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Wilson v. On Rise Enterprises, LLC

United States District Court, District of Columbia

March 31, 2018

INDAH WILSON, Plaintiff,
ON THE RISE ENTERPRISES, LLC, et al., Defendants.


          BERYL A. HOWELL Chief Judge.

         Plaintiff Indah Wilson alleges that she has worked for over ten years at the restaurant Oohhs & Aahhs (“Restaurant”) in Washington, D.C., without ever being paid a wage. Compl. ¶¶ 1, 7, 15, ECF No. 1. The plaintiff brings claims for minimum and overtime wages under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. and the D.C. Wage Payment Act (“WPA”), D.C. Code § 32-1301 et seq., and common law fraud against her alleged employers, defendants On the Rise Enterprises, LLC (“OTR”), Oji. A. Abbott, and Dominique R. Brooks. Id. ¶¶ 25-44, 66-74. Alternatively, the plaintiff seeks a declaration that she is entitled to a fifty percent stake in the Restaurant, an injunction requiring the defendants to convey her such stake, and an accounting of all of the Restaurant's revenues and expenses since its opening. Id. ¶¶ 45- 65. Pending before the Court are the defendants' motions to dismiss on grounds that the plaintiff's claims are time-barred or otherwise not cognizable. See Abbott & OTR's Mot. Dismiss, ECF No. 8. Defendant Brooks also asserts that he is not properly a defendant to this action. Brooks's Mot. Dismiss (“Brooks's Mot.”), ECF No. 16; Brooks' Mem. Supp. Mot. (“Brooks' Mem.”) at 2-3, ECF No. 16-1. For the reasons set out below, the defendants' motions to dismiss are denied in part and granted in part, without prejudice.

         I. BACKGROUND

         The plaintiff, a Maryland resident, alleges that she “founded the Restaurant along with her boyfriend, Defendant Oji Abbott, ” Compl. ¶¶ 1, 2, and then worked at the Restaurant for over ten years without receiving a paycheck, in the belief that she “was an owner of a fifty percent (50%) interest in the Restaurant, ” id. ¶¶ 2, 7, 46. The complaint provides few details about the plaintiff's background, such as her level of education or restaurant-related skills, but she alleges that she “frequently and usually” worked in excess of fifty hours per week while “manag[ing] the day-to-day operations” and “marketing” at the Restaurant. Id. ¶¶ 8, 50, 68. The plaintiff further alleges that “[d]ue in significant part to [plaintiff's] efforts to promote the Restaurant, ” id. ¶ 1, she helped the Restaurant to grow in “popularity and success, ” id. ¶ 10, and earn media exposure in the Washington Post, Washingtonian Magazine, and Food Network's “Diners, Drive-Ins and Dives, ” id. ¶ 1. By contrast to the plaintiff's role, “Abbott's role in the Restaurant allowed him to exercise dominion and control over the business records and organization and structure of the Restaurant.” Id. ¶ 68.

         Abbott allegedly incorporated Oohhs & Aahhs, Inc. in 2003 “to obtain permits and licenses for the Restaurant.” Id. ¶ 5. “Abbott did not inform [the plaintiff] of his use of this entity and did not disclose [to her] the details of the entity . . . .” Id. The plaintiff “did not ask to inspect the initial paperwork establishing the Restaurant or its ownership” due to “her trust in [Abbott] and her unfamiliarity with the business and legal aspects of establishing a restaurant.” Id. ¶ 4.

         On or about May 3, 2012, “after the Restaurant had been operating for nearly a decade, ” Abbott and his “family member, ” defendant Brooks, established OTR, without the plaintiff's knowledge, to “own and operate the Restaurant.” Id. ¶¶ 3, 6. Although Brooks allegedly provided “start-up money” for the Restaurant, he has played no “active role” in the Restaurant's operation, as he was imprisoned shortly after the Restaurant opened. Id. ¶¶ 3, 11. The defendants “did not include [the plaintiff] in the [LLC's] organizational documentation.” Id. ¶ 6. At all relevant times, the defendants “maintained exclusive control over the financial and business records of the Restaurant.” Id. ¶ 54.

         Over the course of the plaintiff's employment, Abbott repeatedly represented to the plaintiff and held out to the public that the plaintiff owned a fifty percent stake in the Restaurant. Id. ¶¶ 47, 51. Abbott also represented to the plaintiff “that he would ‘take care of her'” and “pay for her modest living expenses with proceeds from the Restaurant.” Id. ¶ 7. Placing “her trust in Abbott, ” the plaintiff worked at the Restaurant without pay for years, believing all the while that “she was, in fact, the owner of fifty-percent of the Restaurant.” Id. Unbeknownst to the plaintiff, however, Abbott “concealed the existence of” and “surreptitiously redirected” Restaurant profits from the plaintiff to himself and Brooks. Id. ¶ 10.

         The plaintiff's personal relationship with Abbott “began to erode” in late 2014, at which time the plaintiff sought from Abbott an accounting of the Restaurant's financial information “to ascertain her exact ownership interest in the Restaurant.” Id. ¶ 12. Abbott responded that the plaintiff “was ‘owed nothing'” and “would ‘get nothing.'” Id. ¶ 13. Abbott “suddenly stop[ped] paying any of [the plaintiff's] living expenses” and told the plaintiff “that she would now be responsible for [making] mortgage” payments “on the home in which [the two] had lived since 2005.” Id. ¶ 14. Having never received payment for her work at the Restaurant, the plaintiff “had no savings to cover her expenses.” Id. The plaintiff continues to work at the Restaurant, yet “Abbott still fails and refuses to pay [her] proper wages for her time.” Id. ¶ 15.[1]

         The plaintiff filed the Complaint in November 2016, approximately two years after allegedly being first informed by Abbott that she held no ownership interest in the Restaurant. The Complaint asserts seven claims under two alternative theories: if the plaintiff was an employee, despite Abbott's statements to her and others that plaintiff held a half-ownership interest in the Restaurant, she is owed minimum and overtime wages under the FLSA and the WPA, id. ¶¶ 25-74, both of which statutes authorize the payment of liquidated damages in the amount of double or quadruple the amount of unpaid wages. See 29 U.S.C. § 216(b); D.C. Code § 32-1308(a)(1)(A)(ii). Thus, Counts I and II seek accrued minimum and overtime wages, respectively, under the FLSA, Compl. ¶¶ 25-37, and Count III seeks accrued wages under the WPA, id. ¶¶ 38-44.

         Alternatively, if the defendants have defrauded the plaintiff of the half-ownership interest in the Restaurant, which interest she believed she held based upon Abbott's oral promises, statements to others, and conduct, she seeks declaratory, injunctive, and accounting relief. Id. ¶¶ 25-74. Specifically, Count IV seeks a declaration that the plaintiff “is an equitable owner of a fifty-percent share of the Restaurant and/or LLC, and any other relief deemed appropriate by the Court.” Id. ¶ 52. Count V seeks an injunction compelling the defendants “to convey fifty-percent ownership of the Restaurant and/or LLC to [the plaintiff]” as well as “such other and further relief as may be just and equitable.” Id. ¶ 58. Count VI seeks an accounting of “all revenue and expenses of the Restaurant from 2003 through current . . . fully and completely account[ing] for all disbursements of any sums from the revenue of the Restaurant, including cash disbursements, from 2003 through current, ” as well as entry of judgment against the defendants “in the amount found to be due to [the plaintiff] on such accounting” and “such other and further relief as may be just and equitable.” Id. ¶ 65. Finally, Count VII seeks damages, under a theory of common law fraud, “in the amount of the value of fifty-percent interest in the Restaurant in compensatory damages; punitive damages to be determined at trial, plus interest and costs, ” and “such other and further relief as may be just and equitable.” Id. ¶ 74.

         All three defendants seek dismissal of all claims against them. Abbott & OTR's Mot. Dismiss; Abbott & OTR's Mem. Supp. Mot. Dismiss (“Abbott's Mem.”), ECF No. 12; Brooks' Mot.; Brooks' Mem. at 2-3.[2]


         A district court must dismiss a complaint that “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “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.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In ruling on a motion to dismiss for failure to state a claim, the court accepts as true “all the [factual] allegations in the complaint . . . (even if doubtful in fact)” that “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.

         Fraud claims are subject to a heightened pleading standard. See Fed. R. Civ. P. 9(b). “In alleging fraud . . . a party must state with particularity the circumstances constituting fraud, ” though “conditions of a person's mind may be alleged generally.” Id. To satisfy Rule 9(b), a plaintiff must “set[] forth in sufficient detail the time, place, and manner” of the alleged fraudulent scheme, so as “to guarantee all defendants sufficient information to allow for preparation of a response.” United States ex rel. Heath v. AT&T, Inc., 791 F.3d 112, 123 (D.C. Cir. 2015) (internal quotation marks and citation omitted). Such information often includes “specific fraudulent statements, who made the statements, what was said, when or where these statements were made, and how or why the alleged statements were fraudulent.” Brink v. Cont'l Ins. Co., 787 F.3d 1120, 1127 (D.C. Cir. 2015) (citation omitted). “[A]lthough Rule 9(b) does not require plaintiffs to allege every fact pertaining to every instance of fraud when a scheme spans several years, defendants must be able to defend against the charge and not just deny that they have done anything wrong.” United States ex rel. Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1259 (D.C. Cir. 2004) (internal quotation marks and citation omitted).

         A defendant may raise a statute of limitations defense “in a pre-answer motion under . . . Rule[] 12(b).” Smith-Haynie v. District of Columbia, 155 F.3d 575, 577 (D.C. Cir. 1998). The D.C. Circuit, however, has cautioned that “courts should hesitate to dismiss a complaint on statute of limitations grounds based solely on the face of the complaint.” Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996). “Because statute of limitations issues often depend on contested questions of fact, dismissal is appropriate only if the complaint on its face is conclusively time-barred.” Bregman v. Perles, 747 F.3d 873, 875 (D.C. Cir. 2014) (alteration omitted) (quoting de Csepel v. Republic of Hungary, 714 F.3d 591, 603 (D.C. Cir. 2013)). “A court should dismiss with prejudice only if it determines the plaintiff ‘could not possibly cure the deficiency' by alleging new or additional facts.” United States ex rel. Shea v. Cellco P'ship, 863 F.3d 923, 936 (D.C. Cir. 2017) (quoting Firestone, 76 F.3d at 1209).


         The defendants seek to dismiss each of the plaintiff's counts on grounds that (1) the plaintiff's FLSA and WPA claims, in Counts I through III, are barred by statutes of limitations, Defs.' Mem. at 2-4; (2) the WPA claim in Count III is not cognizable because this local statute governs only “when an employer must pay, ” not “what an employer must pay, ” and requires only that “when there is a dispute over the amount owed, ” the employer “pay the undisputed amount, ” id. at 5; (3) the claims for declaratory, injunctive, and accounting relief, in Counts IV through VI, are mere remedies to which the plaintiff is entitled only by prevailing on an independent claim, id. at 6-9; and (4) the fraud claim, in Count VII, is not plead with the particularity required by Rule 9(b) of the Federal Rules of Civil Procedure, id. at 10-13. Brooks also argues that the plaintiff's claims against him should be dismissed because the plaintiff has failed to allege facts that, if believed, establish his liability as an employer. Brooks' Mem. at 2-3.

         For the reasons that follow, the plaintiff has pleaded valid claims for minimum and overtime wages under FLSA and the WPA (Counts One through Three), but has not adequately pleaded claims for fraud, or for declaratory, injunctive, or accounting relief (Counts Four through Seven). Accordingly, Counts Four through Seven are dismissed without prejudice, and the defendants' motions to dismiss are denied in all other respects.

         A. The Plaintiff's FLSA Claims Are Not Time-Barred.

         The plaintiff brings claims under the FLSA for unpaid minimum and overtime wages that she alleges accrued over the course of her decade-long employment at the Restaurant. See Compl. ¶¶ 25-37. Given that the factual allegations in the complaint are assumed to be true, the defendants do not now dispute that the plaintiff was entitled to, and that they failed to pay her, such wages. Instead, the defendants contend that FLSA's statute of limitations bars any claim for unpaid wages the plaintiff might have. Defs.' Mem. at 3-4. The plaintiff contends that the FLSA's statute of limitations was tolled by the defendants' willfully concealing their violations and causing the plaintiff to believe that she held a fifty percent equity interest in the Restaurant, making her exempt from coverage of the FLSA. See 29 U.S.C. § 213(a)(1) (exempting from coverage of FLSA's minimum wage provisions “any employee employed in a bona fide executive, administrative, or professional capacity”); 29 C.F.R. § 541.101 (defining the term “employee employed in a bona fide executive capacity” to include “any employee who owns at least a bona fide 20-percent equity ...

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