Scalia v. G.E.M Interiors

• Decision Date: 28 September 2021
• Docket Number: 1:17-cv-203
• Parties: EUGENE SCALIA, Secretary of Labor, United States Department of Labor, Plaintiff, v. G.E.M. INTERIORS, INC., et. al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

EUGENE SCALIA, Secretary of Labor, United States Department of Labor, Plaintiff,
v.
G.E.M. INTERIORS, INC., et. al., Defendants.

No. 1:17-cv-203

United States District Court, S.D. Ohio, Western Division

September 28, 2021

Judge Michael R. Barrett United States District Court

This matter is before the Court on Defendants Gem Interiors, Inc., Melissa Hayes, Gregory E Massie, Lisa Pack's Motion for Summary Judgment (Doc. 45); Plaintiff Department of Labor Secretary's Motion for Summary Judgment (Doc. 49); Defendants' Motion to Strike the Declaration of Steve Michael (Doc. 54); Defendants' Motion to Strike Declaration and Exhibit of Wage and Hour Division Investigator Nikolai Bogomolov (Doc. 55); and Defendants' Motion to Strike the Declarations of Unidentified Employee Witnesses (Doc. 63).

I. BACKGROUND

Plaintiff Department of Labor Secretary (“Secretary”) claims that between March 27, 2014 and the present, Defendants have violated the overtime provisions of the Fair Labor Standards Act (“FLSA”) by misclassifying employees, failing to pay for all overtime hours worked, paying for overtime hours through side payments at rates less than the overtime premium rate, and giving employees paid time off, rather than overtime wages.

Defendant G.E.M. Interiors, Inc. performs construction work, including commercial drywall installation; metal stud framing; acoustic ceilings installation; doors and hardware installation; exterior insulation finishing systems (“EIFS”); and siding and windows

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installation. (Doc. 36, ¶ 3). Defendants Greg Massie, Missy Hayes and Lisa Pack are all partial owners of G.E.M. (Id. ¶¶11-13).

In addition to office staff, G.E.M. employs foremen, carpenters, drywall finishers, and laborers. (Id. ¶ 6). G.E.M. typically assigns and places a foreman, employed by G.E.M. as a payroll employee, at each jobsite. (Id. ¶ 7). G.E.M. foremen are responsible for ensuring the job is done on schedule, the work is done safely, and the job is run correctly. (Id. ¶ 8). If additional workers are needed on a jobsite, G.E.M. relies on subcontractors. (Id. ¶¶ 21, 22). The Secretary maintains these additional workers-who the Secretary refers to as “Crew Leaders, ” “Crew Members” and “Alleged Subcontractors”-are not subcontractors, but instead are properly classified as employees under the FLSA; and as employees, they are entitled to overtime under the FLSA. In addition, the Secretary maintains that Defendants have violated the FLSA by failing to pay overtime wages to workers they admit are their employees. The Secretary argues that given Defendants' prior history of violating the FLSA, the Court should find these violations are willful. However, Defendants deny liability for the payment of overtime wages to their employees, or the workers they refer to as “Labor Providers” or “subcontractors.”^[1] Both the Secretary and Defendants claim they are entitled to summary judgment on the Secretary's claims.

II. ANALYSIS

A. Summary judgment standard

Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

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Fed. R. Civ. P. 56(a). A genuine dispute of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding whether this burden has been met by the movant, this Court views the evidence in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). These standards upon which motions for summary judgment are evaluated do not change when, as here, “both parties seek to resolve [the] case through the vehicle of cross-motions for summary judgment.” Taft Broadcasting Co. v. United States, 929 F.2d 240, 248 (6th Cir.1991). As the Sixth Circuit has explained:

“[t]he fact that both parties make motions for summary judgment ... does not require the Court to rule that no fact issue exists.” Begnaud v. White, 170 F.2d 323 327 (6th Cir. 1948)(cited with approval in Cherokee Ins. Co. v. E.W. Blanch Co., 66 F.3d 117, 122 n. 4 (6th Cir. 1995)).

B.F.Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587, 592-93 (6th Cir. 2001). Instead, “the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” Taft Broadcasting, 929 F.2d at 248.

B. Motions to Strike

Federal Rule of Civil Procedure 56(c)(2), as amended in 2010, governs the procedure by which courts must review objections to the admissibility of evidence presented in connection with a motion for summary judgment. Smith v. Interim HealthCare of Cincinnati, Inc., No. 1:10-cv-582, 2011 WL 6012971, at *4 (S.D. Ohio Dec. 2, 2011). A party moving for (or opposing) summary judgment may cite to materials in the record, including depositions, documents, affidavits or declarations, and admissions.

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Fed. R. Civ. P. 56(c)(1)(A). If a party believes that the material cited to support (or dispute) a fact “cannot be presented in a form that would be admissible in evidence[, ]” that party may file an objection. Fed.R.Civ.P. 56(c)(2). Motions to strike, then, are no longer appropriate. Smith, 2011 WL 6012971, at *4 (“The objection functions much as an objection at trial, adjusted for the pretrial setting. The burden is on the proponent to show that the material is admissible as presented or to explain the admissible form that is anticipated. There is no need to make a separate motion to strike.”) (emphasis added)) (citing Fed.R.Civ.P. 56 advisory committee's notes (2010 Amendment)); see also Erwin v. Village of Morrow, No. 1:16-cv-1166, 2019 WL 1495921, at *1 (S.D. Ohio Apr. 4, 2019). “If a party does file a separate motion to strike, the motion should be construed as an objection under Rule 56(c)(2).” Stillwagon v. City of Delaware, 274 F.Supp. 714, 737 (S.D. Ohio 2017) (citing Smith, 2011 WL 6012971, at *4). Accordingly, the Court will construe Defendants' motions to strike as objections under Rule 56(c)(2).

1. Steve Michael Declaration and Exhibits

Defendants' first objection is to the declaration of Steve Michael and the exhibits attached to his declaration (Doc. 47-1). Michael is a former G.E.M. foreman. (Doc. 47-1, ¶ 2, PAGEID 5476). Defendants maintain that Michael's statements constitute legal conclusions, are based on hearsay and other inadmissible evidence, and are more prejudicial than probative. Defendants also object to the exhibits attached to Michael's declaration because they are unauthenticated, unverified and not made based on the declarant's personal knowledge. In the alternative, Defendants argue that the Court must strike portions of the exhibits which constitute inadmissible hearsay, lack relevance, are inadmissible and/or prejudicial.

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Federal Rule of Civil Procedure 56(c)(4) provides that “[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on matters stated.” Fed.R.Civ.P. 56(c)(4). Accordingly, a party “cannot use hearsay or other inadmissible evidence to create a genuine issue of material fact.” Sperle v. Michigan Dep't of Corr., 297 F.3d 483, 495 (6th Cir. 2002).

Defendants argue that the timesheets and time records attached as Exhibits A through C to Michael's Declaration have not been authenticated and do not qualify as self-authenticating business records.

On a motion for summary judgment, a district court should not consider documents which are not authenticated. Magnum Towing & Recovery v. City of Toledo, 287 Fed.Appx. 442, 448 (6th Cir. 2008) (citations omitted). A business record is self-authenticating under Federal Rule of Evidence 803(6) if it meets the following four requirements:

(1) it must have been made in the course of a regularly conducted business activity; (2) it must have been kept in the regular course of that business; (3) the regular practice of that business must have been to have made the memorandum; and (4) the memorandum must have been made by a person with knowledge of the transaction or from information transmitted by a person with knowledge.

Fambrough v. Wal-Mart Stores, Inc., 611 Fed.Appx. 322, 326 (6th Cir. 2015) (quoting Cobbins v. Tenn. Dep't of Transp., 566 F.3d 582, 588 (6th Cir. 2009)). These conditions must be shown “by the testimony of the custodian or another qualified witness.” Fed.R.Evid. 803(6). However, as the Sixth Circuit has explained:

“Rule 803(6) does not require that the custodian personally gather, input, and compile the information memorialized in a business record.” Weinstock, 153 F.3d at 276. The custodian of the records need not be in

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control of or have individual knowledge of the particular corporate records, but need only be familiar with the company's recordkeeping practices. Id. (citing In re Custodian of Records of Variety Distrib., Inc., 927 F.2d 244, 248 (6th Cir.1991)). Likewise, “[t]o be an ‘other qualified witness,' it is not necessary that the person laying the foundation for the introduction of the business record have personal knowledge of their preparation.” Dyno Construction Co. v. McWane, Inc., 198 F.3d 567, 575-76 (6th Cir. 1999).

United States v. Jenkins, 345 F.3d 928, 935-36 (6th Cir. 2003) (quoting United States v. Salgado, 250 F.3d 438, 451-52 (6th Cir. 2001).

In his declaration, Michael states that the timesheets in Exhibit A are copies of timesheets he created as a G.E.M. foreman. (Doc. 47-1, Michael Decl. ¶ 5). Michael explains that he would sometimes take a photograph of the timesheets and text them to Lisa Pack, who is a member of...