# Reyes v. VH Acoustic Ceilings, LLC

> District Court, M.D. Louisiana · January 31, 2020

URL: https://www.frixlaw.com/law-library/cases/10191274

## Case

- **Court:** District Court, M.D. Louisiana
- **Decided:** January 31, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

SELVIN REYES, ET AL. CIVIL ACTION
VERSUS
VH ACOUSTIC CEILINGS, LLC, NO.: 18-00790-BAJ-EWD
ET AL.

RULING AND ORDER

. Before the Court is Plaintiffs’ Motion for Confirmation of Default
Judgment (Doc. 10). Jurisdiction is proper under 28 U.S.C. § 1331. For the
following reasons, Plaintiffs motion is GRANTED.
I. BACKGROUND
A. Plaintiffs’ Allegations
This is a wage-and-hour dispute. It arises from a company’s alleged failure to
pay laborers overtime compensation. Plaintiffs allege that they are employees of
Defendants. Plaintiff Mendoza began working for Defendants in January 2018.
Plaintiffs Selvin Reyes and Nectali Reyes began working for Defendants in March of
2018. (Doc. 1 at p. 3). Plaintiffs allege that they were paid a fixed hourly rate, and
routinely worked in excess of 40 hours per week. Plaintiffs allege that they worked
Monday through Thursday, from 6:30 am to at least 5:00 pm. (Id.) Plaintiffs continued
working Friday and Saturday from 6:30 am to at least 3:00 pm. (Id.). Plaintiffs further
allege that they worked, on average, at least 56 hours per week. All Plaintiffs ended
their employment with Defendants in August of 2018.

Plaintiffs filed their Complaint (Dec. 1) on August 23, 2018. Plaintiffs claim
that they are non-exempt employees under the Fair Labor Standards Act (“FLSA”)
entitled to the payment of overtime wages for all hours worked in excess of forty hours
per week throughout their employment with Defendants. In addition to their alleged
employer, Plaintiffs have also named Manuel Hernandez Guzman, member and
manager of VH Acoustic Ceilings, LLC, as a defendant. Plaintiffs claim that
Defendant Guzman was responsible for the Defendants’ decision not to pay overtime
to Plaintiffs. Plaintiffs further claim that Defendants knowingly and willfully
violated the FLSA; thus, they are entitled to recover liquidated damages, reasonable
attorney's fees, legal interests, costs, and other equitable relief. (Id. at p. 4).
B. Procedural History
Plaintiffs effected service of their Complaint on Defendants on August 30,
2018, in compliance with Federal Rule of Civil Procedure 5. (Docs. 4,5).1 Defendants
never filed a response to the Complaint. Plaintiffs completed the interrogatories
issued by the Court (Doc. 7) and filed a Motion for Clerk’s Entry of Default (Doe. 8).
The Clerk of Court filed an entry of default (Doc. 9), and Plaintiffs filed this motion
to obtain confirmation of default judgment against Defendants.
Il, LEGAL STANDARD
The United States Court of Appeals for the Fifth Circuit has adopted a three-
step process to obtain a default judgment. See New York Life Ins. Co. v. Brown, 84

1VH Acoustics received their summons through Guzman, who is the registered agent designated to
receive service of process. Guzman received his summons by personal service at VH Acoustics’
address.

F.3d 187, 141 (5th Cir. 1996). First, a default occurs when a party “has failed to plead
or otherwise defend” against an action. Fed. R. Civ. P. 55(a). Next, an entry of default
must be entered by the clerk when the default is shown “by affidavit or otherwise.”
See td.; NewYork Life, 84 F.3d at 141. Third, a party may apply to the court for a
default judgment after an entry of default. Fed. R. Civ. P. 55(b); New York Life, 84
F.3d at 141.
After a party files for a default judgment, courts must apply a two-part process
to determine whether a default judgment should be entered. First, a court must
consider whether the entry of default judgment is appropriate under the
circumstances. Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). Several
factors are relevant to this inquiry, including: (1) whether there are material issues
of fact at issue, (2) whether there has been substantial prejudice, (83) whether the
grounds for default have been clearly established, (4) whether the default was caused
by excusable neglect or good faith mistake, (5) the harshness of the default judgment,
and (6) whether the court would think itself obliged to set aside the default on a
motion by defendant. Jd.
Second, the Court must assess the merits of the plaintiffs claims and
determine whether the plaintiff has a claim for relief. Nishimatsu Constr. Co. v.
Houston Nat'l Bank, 515 F. 2d 1200, 1206 (5th Cir. 1975); Hamdan v. Tiger Bros.
Food Mart, Inc., No. CV 15-00412, 2016 WL 1192679, at *2 (M.D. La. Mar. 22, 2016).

DISCUSSION
Default judgments are a drastic remedy, not favored by the Federal Rules and
resorted to by courts only in extreme situations. Lindsey, 161 F.3d at 893. Defendants
have failed to defend the action against them, the Clerk of Court has filed an entry of
default, and Plaintiffs have filed a motion for default judgment. The Court may now
consider whether Plaintiffs are entitled to a default judgment. For the Court to grant
confirmation of the default judgment, it must find that the entry of default judgment
is appropriate by considering the Lindsey factors and that Plaintiffs’ pleadings
provide a sufficient basis for a default judgment.
A. Lindsey Factors
The Court must first decide whether the entry of default judgment is
appropriate under the circumstances, by considering the Lindsey factors. First, there
are no material facts in dispute because Defendants failed to file an answer or motion
under Federal Rule of Civil Procedure 12. Second, there has been substantial
prejudice because Defendants’ failure to appear in this action leaves Plaintiffs with
no recourse for its alleged injuries. Third, the grounds for granting a default judgment
against Defendants are clearly established, as evidenced by the action’s procedural
history and the Clerk’s entry of default. (Doc. 8). Fourth, the Court has no basis to
find that Defendants’ failure to respond was the result of a good faith mistake or
excusable neglect: because Defendants have failed to respond to Plaintiffs or to the
Court. Fifth, Defendants’ failure to file any responsive pleading or motion mitigates
the harshness of a default judgment. Finally, the Court is not aware of any facts that

would lead it to set aside the default judgment if challenged by Defendants. The Court
therefore finds that the six Lindsey factors weigh in favor of default.
B. The Sufficiency of the Pleadings
The FLSA provides that “[a]ny employer who violates [the Act] shall be liable
to the employee cr employees affected in the amount of... their unpaid overtime
compensation.” 29 U.S.C. § 216(b). An employee’s action for unpaid overtime
compensation must first demonstrate by a preponderance of the evidence: (1) that
there existed an employer-employee relationship during the unpaid overtime periods
claimed; (2) that the employee engaged in activities within the coverage of the FLSA;
(3) that the employer violated the FLSA’s overtime wage requirements; and (4) the
amount of overtime compensation due. Johnson v. Heckmann Water Resources (CVR),
inc. 758 F.3d 627,630 (5th Cir. 2014); Parrish v. Premier Directional Drilling, L.P.,
917 F.3d 369 (th Cir. 2019). Once the employee establishes a prima facie case, the
burden would then shift to the employer to “come forward with evidence of the precise
amount of work performed or with evidence to negate the reasonableness of the
inference to be drawn from the employee’s evidence.” Jd. Since Defendants failed to
respond, the Plaimtiffs’ establishment of a prima facie case will result in the granting
of this instant motion, rather than shifting of the burden.
i. Employer-Employee Relationship
Plaintiff alleges that Defendants are their former employer. The FLSA broadly
defines an employer as “any person acting directly or indirectly in the interest of an
employer in relation to an employee. 29 U.S.C. § 203(d). In FLSA actions, courts use

an “economic reality test” to determine whether the alleged employees “as a matter
of economic reality” are “economically dependent upon the business to which they
render their services. Valle v. Beauryne Butlders LLC, No. CV 17-274-SDD-RLB, 2018
WL 1463692, at *2 (M.D. La. Mar. 28, 2018) (citing Reich v. Circle C. Investments,
Inc., 998 F.2d 324, 327 (6th Cir. 1993). This is a fact intensive inquiry requiring a
court to consider whether the alleged employer (1) possessed the power to hire and
fire the employees; (2) supervised and controlled employee work schedules or
conditions of employment; (8) determined the rate and method of payment, and (4)
maintained employment records. Gray v. Powers, 673 F.3d 352, 255 (5th Cir. 2012).
Plaintiffs allege that Defendants required Plaintiffs to work on their crews to
perform sheetrock and framing work. Plaintiffs further allege that Defendants
controlled the method, manner, location, and time of Plaintiffs work, as well as set
the hours that Plaintiffs were required to work. Plaintiffs also allege that Defendant
Guzman is a member and manager of Defendant VH Acoustic Ceilings, and thus, is
their employer as well. The Court finds that based on the economic reality test,
Plaintiffs have sufficiently plead in their Complaint that an employee-employer
relationship existed with Defendants. These allegations show that Plaintiffs, as a
matter of economic reality, were economically dependent on Defendants.
ii. FLSA Covered Activity
Plaintiffs are required to allege that they engaged in activities covered by the
FLSA. A plaintiff must show that either he was (1) engaged in commerce; (2) engaged
in the production of goods for commerce; or (3) employed by an enterprise engaged in

commerce or the production of goods for commerce. 29 U.S.C. § 207(a}(1). Plaintiffs
allege that Defendant VH Acoustic Cetlings, LLC is an enterprise engaging in
interstate commerce, and that Defendant is a contractor that engages in construction
work and utilizes goods or materials that have been moved in or produced for
commerce, Plaintiffs specified in their Answer to Court’s Interrogatories that their
job consisted of installing sheetrock and framing. (See Doc. 7 at >. 2), The Court finds
that Plaintiffs have sufficiently pleaded that they engaged in an activity covered by
the FLSA.
iii. Violation of Overtime Wage Requirements and Amount Due
Plaintiffs allege that Defendants violated the FLSA’s overtime wage
requirements. Plaintiffs allege that they routinely worked in excess of 40 hours per
week but were not paid overtime. Plaintiffs claim that they were paid a fixed hourly
rate of $16.00/ $18.00 per hour?, regardless of the number of hours worked in a week.
Plaintiffs further claim that their workday began at 6:30 am and worked at least until
5:00 pm on Monday through Thursday. On Friday and Saturday, Plaintiffs claim
their workday began at 6:30 am and worked until at least 3:00 pm. Plaintiffs estimate
that they worked, on average, at least 56 hours per week. The Court finds that
Plaintiffs have sufficiently pleaded Defendants’ violation of the overtime wage
requirement.
Plaintiffs assert that since they were paid $16.00/$18.00 per hour for all hours
worked, they are owed an additional $8.00/$9.00 per hour worked in overtime.

2 Plaintiffs Selvin Reyes and Nectali Reyes were paid $16.00 per hour, and Plaintiff Mendoza was
paid $18.00 per hour.

Plaintiffs also claim entitlement to liquidated damages in a sum equal to their unpaid
overtime because Defendants allegedly knowingly and willfully violated the FLSA.
Plaintiff Selvin Reyes claims Defendants are liable to him in the amount of $2,304.00
for an estimated 288 hours, plus $2,304.00 in liquidated damages.® Plaintiff Nectali
Reyes claims Defendants are liable to him in the amount of $2,304.00 unpaid
overtime for an estimated 288 hours, plus $2,304.00 in liquidated damages.‘ Plaintiff
Edgar Anaya Mendoza claims that Defendants are liable to him in the amount of
$3,312.00 for 368 hours, plus $3,312.00 in liquidated damages.5 The Court finds that
Plaintiffs have sufficiently pleaded the amount of overtime wages due.
Based upon the well-pleaded allegations of Plaintiffs’ complaint and their
declarations, the Court determines, by a preponderance of the evidence, that
Defendants have violated the FLSA by failing to pay overtime wages as required
under the statute.
C. Plaintiffs’ Requested Relief
1. Unpaid Overtime Wages
Under the FLSA, any employer who violates the provisions of 29 U.S.C. § 207
shall be liable to the employee(s) affected in the amount of their unpaid overtime
compensation. 29 U.S.C. § 216(b). Plaintiff Selvin Reyes and Nectali Reyes seek an
additional $8.00 an hour owed for every overtime hour worked, and Plaintiff Mendoza
seeks an additional $9.00 an hour. Defendants owe Plaintiffs Selvin Reyes and

3 See Declaration of Selvin Reyes, Doe. 10-2.
4 See Declaration of Nectali Reyes, Doc. 10-3.
5 See Declaration of Edgar Anaya Mendoza, Doc. 10-4.

Nectali Reyes each $2,304.00 in unpaid wages for 288 hours, and Plaintiff Mendoza
is owed $3,312.00 in unpaid wages for 368 hours.
2. Liquidated Damages
Plaintiffs also request liquidated damages. Under the FLSA, an employer who
violates the overtime wage requirement shall owe liquidated damages in an amount
equal to the unpaid overtime wages. See 29 U.S.C. § 216(b).6 However, if an employer
shows to the satisfaction of the court that the omission was in good faith and had
reasonable grounds for believing the omission of pay was not in violation of the FLSA,
the Court may decline to award liquidated damages. See 29 U.S.C. § 260; Heidtman
v. County of Hl Paso, 171 F. 3d 1088, 1042 (5th Cir. 1999). Since Defendants failed to
respond to this action, the Court is not required to decline the award of liquidated
damages based on good faith and reasonable grounds. The Court finds that
Defendants are liable to Plaintiffs Selvin Reyes and Nectali Reyes for liquidated
damages in the amount of $2,304.00 each, and to Plaintiff Mendoza for $3,312.00.
3. Attorneys Fees and Court Costs
Under § 216, “the court in such action shall, in addition to any judgment
awarded to the plaintiff, allow a reasonable attorney's fee to be paid by the defendant,
and costs of the action.” Courts use a two-step process to calculate reasonable
attorney's fees. Muigis v. Pearle Vision, Inc., 185 F.3d 1041, 1047 (th Cir. 1998).
First, the court calculates a “lodestar” fee by multiplying the reasonable number of

Plaintiffs seek liquidated damages due to Defendants’ knowing and willful violation of the overtime
provision. 29 U.S.C. § 216(b) does not require a court to find a knowing and willful violation to award
liquidated damages. See Lee v. Coahoma County, Miss, 937 F. 2d 220, 226 (6th Cir. 1991).

hours spent on the case by the reasonable hourly rates for the participating lawyers.
fd. Second, the court considers whether the lodestar should be adjusted upward or
downward depending on the circumstances of the case, using twelve factors.’ Id.
(citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir, 1974)).
The party seeking attorney's fees bears the initial burden of submitting adequate
documentation of the hours expended and the hourly rates. Hensley v. Eckerhart, 461
U.S. 424, 437 (1983).
Plaintiff seeks an award of attorney’s fees in the amount of $2,175.00. This is
based on 5.25 hours of attorney time at the hourly rate of $200, 3.00 hours of attorney
time at the hourly rate of $375.00. (Doc. 10-5), Plaintiffs’ counsel submitted an
affidavit explaining the attorney's fees and court costs. Jd. Moreover, given that
Plaintiffs’ attorneys have been practicing law for twenty years combined in FLSA
claims, the Court concludes that $200.00 and $875.00 an hour are a reasonable rate
requests. The Court shall award Plaintiffs this amount incurred in attorney’s fees.
Plaintiffs also seek an award of court costs for $482.20. This 1s based on a
$400.00 filing fee and a service of process costs of $82.20. The Court shall award
Plaintiffs this amount of court costs incurred.

factors are: (1) the time and labor required for the litigation; (2) the novelty and difficulty of the
questions presented: (8) the skill required to perform the legal services properly; (4) the preclusion of
other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the
fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the
amount involved and the result obtained; (9) the experience, reputation and ability of the attorneys;
(10) the “undesirability” of the ease; (11) the nature and length of the professional relationship with
the chent; and (12) awards in similar cases.” Migis, 135 I. 3d at 1047.
10

IV. CONCLUSION
IT IS ORDERED that Plaintiffs Motion for Confirmation of Default
Judgment is GRANTED.
IT IS FURTHER ORDERED that an award in the amount of unpaid
overtime damages and liquidated damages is hereby entered in favor of Plaintiffs
against Defendant, in the amount of $15,840.00—that is $7,920.00 in unpaid wage
damages and $7,920.00 in liquidated damages.
IT IS FURTHER ORDERED that Plaintiffs shall be awarded $2,175.00 in
attorney's fees and $482.20 in court costs.
~ Ol xt
Baton Rouge, Louisiana, this “= day of January, 2020.
(A. @ St
JUDGE BRIAN A) SON
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10191274. Public record. Not legal advice.