McCloskey & Co. v. Eckart

• Decision Date: 12 November 1947
• Docket Number: No. 11967.,11967.
• Citation: 164 F.2d 257
• Parties: McCLOSKEY & CO. v. ECKART.
• Court: U.S. Court of Appeals — Fifth Circuit

164 F.2d 257 (1947)

McCLOSKEY & CO. v. ECKART.

No. 11967.

Circuit Court of Appeals, Fifth Circuit.

November 12, 1947.

T. Paine Kelly, Jr., of Tampa, Fla., for appellant.

B. A. Gregory and Donn Gregory, both of Tampa, Fla., for appellee.

Before SIBLEY, HUTCHESON, and HOLMES, Circuit Judges.

SIBLEY, Circuit Judge.

Appellee Eckart on July 9, 1945, sued his employer McCloskey & Co. for $1,002.13 as liquidated damages arising from delay in paying $1,002.13 overtime earned between Nov. 1, 1942, and Jan. 15, 1943, and also for $100.06 of overtime between July 2, 1944, and Oct. 1, 1944, and a like sum of $100.06 as liquidated damages for delay, all by virtue of the Fair Labor Standards Act, 29 U.S.C.A. § 216(b). He alleged he worked in the payroll department and did work "necessary in handling the accounts of the many employees engaged in constructing ships and boats for use in interstate and foreign commerce for the United States Government in prosecution of the present war"; and that $1002.13 was about May 15, 1945, paid him for actual overtime worked prior to July 1, 1944, but with no damages added; and an itemized schedule of overtime since July 1, 1944, was annexed. Because of the interest of the United States in the matter, the ships being built on a cost plus basis, the United States District Attorney undertook the defense, but for more than four months was unable to obtain instructions from Washington, and after two extensions of time to plead, the Clerk on plaintiff's motion entered a default on Nov. 29, 1945. On that date further time was asked by the district attorney to allow the defendant to file an answer. The request was resisted, and the court said that in view of the circumstances the plaintiff might go ahead and prove his case, but no judgment would be entered for a few days or weeks to enable the Maritime Commission to come in and show they have a defense. The plaintiff's evidence was then heard. On Dec. 6, 1945, a formal motion was filed to open the default and an answer was tendered. The court said the first question was whether a defense was presented; "If so, the Court may permit the case to be opened; but if not, it would be an idle gesture". In addition to the allegations of the answer, counsel made a more detailed statement of the defenses intended to be proved, and the matter was then taken under advisement. On Dec. 21, 1946, a final judgment was rendered, the judge referring in his conclusions of law to each proposed defense and holding that it was not good in law, and giving judgment for the amounts sued for, with attorney's fees. This appeal was taken.

1. There was no formal overruling of the motion to open the default, but the judgment given amounted to a denial of it upon the ground that the defenses offered were not good in law. The opening of a default under Federal Rules, of Civil Procedure, rule 55(c), 28 U.S.C.A. following section 723c, is generally discretionary, but the record indicates that discretion would have been favorably exercised if a good defense had been offered. We accordingly examine the defenses pleaded.

2. The answer admits that defendant was building ships and boats for use in interstate and foreign commerce and for the United States Government, but denies that plaintiff had correctly stated his duties; averring that until Jan. 16, 1943, he was head payroll clerk, but then became "Head Payroll Supervisor" and his job classification was changed to "Supervision and Clerical", and so continued to the end; and that during all said time his duties were of an executive and administrative character, and he drew a fixed monthly salary which was to be full remuneration for his services regardless of hours required, and not based on forty hours per week, plus eight hours overtime as he alleged. It was denied that any overtime was earned as alleged, at any period. Passing for the present the denials, the defense that Eckart's work was executive and administrative is good for such periods as that can be proven. The Act excepts from its application "any employee employed in a bona fide executive or administrative * * * capacity * * * as * * * defined * * * by regulations of the Administrator", 29 U.S.C.A. § 213(a). The regulations are stated and applied in Smith v. Porter, 8 Cir., 143 F.2d 292. Whether Eckart was within the exception presents a mixed question of law and fact which might be decided favorably to this defense and ought to be tried out.

3. It is argued that the payment of $1002.06 in 1945 is a conclusive admission that overtime to that amount had been earned prior to July 1, 1944, and was due under the Act, so that the penalty in like amount is recoverable as a matter of law. The answer denies that any overtime was in fact due under the Act, but that a dispute existed about it, and that the $1002.06 was paid as a compromise of the entire dispute, and a sealed release executed which is exhibited. The release recites that there was dispute whether Eckart's claim was covered by the Act, and as to the number of hours overtime worked, and the rate of compensation, and that employee and employer had agreed on an adjustment of all such disputes and a compromise settlement of the number of hours of overtime actually worked and the rate of overtime compensation, "as well as the total amount and other terms of the liquidation of such claims, with the distinct and mutual understanding, however, that such adjustment shall not be considered nor be a recognition in any respect by the employer of any legal obligation or responsibility therefor under the existing facts and circumstances." The words of release are "I * * * in consideration of the sum of...