WILLIAM S. DUFFEY, Jr., District Judge.
This matter is before the Court following the July 6, 2016, evidentiary hearing on Plaintiff Micheal Fresh's ("Plaintiff") Motion for Default Judgment [44].
On August 9, 2013, Plaintiff filed his Complaint [1] alleging that Defendants David Ulmer and Diamond Development & Investments Inc. (collectively, "Defendants") failed to pay him overtime wages in violation of the Fair Labor Standards Act of 1938 ("FLSA"), § 7, 29 U.S.C. § 207. On March 9, 2015, Plaintiff, with leave from the Court, amended [22] his Complaint to add a defendant. That defendant, Restaurant Development, Inc. ("Restaurant Development"), was later dismissed from this action because it was not timely served with the Amended Complaint.
On September 3, 2015, the Court found [38] that Defendants had not complied with (1) Local Rule 16.4, (2) the Court's July 23, 2015, Order [34] requiring the parties to file a proposed consolidated pretrial order, (3) the Court's August 5, 2015, Order [36] requiring Defendants to show cause case why default judgment should not be entered against them, (4) and the Court's August 18, 2015, Order again requiring the parties to file a proposed consolidated pretrial order. The Court found that Defendants had been given "ample opportunity" to file a proposed consolidated pretrial order and that their "flagrant" failure to do so warranted sanctions. On September 3, 2015, as a result of Defendants' violations, the Court entered default against Defendants.
Six (6) months later, on March 9, 2016, Plaintiff filed his Motion for Default Judgment, seeking entry of judgment against Defendants for $23,850 in unpaid overtime wages, liquidated damages in the same amount, attorneys' fees, litigation expenses, and prejudgment interest. On March 29, 2016, Defendant David Ulmer ("Ulmer"), now proceeding pro se, filed his Response to Plaintiff's Motion for Default Judgment, requesting that the Court deny Plaintiff's motion and set aside the entry of default.
On March 29, 2016, Ulmer also filed his Motion for Summary Judgment [47], asserting that Plaintiff does not adequately plead that Defendants employed him, that an entity known as Worklife Financial actually employed him, and that Plaintiff was an "administrative employee" and thus exempt from FLSA's overtime requirements. On April 21, 2016, Plaintiff filed his Opposition to Defendants' Motion for Summary Judgment [49], arguing that Ulmer's motion is untimely and fails to comply with the Local Rules of this Court. The Court has not ruled on Ulmer's Motion for Summary Judgment.
On May 11, 2016, the Court considered [50] Plaintiff's Motion for Default Judgment, declined to set aside the entry of default, found that Plaintiff's Amended Complaint states an overtime claim under FLSA, and scheduled an evidentiary hearing to determine the amount of Plaintiff's damages.
On July 1, 2016, Ulmer filed his Motion to Dismiss [51], arguing that Restaurant Development employed Plaintiff and that Restaurant Development was not covered by FLSA during Plaintiff's employment because it did not have an annual gross volume of sales of at least $500,000. On July 6, 2016, Defendant Diamond Development & Investments Inc. filed its Motion to Dismiss [52], seeking dismissal on the same grounds. The Court has not ruled on these motions to dismiss.
On July 6, 2016, the Court held an evidentiary hearing on Plaintiff's Motion for Default Judgment. Plaintiff testified on the issue of whether he worked for Defendants in a "bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1). Ulmer informed the Court that Defendant Diamond Development & Investments Inc. was a shell corporation, without assets, that no longer exists. Ulmer also stated that Defendants were not covered by FLSA during Plaintiff's employment because their enterprise did not have annual gross sales of at least $500,000. Ulmer stated further that Plaintiff worked for a Professional Employer Organization retained by a corporation that Ulmer owned.
"[A] defaulted defendant is deemed to admit the plaintiff's well-pleaded allegations of fact."
2 Steven S. Gensler,
Rule 55(b)(2) of the Federal Rules of Civil Procedure provides that "[t]he court may conduct hearings . . . when, to enter or effectuate judgment, it needs to . . . establish the truth of any allegation by evidence" or "investigate any other matter." Fed. R. Civ. P. 55(b)(2). Thus, "when it seems advantageous, a court may conduct a hearing to determine whether to enter a judgment by default." 10A Charles Alan Wright, et al.,
In light of the information presented at the July 6, 2016, evidentiary hearing, the Court has questions about the merits of Plaintiff's claim, including (1) whether Plaintiff was employed by Defendants, (2) whether Defendants' enterprise has an annual gross volume of sales not less than $500,000, (3) whether Plaintiff was a non-exempt employee under FLSA, and (4) whether Defendant Diamond Development & Investments Inc. exists as a legal entity. The Court finds that an additional hearing is required for the Court to determine whether there is sufficient proof of Plaintiff's claim and whether it is appropriate to enter default judgment in this case. The Court will conduct this hearing on August 25, 2016, at which Plaintiff is required to present evidence on the following four (4) issues: (1) Did Defendants employ Plaintiff between April 10, 2012 and April 16, 2013? (2) Does Defendants' enterprise have an annual gross volume of sales or business of not less than $500,000? (3) Was Plaintiff employed in a bona fide executive, administrative or professional capacity? (4) Does Defendant Diamond Development & Investments Inc. exist as a legal entity?
For the foregoing reasons,