Hantz v. Prospect Mortg., LLC

• Decision Date: 05 February 2014
• Docket Number: No. 1:13cv1435JCC/TRJ.,1:13cv1435JCC/TRJ.
• Citation: 11 F.Supp.3d 612
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Ronald HANTZ, Plaintiff, v. PROSPECT MORTGAGE, LLC, Defendant.

11 F.Supp.3d 612

Ronald HANTZ, Plaintiff
v.
PROSPECT MORTGAGE, LLC, Defendant.

No. 1:13cv1435JCC/TRJ.

United States District Court, E.D. Virginia, Alexandria Division.

Signed Feb. 5, 2014.

11 F.Supp.3d 614

David Lawrence Scher, Nicholas Wyckoff Woodfield, Robert Scott Oswald, The Employment Law Group PC, Washington, DC, for Plaintiff.

Taron Kato Murakami, Seyfarth Shaw LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION

JAMES C. CACHERIS, District Judge.

This matter is before the Court on Defendant Prospect Mortgage, LLC's (“Defendant” or “Prospect”) Motion for Summary Judgment. [Dkt. 9.] For the following reasons, the Court will grant Defendant's Motion.

I. Background

Prospect is a California corporation that offers consumer lending products. (Second Am. Compl. ¶ 9.) Plaintiff Ronald Hantz (“Plaintiff”) worked as a mortgage loan officer at Prospect from January 24, 2007, until October 16, 2009. (Second Am. Compl. ¶ 7; Joint Statement of Facts ¶ 9.)

In October 2010, several former mortgage loan officers filed a collective action against Prospect under the Fair Labor Standards Act (“FLSA”). See Sliger v. Prospect Mortg., LLC, No. CIV. S–11–465 LKK/EFB, 2011 WL 3747947, at *1 (E.D.Cal. Aug. 24, 2011). Plaintiffs alleged that Prospect “misclassified them as

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exempt employees under the FLSA, and therefore improperly failed to pay them minimum wage and overtime.” Id. at *2. Plaintiff opted-in to the Sliger matter on January 6, 2012. (Second Am. Compl. ¶ 17.)

On January 23, 2013, the Sliger action decertified and Plaintiff was removed from the case. (Second Am. Compl. ¶ 19.) Consequently, Plaintiff filed this action against Prospect alleging analogous violations of the FLSA.¹ Plaintiff avers that Defendant wrongfully classified him as an exempt employee, resulting in lost minimum wage and overtime compensation. (Id. at ¶¶ 23–33.)

Defendant has now moved for summary judgment. (Def.'s Mot. for Summ. J. at 1.) Defendant first argues that Plaintiff is exempt from the FLSA's overtime and minimum wage requirements under the statute's “outside sales exemption,” which provides that employers are relieved of these obligations for employees engaged “in the capacity of outside salesman.” (Def.'s Mem. in Support at 6 (citing 29 U.S.C. § 213(a)(1) ).) In support, Defendant points to testimony from Plaintiff's former manager, Grayson Hanes, who testified that Plaintiff was expected to be “our there knocking on doors.” (Id. at 11.) Defendant has also produced testimony that Plaintiff regularly engaged in sales work away from the office. (Id. at 9.) Thus, concludes Defendant, Plaintiff was properly classified as exempt. (Id. at 9–10.)

Defendant separately argues that Plaintiff's claims are time-barred. (Def.'s Mem. in Support at 12.) Defendant notes that Plaintiff initiated this action, at the earliest, on January 6, 2012, when he joined the Sliger lawsuit. Therefore, under the applicable two-year limitations period, Plaintiff cannot recover for violations prior to January 6, 2010. (Id. ) Plaintiff, however, ceased working for Prospect in October 2009. (Id. )

On January 24, 2014, Plaintiff filed his opposition. (Pl.'s Opp'n at 1.) First, Plaintiff disputes his classification as an exempt employee. (Id. at 20.) According to Plaintiff, the evidence shows that he performed a vast majority of his work inside of Defendant's office and “did not engage in any outside sales activities on a customary and regular basis.” (Id. ) Thus, surmises Plaintiff, the outside sales exemption is inapplicable. As for timeliness, Plaintiff argues that his claims are justiciable under the FLSA's three-year limitations period. (Id. at 26.) Plaintiff contends that the applicability of this extended limitations period is a question for the jury, and therefore summary judgment is inappropriate. (Id. )

Defendant's Motion for Summary Judgment is now before the Court.

II. Standard of Review

Summary judgment is appropriate only if the record shows “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party always bears the initial burden of “informing the district court of the basis for its motion,” and identifying the matter “it believes demonstrate[s] the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323, 106 S.Ct. 2548. “A material fact is one ‘that might

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affect the outcome of the suit under the governing law.’ A disputed fact presents a genuine issue ‘if the evidence is such that a reasonable jury could return a verdict for the non-moving party.’ ” Spriggs v. Diamond Auto Glass, 242 F.3d 179, 183 (4th Cir.2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ).

Once the movant has met the initial burden, “the non-moving party ‘may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial.’ ” Hughes v. Bedsole, 48 F.3d 1376, 1381 (4th Cir.1995) (quoting Anderson, 477 U.S. at 256, 106 S.Ct. 2505 ). This is particularly important where the opposing party bears the burden of proof. Hughes, 48 F.3d at 1381. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. Anderson, 477 U.S. at 249–50, 106 S.Ct. 2505. The mere existence of a scintilla of evidence is insufficient; there must be evidence on which the jury could reasonably find for the non-moving party. Id. at 252, 106 S.Ct. 2505. The judge's inquiry, therefore, unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the opposing party is entitled to a verdict.

In reviewing the record on summary judgment, the Court “must draw any inferences in the light most favorable to the non-movant” and “determine whether the record taken as a whole could lead a reasonable trier of fact to find for the non-movant.” Brock v. Entre Computer Ctrs., Inc., 933 F.2d 1253, 1259 (4th Cir.1991) (citations omitted). “[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249, 106 S.Ct. 2505.

III. Analysis

A. Statute of Limitations

The Court will first address the threshold issue of whether the applicable statute of limitations precludes Plaintiff's claims. See Baldwin v. City of Greensboro, No. 1:09CV742, 2012 WL 1405789, at *4 (M.D.N.C. Mar. 1, 2012), report and recommendation adopted by, 2012 WL 9703088 (M.D.N.C. May 7, 2012).

A two-year statute of limitations applies to ordinary violations of the FLSA, but a three-year statute of limitations applies to willful violations. See 29 U.S.C. § 255(a) ; Desmond v. PNGI Charles Town Gaming, L.L.C., 630 F.3d 351, 357 (4th Cir.2011) (“The FLSA provides two potential limitations periods. For non-willful FLSA violations, a two-year statute of limitations applies. When the violation is willful, a three-year statute of limitations applies.” (citations omitted)). Accordingly, a plaintiff is limited to looking back two or three years for breaches of the FLSA by their employer. See Qin Yong Jin v. Any Floors, Inc., No. 1:10–cv–1201, 2012 WL 777501, at *3 (E.D.Va. Mar. 5, 2012).

This two-tier system “makes it obvious that Congress intended to draw a significant distinction between ordinary violations and willful violations.” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 132, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988). As articulated by the Supreme Court, a violation is willful if the employer either knew or showed reckless disregard for whether its conduct was prohibited. Id. at 133, 108 S.Ct. 1677. “If an employer acts unreasonably, but not recklessly, in determining its legal obligation” it is not considered willful. Id. at 135 n. 13, 108 S.Ct. 1677. Hence, “[m]ere negligence on the part of the employer with regard to

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compliance with the FLSA is not sufficient to prove willfulness.” Gionfriddo v. Jason Zink, LLC, 769 F.Supp.2d 880, 890 (D.Md.2011) (citation omitted).

The employee bears the burden of proof when alleging that a violation is willful. See Desmond, 630 F.3d at 358. Although this is ultimately a question of fact, a plaintiff must present sufficient evidence of willfulness to survive summary judgment. See Pignataro v. Port Authority, 593 F.3d 265, 273 (3d Cir.2010).

Here, Plaintiff's claims plainly fall outside the two-year limitations period given he commenced this action by joining the Sliger lawsuit on January 6, 2012, but ceased working for Prospect on October 16, 2009. See LaFleur v. Dollar Tree Stores, Inc., No. 2:12–cv–00363, 2012 WL 4739534, at *1 (E.D.Va. Oct. 12, 2012) (noting that an action under the FLSA is considered “commenced” when the...