Dunson v. RMH Franchise Corporation ( 2023 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Lexi Dunson, No. CV-23-00148-TUC-RM 10 Plaintiff, ORDER 11 v. 12 RMH Franchise Corporation, 13 Defendant. 14 15 Pending before the Court is Plaintiff Lexi Dunson’s Motion for Default Judgment. 16 (Doc. 8.) For the following reasons, the Motion will be granted. 17 I. Background 18 On March 28, 2023, Plaintiff filed a Complaint against Defendant RMH Franchise 19 Corporation, alleging a failure to pay minimum wages in violation of the Fair Labor 20 Standards Act (“FLSA”) and the Arizona Minimum Wage Act (“AMWA”). (Doc. 1.) 21 Plaintiff alleges that she worked at an Applebee’s operated by Defendant for 22 approximately 20 to 40 hours and was not compensated for her work. (Id. at 4-5.) 23 On April 6, 2023, Plaintiff served Christie Garrett of Corporate Creations 24 Network, Inc., the statutory agent of RMH Franchise Corporation, at 3260 N. Hayden 25 Rd., #210, Scottsdale, AZ 85251. (Doc. 5.) To date, Defendant has not answered or 26 otherwise responded to Plaintiff’s Complaint. The Clerk of Court entered default on June 27 7, 2023. (Doc. 7.) 28 . . . . 1 II. Legal Standard 2 “When a party against whom a judgment for affirmative relief is sought has failed 3 to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk 4 must enter the party’s default.” Fed. R. Civ. P. 55(a). The plaintiff may thereafter apply 5 for entry of a default judgment by the Court. Fed. R. Civ. P. 55(b)(2). The Court may 6 conduct a hearing if necessary to enter or effectuate judgment. Id. In determining 7 whether to grant default judgment, courts consider “(1) the possibility of prejudice to the 8 plaintiff, (2) the merits of [the] plaintiff’s substantive claim, (3) the sufficiency of the 9 complaint, (4) the sum of money at stake in the action[,] (5) the possibility of a dispute 10 concerning material facts[,] (6) whether the default was due to excusable neglect, and (7) 11 the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on 12 the merits.” Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 13 III. Discussion 14 Plaintiff satisfies the first Eitel factor because she would lose the right to a judicial 15 resolution of her claims if default judgment is not entered. The second and third Eitel 16 factors also support granting Plaintiff’s Motion for Default Judgment. Plaintiff alleges 17 that she was not compensated for work performed, in violation of the FLSA and the 18 AMWA. (Doc. 1.) The FLSA requires payment of at least $7.25 per hour to employees 19 engaged in commerce or employed in an enterprise engaged in commerce. 29 U.S.C. § 20 206(a)(1). The AMWA requires payment of a minimum wage of at least $12.00 per hour 21 plus cost-of-living increases after January 1, 2021, as measured by the consumer price 22 index. A.R.S. § 23-363(A)-(B).1 Employers may pay tipped employees a maximum of 23 “$3.00 per hour less than the minimum wage if the employer can establish by its records” 24 that “the employee received not less than the minimum wage for all hours worked” when 25 adding tips received to wages paid. A.R.S. § 23-363(C). By alleging Defendant failed to 26 compensate her at all for hours worked, Plaintiff has sufficiently stated claims under the 27 FMLA and AMWA. 28 1 During the relevant time period, the inflation-adjusted Arizona minimum wage was $13.85 per hour. (Doc. 8 at 6; Doc. 8-1 at 3.) 1 In her Motion for Default Judgment, Plaintiff avers that she worked approximately 2 40 hours for Defendant, with total unpaid federal minimum wages of $290 and total 3 unpaid Arizona minimum wages of $554. (Doc. 8 at 5-6.) Plaintiff seeks double 4 damages under the FLSA, 29 U.S.C. § 216(b), which provides that an employer who 5 violates the minimum wage provision of § 206 is liable to the employee in the amount of 6 the unpaid minimum wages as well as “an additional equal amount as liquidated 7 damages.” (Doc. 8 at 7-8.) Plaintiff seeks treble damages under the liquidated damages 8 provision of A.R.S. § 23-364(G), which provides that an employer who fails to pay 9 minimum wages “shall be required to pay the employee the balance of the wages . . . and 10 an additional amount equal to twice the underpaid wages.” (Id.) Plaintiff also seeks 11 treble damages under A.R.S. § 23-355(A), which provides that an employer who fails to 12 pay wages due to an employee is liable in “an amount that is treble the amount of the 13 unpaid wages.” (Id.) As the treble damages figure engulfs the federal minimum wage 14 damages, Plaintiff seeks $1,662.00 in trebled unpaid minimum wages, plus post- 15 judgment interest pursuant to 28 U.S.C. § 1961. (Id. at 8.) The Court finds that the sum 16 of money at stake weighs in favor of granting Plaintiff’s Motion for Default Judgment. 17 Plaintiff states that she does not have complete time records or pay records in her 18 possession and has therefore estimated the number of hours of work for which she has 19 not been paid. (Doc. 8 at 4-5.) Plaintiff argues that she should not be penalized for her 20 employer’s lack of records. (Id.) When an employer’s records are inaccurate or 21 inadequate, the employee must prove she has performed work for which she was 22 improperly compensated and must “produce[] sufficient evidence to show the amount 23 and extent of that work as a matter of a just and reasonable inference.” Brock v. Seto, 24 790 F.2d 1446, 1448 (9th Cir. 1986) (internal emphasis and quotation marks omitted). 25 “The burden then shifts to the employer to show the precise number of hours worked or 26 to present evidence sufficient to negate the reasonableness of the inference to be drawn 27 from the employee’s evidence.” Id. (internal quotation marks omitted). Given the lack 28 of time or pay records supporting Plaintiff’s claimed damages, there is a possibility of a 1 || material dispute concerning the hours that Plaintiff worked and the damages to which 2|| Plaintiff is entitled. However, the current record contains no evidence negating the 3 || reasonableness of Plaintiff's estimates of her hours worked. The Court finds that the fifth Eitel factor is neutral. 5 There is no evidence in the record to indicate that Defendant’s default was due to 6 || excusable neglect, and thus the sixth Eitel factor weighs in favor of granting □□□□□□□□□□□ 7|| Motion. The policy favoring decisions on the merits supports denying default judgment, 8 || but it does not sufficiently outweigh the other Fitel factors, which as a whole support 9|| granting default judgment. Accordingly, the Court will grant Plaintiff's Motion for || Default Judgment. The Court finds that a hearing on Plaintiff's Motion is not necessary. 11 IT IS ORDERED that Plaintiff's Motion for Default Judgment (Doc. 8) is granted. The Clerk of Court is directed to enter default judgment in favor of Plaintiff 13} Lexi Dunson and against Defendant RMH Franchise Corporation in the amount of 14|| $1,662.00. 15 Dated this 2nd day of August, 2023. 16 17 8 ph Laon, 19 a) Z Honorable Rostsiary □□□□□□□ 20 United States District □□□□□ 21 22 23 24 25 26 27 28 -4-