Rutledge v. Action Products Int'l, Inc.

• Court: U.S. District Court — Middle District of Florida
• Writing for the Court: MARY S. SCRIVEN
• Decision Date: 17 August 2011
• Docket Number: Case No. 6:09-cv-1245-Orl-35GJK
• Citation: Rutledge v. Action Products Int'l, Inc., Case No. 6:09-cv-1245-Orl-35GJK (M.D. Fla. Aug 17, 2011)
• Parties: DEBRA RUTLEDGE, ERIC RUTLEDGE and JEANNE MOORE, Plaintiffs, v. ACTION PRODUCTS INTERNATIONAL, INC., ACTION TOYS, INC, ACTION HEALTHCARE PRODUCTS, INC., CURIOSITY KITS, INC., WARREN KAPLAN and JUDITH KAPLAN, Defendants.

DEBRA RUTLEDGE, ERIC RUTLEDGE and JEANNE MOORE, Plaintiffs,

v. ACTION PRODUCTS INTERNATIONAL, INC., ACTION TOYS, INC,ACTION HEALTHCARE PRODUCTS, INC., CURIOSITY KITS, INC.,WARREN KAPLAN and JUDITH KAPLAN, Defendants.

Case No. 6:09-cv-1245-Orl-35GJK

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION

Dated: August 17, 2011

ORDER

THIS CAUSE comes before the Court for consideration of Plaintiffs' Renewed and Revised Motion for Entry of Final Default Judgment against Corporate Defendants. (Dkt. 154) Upon consideration of all relevant filings, case law, and being otherwise fully advised, the Court hereby GRANTS Plaintiffs' motion (Dkt. 154), as described herein.

I. BACKGROUND

On July 17, 2009, Plaintiffs filed their Verified Complaint in this case, alleging violations of the Fair Labor Standards Act ("FLSA") (Count I), breach of contract (Count II), retaliation under the FLSA and the Florida Whistleblower Act ("FWA") (Count III), and damages for violations of COBRA and the American Recovery and Reinvestment Act ("ARRA") (Count IV). (Dkt. 1 at 12-17) Defendants filed their Answer, Affirmative Defenses, and Counterclaim on August 7, 2009, which included a counterclaim byDefendants/Counter-Plaintiffs Action Products International, Inc. ("APII"), Judith Kaplan, and Warren Kaplan against Plaintiff/Counter-Defendant Debra Rutledge for indemnification. (Dkt. 4 at 7-9) On October 7, 2010, the Clerk entered Default Judgment against Defendants Action Products International, Inc., Action Toys, Inc., Action Healthcare Products, Inc., and Curiosity Kits, Inc., after these corporate Defendants failed to retain counsel. (See Dkt. 52; Dkt. 57)

Plaintiffs and individual Defendants Warren and Judith Kaplan proceeded to a jury trial and settled their claims after the first day. (See Dkt. 128; Dkt. 128; Dkt. 129) On March 10, 2011, the Court held a hearing and granted the parties' Oral Stipulated Motion to Approve Settlement Agreement and Dismiss Action with Prejudice as to the individual Defendants. (Dkt. 128) At the hearing, Plaintiffs counsel advised that she was "undergoing some settlement negotiations with the corporate defendant, who has finally engaged counsel in Florida[.]" (Tr. Day 2 at 32) Accordingly, the Court issued an Order directing the Plaintiffs to file a status report regarding negotiations within twenty-one days. (Dkt. 133) In a March 31, 2011 status report, Plaintiffs requested an additional two weeks to continue settlement negotiations with corporate Defendant APII, advising that "[t]he other corporate Defendants refuse to discuss settlement." (Dkt. 134 at 1) No other status report has been filed and it appears that Plaintiffs have been unable to resolve their claims against corporate Defendants APII, Action Toys, Inc., Action Healthcare Products, Inc., and Curiosity Kits, Inc.

At Plaintiffs' request, the Court dismissed Plaintiff Eric Rutledge and Plaintiff Jeanne Moore's retaliation claims and Plaintiff Debra Rutledge's FLSA minimum wageclaim against the corporate Defendants on July 6, 2011. (Dkt. 147) On August 4, 2011, the Court dismissed Plaintiff Debra Rutledge's retaliation claims against the corporate Defendants. (Dkt. 155) Plaintiffs filed the instant motion on August 2, 2011, requesting final default judgment be entered against (1) Plaintiff Eric Rutledge and Plaintiff Jeanne Moore's unpaid wages/breach of contract claims (Count II); (2) Plaintiff Debra Rutledge's unpaid wages/breach of contract claim (Count II); and (3) Plaintiff Debra Rutledge's COBRA violation claim (Count IV). (Dkt. 154 at 3)

II. FACTS

Based on the Verified Complaint (Dkt. 1) and Plaintiff's Motion (Dkt. 154), the Court finds as follows:

1. This Court has jurisdiction over Plaintiffs, Debra Rutledge, Eric Rutledge, and Jeanne Moore, and Defendants, Action Products International, Inc., Action Toys, Inc., Action Healthcare Products, Inc., and Curiosity Kits, Inc., and has subject matter jurisdiction over this action.

2. At all times material hereto, the principal executive office and headquarters of each corporate Defendant was located at 1101 N. Keller Road, Suite E, Orlando, Florida 32810.

3. Defendant APII was the holding company for the other three corporate Defendants—Action Toys, Inc., Action Healthcare Products, Inc., and Curiosity Kits, Inc.—and owned, operated, and controlled these entities at all times material hereto.

4. Defendant APII was incorporated in Florida in 1980 and became a publicly traded company on the NASDAQ stock market in 1984. 5. Defendant APII is engaged in the business of toy marketing, manufacturing, and sales.

6. Plaintiff Debra Rutledge was employed by Defendant APII from September 2000 until March 2009. During her tenure, Plaintiff Debra Rutledge served as the corporation's controller and manager of credit, collections and office operations.

7. Plaintiff Eric Rutledge, Debra Rutledge's son, was employed by Defendant APII for approximately three years, from March 2006 until March 2009.

8. Plaintiff Jeanne Moore was employed by Defendant APII for approximately five years, from March 2005 until March 2009.

9. Plaintiffs' wages were deferred for the payroll periods ending: (1) 02/22/09; (2) 03/08/09; (3) 03/22/09; and (4) 03/24/09. During the pay periods ending 02/22/09 and 03/08/09, Plaintiffs were paid two-thirds of their normal earning, i.e., one-third of their wages were deferred. During the pay periods ending 03/22/09 and 03/24/09, Plaintiffs were paid $10.00 per hour, with the remainder of their wages deferred.

10. Plaintiffs never consented or agreed to a reduction and/or deferral of their wages.

11. Plaintiff Debra Rutledge terminated the employment of Plaintiffs Eric Rutledge and Jeanne Moore on March 20, 2009. Plaintiff Debra Rutledge ceased working for Defendant APII a few days later.

12. Plaintiffs were not paid any deferred wages after their termination from employment.

13. Plaintiff Debra Rutledge was a participant in the corporate Defendants' medical benefit plan on the date of her resignation.

14. The corporate Defendants failed to provide Plaintiff Debra Rutledge with any information or notice regarding health insurance continuation or any other rights she had under COBRA and the ARRA.

15. After her termination, Plaintiff Debra Rutledge incurred $8,507.57 in medical expenses.

III. LEGAL STANDARD AND ANALYSIS

"When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk shall enter the party's default." FED. R. CIV. P. 55(a). However, a defendant's default alone does not require the court to enter a default judgment. DIRECTV, Inc. v. Trawick, 359 F. Supp. 2d 1204, 1206 (M.D. Ala. 2005). To enter a judgment, there must be sufficient basis in the pleadings to support the relief sought. Id. "The defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law. In short . . . a default is not treated as an absolute confession of the defendant of his liability and of the plaintiff's right to recover." Nishimatsu Constr. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). If the facts in the complaint are sufficient to establish liability, then the court must conduct an inquiry to ascertain the amount of damages. See Adolph Coors Co. v. Movement Against Racism & the Klan, 777 F.2d 1538, 1543-44 (11th Cir. 1985).

Damages may be awarded only if the record adequately reflects the basis for the award via a hearing or a demonstration of detailed affidavits establishing the necessary facts. See id. at 1544. While a defaulted defendant admits well-pleaded allegations of liability, allegations regarding the amount of damages are not admitted by virtue of default. Miller v. Paradise of Port Richey, Inc., 75 F. Supp. 2d 1342, 1346 (M.D. Fla. 1999). The Court determines the amount and character of damages and may hold a hearing to determine the same. Id. "Default judgments entered under Florida law only admit to a plaintiff's entitlement to liquidated damages, those damages that can be determined with exactness from the cause of action as pleaded, such as a pleaded agreement between the parties, pleadings susceptible to an arithmetical calculation, or by application of definite rules of law." Loos v. Club Paris, LLC, 684 F.Supp.2d 1328, 1336 (M.D .Fla. 2010).

A. Count II- Breach of Express Employment Contract

For a breach of contract claim, Florida law requires a plaintiff to plead and establish: "(1) the existence of a contract; (2) a material breach of that contract; and (3) damages resulting from the breach." Vega v. T-Mobile, USA, Inc., 564 F. 3d 1256, 1272 (11th Cir. 2009). All three Plaintiffs contend that the corporate Defendants breached an "express oral contract that they would perform their job each day in exchange for payment of the agreed upon salary rate of pay for their labor." (Dkt. 74 at 7-8; see also Dkt. 1 at 13-14) In her sworn declaration, Plaintiff Debra Rutledge stated:

It was the practice, policy and custom of defendants to pay all amounts due and owing to an employee in their last regular paycheck, including unpaid accrued Paid Time Off (PTO), unless that employee was terminated for cause.

(Dkt. 154-1 at ¶ 4) Further, Plaintiffs allege that "Defendants breached that agreement by failing to pay Plaintiffs the deferred amounts." (Dkt. 1 at ¶ 78) As a result, Plaintiffs claim they have suffered financial damages in the form of unpaid wages and unpaid accrued time off. (Dkt. 1 at 13; Dkt. 154 at 6-8)

Plaintiffs' allegations are sufficient to meet the elements of a claim for breach of contract under Florida law. Accordingly, Plaintiffs' motion for default judgment on Count II is GRANTED.

Damages

The purpose of damages is to restore an injured party to the same position that he would have been in had the other party not breached the contract. Capitol Envtl. Servs., Inc. v. Earth Tech, Inc., 25 So.3d 593, 596 (Fla....