Nilaj v. MGO Labs, LLC

District Court, M.D. Florida·Decided July 15, 2024·No. 8:23-cv-02671·Unknown

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

JOHN NILAJ,

Plaintiff,

v. Case No. 8:23-cv-2671-WFJ-NHA

MGO LABS, LLC; DO ENTERPRISES, LLC, d/b/a/ 18TH&MAIN; and DANNY ORTEGA,

Defendants. ___________________________________/

ORDER

Before the Court is Plaintiff John Nilaj’s Motion for Default Judgment against Defendants MGO Labs, LLC (“MGO”), DO Enterprises, LLC (“DO Enterprises”), and Danny Ortega (Dkt. 66), as well as Mr. Nilaj’s separate Motion for Default Judgment against Mr. Ortega in his individual capacity (Dkt. 71). Upon careful consideration, the Court grants-in-part and denies-in-part the Motions. BACKGROUND MGO and DO Enterprises (collectively, the “Corporate Defendants”) are Florida Limited Liability Companies owned and operated by Mr. Ortega. Dkt. 44 at 2–4. It is not clear what they do, how many people they employ, or how much money they generate. See id. at 1–16. Notwithstanding, on April 20, 2023, Mr. Nilaj purportedly began working for both of them, as well as for Mr. Ortega, “in an office management and personal secretarial capacity.” Id. at 5, 22.

On June 7, 2023, Mr. Nilaj signed a written employment agreement with DO Enterprises and Mr. Garcia (the “Employment Agreement”). Id. at 42–44. The Employment Agreement provided for a “Part-Time position of Front Desk

Reception with the potential to be Full-Time in the upcoming months.” Id. “In consideration of [his] services,” Mr. Nilaj was to receive “$15 hourly.” Id. at 42. Unfortunately, it appears that Mr. Nilaj was never paid his wages—even after entering into the Employment Agreement. Between April 20, 2023, and

September 14, 2023, Mr. Nilaj allegedly worked 795.5 hours, including 91 hours of overtime, without compensation. Id. at 22–26. Mr. Nilaj further maintains that Defendants withheld promised bonuses worth $600.00 and refused to reimburse

$965.72 in work-related expenditures. Id. at 7. On September 2, 2023, Mr. Nilaj entered into a written equity agreement with DO Enterprises (the “Ownership Agreement”). Id. at 28–34. Thereunder, Mr. Nilaj received 2% ownership of DO Enterprises in recognition of an earlier

$10,000 contribution he gave to Mr. Ortega. Id. at 28–29. Mr. Nilaj was seventeen years old at the time the Ownership Agreement was executed. Id. at 11. He was presumably sixteen or seventeen at the time he gave $10,000 to Mr. Ortega. Id. at

37. Around September 14, 2023, Mr. Nilaj quit working for Defendants and hired an attorney. He subsequently disaffirmed the Ownership Agreement with

written notice, id. at 36–40, and brought suit, see Dkt. 1. Mr. Nilaj filed his Second Amended Complaint (the “SAC”) on February 27, 2024. Dkt. 44. He asserts five claims: Count I—violation of the Fair Labor

Standards Act (“FLSA”); Count II—violation of Florida’s Minimum Wage Act (“FMWA”); Count III—recission of the Ownership Agreement; Count IV—breach of the Employment Agreement; and Count V—unjust enrichment. Id. at 9–16. While Counts IV and V apparently focus on DO Enterprises and Danny Ortega, it

is not entirely clear towards whom Counts I–III are directed. Id. Despite earlier participation in the instant lawsuit, Defendants never answered the SAC. And, on March 11, 2024, the Court granted three motions to

withdraw filed by Defendants’ former attorneys. Dkt. 54. The Corporate Defendants have not retained new counsel, and Mr. Ortega has not filed a notice of his intention to proceed pro se. Accordingly, on May 20, 2024, a Clerk’s Default was entered against the Corporate Defendants. Dkt. 62. A second Clerk’s Default

was entered against Mr. Ortega less than one month later. Dkt. 69. Mr. Nilaj now moves for default judgment against all Defendants. Dkts. 66; 71. In addition, Mr. Nilaj’s attorney requests over $40,000 in fees and costs. Dkt.

66 at 45–47. LEGAL STANDARD “The effect of the entry of a default is that all of the factual allegations in the

[c]omplaint are taken as true, save for the amount of unspecified damages.” Whole Space Indus., Ltd. v. Gulfcoast Int'l Prod., Inc., No. 209-CV-217-UA-SPC, 2009 WL 2151309, at *3 (M.D. Fla. July 13, 2009) (citation omitted). Accordingly, “if

liability is well-pled in the complaint, it is established by the entry of a default.” Id. “Although a defaulted defendant admits well-pleaded allegations of liability, allegations relating to the amount of damages are not admitted by virtue of default[.]” Id. Instead, “the Court determines the amount and character of damages

to be awarded.” Id. Damages may be awarded without an evidentiary hearing if the amount is a liquidated sum or capable of calculation. See Fed. R. Civ. P 55(b)(1); SEC v. Smyth, 420 F.3d 1225, 1231 (11th Cir. 2005) (collecting cases).

DISCUSSION The Court will address liability before turning to damages, fees, and costs. I. Liability a. FLSA (Count I)

To prevail on a minimum wage or overtime compensation claim under the FLSA, a plaintiff must establish individual coverage or enterprise coverage. See Holland v. Westside Sportsbar & Lounge, Inc., No. 6:19-CV-945-ORL-41GJK,

2020 WL 7390724, at *2 (M.D. Fla. Oct. 13, 2020), report and recommendation adopted, No. 6:19-CV-945-ORL-41GJK, 2020 WL 7390683 (M.D. Fla. Nov. 4, 2020) (discussing coverage in the minimum wage context); see also Joseph v.

Nichell's Caribbean Cuisine, Inc., 862 F. Supp. 2d 1309, 1313–14 (S.D. Fla. 2012), as amended (July 17, 2012) (discussing coverage in the overtime context). Enterprise coverage is established where the defendant is an enterprise engaged in

commerce or in the production of goods for commerce such that it: [1] has employees engaged in commerce or in the production of goods for commerce, or that has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person; and . . . [2] is an enterprise whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated)[.]

29 U.S.C. § 203(s)(1)(A)(i)–(ii). Individual coverage is established where the plaintiff is (or was) directly “participating in the actual movement of persons or things in interstate commerce by (i) working for an instrumentality of interstate commerce . . . or (ii) by regularly using the instrumentalities of interstate commerce in his work, e.g., regular and recurrent use of interstate telephone, telegraph, mails, or travel.” Thorne v. All Restoration Servs., Inc., 448 F.3d 1264, 1266 (11th Cir. 2006). Mr. Nilaj has not demonstrated enterprise coverage. It is well established that “[d]istrict courts cannot presume for enterprise coverage . . . that the employer grosses over $500,000 annually.” De Lotta v. Dezenzo's Italian Rest., Inc., No. 6:08CV2033ORL22KRS, 2009 WL 4349806, at *2 (M.D. Fla. Nov. 24, 2009) (citing Sandoval v. Fla. Paradise Lawn Maint., Inc., 303 Fed. App'x. 802, 805

(11th Cir. 2008)). This, however, is exactly what Mr. Nilaj asks the Court to do. He has failed to assert any factual allegations in the SAC concerning Defendants’ annual gross volume of sales made or business done. See generally Dkt. 44. And

the Court cannot fill in the blanks based on Mr. Nilaj’s conclusory statement that he was “employed by an enterprise engaged in commerce or in the production of goods for commerce.” Dkt. 66 at 8; see Cloer v.

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