Aguiar v. Robertos' Used Cars Inc.

          MEMORANDUM OPINION AND ORDER ^[1]

          JOHN H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE.

         On April 5, 2019, Defendants Roberto's Used Cars, Inc., Maria Catano, Jose Guadalupe Catano, ^[2] Jamie Perez, and Alejandro Reynosa (collectively, the “Defendants”) moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6). (Doc. 7). On April 19, 2019, Plaintiff Jesus Aguiar (“Aguiar” or “Plaintiff”) moved to strike exhibits to the motion to dismiss or, in the alternative, convert the motion to one for summary judgment and allow discovery prior to ruling upon it. (Doc. 11). The same day, Aguiar filed a separate response to the motion, again alternatively requesting discovery. (Doc. 12). The undersigned set a deadline for Defendants to oppose the motion to strike, (doc. 14), but Defendants did not file a response.

         L Legal Standard

         Federal Rule of Civil Procedure 12(b)(6) permits dismissal when a complaint is deficient under Rule 8 and fails to state a claim upon which relief can be granted. Under Rule 8(a)(2), a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” “[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955 (2007)). Mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action” are insufficient. Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949 (citations and internal quotation marks omitted). “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Id. (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955). Additionally, “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b).

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949 (citations and internal quotation marks omitted). A complaint states a facially plausible claim for relief “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). The complaint must establish “more than a sheer possibility that a defendant has acted unlawfully.” Id.; see also Twombly, 550 U.S. at 555, 127 S.Ct. at 1965 (“Factual allegations must be enough to raise a right to relief above the speculative level.”). Ultimately, this inquiry is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679, 129 S.Ct. at 1950.

         II. Background

         According to the complaint, Aguiar worked as a laborer for Roberto's Used Cars, a car repair shop and dealership located in Columbiana, Alabama. (Doc. 1 at ¶¶ 3, 13, 26). The Catanos own Roberto's Used Cars, and Perez and Reynosa manage and operate the shop. (Id. at ¶¶ 14-17). Over the eleven years that Aguiar worked for Roberto's Used Cars, he was required to work approximately sixty-one hours per week, but was never paid overtime; instead, Defendants paid him a flat weekly rate in cash. (Id. at ¶¶ 23, 29-33, 37). Aguiar alleges Defendants' actions violate the overtime compensation provisions of the Fair Labor Standards Act (“FLSA”). (Id. at 40-43).

         III. Analysis

         Defendants deny Aguiar worked as many hours as he claims; instead, they state Aguiar resided on the shop premises in a mobile home, as he did not have a place to reside, and in any event was compensated for all the hours he worked. (Doc. 7 at 2-3). They also contend Roberto's Used Cars is a small business exempt from the FLSA because its gross sales are less than $500, 000 per year. (Id. at 3). In support of this latter argument, they attach Alabama sales tax returns from 2017 and 2018. (Doc. 7-1). Aguiar points out that Defendants' evidence is incomplete and, in any event, outside the pleadings. (Doc. 11 at 1-2). In his motion to strike, and continuing into his response to the motion to dismiss, he requests the opportunity to conduct discovery into Roberto's Used Cars' gross sales. (Id.; doc. 12 at 5-6). Aguiar states his overtime claim is facially plausible, and Defendants' arguments as to whether he worked as many hours as he claimed or was compensated for those hours are simply factual disputes not subject to resolution on a Rule 12(b)(6) motion to dismiss. (Doc. 12 at 3-5).

         A. Sufficiency of Allegations of Overtime Work

         Defendants do not directly challenge Aguiar's complaint facial sufficiency. Instead, their attack on the complaint is that an alternative explanation exists for Aguiar's presence at the shop during the hours he says he worked. This does not support dismissal under Rule 12(b)(6), because the court takes the facts alleged in the complaint as true. Lanfear v. Home Depot, Inc., 679 F.3d 1267, 1275 (11th Cir. 2012) (citation omitted). Defendants' arguments are not well taken, and their motion is due to be denied on this basis.^[3]

         B. Enterprise Coverage Under the FLSA

         An employer can be subject to the overtime provisions of the FLSA in one of two ways: individual coverage or enterprise coverage. See 29 U.S.C. § 207(a)(1). Aguiar alleges Defendants are subject to enterprise coverage. (Doc. 1 at ¶ 21). “Employers fall within the FLSA's enterprise coverage section if they (1) have employees engaged in commerce or in the production of goods for commerce, or have employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person and (2) have at least $500, 000 of annual gross volume of sales made or business done.” Hurst v. Youngelson, 354 F.Supp.3d 1362, 1382 (N.D.Ga. 2019) (quoting Polycarpe v. E & S Landscaping Service, Inc., 616 F.3d 1217, 1220 (11th Cir. 2010)) (internal alterations and quotation marks omitted). See also 29 U.S.C. § 203(a)(1)(A).

         Defendants' evidentiary submissions consist of monthly state sales returns. For 2018, Defendants attach the sales returns from January, February, March, April, May, June, July, August, September, and October, but omit the returns from November and December. (Doc. 7-1 at 1-10). The total reported sales are $474, 980. (Id.). For 2017, Defendants ...