United States District Court, E.D. North Carolina, Western Division
CHRISTIAN VELASQUEZ, on behalf of himself and all others similarly situated, Plaintiff,
SALSAS AND BEER RESTAURANT, INC., NOE PATINO, PATRICIA PATINO, DIONISIO PATINO, and ISMAEL PATINO, Defendants.
C. DEVER III Chief United States District Judge
April 7, 2015, Christian Velasquez ("Velasquez" or
"plaintiff') filed a class-action complaint against
Salsas and Beer Restaurant, Inc., ("SBR" or
"the Restaurant"), Noe Patino, Patricia Patino,
Dionisio Patino, and Ismael Patino (collectively,
"defendants") claiming violations of the Fair Labor
Standards Act ("FLSA"), 29 U.S.C. §§ 201
et secu, and the North Carolina Wage and Hour Act
("NCWHA), N.C. Gen. Stat. §§ 95-25.1 et secu
P-E. I]. On June 10, 2015, defendants answered
[D.E. 21]. On October 24, 2016, Velasquez moved for summary
judgment [D.E. 40] and filed a memorandum in support [D.E.
42], a statement of material facts ("SMF") [D.E.
41], and supporting exhibits [D.E. 43]. On December 16, 2016,
defendants responded in opposition [D.E. 48], appended an
affidavit from Patricia Patino ("Patino affidavit")
to their response, and argued that the court lacks
subject-matter jurisdiction over Velasquez's FLSA claim
[D.E. 48-1]. On December 30, 2016, Velasquez replied [D.E.
December 30, 2016, Velasquez moved to strike the Patino
affidavit [D.E. 49]. On January 20, 2017, defendants
responded in opposition to Velasquez's motion to strike
[D.E. 52]. On February 1, 2017, Velasquez replied [D.E. 53].
On February 1, 2017, Velasquez also moved for sanctions,
claiming that the Patino affidavit contained a known
falsehood [D.E. 54]. On February 22, 2017, defendants
responded in opposition [D.E. 56]. On March 1, 2017,
Velasquez replied [D.E. 57]. As explained below, the court
denies Velasquez's motion for summary judgment, denies
Velasquez's motion to strike, and denies Velasquez's
motion for sanctions.
Patricia, Dionisio, and Ismael Patino own and operate SBR.
See SMF ¶ 3. SBR is registered as a business corporation
with the North Carolina Secretary of State. Id.
¶ 4. Noe is SBR's President. Patricia is SBR's
Vice President. Dionisio is SBR's Secretary. Ismael is
SBR's Treasurer. Id. ¶ 3. SBR's
principal office is in Fayetteville, North Carolina, and it
has another office in Hope Mills, North Carolina. [D.E.
43-3]. Defendants operate three Salsas and Beer Restaurants,
including a location at 231 Skyland Shopping Center, Spring
Lake, North Carolina ("the Restaurant").
resides in Spring Lake, North Carolina. Id. ¶
1. From September 2012 through November 17, 2014, defendants
employed Velasquez. Id. ¶ 2. Velasquez worked
as a server at the SBR at 231 Skyland Shopping Center, Spring
Lake, North Carolina. Id. ¶¶ 5-6. As a
server, Velasquez reported directly to the Patinos or their
agents. Id. ¶ 9. Velasquez's job duties
included serving food and drinks to the Restaurant's
customers, but did not include management of business or
employees. Id.¶¶7-8. Defendants set
Velasquez's work schedule. Id. ¶ 10.
Velasquez's employment at the Restaurant, except for a
two-week period in August 2014, Velasquez received no hourly
wage, but instead was paid only tips. IcL ¶¶ 13-15.
During a two-week period in August 2014, Velasquez received
checks for a total payment of $ 124.67. [D.E. 43-4] ¶
10. Defendants deducted five dollars per day from
Velasquez's tips and gave that money to non-tipped
employees, including a "chip girl, "
drink-carriers, and busboys. SMF ¶¶ 17-19; [D.E.
43-2] 26-27; [D.E. 43-4] ¶ 9. Velasquez worked 55 hours
per week on average, but was never paid additional wages for
overtime hours worked. SMF ¶ 20. Defendants did not keep
or maintain records showing how many hours Velasquez worked.
Id. ¶ 12.
April 7, 2015, Velasquez filed this action. See Compl. [D.E.
1]. Defendants answered and denied that defendants
were an enterprise engaged in commerce or the production of
goods as defined by Section 3(s) of the FLSA, 29 U.S.C.
§ 203(s)(1), in that said enterprise had employees
engaged in commerce or in the production of goods for
commerce, or employees handling, selling, or otherwise
working on goods or materials that have been moved in or
produced for commerce by any person and in that said
enterprise has had and has an annual gross volume of sales
made or business done of not less than $500, 000.
See Answer [D.E. 21] ¶ 26. Defendants raised as
a defense to the FLSA claim a lack of subject-matter
jurisdiction. See id.; see also Id. at 1.
judgment is appropriate if the moving party demonstrates that
there is no genuine dispute as to any material fact and the
moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). The party seeking summary judgment must
initially show an absence of a genuine dispute of material
fact or the absence of evidence to support the nonmoving
party's case. Celotex Corp. v. Catrett. 477 U.S.
317, 325 (1986). If a moving party meets its burden, the
nonmoving party must "come forward with specific facts
showing that there is a genuine issue for trial."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp..
475 U.S. 574, 587 (1986) (quotation and emphasis omitted). A
genuine issue for trial exists if there is sufficient
evidence favoring the nonmoving party for a jury to return a
verdict for that party. Anderson v. Liberty Lobby.
Inc.. 477 U.S. 242, 249 (1986). "The mere existence
of a scintilla of evidence in support of the plaintiffs
position [is] insufficient" Id. at 252; see
Beale v. Hardv. 769 F.2d 213, 214 (4th Cir. 1985)
("The nonmoving party, however, cannot create a genuine
issue of material fact through mere speculation or the
building of one inference upon another."). Only factual
disputes that might affect the outcome under substantive law
properly preclude summary judgment. Anderson, 477 U.S. at
248. In reviewing the factual record, the court views the
facts in the light most favorable to the nonmoving party and
draws reasonable inferences in that party's favor.
Matsushita. 475 U.S. at 587-88.
NCWHA claim requires this court to apply North Carolina law.
In resolving any disputed issue of state law, the court must
determine how the Supreme Court of North Carolina would rule.
See Twin City Fire Ins. Co. v. Ben Arnold-Sunbelt
Beverage Co..433 F.3d 365, 369 (4th Cir. 2005). If the
Supreme Court of North Carolina "has spoken neither
directly nor indirectly on the particular issue before,
" this court must "predict how [it] would rule if
presented with the issue." Id. (quotations
omitted). In making that prediction, the court "may
consider lower court opinions[, ].. .treatises, and the
practices of other states." Id. (quotation
omitted). When predicting an outcome under state
law, a federal court "should not create or expand [a]
[s]tate's public policy." Time Warner
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