Klotz v. Ippolito

• Decision Date: 21 July 1941
• Docket Number: No. 62.,62.
• Citation: 40 F. Supp. 422
• Parties: KLOTZ v. IPPOLITO.
• Court: U.S. District Court — Southern District of Texas

40 F. Supp. 422

KLOTZ v. IPPOLITO.

No. 62.

District Court, S. D. Texas, Galveston Division.

July 21, 1941.

A. B. Wilson and L. A. Kottwitz, both of Houston, Tex., for plaintiff.

Maurice M. Davis and C. E. Coolidge, both of Houston, Tex., for defendant.

KENNERLY, District Judge.

By Complaint filed January 13, 1941, plaintiff instituted this suit against defendant, to recover overtime under the Fair Labor Standards Act of 1938, Sections 201 to 219, Title 29 U.S.C.A. An amended complaint, upon which the case was tried, was filed April 5, 1941. It is alleged that plaintiff was employed by defendant July 12, 1937, and worked for defendant until February 6, 1940, when he was discharged. Plaintiff sues for overtime under such Act from October 24, 1938, until February 6, 1940, the time of his discharge, and for damages and attorney's fees.

Defendant answered, admitting plaintiff's employment on July 12, 1937, and that plaintiff worked for him from that date until discharged February 6, 1940, but denies liability to plaintiff for overtime. Defendant also pleads the Texas two-year statute of limitation. He also seeks to offset against any recovery by plaintiff an indebtedness by plaintiff to defendant in the sum of $275 and interest, etc., thereon, arising out of the payment by defendant of that sum on plaintiff's note to the City National Bank of Galveston, upon which defendant was an endorser. He also prays that in case plaintiff be denied recovery against defendant, that defendant have judgment over against plaintiff for the $275, with interest, etc.

Plaintiff filed replication, setting forth that under the Constitution of Texas, defendant may not offset such indebtedness against plaintiff's claim for overtime wages, damages, and attorney's fees.

The facts are substantially as follows:

(a) Plaintiff was employed by defendant July 12, 1937, and continued in defendant's employ at Galveston, Texas, in this Division and District, until February 6, 1940, at which time he was discharged. Under the oral contract of employment, plaintiff was employed to work 6 days per week, at the rate of $5 per day of 9 hours, beginning approximately at 7 A. M. and ending approximately at 5 P. M. There was no agreement by defendant to pay plaintiff anything additional if and when plaintiff worked more than 9 hours per day. On one occasion when plaintiff worked only 4½ days, or 40½ hours, in one week, he was paid for 4½ days at $5 per day, or $22.50.

(b) When the Fair Labor Standards Act became effective October 24, 1938, defendant believing that neither his business nor plaintiff's employment came within the scope of such Act, there was no change either in plaintiff's rate of pay per day nor his hours of employment.

Because the employment of plaintiff was by the day of 9 hours, and 6 days a week, it follows, and I find, that plaintiff's regular rate of pay was, and he was paid, for 44 hours per week during the first year such Act was in force, $24.45. His rate of pay was, and he was paid, for 10 hours per week in excess of such 44 hours (overtime) during such first year, $5.55. And plaintiff's regular rate of pay was, and he was paid, for 42 hours per week during the part of the second year he worked while such Act was in force, $23.33. His rate of pay was, and he was paid, for 12 hours per week in excess of such 42 hours (overtime) during such period, $6.67.

(c) Plaintiff claims that he frequently worked more than 9 hours per day, and produced a diary purporting to show quite in detail that he did. This, defendant strenuously denied. I think the preponderance of the evidence on that issue is with defendant, and I find that plaintiff did not work more than 9 hours per day. He was paid the contract price for all the work he did.

(d) Defendant has a bottling plant and is engaged in the manufacture, processing and bottling of soda water, etc., and selling same at wholesale, which business he carries on in the City of Galveston. He bought outside of Texas during the time plaintiff was employed by him one or possibly two of the ingredients (syrup) used by him in manufacturing, processing, and bottling soda water, etc. He bought outside of Texas during the time plaintiff was employed by him some of the bottles in which the soda water, etc., was bottled. When such syrup and such bottles were received, they were stored in defendant's place of business where they remained until they were needed and used in his bottling business. These purchases outside of Texas were relatively unimportant, and plaintiff performed no work in connection therewith. None of the soda water, etc., bottled by defendant was sold or delivered outside of Texas during the time plaintiff was employed by defendant. Defendant's soda water, etc., business has been carried on in the same way since plaintiff left his employ.

(e) Defendant, during the time of plaintiff's employment, was also engaged in the wholesale sale of beer. He had a large warehouse in which his supply of beer, bottles, cans, etc., were kept. He bought beer in quite large quantities from the manufacturers thereof in New Orleans, Louisiana, and Peoria, Illinois, and it was shipped to him by rail in freight cars or by water on barges, with bill of lading attached to draft, which was sent through the banks. When he paid the draft at the bank, he obtained the bill of lading and took possession of the beer in the box car or on the barge, and moved it to and stored it in his warehouse. It was then sold from time to time in lots or parcels in the regular course of his wholesale beer business. A negligible amount of beer was sold at retail. He made no sales nor deliveries of beer outside of Texas.

Defendant's customers returned to him the empty beer containers, and he returned them to the beer manufacturers. Defendant's beer business has been carried on in the same way since plaintiff left his employ.

(f) Plaintiff was employed by defendant primarily to have charge of defendant's bottling plant. It appearing that his duties in the bottling plant would not consume all of his time, there was also included in his employment the unloading into defendant's warehouse, from time to time, of beer from railroad freight cars or barges. Also the loading of empty beer containers into freight cars, etc., to be returned to the beer manufacturers. From time to time, during his employment, plaintiff helped unload beer and helped load empty containers, but his principal and major employment was in the soda water business or bottling department. The unloading of beer and the loading of empty containers was infrequent, and plaintiff only worked unloading beer and/or loading empty containers a part of the time during approximately one-fourth of the weeks he worked for defendant. During the other three-fourths of the weeks he worked for defendant, he worked wholly or exclusively in the soda water, etc., bottling business.

(g) Plaintiff, as head of defendant's bottling department, decided when to bottle soda water, etc., hired, controlled and discharged employees of that department, and had general executive supervision thereof. He had, however, no supervision or control over any of defendant's employees engaged in the beer business, and insofar as the beer business was concerned, plaintiff was not a bona fide executive or administrator as defined in such Act.

(h) The principal business of defendant, both as to volume and money value, was the beer business. Such beer business was probably one and one-half or two times more than the soda water, etc., business. Taken as a whole, defendant's chief business was the intrastate sale of beer and the intrastate manufacture and sale of soda water, etc. While the purchase outside of Texas of the bottles and syrup for the soda water, etc., and the purchase outside of Texas of beer, and the return of the empty containers, were transactions in interstate commerce or commerce within the meaning of the Act, such transactions were only incidental to defendant's main intrastate business.

(i) Defendant has not complied, and has made no effort to comply, with the Fair Labor Standards Act of 1938, because he has been advised that his business is not covered thereby.

(j) Plaintiff is indebted to defendant in the sum of $275, same being the amount paid by defendant on a note of plaintiff endorsed by defendant at a bank, with interest at 6% from date of payment.

(k) I find $200 to be a reasonable attorney's fee for bringing and prosecuting this suit by plaintiff's attorneys.

1. Defend...