Escolar Documentos
Profissional Documentos
Cultura Documentos
CONSENT CASE
Plaintiff,
vs.
Defendants.
__________________________________/
ORDER ON DEFENDANT’S
MOTIONS FOR FINAL SUMMARY JUDGMENT AND RULE 11 SANCTIONS
This matter is before the Court on Defendant Yolanda Garcia d/b/a Ace
Protection Agency’s Motion for Final Summary Judgment [D.E. 24] and Motion for
Rule 11 Sanctions [D.E. 27]. The Court has reviewed the motions, responses, reply,
relevant authority, supplemental filings and the record evidence submitted in support
for or in opposition to the motions. Based upon a thorough review of the record, we
find that there are no genuine issues of material fact to preclude final summary
judgment. For the following reasons, the final summary judgment motion will be
GRANTED. But, we find that Plaintiff’s claim is not objectively frivolous and,
I. BACKGROUND
Defendant Yolanda Garcia d/b/a Ace Protection Agency (“Garcia”) is the owner
and sole proprietor of Ace Protection Agency (“Ace Protection”) located in Miami,
unarmed security services for residential and commercial areas.2 In its first year, Ace
Protection generated no revenue. During 2008 and 2009, the company’s gross revenue
that Ace Protection never earned gross revenue greater than $500,000.00 during the
Plaintiff Julie Cesar Mederos (“Mederos”) was a security guard who worked for
Ace Protection from June 2008 through July 2009. [D.E. 30 at 2]. While working for
Condominiums (“Royal Palm”). Mederos also provided security services for other Ace
Protection contracts and for Garcia’s mother’s company Top Guard Security Protection
Services, Inc. (“Top Guard”). However, the record is undisputed that Mederos spent
1
For convenience’s sake, we will refer to Garcia and Ace Protection
interchangeably. Nevertheless, these monikers each refer equally to movant Yolanda
Garcia d/b/a Ace Protection Agency.
2
It is undisputed that Ace Protection does not manufacture goods. [D.E. 25 ¶ 1;
D.E. 46-1 ¶ 1].
2
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Royal Palm is owned by a single nonprofit corporation that operates Royal Palm
to provide housing for the elderly. [D.E. 46-2, Marta Navarro Deposition at 9].3 Royal
Palm is financed, at least in part, through federal funding from the U.S. Department
of Housing and Urban Development (“HUD”). Royal Palm qualifies for HUD funding
because its residents are at least sixty two (62) years old and earn income no greater
than 50% of the median for their area. Id. Generally speaking, each resident pays rent
equivalent to 30% of their monthly income and then HUD subsidizes the remainder.
Id. at 9-10. HUD also grants nonprofit organizations financing to construct these
buildings. Then, assuming the organization operates the building in compliance with
HUD regulations, the grant is forgiven after a set period of time. Id. at 26. Royal Palm
from entering the building and to report any suspicious activities. He would also
intermittently inspect areas within the building to ensure the safety of the residents.
However, his primary duty was to check to see who would enter the building and
therefore the majority of his time was spent at this post outside the main entrance.
On September 23, 2009, Mederos filed this action against Garcia to recover
overtime wages under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 207(a)(1).
Thereafter, on May 10, 2010, he filed an amended complaint adding Top Guard
3
Marta Navarro is the director and executive director of Royal Palm. [D.E. 46-2,
at 20].
3
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Security Protection Services, Inc. (“Top Guard”) and Yolanda [E.] Garcia (Garcia’s
mother) asserting that, in effect, these defendants and Ace Protection (collectively
“Defendants”) jointly employed Mederos and failed to compensate him for overtime
wages.4 Like his complaint, Mederos’s amended complaint alleges that he worked an
average of 70 hours per week for Defendants during his tenure and received an initial
hourly rate of $7.00 per hour and then (according to the amended complaint) received
a raise to $7.25 per hour in February 2009. However, Mederos alleges that he was
never paid overtime wages as required by the FLSA for any of the hours that he
worked in excess of forty hours weekly. Mederos also alleges that the Defendants
“willfully and intentionally refused to pay [Mederos] the overtime wages” for which he
Ace Protection seeks final summary judgment arguing that Mederos cannot
wholly intrastate, company that earned a gross revenue of less than $500,000.00 at all
commerce” or the “production of goods for commerce” and thus no individual coverage
exists; and, 3) Ace Protection and Top Guard are not joint employers for purposes of
4
Yolanda [E.] Garcia and Top Guard failed to respond to the amended complaint.
The clerk entered a Default against these defendants on June 25, 2010. [D.E. 42, 43].
4
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Mederos opposes this motion arguing that “the entities that [Mederos] guarded
are covered under the FLSA, therefore [Mederos] who guarded said facilities is covered
under the FLSA.” [D.E. 46 at 2]. Notably, Mederos’s response makes no argument that
gross revenue greater than $500,000.00. Moreover, Mederos makes no argument that
his services as a local unarmed security guard, in and of itself, qualify as “engaged in
Rather, Mederos contends that Ace Protection is liable because Mederos guarded Royal
afforded individual coverage under the statute and Ace Protection is liable as his
Ace Protection is an “enterprise,” he argues that Ace Protection and Top Guard are
II. ANALYSIS
“The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgement as a
matter of law.” Fed. R. Civ. P. 56(a). A party asserting that a fact cannot be or is
5
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that materials cited do not establish the absence or presence of a genuine dispute, or
that an adverse party cannot produce admissible evidence to support the fact.” Id. at
56(c)(1). “In determining whether summary judgment is appropriate, the facts and
inferences from the facts are viewed in the light most favorable to the non-moving
party, and the burden is placed on the moving party to establish both the absence of
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
In opposing a motion for summary judgment, the non-moving party may not rely
interrogatories, and admissions that specific facts exist demonstrating a genuine issue
for trial. See Fed. R. Civ. P. 56(c), (e); see also Celotex Corp. v. Catrett, 477 U.S. 317,
323-24 (1986); Gonzalez v. Lee County Hous. Auth, 161 F.3d 1290, 1294 (11th Cir. 1998).
position is insufficient; there must be evidence on which the jury could reasonably find
for the non-movant. Andersen v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
Likewise, a court need not permit a case to go to a jury when the inferences that are
drawn from the evidence, and upon which the non-movant relies, are “implausible.”
Matsushita, 475 U.S. at 592-94; Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 743
6
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The FLSA requires an employer to pay one-and-one-half times the regular rate
of pay to each employee for all time worked in excess of forty hours in a week, so long
commerce.” 29 U.S.C. § 207(a). Put differently, an employee may establish a claim for
coverage. Scott v. K.W. Max Invs., Inc., 256 F. App’x 244, 247 (11th Cir. 2007).
engaged in commerce or (2) engaged in the production of goods for commerce.” Thorne
v. All Restoration Servs., Inc., 448 F.3d 1264, 1266 (11th Cir. 2006); 29 U.S.C. § 207
(a)(1). The United States Supreme Court has established that the phrase “engaged in
commerce” under the Act should be “construed liberally to apply to the furthest reaches
consistent with congressional action.” Mitchell v. Lublin, McGaughy & Assocs., 358
U.S. 207, 211 (1959). In making this determination, courts must focus on “the
activities of the employee[ ] and not on the business of the employer.” Id. at 211; see
also Johnston v. Spacefone Corp., 706 F.2d 1178, 1180 (11th Cir. 1983). However,
whether an employee is “engaged in commerce” under the FLSA is “whether the work
interstate commerce to be, in practical effect, a part of it, rather than isolated, local
activity.” Mitchell v. C.W. Wollmer & Co., 349 U.S. 427, 429 (1955).
7
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29 U.S.C. § 207(a)(1); Thorne, 448 F.3d at 1266. The FLSA provides, in pertinent part,
29 U.S.C. § 203(s)(1).
commerce or in the production of goods for commerce, including the handling, selling
or otherwise working on goods that have been moved in or produced for commerce by
any person, if ... it regularly and recurrently has at least two or more employees
engaged in such activities. On the other hand, it is plain that an enterprise that has
employees engaged in such activities only in isolated or sporadic occasions, will not
meet this condition. See Scott, 256 F. App’x at 248 (citing C.F.R. § 779.238 (1970))
(emphasis added).
8
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As noted above, the FLSA delineates two prongs that an employee must satisfy
commerce and earn gross revenue greater than $500,000. In her motion, Garcia argues
there is no genuine dispute of material fact relating to either prong and that Ace
Protection is not an “enterprise” under the FLSA. Her motion sets forth the following
supported facts: 1) Ace Protection’s “sole function was to provide unarmed security
[D.E. 24 at 6; D.E. 25 at ¶ 1; D.E. 25-1,Garcia Aff. ¶¶ 4,12]; 2) Ace Protection “does not
manufacture any goods” [D.E. 25-1,Garcia Aff. ¶ 4]; and, 3) Ace Protection’s employees
do not handle, sell or otherwise work on goods or materials that have been moved in
or that have been produced for commerce by any person on a regular or recurrent basis”
fails to demonstrate a genuine factual dispute for trial. In fact, in his full response,
Mederos simply admits Ace Protection is a local company without interstate contacts
[D.E.46-1 at ¶1] and “that Ace [Protection] does not have contracts with out of state
businesses.” [D.E. 46-1 at ¶11]. But by doing so, Mederos effectively admits the
remaining factual assertions or, put differently, acquiesces to them through silence.
interrogatories, and admissions that specific facts exist demonstrating a genuine issue
for trial” warrants our conclusion that no such dispute to a genuine material fact
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exists. See Fed. R. Civ. P. 56(c), (e). Moreover, [a]ll material facts set forth in the
movant’s statement filed and supported by the record will be deemed admitted unless
controverted by the opposing party’s statement ... .” S.D. Fla. L.R. 7.5 (d); see also Head
*2 n. 2 (S.D. Fla. Sept. 22, 2010) (finding that under this local rule, “[u]nless a
Defendants’ statements which are supported by evidence in the record, are deemed
admitted.”)
Thus, upon finding that Mederos fails to controvert Ace Protection’s supported
evidence, we conclude that Ace Protection: 1) is a local company providing services only
to local businesses; 2) does not manufacture goods; and, 3) does not have employees
who handle, sell, or otherwise work on goods or materials that have been moved in or
that have been produced for commerce by any person on a regular or recurrent basis.
Therefore, Mederos has failed to demonstrate a dispute of material fact relating to the
first “enterprise” prong under the FLSA. Notwithstanding this result, our conclusion
finds additional support in analogous case law. See Velasquez v. All Florida Security
Corp., 07-23159-CIV, 2008, WL 5232916 (S.D. Fla. Dec. 15, 2008) (holding a wholly
local security company that does not produce or manufacture goods and whose
earned gross revenue less than $500,000 for all times relevant hereto. See [D.E. 25 at
10
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¶ 4; D.E. 46-1 at ¶4]. Therefore, Mederos cannot establish that Ace Protection satisfies
the second “enterprise” prong under the FLSA. Id. Based on the evidence, we conclude
that there is an insufficient factual basis in the record for the trial of fact to determine
E. Individual Coverage
focuses his response on the existence of individual coverage. The crux of Mederos’s
argument is that Ace Protection assigned him to guard Royal Palm a purported covered
“enterprise” and, therefore, Ace Protection is subject to liability under the FLSA
through the individual coverage avenue. In the past, courts have accepted this
argument but, unlike here, only when the employee guarded his employer’s building.
See Russell Co., Inc. v. McComb, 187 F.2d 524, 524-25 (5th Cir. 1951) (night watchman
guarding his employer’s wholesale grocery company, including the loading platform, the
interstate shipments loaded in freight cars and trucks, as well as a warehouse building
in which a percentage of coffee and rice was prepared for interstate shipment were
Silverstone Investments, Inc., No. 04-21392-Civ-Graham, 2005 U.S. Dist. LEXIS 45311,
at *9-10 (S.D. Fla. Sept. 7, 2005) (court concluded employee’s guarding of his employer’s
building had sufficient interstate character to bring him within the coverage of the
FLSA). However, when Judge King considered a factually analogous case, he flatly
rejected this argument. See Velasquez, 2008 WL 5232916, at *1-2 (security guard cases
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where employees actually guard their employer’s buildings or premises are inapposite
to a case where an employee works for a security company providing guards to local
businesses).
forward with his position. To buttress his argument, Mederos relies on case law
employer’s building or his employer’s client’s building as long as the subject of his
guard is within the FLSA. See Rodilla v. TFC-RB, LLC, No. 08-21352-CIV-AMS, 2009
WL 3720892, at *8 (S.D. Fla. Nov. 4, 2009) (citing Kirschbaum v. Walling, 316 U.S. 517
(1942); Walling v. Jacksonville Papers Co., 317 U.S. 564 (1943)). In light of this, and
acknowledging that Velasquez (while indeed negative) is not binding precedent, we will
(s)(1)(C) and (B) arguing that he guarded either: 1) a public agency; or, 2) an institution
primarily engaged in the care of the aged. After careful review of the record, we
disagree with Mederos and find that Royal Palm is not a covered enterprise under
either subsection.
1. Public Agency
Mederos asserts that Royal Palm is a “public agency” because “the creation of
these apartments were solely funded by HUD which is a federally funded program and
paid directly to the building and not through the individual tenants, these enterprises
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running said buildings must be construed to be enterprises covered under the FLSA
(s)(1)(C).” [D.E. 46 at 6].5 Mederos further supports his argument on the basis that
Royal Palm must comply with certain HUD regulations to receive its federal funding.
Mederos’s “public agency” argument fails because he misstates the relevant facts and,
tellingly, neither includes the FLSA’s definition of “public agency” nor cites a single
As noted above, Royal Palm provides housing for the elderly. The salient facts
relating to Royal Palm are undisputed: 1) it receives funding partially from HUD and
partially from its residents; 2) it houses residents who are at least 62 years old and
by HUD once every two or three years; and, 4) it received a HUD grant to construct the
building. As explained below, those facts demonstrate that, while Royal Palm receives
some federal funding and influence from HUD, it is not considered a “public agency”
the United States; the government of a State or political subdivision thereof; any
agency of the United States (including the United States Postal Service and Postal
5
While Mederos refers to the “buildings” and “enterprises” here in the plural, we
are solely concerned with a single enterprise, Royal Palm, where Mederos admittedly
spent the vast majority of his time.
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Mederos asserts, however, that as Royal Palm receives HUD funding and
complies with certain HUD regulations these facts somehow transform it into a public
settled that a nonprofit organization that receives federal funding or must comply with
government regulations to receive said funding does not turn into a public agency. See
Williams v. Eastside Mental Health Center, Inc., 669 F.2d 671, 679 (11th Cir. 1982)
corporations and professional individuals that are subject to similar state control
pursuant to licencing statutes. Such controls are normal means by which states
effectuate public policies through the regulation of private entities. These licensing
controls do not, however, somehow magically transform the fundamental nature of the
licensed entity into a public agency or official.”); see also Powell v. Tucson Air Museum
Foundation of Pima County, 771 F.2d 1309, 1312 (9th Cir. 1985) (court rejected the
argument that a nonprofit corporation that was contractually subject to certain state
government regulations was converted into a public agency for FLSA purposes); Briggs
v. Chesapeake Volunteers in Youth Services, Inc., 68 F. Supp. 2d 711, 715 (E.D. Va.
1999) (court rejected the argument that receipt of governmental funding converts a
14
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Thus, it is abundantly clear that the receipt of state or federal funding alone is
courts look to several factors when determining whether a private party, such as a not-
responsible to public officials or to the general public,” and, 2) “whether the parties'
Here, Mederos makes no argument - nor sets forth any evidence - to suggest that
Royal Palm is directly responsible to a public official or the general public. Further,
his argument is devoid of any evidence (or even an inference) to suggest that Royal
otherwise an independently owned and operated nonprofit corporation. See [DE 46-2
at 6-7]. Mederos thus again fails to create a genuine issue of fact to support his
Mederos next asserts that Royal Palm “is engaged in the operation of ... an
institute primarily engaged in the care of the sick, the aged, or the mentally ill or
defective who reside on the premises of such an institution....” See 29 U.S.C. § 203
(s)(1)(B). In support of this argument, Mederos latches onto the requirement that each
Royal Palm occupant must be at least 62 years old. While this is true, the fact alone
15
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is insufficient to satisfy this statute because, importantly, the operative works are
“primarily” and “care” rather than simply “aged.” See Dole v. Odd Fellows Home
Endowment Board, 912 F.2d 689 (4th Cir. 1990) (court found defendant was an
“enterprise” because by providing services it was clear that defendant was primarily
engaged in caring for the aged and not a “mere boarding housing.”) (emphasis added).
Indeed, several federal court cases support the conclusion that § 203(s)(1)(B) applies
to institutions whose primary focus is on providing care to the aged (or other applicable
Inc., 393 F. Supp. 2d 1282 (M.D. Fla. 2005), the court examined whether this statute
children who also received mental health-related services. In Kitchings, the court held
approach to working with [r]esidents in a variety of ways, and which provides many
(emphasis added). Thus, the court concluded that the institution was not primarily
engaged in the care of the mentally ill as those services were incidental to its primary
Likewise, in Brennan v. Harrison County, Miss., 505 F.2d 901 (5th Cir. 1975),
the court declined to extend FLSA coverage for employees at the Harrison County
Home for the Poor concluding that the home was primarily engaged in providing
16
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residences to the indigent, not the aged or ill. Id. at 903. While Brennan notes that
many residents were old or ill, it found this was an incidental, not a primary factor. Id.
at 904.
primarily engaged in the care of the sick, aged, mentally ill or defective, courts find the
FLSA applies. See, e.g., Marshall v. Sunshine & Leisure, Inc., 496 F. Supp. 354, 356-
58 (M.D. Fla. 1980) (rest home was an institution primarily engaged in the care of the
aged under § 203(s)(1)(B) where all residents of the home were aged, the services it
provided constituted care for the aged, and the reasons given for choosing the home
arose out of the frailties associated with persons of advanced aged). Importantly, in
Marshall, the court recognized that the employees provided various services to the
giving haircuts; preparing food; providing maid services; house cleaning; and, assisting
Unlike Marshall, Royal Palm is more akin to Brennan and, to a lesser degree,
persons who are aged, nothing more. Regardless, as those cases make clear, this issue
every morning enter at [Royal Palm]. Once a week, I observed another nurse enter the
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building. Almost every day that I worked at [Royal Palm], a driver would arrive to pick
up several patients and take them to their doctor visits.” [D.E. 46-4 at ¶ 11]. Taking
Mederos’s testimony is true, as we must, and giving him every reasonable inference,
we find his observations fail to rise above mere speculation and, more importantly,
they fail to demonstrate that Royal Palm was primarily engaged in caring for the aged.
Mederos’s testimony gives no indication that the nurses worked for Royal Palm. Nor
does his testimony indicate he observed a recurring group of nurses (to suggest they
are Royal Palm staff). Nor does his testimony indicate (or provide a basis to infer) that
Royal Palm derives income from these nurses or drivers. Simply put, Mederos’s
testimony fails to otherwise indicate that these individuals are affiliated with Royal
Palm.
That being said, even assuming Royal Palm was affiliated with these nurses, we
still would conclude that Mederos’s evidence fails to raise a genuine issue of material
fact that Royal Palm was primarily engaged in the of the aged.
The term “primarily” is not defined in the FLSA. However, the FLSA Advisor
issued a report on this subject which provides guidance in this area: the phrase
institution primarily engaged in the care of the sick, the aged, the mentally ill or
developmentally disabled who live on the premises means an institution (other than
a hospital) primarily engaged in (i.e. more that (sic) 50% of the income is attributable
to) providing care to the individuals who reside on the premises. See Chacon v. El
Milagro Child Care Center, No. 07-22835-CIV-AMS, 2009 WL 2059910, at *5 (S.D. Fla.
July 9, 2009) (citations omitted). Thus, to raise a genuine issue of fact, Mederos must
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provide sufficient evidence to suggest that at least 50% of Royal Palm’s income is
derived from services providing care to the aged. However, as noted above, Mederos’s
observations are insufficient to raise an issue of material fact as to whether or not more
than 50% of Royal Palm’s revenue is derived from these purported services.
demonstrate that Royal Palm derives 50% - or any - of its revenue from primarily
conclusion that Royal Palm is not an institution primarily engaged in the care of the
aged. She consistently testified that Royal Palm: 1) is not an assisted living facility;
2) provides no social or medical services to its residents; 3) only approves residents able
to live independently; and, 4) only provides housing. See [D.E. 46-2 at 9, 12, 16, 22 and
24]. We find Ms. Navarro’s testimony is undisputed in this record and, importantly, in
accord with Mederos’ testimony. Indeed, while Royal Palm does not provide care, there
there is insufficient evidence on this issue to support a positive finding from the trier
of fact.
F. Joint Employers
As noted above, we conclude that the undisputed facts demonstrate that Ace
Protection is not an “enterprise” for liability purposes under the FLSA. More
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203(s)(1)(A). Nevertheless, Mederos asserts that Defendants Ace Protection and Top
Guard are joint employers because they “seem[ ] to be a family run business which is
run out of the same location with two separate names.” [D.E. 46 at 7,9]. Mederos
argues joint employer status to “combine the income of both corporation[s] to meet the
Ignoring for a moment that Mederos cannot establish the first prong of §
203(s)(1)(A), we need not consider the merits of this issue because, even assuming Ace
Protection and Top Guard are joint employers, Mederos presents no factual support
that Top Guard earned gross revenues sufficient to total $500,000.00 when combined
with Ace Protection. Mederos asserts that he was unable to take discovery relating to
Top Guard because Top Guard defaulted and failed to otherwise participate in
discovery. [D.E. 46 at 9]. While this may be true, the mere fact that Top Guard
defaulted does not permit Mederos to assume a combined gross revenue of $500,000.00.
Ultimately, the FLSA applies where an employee satisfies this second prong and, in
Simply put, the record is devoid of any evidence to establish Top Guard’s gross
revenue. Accordingly, we find that Mederos has failed to raise a genuine issue of
material fact as to whether Ace Protection (individually or combined with Top Guard)
coverage under the FLSA. See Scott, 256 F. App’x at 250 (affirming summary judgment
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coverage); see also Flores v. Nuvoc, Inc., 610 F. Supp. 2d 1349, 1356-1358 (S.D. Fla.
exceeding $500,000 warrants judgment as a matter of law), rev’d on other grounds sub
nom, Polycarpe v. E&S Landscaping Services, Inc., 616 F.3d 1217, 1229 (11th Cir.
2010).
G. Sanctions
Ace Protection filed a Rule 11 sanctions motion contemporaneously with its final
summary judgment motion raising all of the same arguments. Mederos responded in
kind and, thereafter, filed an amended complaint naming defendant Top Guard in an
attempt to establish the requisite $500,000.00 for enterprise coverage through a joint
employer argument.
sanctions,” after notice and reasonable opportunity to respond, when a party presents
to the court a pleading, written motion or other paper that is not based in fact, is not
legally tenable, or is submitted in bad faith for an improper purpose. Fed. R. Civ. P.
11(c); see also Riccard v. Prudential Ins. Co., 307 F.3d 1277, 1294 (11th Cir. 2002). The
Eleventh Circuit has developed a two-step inquiry for Rule 11 sanctions that examines
(1) whether the claims are objectively frivolous, and (2) whether the person who signed
the pleadings should have been aware that the claims were frivolous. See Baker v.
Alderman, 158 F.3d 516, 524 (11th Cir. 1998); Byrne v. Nezhat, 261 F.3d 1075, 1105
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(11th Cir. 2001). The first prong of this inquiry is an objective standard for assessing
conduct, which takes into account the “reasonableness under the circumstances” and
“what was reasonable to believe at the time” the representation to the Court was made.
Aetna Ins. Co. v. Meeker, 953 F.2d 1328, 1331 (11th Cir. 1992); Donaldson v. Clark, 819
F.2d 1551, 1556 (11th Cir. 1987).6 Moreover, sanctions are warranted when a party
demonstrates a “deliberate indifference to obvious facts,” but not when the evidence is
merely weak or the case is brought as a result of “poor judgment.” Davis v. Carl, 906
F.2d 533, 537 (11th Cir. 1990). In other words, Rule 11 is intended to “deter claims
with no factual or legal basis at all.” Benavides v. Miami Atlanta Airfreight, Inc., 612
F. Supp. 2d 1236, 1238 (S.D. Fla. 2008) (citing Davis, 906 F.2d at 538).
counsel for filing a frivolous lawsuit. In this Order, the Court agreed with Ace
Protection’s argument that no genuine issue of material fact existed with which to
sustain Mederos’s claim that he is a covered employee owed overtime wages under the
Fair Labor Standards Act. Ace Protection argues that the claim was entirely frivolous
from the inception of the litigation, or at least after discovery commenced and it
became clear that, among other arguments, Mederos could not demonstrate that Ace
6
Three types of conduct satisfy the objective prong of the test (1) when a party
files a pleading, written motion or other paper that has no reasonable factual basis; (2)
when a party files a pleading, written motion or other paper that is based on a legal
theory that has no reasonable chance of success and that cannot be advanced as a
reasonable argument to change existing law; and (3) when a party files a pleading,
written motion or other paper in bad faith for an improper purpose. Id.
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Upon reviewing the same record that led the Court to grant summary judgment
in Defendant’s favor, we are convinced that the claim was not objectively frivolous,
thus negating the first element required for the entry of Rule 11 sanctions. Clearly,
the evidence was overwhelming that Ace Protection was not a covered enterprise or
grossed greater than $500,000.00, or that Mederos was individually covered for
guarding Royal Palm - that being the reasons why summary judgment was entered.
The question is whether there was any factual or legal basis for the claim. Here,
there was a factual and legal basis for individual coverage given that Royal Palm
provides housing to the aged and that Mederos observed nurses entering Royal Palm.
Furthermore, had Mederos provided evidence relating to Top Guard’s gross revenue
then Mederos, as a threshold matter, could have made a colorable argument to satisfy
some testimony to support his claim. However, Ace Protection’s evidence thoroughly
and convincingly demonstrated that any inference in Mederos’s favor was simply too
implausible to overcome summary judgment. But, ultimately, that is not enough for
us to find that there was zero factual support for his claim.
Moreover, the law on which the Court relied is not necessarily settled in the
Eleventh Circuit. Though it is clearly, in our view, the correct application of law under
the FLSA, the absence of controlling authorities on these issues in this circuit leaves
open some room for argument. As a result, the Court cannot find that Mederos’s legal
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Case 1:09-cv-22842-EGT Document 53 Entered on FLSD Docket 03/18/2011 Page 24 of 24
Hence the Court cannot grant the pending motion because the essential
prerequisite for sanctions has not been satisfied. The case was clearly weak, too weak
in fact to survive summary judgment given Mederos’s evidence. But that is not what
III. CONCLUSION
For the reasons stated above, it is hereby ORDERED AND ADJUDGED that
Defendant Yolanda Garcia d/b/a Ace Protection Agency’s Final Summary Judgment
Motion [D.E. 24] is GRANTED. However, we find that Mederos’s position was not
objectively frivolous and, therefore, Defendant Yolanda Garcia d/b/a/ Ace Protection
Agency’s Rule 11 Sanctions Motion [D.E. 27] is DENIED. Final judgment shall be
entered in Defendant Yolanda Garcia d/b/a Ace Protection Agency’s favor by separate
order.
March, 2011.
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