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Velasquez v. Salsas and Beer Restaurant, Inc.

United States District Court, E.D. North Carolina, Western Division

September 28, 2017

CHRISTIAN VELASQUEZ, on behalf of himself and all others similarly situated, Plaintiff,


          JAMES C. DEVER III Chief United States District Judge

         On 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].[1] 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. 50].

         On 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.


         Noe, 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"). SMF¶5.

         Velasquez 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.

         During 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.

         On 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.


         Summary 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.

         Velasquez's 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).[2] When predicting an outcome under state law, a federal court "should not create or expand [a] [s]tate's public policy." Time Warner Entm't-Advance/Newhouse P'ship v. ...

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