Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 06-15931.

• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Citation: 515 F.3d 1150
• Docket Number: No. 06-15931.,06-15931.
• Parties: Israel ALVAREZ PEREZ, Plaintiff-Appellee Cross-Appellant, v. SANFORD-ORLANDO KENNEL CLUB, INC., Collins & Collins, d.b.a. CCC Racing, Defendants-Appellants Cross-Appellees, Jack Collins, Defendant Cross-Appellee.
• Decision Date: 29 January 2008

515 F.3d 1150 Israel ALVAREZ PEREZ, Plaintiff-Appellee Cross-Appellant,
v.
SANFORD-ORLANDO KENNEL CLUB, INC., Collins & Collins, d.b.a. CCC Racing, Defendants-Appellants Cross-Appellees,
Jack Collins, Defendant Cross-Appellee. No. 06-15931. United States Court of Appeals, Eleventh Circuit. January 29, 2008.

[515 F.3d 1152]

Barnett Q. Brooks, Ogletree, Deakins, Nash, Smoak & Stewart, Tampa, FL, for Defendants-Appellants Cross-Apellees.

[515 F.3d 1153]

Leigh Todd Budgen, K.E. Pantas, Pantas Law Firm, P.A., Orlando, FL, for Alvarez Perez.

Appeals from the United States District Court for the Middle District of Florida.

Before CARNES, BARKETT and HILL, Circuit Judges.

CARNES, Circuit Judge:

This appeal and cross-appeal arise from an overtime wages lawsuit brought under the Fair Labor Standards Act, 29 U.S.C. §§ 201-19, by Israel Alvarez Perez against Sanford-Orlando Kennel Club, Inc., Collins & Collins Partnership d/b/a CCC Racing, and Jack Collins, Sr. The judgment winding up the litigation in the district court found Kennel Club and CCC Racing, but not Collins, Sr., liable for a violation of the FLSA overtime wages provision and awarded damages, but not liquidated damages, to Perez. All of the parties except Collins, Sr. were unhappy with one or more parts of the judgment.

Kennel Club and CCC Racing have appealed from the judgment insofar as it found them liable on the overtime claim. They contend that the district court should have granted them judgment as a matter of law on the theory that they are separate establishments, which would mean that each of them was a seasonal operation qualifying for the recreational and amusement exemption in 29 U.S.C. § 213(a)(3).

Perez has cross-appealed from two aspects of the judgment. He contends that the district court erred in granting Collins, Sr. judgment as a matter of law on the theory that he was not Perez's employer. He also contends that in light of the jury's finding for statute of limitations purposes that the violations were willful, it was error for the court to then find that the defendants had acted in good faith, thereby precluding liquidated damages.

I.

From 1955 through 2001, Kennel Club operated a winter greyhound racing season from November through May of each year at its Longwood facility near Orlando, Florida. At that time, there was another facility—the Seminole Raceway—located just two or three miles away from Kennel Club that operated a summer season of greyhound racing. In November 2000 Jack Collins, Jr., on behalf of Kennel. Club, initiated discussions with Seminole Race way's management, inquiring whether Seminole would sell its summer racing permit to Kennel Club. Seminole wanted to get out of the greyhound racing business, but some Kennel Club shareholders refused to help Collins, Sr. put up the necessary capital to finance the purchase agreement.

As a result, Collins & Collins Partnership purchased Seminole's summer racing permit with the personal funds of Jack Collins, Sr., who was an officer and majority shareholder of both Kennel Club and Collins & Collins Partnership. The purchase added a summer race season at Kennel Club's facility to the winter one already being conducted there. Around the same time, Kennel Club registered with the Department of State the name Collins & Collins Partnership d/b/a CCC Racing.

In May 2001 CCC Racing entered into an agreement with Kennel Club to use its facility during the summer months. In that agreement Kennel Club authorized CCC Racing to operate a summer season of greyhound racing at the Longwood facility from May through October of each year. During that summer season, CCC Racing would be responsible for the operations of the Longwood facility: the "general operational activities," "marketing activities," and all "administrative activities,

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including accounting, legal, and compliance activities." As consideration, the agreement entitled Kennel Club "to receive One and One-Half (1.5%) of the aggregate `pari-mutuel wagering handle'" earned by CCC Racing during each summer season. That percentage amounted to $398,821 in 2002 and $388,044 in 2003.

Kennel Club continued conducting winter race meets at the Longwood facility, while CCC Racing began conducting summer race meets there. Although Kennel Club and CCC Racing maintained separate bank accounts, payrolls, tax identification numbers, and permits, the companies did share the same facility, telephone number, credit card, and general liability insurance policy. Money coming from Kennel Club's operating accounts was also recorded as a payable on CCC Racing's books, and CCC Racing controlled Kennel Club's operating cash.

As for the management of the Longwood facility, an agreement between Kennel Club and CCC Racing named Jack Collins, Sr. as the managing agent of the facility. Despite his official position and being known as "the head boss," Collins, Sr.'s sons had actually run the business for him since he suffered a heart attack in 1998. Jack Collins, Jr., rather than his father, had ultimate authority over hiring and firing decisions. In fact, Collins, Sr. had visited the facility only once a year since his heart attack. He had not taken part in the day-to-day operations of the facility since 1998, nor had he been involved in the hiring and firing of employees, employee assignments, determining employee compensation, or supervising employees.

Once the Longwood facility began operating year-round, many employees who worked for Kennel Club during the winter race seasons continued to work for CCC Racing during the new summer seasons. In fact, a majority of the employees at Kennel Club and CCC Racing worked for both companies. These employees performed the same work year-round, with the only notable difference being that they received separate paychecks from the two entities for each half of the year. Perez, who worked maintenance at the racetrack facility for nearly two years, was one of these employees. He generally received separate tax forms and paychecks from Kennel Club and. CCC Racing. On one occasion, however, Perez was paid by Kennel Club during a period in which CCC Racing was operating the Longwood facility.

In February 2005 Perez filed a complaint in the Middle District of Florida against both Kennel Club and Jack Collins, Sr., which Perez later amended to include CCC Racing as an additional defendant. The complaint contended that all of the defendants were Perez's former employers and had "repeatedly and willfully" violated 29 U.S.C. § 207 "by failing to compensate [him] at a rate not less than one and one-half times his regular rate at which he was employed for workweeks longer than (40) hours." He asked that the defendants be held jointly and severally liable for unpaid overtime wages and for an additional amount as liquidated damages.

The defendants answered Perez's complaint by asserting that they were not his employers under the FLSA, and that his claims were barred by the recreational and amusement exemption in 29 U.S.C. § 213(a)(3) under what they characterized as the "six-month receipts test and/or the seasonal operation test." They also asserted that the claims were "barred, in whole or in part, by the applicable statute of limitations," and that "[a]ll actions taken by the Defendants with respect to its [sic] relationship with [Perez] were in good

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faith and based on legitimate business interests."

The district court conducted a two-day jury trial in September 2006. After the conclusion of Perez's case, the defendants moved for judgment as a matter of law.¹ The district court reserved judgment on that motion and ultimately sent the case to the jury, which returned a verdict in favor of Perez against all three defendants. Specifically, the jury found that each of the defendants was not "exempt from the [FLSA] through the seasonal operation exemption or the six-month receipts test," that Collins, Sr. was Perez's employer, and that each of the defendants had failed to pay Perez the overtime compensation to which he was entitled by law. On the statute of limitations issue, the jury found that the defendants "either knew or showed reckless disregard for whether its conduct was prohibited by the FLSA," meaning that they acted willfully.

Following the jury's verdict, the defendants renewed their motions for judgment as a matter of law and also moved for a new trial. The district court granted judgment as a matter of law to Collins, Sr. concluding that he was not Perez's employer under the FLSA because, although he "may have owned the company and he may have had control as the owner," he did not have the dealings with employees that the FLSA requires. As to Kennel Club and CCC Racing, the district court denied their motions.

Although the district court allowed the jury's verdict against Kennel Club and CCC Racing to stand, it denied Perez's motion for liquidated damages. As a basis for that denial, the court relied on its own finding that Kennel Club and CCC Racing had sought advice regarding the exemption issue from both an attorney and their payroll company. The court was satisfied that this was enough to show that they had acted in good faith for purposes of 29 U.S.C. § 260, even though the jury, in connection with the statute of limitations issue, had found that their violations of the FLSA had been willful ("either knew or showed reckless disregard for whether its conduct was prohibited by the FLSA"). The court explained that the inconsistency between its finding and the jury's was permitted because it was "within the Court's domain, not the jury's, to determine whether Defendants established a good faith defense," thereby precluding liquidated damages.

Kennel Club and CCC Racing filed this appeal. They contend that the district court erred in denying their motions for judgment as a matter of law because they are exempt from the overtime requirement of the FLSA pursuant to the...