UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 20-cv-22746-UU

CARLOS FERNANDEZ,

Plaintiff, 

v. 

CHECKALT ERAS, INC. and 

SHAI STERN,

Defendants. 

 /

 

ORDER

THIS CAUSE comes before the Court upon Defendants’ Motion to Dismiss Plaintiff’s 

Complaint (the “Motion”). D.E. 9. 

THE COURT has considered the Motion and the pertinent portions of the record and is

otherwise fully advised on the premises. For the reasons set forth herein, the Motion is GRANTED 

IN PART.

I. Background

Unless otherwise indicated, the following facts are taken from the Complaint for Damages 

(D.E. 1, Ex. 1) filed by Plaintiff Carlos Fernandez against Defendants CheckAlt ERAS, Inc. 

(“CheckAlt”) and Shai Stern (“Stern” and, together with CheckAlt, “Defendants”).

At all relevant times, Plaintiff was an employee of CheckAlt. D.E. 1, Ex. 1 ¶ 3. Stern was 

Plaintiff’s supervisor and had “operational control” over CheckAlt. Id. Plaintiff alleges that “[i]n 

several workweeks during the relevant period, Plaintiff worked[] in excess [of] forty (40) hours 

per week for Defendants.” Id. ¶ 11. During these weeks, however, Defendants purportedly failed 

to pay Plaintiff overtime compensation in violation of the Fair Labor Standards Act (“FLSA”). In 

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addition, Plaintiff alleges that “[i]t is also believed that Plaintiff worked regular time for which he 

was not paid.” Id. ¶ 11. Further, Plaintiff alleges that during his employment with Defendants, 

“Plaintiff was improperly paid as a 1099 employee where, in actuality, he was a W-2 employee.” 

Id. ¶ 8. 

Plaintiff filed the underlying Complaint on or around June 2, 2020 in the 11th Judicial 

Circuit in and for Miami-Dade County, Florida. In the Complaint, Plaintiff asserts six causes of 

action for: (1) FLSA violations against both Defendants; (2) violations of the Florida Deceptive 

and Unfair Trade Practices Act (“FDUTPA”) against both Defendants; (3) declaratory relief 

against CheckAlt pertaining to Plaintiff’s classification as a 1099 employee; (4) violation of 

26 U.S.C. § 7434 against both Defendants for filing fraudulent information returns; (5) breach of 

oral contract against CheckAlt; and (6) unjust enrichment against CheckAlt. See generally id. 

Defendants timely removed the state-court action to this Court. D.E. 1. Through the 

Motion, Defendants move to dismiss each count in Plaintiff’s Complaint for failure to state a claim 

under Rule 12(b)(6). In addition, Defendants move to dismiss Stern as a named defendant. The 

Motion is now fully briefed and ripe for adjudication.

II. Legal Standard

To state a claim for relief, Federal Rule of Civil Procedure 8(a)(2) requires only “a short 

and plain statement of the claim showing that the pleader is entitled to relief.” While a court, at 

this stage of the litigation, must consider the allegations contained in the plaintiff’s complaint as 

true, this rule “is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

In addition, the complaint’s allegations must include “more than an unadorned, the-defendant 

unlawfully-harmed-me accusation.” Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555

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(2007)). Thus, “[t]hreadbare recitals of the elements of a cause of action, supported by mere 

conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). 

In practice, to survive a motion to dismiss, “a complaint must contain sufficient factual 

matter, accepted as true, to ‘state a claim of relief that is plausible on its face.’” Id. (quoting 

Twombly, 550 U.S. at 570). A claim has facial plausibility 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. The plausibility standard requires more than a sheer possibility that a defendant has 

acted unlawfully. Id. Where a complaint pleads facts that are merely consistent with a defendant’s 

liability, it stops short of the line between possibility and plausibility of entitlement to relief. Id.

Determining whether a complaint states a plausible claim for relief is a context-specific 

undertaking that requires the court to draw upon its judicial experience and common sense. Id. at 

679.

Fraud claims are subject to Rule 9(b)’s heightened pleading requirements. Rule 9(b) 

provides that “[i]n allegations of fraud or mistake, a party must state with particularity the

circumstances constituting fraud or mistake” but “[m]alice, intent, knowledge, and other condition 

of mind of a person shall be averred generally.” Fed. R. Civ. P. 9(b). The Eleventh Circuit has 

stated that Rule 9(b)’s fraud particularity requirement is met as long as the complaint sets forth (1) 

precisely what representations were made, and (2) the time and place of each such statement and 

the person responsible for making (or, in the case of omissions, not making) the same, and (3) the 

content of such statements and the manner in which they misled the plaintiff, and (4) what the 

defendants obtained as a consequence of the fraud.” Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194, 

1202 (11th Cir. 2001) (internal citation omitted).

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III. Analysis

A. Count I – FLSA Violations

Defendants argue that Count I should be dismissed because Plaintiff has not established 

coverage under the FLSA. D.E. 9, pp. 5–7. The FLSA provides for two forms of coverage: 

individual coverage and enterprise coverage. Amadon v. Delivery Dudes, LLC, No. 16-CV-62329, 

2017 WL 7792707, at *2 (S.D. Fla. Mar. 3, 2017) (citing Thorne v. All Restoration Servs., Inc., 

448 F.3d 1264, 1265–66 (11th Cir. 2006)). To trigger the applicability of the FLSA, a plaintiff 

must allege that he is covered by the FLSA through either theory of coverage. Villafana v. Feeding 

S. Fla., Inc., No. 13-60760-CIV, 2013 WL 2646729, at *9 (S.D. Fla. June 12, 2013) (citing 

Polycarpe v. E & S Landscaping Serv., Inc., 616 F.3d 1217, 1220 (11th Cir. 2010)). A plaintiff 

may claim individual coverage “if he regularly and directly participates in the actual movement of 

things or persons in interstate commerce.” Ceant v. Aventura Limousine & Transp. Serv., Inc., 

874 F. Supp. 2d 1373, 1376 (S.D. Fla. 2012) (citing Josendis v. Wall to Wall Residence Repairs, 

Inc., 662 F.3d 1292, 1298 (11th Cir. 2011)). And a plaintiff may assert enterprise coverage “if his 

employer: (1) has employees engaged in interstate commerce or in the production of goods for 

interstate commerce, or employees who handle, sell, or otherwise work on goods or materials that 

have been moved in, or produced for, interstate commerce by any person; and (2) has gross volume 

sales or business of at least $500,000 annually.” Id.

Here, the Complaint is devoid of any allegations to establish that Plaintiff participated in 

interstate commerce, and as such, Plaintiff fails to allege individual coverage under the FLSA. 

Plaintiff attempts to establish enterprise coverage through his allegations that Defendants “were 

regularly engaged in activities that involved interstate commerce,” and that Defendants “had 

annual gross sales or business in an amount not less than $500,000.00.” D.E. 1, Ex. 1 ¶ 6. The 

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Complaint, however, provides no factual allegations about the nature of Defendants’ business or 

how Defendants’ business is connected to interstate commerce. Plaintiff’s conclusory statement 

that Defendants were involved in interstate commerce, without any supporting factual allegations, 

is insufficient to withstand dismissal. Gaviria v. Maldonado Bros., Inc., No. 13-60321-CIV, 2013 

WL 3336653, at *4 (S.D. Fla. July 2, 2013) (“Bare assertions that a defendant is ‘engaged in 

interstate commerce within the meaning of the law,’ and nothing more, are mere ‘formulaic 

recitations of the elements of a cause of action’ and should not survive a motion to dismiss.”); 

Burge v. Kings Realty Grp., LLC, No. 12-CV-1172, 2012 WL 4356815, at *2 (M.D. Fla. Sept. 24, 

2012) (finding that the plaintiff failed to sufficiently allege enterprise coverage because the 

complaint “merely allege[d] in conclusory fashion that ‘Defendants were an enterprise engaging 

in commerce or in the production of goods for commerce’ . . . and that ‘Defendants have annual 

gross volume of sales or business done of not less than $500,000.’”); see also Ceant, 874 F. Supp. 

2d at 1377 (dismissing the plaintiff’s complaint for failing to provide sufficient allegations as to 

either enterprise or individual coverage under the FLSA).

Accordingly, the Court finds that Count I must be dismissed, but will allow Plaintiff an 

opportunity to amend. 

B. Count II – FDUTPA Violations

In Count II, Plaintiff asserts a claim for “unfair and deceptive trade practice[s] prohibited 

by Florida Statutes.” D.E. 1, Ex. 1 ¶ 14. More specifically, Plaintiff alleges that the “actions of 

Defendants, misclassifying Plaintiff, is an unfair and deceptive trade practice.” Id. Defendants 

argue that Plaintiff’s FDUTPA claim should be dismissed because “Plaintiff fails to sufficiently 

allege the element of causation or that he sustained actual damages.” D.E. 9, p. 9. The Court 

agrees. More importantly, the Court finds sua sponte that Plaintiff cannot state a claim under 

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FDUTPA because he is not seeking to recover for a “deceptive or unfair trade practice” within the 

meaning of the statute.

The FDUTPA protects “the consuming public and legitimate business enterprises from 

those who engage in unfair methods of competition or unconscionable, deceptive, or unfair acts or 

practices in the conduct of any trade or commerce.” Fla. Stat. § 501.202(2). Plaintiff is not suing 

as a consumer and he is not a “legitimate business enterprise.” Rather, he is suing his former 

employer for unpaid compensation. Accordingly, Plaintiff has remedies, but they do not lie under

FDUTPA. See Leon v. Tapas & Tintos, Inc., 51 F. Supp. 3d 1290, 1296 (S.D. Fla. 2014)

(dismissing with prejudice a claim for violations of FDUTPA predicated upon the defendants’ 

alleged misclassification of the plaintiff as an independent contractor); see also Pinecrest 

Consortium, Inc. v. Mercedes-Benz USA, LLC, No. 13-20803-CIV, 2013 WL 1786356, at *1 (S.D. 

Fla. Apr. 25, 2013) (explaining that FDUTPA “has no application to entities complaining of 

tortious conduct which is not the result of a consumer transaction”).

This limitation is apparent from the requirement that “actual damages in the FDUTPA 

context consist of the difference in the market value of the product or service in the condition in 

which it was delivered and its market value in the condition in which it should have been delivered 

according to the contract of the parties.” Vazquez v. Joseph Cory Holdings, LLC, No. 16-CV1307, 2016 WL 11221088, at *5 (M.D. Fla. Nov. 10, 2016) (internal quotation marks and citation 

omitted). Here, although Plaintiff alleges (in a most conclusory fashion) that he “suffered 

damages” as a “result of Defendants’ unfair and deceptive trade practices” (D.E. 1, Ex. 1 ¶ 15), 

his damage claim is for unpaid compensation – not for the type of damages FDUTPA is intended 

to address.

As such, the Court will dismiss Count II with prejudice.

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C. Count III – Declaratory Relief

Plaintiff alleges that during his employment with Defendants, he was “improperly 

classified as an independent contractor when in fact he was just an employee.” D.E. 1, Ex. 1 ¶ 17. 

Through Count III, Plaintiff seeks “a declaration of whether he was an independent contractor.” 

Id. ¶ 18. Defendants move to dismiss Count III, arguing that “this cause of action is nothing more 

than a mash-up of other counts in the Complaint and redundant where all issues are adequately 

addressed by those other counts.” D.E. 9, p. 12. 

The Declaratory Judgment Act “confers on federal courts unique and substantial discretion 

in deciding whether to declare the rights of litigants.” Wilton v. Seven Falls Co., 515 U.S. 277, 

284 (1995). Indeed, “a district court is authorized, in the sound exercise of its discretion, to stay 

or to dismiss an action seeking a declaratory judgment.” Compere v. Nusret Miami, LLC, 391 F. 

Supp. 3d 1197, 1206 (S.D. Fla. 2019). Still, “[d]eclaratory relief is only appropriate where there 

is a threat of imminent future harm.” Id. (citing Elend v. Basham, 471 F.3d 1199, 2017 (11th Cir. 

2006). 

Here, Plaintiff fails to allege that there is a threat of imminent future harm with respect to 

Plaintiff’s alleged improper classification as an independent contractor. And given that Plaintiff 

is no longer employed by Defendants, there can be no future harm to Plaintiff stemming from his 

alleged classification as an independent contractor during his employment with Defendants. 

Declaratory relief is thus inappropriate. The Court finds that allowing Plaintiff to amend this count 

would be futile, and as such, Count III is dismissed with prejudice.

D. Count IV – Violation of 26 U.S.C. § 7434

Under Section 7434, “[i]f any person willfully files a fraudulent information return with 

respect to payments purported to be made to any other person, such other person may bring a civil 

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action for damages against the person so filing such return.” 26 U.S.C. § 7434. To state a claim 

under Section 7434, a plaintiff must allege: “(1) Defendants issued an information return; (2) [t]he 

information return was fraudulent; and (3) Defendants willfully issued a fraudulent information 

return.” Leon, 51 F. Supp. 3d at 1297. With respect to the third element, “at the motion to dismiss 

stage, the complaint must contain specific allegations supporting a plausible inference that [the 

defendant] willfully filed false information returns.” Id. at 1298. “Bare assertions that Defendants 

‘knew’ the returns to be false, or that Plaintiff requested that Defendants pay him as an employee—

without specific facts as to the who, what, when, why or how surrounding the actual filing of 

returns—does not meet the standard for pleading tax fraud.” Id.

The Court finds that Plaintiff fails to state a claim under Section 7434. Plaintiff merely 

alleges that “Defendants have violated 26 U.S.C. Section 7434 by willfully filing of fraudulent 

information returns.” D.E. 1, Ex. 1 ¶ 23. Plaintiff presumably predicates his claim under Count 

IV on the basis that “Plaintiff was improperly paid as a 1099 employee.” Id. ¶ 8. But Plaintiff 

falls short of alleging that Defendants actually issued a 1099 to satisfy the first element required 

to state a claim under Section 7434. Accepting as true the fact that Plaintiff was “paid as a 1099 

employee” does not establish that Defendants were the parties responsible for issuing the 1099s. 

Further, the Complaint contains no factual allegations with respect to how the information returns 

were purportedly fraudulent. Plaintiff only alleges that Defendant filed “fraudulent information 

returns.” Moreover, Plaintiff fails to allege any facts to support a plausible inference that 

Defendants willfully filed false information returns. In short, the Complaint is devoid of any 

“specific facts as to the who, what, when, why or how surrounding the actual filing of returns,” 

which must be pled to state a claim under Section 7434. Leon, 51 F. Supp. 3d at 1298.

Accordingly, Count IV is dismissed without prejudice.

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E. Count V – Breach of Oral Contract

In Count V, Plaintiff alleges that Defendant CheckAlt breached “an oral agreement for 

Plaintiff to be paid certain compensation . . . by failing to pay agreed upon regular time and 

overtime.” D.E. 1, Ex. 1 ¶¶ 24, 27. Defendants argue that Count V should be dismissed because 

Plaintiff “fails to plead the elements of a claim for breach of an oral contract.” D.E. 9, p. 16. The 

Court agrees that Count V is subject to dismissal on this basis.

1

To establish the existence of a contract, a plaintiff must plead offer, acceptance, 

consideration, and sufficient specification of the essential terms. See, e.g., Pirowskin v. Atl. & 

Pac. Ass’n Mgmt., Inc., No. 20-CV-21380, 2020 WL 2322920, at *2 (S.D. Fla. May 11, 2020)

(citing St. Joe Corp. v. McIver, 875 So. 2d 375, 381 (Fla. 2004)). In addition, to state a claim for 

breach of an oral contract, “a plaintiff must allege that the ‘parties mutually assented to a certain 

and definite proposition and left no essential terms open.’” Id. (quoting W.R. Townsend 

Contracting, Inc. v. Jensen Civil Constr., Inc., 728 So. 2d 297, 300 (Fla. 1st DCA 1999)). 

“Conclusory allegations of ‘verbal promises,’ without more, do not state a claim for breach of 

contract under Florida law.” Sleit v. Ricoh Corp., No. 07-CV-724, 2007 WL 2565967, at *1 (M.D. 

Fla. Aug. 31, 2007).

Here, the only facts alleged by Plaintiff are that the parties entered into an “oral agreement 

for Plaintiff to be paid certain compensation,” but that CheckAlt “breached the agreement by 

failing to pay agreed upon regular time and overtime,” and as a result, Plaintiff suffered damages. 

1 Defendants also argue that Count V is barred by the Statute of Frauds. D.E. 9, p. 

17–18. But the Court is not persuaded by this argument given that “the general rule is that an oral 

employment agreement for an indefinite period of time is not barred by the statute of frauds.” AlBabtain v. Banoub, No. 06-CV-1973, 2009 WL 10670840, at *2 (M.D. Fla. June 26, 2009) 

(applying Florida law).

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The Complaint fails to allege any facts with respect to the formation or terms of the contract, and 

therefore, Count V fails to state a claim for breach of oral contract. 

Accordingly, Count V is dismissed with leave to amend.

F. Count VI – Unjust Enrichment

Plaintiff’s claim for unjust enrichment is premised on the allegation that “Plaintiff worked 

in excess of forty hours per week and was not paid overtime and/or was not paid regular time.” 

D.E. 1, Ex. 1 ¶ 7. Defendants argue that Plaintiff’s unjust enrichment claim is subject to dismissal 

with prejudice because it is preempted by the FLSA. 

“[A] plaintiff cannot circumvent the exclusive remedy prescribed by Congress in asserting 

equivalent state law claims in addition to the FLSA.” Garcia v. Nachon Enters., Inc., 223 F. Supp. 

3d 1257, 1268 (S.D. Fla. 2016). “Where a plaintiff’s state law claims are merely the FLSA claims 

recast in state law terms, those state law claims are preempted by the FLSA.” Id. Here, the Court 

finds that Plaintiff’s claim for unjust enrichment is nothing more than a state-law version of his 

FLSA claim for unpaid wages.2

 See D.E. 1, Ex. 1 ¶ 30 (“[Defendant] voluntarily accepted and 

retained the benefits conferred upon it by Plaintiff without paying his wages.”). Moreover, unjust 

enrichment is only available where there is no adequate remedy at law, and in this case, the FLSA 

provides an adequate remedy through which Plaintiff may pursue his claim for unpaid wages. See 

Bule v. Garda CL S.E., Inc., No. 14-21898-CIV, 2014 WL 3501546, at *3 (S.D. Fla. July 14, 

2014).

Accordingly, Count VI is dismissed with prejudice.

2 Although the Southern District of Florida is split on the issue of “whether a claim 

for unjust enrichment survives a preemption challenge where it’s pled solely as an alternative to 

the FLSA,” Altare v. Vertical Reality MFG, Inc., No. 19-CV-21496, 2020 WL 209272, at *3 (S.D. 

Fla. Jan. 14, 2020), nowhere does Plaintiff allege that his unjust enrichment claim is pled in the 

alternative to his FLSA claim.

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G. Defendant Stern

As a final matter, Defendants argue that Stern should be dismissed with prejudice from this 

case as a named party defendant because he is “shielded by the corporation.” D.E. 9, p. 4. 

According to Defendants, “[t]he corporate shield doctrine prohibits jurisdiction over an individual 

if the individual’s only relevant contacts with the forum are acts performed for the benefit of the 

individual’s employer.”3

 Id. Stern is named as a defendant in Counts I, II, and IV.

With respect to Plaintiff’s Count I (FLSA violations), the FLSA defines “employer” as 

“any person acting directly or indirectly in the interest of an employer in relation to an employee.” 

29 U.S.C. § 203(d). The statute thus explicitly includes individuals other than the actual employer 

within its definition of “employer.” In fact, “[t]he overwhelming weight of authority is that a 

corporate officer with operational control of a corporation’s covered enterprise is an employer 

along with the corporation, jointly and severally liable under the FLSA for unpaid wages.” Patel 

v. Wargo, 803 F.2d 632, 637–38 (11th Cir. 1986). In this case, Plaintiff alleges that Stern “was 

the supervisor of Plaintiff[] and had operational control over Check[Alt].” D.E. 1, Ex. 1 ¶ 3. 

Accepting these allegations as true, the Court finds that Plaintiff has alleged enough facts to 

preclude a dismissal of Mr. Stern with prejudice.

As for Count IV (Section 7434 violation), the Court has already determined that dismissal 

of this count with leave to amend is appropriate. Although the Complaint as pled offers limited 

factual allegations with respect to Stern, Count IV sounds in fraud. And as Defendants assert in 

3 In their Reply, Defendants argue for the first time that Plaintiff has failed to 

establish personal jurisdiction over Stern. See D.E. 25. But by not raising lack of personal 

jurisdiction in the Motion, Defendants have waived that argument. See, e.g., U.S. Commodity

Furtures Trading Comm’n v. Oakmont Fin., Inc., 191 F. Supp. 3d 1347, 1352 (S.D. Fla. 2016) 

(“Because the Defendant makes this argument for the first time in the Reply, the Court will not 

consider the argument.”).

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the Motion, “[a] corporate officer is only subject to jurisdiction in the forum if the corporate officer 

commits intentional torts.” D.E. 9, p. 4. As such, dismissal of Stern at this time would be 

premature.

IV. Conclusion

For the foregoing reasons, it is hereby

ORDERED AND ADJUDGED that the Motion (D.E. 9) is GRANTED IN PART. Counts 

II, III, and VI are DISMISSED WITH PREJUDICE. Counts I, IV, and V are DISMISSED 

WITHOUT PREJUDICE and with leave to amend. Plaintiff may file an amended complaint no 

later than Friday, September 11, 2020. Failure to adhere to this deadline will result in dismissal 

of this action without further notice. It is further

ORDERED AND ADJUDGED that the Initial Planning and Scheduling Conference is 

RESET to Friday, October 2, 2020.

DONE AND ORDERED in Chambers, Miami, Florida, this 28th day of August, 2020.

__________________________________

URSULA UNGARO

UNITED STATES DISTRICT JUDGE

Copies furnished:

All counsel of record

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