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Sydell v. Lifemed USA, Inc.

United States District Court, M.D. North Carolina

March 30, 2019

LIFEMED USA, INC., THE LIFEMED GROUP, INC., and MURRAY MAYNARD, in his individual capacity, Defendants.



         Before the Court is Plaintiff's Motion for Default Final Judgment. (ECF No. 35.) For the reasons stated below, Plaintiff's motion is granted.


         Plaintiff filed a Complaint in this Court on September 14, 2016, pursuant to 28 U.S.C. § 1332(a), alleging various violations arising out of her employment with Defendants to include violations of the North Carolina Wage & Hour Act, and the Retaliatory Employment Discrimination Act (“REDA”). (ECF No. 1.) Defendants answered the Complaint, (ECF Nos. 5, 8), and on September 13, 2017, counsel for the Defendants filed a motion to withdraw, stating that Defendants “have no resource or intent to defend this matter further.” (ECF No. 16 at 1.) On October 27, 2017 this Court entered a Memorandum Opinion and Order which, among other things, allowed Defendants' counsel to withdraw, directed the corporate Defendants to retain new counsel, and ordered Defendants to comply with discovery. (ECF No. 25 at 6-7.) On December 12, 2017, Plaintiff filed a Request for Entry of Default against all Defendants for failure to comply with the October 27, 2017 Order of the Court. (ECF No. 28.) On January 3, 2018, this Court entered a Text Order granting Plaintiff's Request for Entry of Default, striking Defendants' Answers to the Complaint, and ordering the Clerk of Court to enter default as to each Defendant. On January 4, 2018, the Clerk of Court entered default against all Defendants. (ECF No. 29.) Plaintiff now seeks default judgment from this Court.


         “Entry of default judgment is left to the discretion of the court.” S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005). “Upon the entry of default, the defaulted party is deemed to have admitted all well-pleaded allegations of fact contained in the complaint.” J & J Sports Prods., Inc. v. Romenski, 845 F.Supp.2d 703, 705 (W.D. N.C. 2012). However, “[t]he defendant is not held . . . to admit conclusions of law, ” as “a default is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover.” Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). To determine whether to enter judgment on a defendant's default, the court examines whether the well-pleaded allegations in the complaint support the relief sought in the case. Id. “There must be a sufficient basis in the pleadings for the judgment entered.” Nishimatsu, 515 F.2d at 1206. If the court determines that liability has been established, the court must then determine damages. Romenski, 845 F.Supp.2d at 706. Unlike allegations involving liability, allegations regarding damages are not deemed admitted by a defendant's default. Lawbaugh, 359 F.Supp.2d at 422. “The court must make an independent determination regarding damages.” Romenski, 845 F.Supp.2d at 706. In determining damages, the court may conduct an evidentiary hearing or rely on affidavits or documentary evidence in the record. Id.


         Plaintiff's Complaint sets forth the following claims against Defendants: (1) Violation of the North Carolina Wage & Hour Act; (2) Violation of REDA; (3) Wrongful Discharge in Violation of North Carolina Public Policy; (4) Breach of Contract and Breach of Implied Covenant of Good Faith and Fair Dealing; (5) Unjust Enrichment; and (6) Conversion. (ECF No. 1 ¶¶ 58-97.) As stated earlier, Defendants' Answers have been stricken by Order of the Court due to their failure to comply with orders of the Court, including discovery orders, and their failure to appear for properly noticed depositions.[1] The Court, having carefully considered the allegations in Plaintiff's Complaint, which are well-pleaded and hereby taken as true, finds that Plaintiff has established that Defendants, jointly and severally, are liable to her on each of her claims.

         Plaintiff is, therefore, entitled as a matter of law to entry of default judgment with respect to each of the claims outlined in her Complaint.


         Because Plaintiff's allegations of damages are not deemed admitted by Defendants' default, the Court will make an independent determination of Plaintiff's damages based on the record. The Fourth Circuit has articulated the following factors as relevant in a court's determination of the appropriate amount of damages: “the severity of the violation; the degree of harm to the plaintiff; the relative financial burdens of the parties; and the purpose to be served by imposing statutory damages.” J & J Sports Prods., Inc. v. Olmos, No. 5:08CV33-V, 2010 WL 625283, at *2 (W.D. N.C. Feb. 19, 2010) (citing DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 330 n.8 (4th Cir. 2008)).

         The Court makes the following findings to provide context for its determination of an appropriate award of damages: On September 5, 2014, Plaintiff entered an Employment Agreement (the “Agreement”) with Defendants. (ECF No. 37-2.) The Agreement provided, in pertinent part, that Plaintiff would be paid a base salary of $75, 000 and a commission program where based on Plaintiff's performance she would receive an additional $75, 000. (Id. at 1.) Plaintiff would be paid bi-weekly at a rate of $2, 884.62 less payroll deductions and all required withholdings. (Id.) The Agreement also provided that Plaintiff would be provided a $500 per month car allowance and a monthly allowance of $600 per month to pay for a private health insurance policy. (Id.) During her employment, Defendants “randomly and intermittently” paid Plaintiff from Defendant Maynard's personal account with no accounting for benefits or payroll taxes. (ECF No. 1 ¶ 29; ECF No. 1-1 at 3.) In May 2015 Defendants engaged an accounting firm, Bober, Markey and Fedorovich (“BMF”), to determine what Defendants owed to Plaintiff in back wages and taxes. (ECF No. 1 ¶ 30; ECF No. 37-8 ¶ 5.)

         Defendants also agreed to make catch-up payments to Plaintiff for the back wages owed to her. (ECF No. 37-7; ECF No. 37-8 ¶ 10.) Plaintiff repeatedly requested to be paid, and, although Defendants promised to do so, they rarely paid her as set forth in the Agreement. (ECF No. 37-8 ¶¶ 14-15.) On October 19, 2015, without notice or authority, there was an unauthorized cash sweep of $45, 657 from Plaintiff's bank account back into Defendants' account. (ECF No. 1 ¶ 42.) Defendant Maynard chastised Plaintiff twice for threatening to sue him and BMF over her missing wages. (Id. ¶ 50.) On February 17, 2016, Defendants terminated Plaintiff. (Id. ¶ 55.) Plaintiff seeks monetary damages as follows: (a) $119, 278.55 in unpaid back wages; (b) $7, 660.80 in unpaid medical expenses; (c) $41, 712.88 in unpaid tax liability; (d) $124, 438.36 in lost wages; (e) $13, 724.10 in unpaid reimbursable business expenses; (f) prejudgment interest to be determined; (g) $357, 835.65 in treble damages; and (h) $100, 000.00 in attorneys' fees. (ECF No. 37 at 24.)

         Considering the factors outlined by the Fourth Circuit and the record before the Court, the Court finds, and concludes as a matter of law, that Plaintiff is ...

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