concludes that the Defendants are subject to liability for
violations of the minimum wage and overtime requirements of
Is Plaintiff a Covered “Employee”?
the Court evaluates whether the Plaintiff qualifies as a
covered employee under the Act.
FLSA broadly defines “employee, ” with numerous
exceptions not applicable here, to be “any individual
employed by an employer.” 29 U.S.C. § 203(e)(1).
“In determining whether a worker is an employee covered
by the FLSA, a court considers the ‘economic
realities' of the relationship between the worker and the
putative employer.” Schultz v. Capital Int'l
Sec., Inc., 466 F.3d 298, 304 (4th Cir. 2006) (quoting
Henderson v. Inter-Chem Coal Co., 41 F.3d 567, 570
(10th Cir. 1994)). “The focal point is whether the
worker is ...