Evans v. Loveland Automotive Investment ( 2015 )


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  •                                                                                 FILED
                                                                        United States Court of Appeals
                          UNITED STATES COURT OF APPEALS                        Tenth Circuit
    
                                 FOR THE TENTH CIRCUIT                      December 10, 2015
                             _________________________________
                                                                            Elisabeth A. Shumaker
                                                                                Clerk of Court
    WILLIAM EVANS,
    
          Plaintiff - Appellant,
    
    and
    
    JEFFREY THAYER,
    
          Plaintiff,
    
    v.                                                         No. 15-1049
                                                  (D.C. No. 1:13-CV-02415-WJM-KMT)
    LOVELAND AUTOMOTIVE                                         (D. Colo.)
    INVESTMENTS, INC.; JOHN RICHARD
    PIPE, d/b/a Loveland Auto Transport;
    PIPELINE AUTO TRANSPORT, INC.,
    
          Defendants - Appellees.
                          _________________________________
    
                                 ORDER AND JUDGMENT*
                             _________________________________
    
    Before TYMKOVICH, Chief Judge, HOLMES and PHILLIPS, Circuit Judges.
                     _________________________________
    
          Appellant William Evans appeals from one ruling in a judgment generally
    
    granted in his favor—the denial of an award of liquidated damages under the Fair
    
    
          *
            After examining plaintiff-appellant’s brief and the appellate record, this
    panel has determined unanimously that oral argument would not materially assist in
    the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G).
    The case is therefore ordered submitted without oral argument. This order and
    judgment is not binding precedent, except under the doctrines of law of the case, res
    judicata, and collateral estoppel. It may be cited, however, for its persuasive value
    consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
    Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219. Exercising jurisdiction under
    
    28 U.S.C. § 1291, we agree with Mr. Evans that the district court was not precluded
    
    from awarding liquidated damages, and we remand the case for reconsideration in
    
    accordance with this order.
    
           Mr. Evans worked as a truck driver for the defendants. After the defendants
    
    failed to timely pay him wages, he sued under FLSA and the Colorado Wage Claim
    
    Act (“CWCA”), Colo. Rev. Stat. §§ 8-4-101 to -123.1 Mr. Evans properly served the
    
    defendants with his complaint, but the defendants failed to file a responsive pleading
    
    by the applicable deadline or otherwise respond to the complaint. After default was
    
    entered against the defendants, they moved to set aside the entry of default.
    
    Although the court initially set aside entry of default as to one of them, it later
    
    granted Mr. Evans’s subsequent motion for entry of default judgment as to all of
    
    them. Oddly, Mr. Evans next moved for summary judgment, rather than default
    
    judgment.
    
           The district court treated Mr. Evans’s motion for summary judgment as an
    
    application for default judgment under Fed. R. Civ. P. 55(b)(2) and entered a final
    
    default judgment. In doing so, the court concluded that Mr. Evans was entitled to
    
    judgment in his favor on both his FLSA and CWCA claims. Aplt. App. at 15;
    
    see Redmond v. Chains, Inc., 
    996 P.2d 759
    , 764 (Colo. App. 2000) (holding that
    
    
    
    
           1
            Mr. Evans’s co-plaintiff has not appealed, so this order and judgment
    addresses only Mr. Evans’s claims.
                                                2
    because FLSA does not preempt CWCA, a plaintiff “is entitled to assert claims for
    
    relief under both statutes”).
    
          The court then stated that “these claims give rise to similar and, at least
    
    partially, overlapping damages.” Aplt. App. at 15. The court cited Mason v.
    
    Oklahoma Turnpike Authority, 
    115 F.3d 1442
    , 1459 (10th Cir. 1997) (quoting U.S.
    
    Indus., Inc. v. Touche Ross & Co., 
    854 F.2d 1223
    , 1259 (10th Cir. 1988)), overruled
    
    on other grounds by TW Telecom Holdings Inc. v. Carolina Internet Ltd., 
    661 F.3d 495
     (10th Cir. 2011), for the principle that “‘[i]f a federal claim and a state claim
    
    arise from the same operative facts, and seek identical relief, an award of damages
    
    under both theories will constitute double recovery.’” Then without evaluating the
    
    nature of relief available under FLSA and CWCA, the court further concluded that
    
    Mr. Evans could “recover damages only on the statute which provides the greatest
    
    relief.” Aplt. App. at 15.
    
          Without explaining why it believed CWCA provided greater relief than FLSA,
    
    the district court awarded Mr. Evans $7,248.75 in compensatory damages for unpaid
    
    wages under CWCA. Further, after finding that Mr. Evans had made a proper,
    
    written demand for payment under CWCA and that the defendants had willfully
    
    failed to pay the owed wages, the district court also awarded Mr. Evans a penalty
    
    under CWCA of 175% of the unpaid wages: $12,685.31. See Colo. Rev. Stat.
    
    § 8-4-109(3). Although noting that Mr. Evans had provided no support for his
    
    prejudgment-interest claim, the court nevertheless exercised its discretion and
    
    awarded prejudgment interest—solely on the compensatory damages—in the amount
    
                                                3
    of $1077.18, together with postjudgment interest. In addition, it ruled that Mr. Evans
    
    was entitled to his attorney fees and costs.
    
          On appeal, Mr. Evans contends that he is entitled to FLSA liquidated damages
    
    in addition to the CWCA penalty because the two monetary awards serve different
    
    purposes. More specifically, he contends that FLSA liquidated damages are meant to
    
    compensate employees wrongly unpaid their wages, but that the CWCA penalty is
    
    meant to punish employers that wrongly fail to pay their employees’ earned wages.
    
    We agree with Mr. Evans’s position.
    
          We review de novo a district court’s conclusions of law, including matters of
    
    statutory interpretation and legal analysis underlying a district court’s award of
    
    damages. O’Neal v. Ferguson Constr. Co., 
    237 F.3d 1248
    , 1257 (10th Cir. 2001).
    
          In addition to requiring employers to pay wages owed, FLSA authorizes the
    
    imposition of an equal amount as liquidated damages unless “the employer shows
    
    both that he acted in good faith and that he had reasonable grounds for believing that
    
    his actions did not violate the Act.” Doty v. Elias, 
    733 F.2d 720
    , 725-26 (10th Cir.
    
    1984); see also 29 U.S.C. §§ 216(b), 260. Liquidated damages awarded under FLSA
    
    are compensatory rather than punitive. Brooklyn Sav. Bank v. O’Neil, 
    324 U.S. 697
    ,
    
    707 (1945). In other words, they “‘are not a penalty exacted by the law, but rather
    
    compensation to the employee occasioned by the delay in receiving wages due
    
    caused by the employer’s violation of the FLSA.’” Jordan v. U.S. Postal Serv.,
    
    
    379 F.3d 1196
    , 1202 (10th Cir. 2004) (quoting Herman v. RSR Sec. Servs. Ltd.,
    
    
    172 F.3d 132
    , 142 (2d Cir. 1999)); see also Renfro v. City of Emporia, 
    948 F.2d 4
    1529, 1540 (10th Cir. 1991) (“The purpose for the award of liquidated damages is
    
    ‘the reality that the retention of a workman’s pay may well result in damages too
    
    obscure and difficult of proof for estimate other than by liquidated damages.’”
    
    (quoting Laffey v. Northwest Airlines, Inc., 
    567 F.2d 429
    , 463 (D.C. Cir. 1976))).
    
          The relief available under FLSA and CWCA does partially overlap because
    
    both laws allow employees to recover unpaid wages as compensatory damages. And
    
    Mr. Evans concedes that he can recover his unpaid wages only once. But, as
    
    discussed above, FLSA allows for additional compensatory damages as liquidated
    
    damages. In contrast, CWCA imposes a penalty on an employer who receives an
    
    employee’s written demand for payment and fails to make payment within fourteen
    
    days, and it increases the penalty if the employer’s failure to pay is willful.
    
    See Graham v. Zurich Am. Ins. Co., 
    296 P.3d 347
    , 349-50 (Colo. App. 2012). No
    
    Tenth Circuit case directly addresses whether these damages duplicate one another.
    
          Other jurisdictions have concluded that an award of both a state statutory
    
    penalty and FLSA liquidated damages does not constitute a double recovery.
    
    See, e.g., Mathis v. Housing Auth., 
    242 F. Supp. 2d 777
    , 790 (D. Or. 2002) (“[A]n
    
    award of the penalty under [the state law] and an award of liquidated damages under
    
    the FLSA do not constitute a double recovery.”); Morales v. Cancun Charlie’s Rest.,
    
    No. 3:07-cv-1836 (CFD), 
    2010 WL 7865081
    , at *9 (D. Conn. Nov. 23, 2010)
    
    (unpublished) (allowing recovery of liquidated damages under both FLSA and state
    
    law because the provisions “serve different purposes—the FLSA damages are
    
    compensatory and the [state law] damages serve a punitive purpose”); Do Yea Kim v.
    
                                                5
    167 Nail Plaza, No. 05 CV 8560 (GBD), 
    2008 WL 2676598
    , at *3 (S.D.N.Y. July 7,
    
    2008) (unpublished) (“New York Labor Law provides separately for liquidated
    
    damages in overtime compensation claims, in addition to federal liquidated
    
    damages.”). We agree with the rationale of these cases.
    
          We note further that, like FLSA liquidated damages, prejudgment interest also
    
    is meant “‘to compensate the wronged party for being deprived of the monetary value
    
    of his loss from the time of the loss to the payment of the judgment.’” Greene v.
    
    Safeway Stores, Inc., 
    210 F.3d 1237
    , 1247 (10th Cir. 2000) (quoting Suiter v.
    
    Mitchell Motor Coach Sales, Inc., 
    151 F.3d 1275
    , 1288 (10th Cir. 1998)). It follows
    
    that “a party may not recover both liquidated damages and prejudgment interest
    
    under the FLSA.” Doty, 733 F.2d at 726. Thus, on remand, if the district court
    
    awards FLSA liquidated damages it must vacate its award of prejudgment interest.
    
    See Dep’t of Labor v. City of Sapulpa, 
    30 F.3d 1285
    , 1290 (10th Cir. 1994) (“If the
    
    district court finds that liquidated damages should be awarded it must vacate its
    
    award of prejudgment interest, because it is settled that such interest may not be
    
    awarded in addition to liquidated damages.”).
    
          Therefore, we remand to the district court to recalculate the amount of
    
    damages in light of our determination that it is permissible for the court to award
    
    
    
    
                                               6
    both FLSA liquidated damages and a CWCA penalty. If the court awards FLSA
    
    liquidated damages, it must vacate the award of prejudgment interest.
    
    
                                              Entered for the Court
    
    
                                              Gregory A. Phillips
                                              Circuit Judge
    
    
    
    
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