Court Opinion

ID: 9901725
Source: CourtListenerOpinion
Date Created: 2023-11-22 15:02:42.783932+00
Date Added: 2024-06-11T09:21:38.211927
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

                             PETER SERRAO,
                                Appellant,

                                     v.

             MANTIS FUNDING, LLC, and MICHAEL MARANO,
                             Appellees.

                             No. 4D2022-1467

                           [November 22, 2023]

  Appeal from the County Court for the Fifteenth Judicial Circuit, Palm
Beach County; Frank S. Castor, Judge; L.T. Case No. 50-2021-CC-
000045-XXXX-MB.

   Scott M. Behren of Behren Law Firm, Weston, for appellant.

  Juan C. Zorrilla and Victor M. Velarde of Fowler White Burnett P.A.,
Miami, for appellees.

WARNER, J.

    After obtaining a jury verdict on a claim for violation of the Fair Labor
Standards Act (FLSA/Act), appellant moved for costs, liquidated damages
under the Act, and attorney’s fees. The trial court granted only a portion
of appellant’s costs, because it concluded that appellant had not prevailed
on two state law actions and minimally prevailed on the FLSA action. The
court denied liquidated damages under the Act, because it found that
appellees had acted in good faith even though appellees had failed to pay
appellant some overtime wages. The court finally denied attorney’s fees,
concluding that neither party had prevailed. We affirm the cost award
because the trial court has discretion to determine costs under the FLSA.
We reverse as to the liquidated damages, as appellees did not present
evidence sufficient to find good faith under the FLSA. Finally, we reverse
the denial of attorney’s fees, as the FLSA requires an award of fees upon
rendering of a judgment finding a FLSA violation.

   Appellant was employed by appellee Mantis Funding, LLC (“Mantis”) in
a salaried position and was not paid overtime. Appellant sued appellee
Mantis, as well as its principal, Marano, for violation of the FLSA and
claimed he was owed at least $10,475.51 in overtime and liquidated
damages under the Act. He also sued appellee Mantis for breach of
contract and unjust enrichment. Appellees answered, contending that
appellant was a salaried employee, properly classified as exempt under the
FLSA and therefore not owed any overtime. In addition, they asserted that
if a violation of the FLSA occurred, the act or omission giving rise to the
violation was in good faith, and they had reasonable grounds to believe the
act or omission was not a violation of the FLSA. Therefore, liquidated
damages were inappropriate.

   During the jury trial, the court directed a verdict on appellant’s breach
of contract and unjust enrichment claims. On the FLSA claim, the jury
returned a verdict of $808.77 for appellant finding that he proved by the
greater weight of the evidence that appellees owed him overtime
compensation, and appellees failed to prove that appellant was legally
classified as administratively exempt under the FLSA.

   After the verdict, appellant filed motions to impose liquidated damages
and for attorney’s fees, both pursuant to the FLSA. He also moved to tax
costs pursuant to section 57.041, Florida Statutes (2021).

   After a non-evidentiary hearing on the motions, the trial court denied
appellant’s motion for liquidated damages, finding “[Appellees] acted in
good faith predicated upon reasonable grounds” and citing Joiner v. City
of Macon, 814 F.2d 1537, 1539 (11th Cir. 1987). The trial court entered
final judgment for appellant in the amount awarded by the jury with
prejudgment interest, and in a separate order denied the motion for costs
and for fees.

   Appellant filed a motion for rehearing of the denial of fees and costs.
The trial court granted the rehearing as to costs but not fees. The trial
court granted costs in the amount of $1,516, which was half of appellant’s
requested costs, after certain cost deductions by the court. The court
reasoned that appellant was not entitled to all of his costs, because there
was no prevailing party in the case. For the same reason, the court denied
an award of attorney’s fees to appellant. From these rulings, appellant has
taken this appeal.

                                  Costs

   Appellant contends the court erred in reducing his costs on the ground
that he was not the prevailing party on all counts of his complaint. He
claims that pursuant to section 57.041, Florida Statutes (2021), he was

                                     2
entitled to all of his costs, because he obtained a judgment against
appellees. See Sherman v. Sherman, 279 So. 3d 188 (Fla. 4th DCA 2019).

    Appellees, however, argue that the award of costs in this matter is
controlled by 28 U.S.C. § 1920, because appellant prevailed on a federal
FLSA claim. Further, they argue that appellant’s cost claim when
controlled by 28 U.S.C. § 1920 allows the trial court discretion in deciding
taxable costs, which the trial court did not abuse. While appellees did not
raise the application of the FLSA and 28 U.S.C. § 1920 at trial, we consider
it under the tipsy coachman doctrine. See Dade Cnty. Sch. Bd. v. Radio
Station WQBA, 731 So. 2d 638, 644 (Fla. 1999) (“[I]f a trial court reaches
the right result, but for the wrong reasons, it will be upheld if there is any
basis which would support the judgment in the record.”).

   The FLSA provides a specific remedy within its terms, which includes
costs. “The court in such action shall, in addition to any judgment
awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to
be paid by the defendant, and costs of the action.” 29 U.S.C.A. § 216(b).
Further, “the circumstances under which a party is entitled to costs and
attorney’s fees is substantive.” Timmons v. Combs, 608 So. 2d 1, 2–3 (Fla.
1992). Therefore, in determining the issue of costs allowable under the
FLSA, we look to federal law, as the taxation of costs provision of 28 U.S.C.
§ 1920 should have been applied to determine the costs for which
appellant was entitled to recover. See Glenn v. Gen. Motors Corp., 841 F.2d
1567, 1575 (11th Cir. 1988) (“[N]othing in the legislative history associated
with section 216(b)’s passage suggests that Congress intended the term
‘costs of the action’ to differ from those costs as now enumerated in 28
U.S.C.A. § 1920.”).

   As appellees note, many of appellant’s asserted costs are not
recoverable costs under the federal statute. In fact, the costs recoverable
under the statute may be less than what was actually awarded by the
court. Therefore, by applying the correct cost statutes, there is no showing
of an abuse of discretion by the trial court in the ultimate award of costs
to appellant.

                           Liquidated Damages

   The FLSA provides: “Any employer who violates the provisions of [the
FLSA] . . . shall be liable to the . . . employees affected in the amount of
their . . . unpaid overtime compensation . . . and in an additional equal
amount as liquidated damages.” 29 U.S.C. § 216(b). “The Portal to Portal
Act, 29 U.S.C. §§ 251–62, which amended FLSA, provides a safe harbor
for an employer who can establish that it acted in good faith and under

                                      3
the reasonable belief that it was in compliance with the FLSA.” Rodriguez
v. Farm Stores Grocery, Inc., 518 F.3d 1259, 1272 (11th Cir. 2008) (citing
29 U.S.C. § 260). According to section 260, an employer is entitled to safe
harbor from liquidated damages under the FLSA:

      [I]f the employer shows to the satisfaction of the court that the
      act or omission giving rise to such action was in good faith
      and that he had reasonable grounds for believing that his act
      or omission was not a violation . . . the court may, in its sound
      discretion, award no liquidated damages . . . .

29 U.S.C. § 260.

   The burden of proving entitlement to the safe harbor rests with the
employer who violates the FLSA’s overtime provision. Joiner, 814 F.2d at
1539; see also Ransom v. M. Patel Enters., Inc., 734 F.3d 377, 387 n.16
(5th Cir. 2013) (“It is the employer’s substantial burden to prove good faith
and reasonableness.”). “To satisfy the good faith requirement, an employer
must show that it acted with both objective and subjective good faith.”
Rodriguez, 518 F.3d at 1272; Alvarez Perez v. Sanford-Orlando Kennel
Club, Inc., 515 F.3d 1150, 1163 (11th Cir. 2008) (same). “To satisfy the
subjective ‘good faith’ component, the employer has the burden of proving
that it had an honest intention to ascertain what the Act requires and to
act in accordance with it.” Davila v. Menendez, 717 F.3d 1179, 1186 (11th
Cir. 2013) (quoting Dybach v. State of Fla. Dep’t of Corrs., 942 F.2d 1562,
1566 (11th Cir. 1991)).

    If the employer demonstrated an honest intention, sufficient to meet
the subjective component of good faith, then the employer “still must
shoulder the ‘additional requirement’ of showing that the employer had
reasonable grounds for believing that its conduct comported with the Act."
Dybach, 942 F.2d at 1567. If the employer “shows to the satisfaction of
the court that the act or omission giving rise to such action was in good
faith and that he had reasonable grounds for believing that his act or
omission was not a violation of the [FLSA],” then the court has discretion
to reduce or deny an award of liquidated damages. Alvarez Perez, 515
F.3d at 1163.

    In this case, the trial court found that defendants “acted in good faith
predicated upon reasonable grounds.” However, even if appellees acted
subjectively in good faith, the evidence does not show an objective
reasonable basis for that belief. Appellee’s principal Marano testified at
trial that all of his employees were salaried employees. Marano was asked
what he did to ensure compliance with the FLSA, and he responded that

                                     4
his ex-business partner spoke with a Jupiter attorney in 2015. However,
Marano did not testify that the Jupiter attorney had expertise in the field
of the FLSA, although the attorney was an employment attorney.

    Marano also did not give specifics about how appellee Mantis was
advised to comply with the FLSA. Marano did not specifically testify that
the Jupiter attorney addressed exempt status for various employee
positions under the FLSA, including the position which appellant was
offered four years after the Jupiter attorney was consulted, when appellant
was hired in 2019. Nor did Marano testify that the attorney drafted the
employment offer letter received by appellant specifically for appellant.
When appellant’s attorney sought to question Marano about what advice
the attorney gave regarding the FLSA compliance, appellee objected as
violating the attorney/client privilege, which objection the trial court
sustained. Compare Jackson v. R & A Towing, LLC, No. 4:21-CV-0618,
2023 WL 2433977, at *8 (S.D. Tx. March 9, 2023) (liquidated damages
awarded where employer gave details of counsel’s advice regarding how to
pay all tow truck drivers but the evidence showed that the employer did
not comply with the advice), with Gelber v. Akal Security, Inc., 14 F.4th
1279, 1288 (11th Cir. 2021) (finding no error in district court’s conclusion
that employer acted in good faith on the advice of counsel when
“[employer’s] outside counsel testified that a company executive sought his
advice regarding the meal-breaks policy and that he advised [the employer]
that the policy comported with the FLSA”).

   Marano volunteered that in-house counsel had recommended Mantis
to “pay hourly to save money.” But when asked if in-house counsel had
told him that legally he should have been paying the employees on an
hourly basis, Marano’s counsel objected as “asked and answered,” and the
objection was sustained.

   Because of appellee’s objections, which the trial court sustained, no
evidence was presented as to what specific advice appellee had received
regarding compliance with the FLSA. The testimony only revealed that
appellees consulted an attorney regarding setting up an employment
system. Nor were any documents introduced to show that appellee had
contacted anyone, including the Department of Labor to ask about the
FLSA compliance. See Rodriguez, 518 F.3d at 1273 (“[T]he absence of
documentary evidence or testimony that [the employer] consulted the DOL
or an FLSA expert before or during the period of the violation weighed
against a finding of objective good faith. That is self evident from the fact
that documentary evidence or consultation with the DOL or an outside
expert would have weighed in [the employer’s] favor.”). Therefore, no
evidence was offered by appellees from which the court could determine

                                     5
that they “had an honest intention to ascertain what the Act requires and
to act in accordance with it . . . .” Davila, 717 F.3d at 1186. Had Marano
been allowed to testify as to advice by counsel that his employment
agreements met the FLSA requirements, the trial court would have had
grounds to find that appellees had exercised good faith. Because no such
grounds existed, we must reverse for the trial court to assess liquidated
damages.

   After the court denied the assessment of liquidated damages, appellant
requested, and the trial court assessed, pre-judgment interest on the
amount of overtime which the jury found was owed. “Plaintiffs may not
recover both liquidated damages and prejudgment interest under the
FLSA.” Joiner, 814 F.2d 1537, 1539 (citing Brooklyn Savings Bank v.
O’Neil, 324 U.S. 697, 715 (1945)). However, while appellant cannot recover
both prejudgment interest and liquidated damages, where the appellate
court finds that liquidated damages must be awarded, then the
prejudgment interest awarded for the same period of time “must be
credited against the new award.” Id.

                             Attorney’s Fees

   29 U.S.C. § 216(b) provides for the award of attorney’s fees in a FLSA
action as follows:

      The court in such action shall, in addition to any judgment
      awarded to the plaintiff or plaintiffs, allow a reasonable
      attorney’s fee to be paid by the defendant, and costs of the
      action.

Id. (emphasis supplied). Where a party prevails under the FLSA, federal
law governs the disposition of an appeal of an award of attorney’s fees.
Patricia Gail Van Diepen, P.A. v. Brown, 976 So. 2d 38, 39 (Fla. 5th DCA
2008).

   The trial court denied attorney’s fees, reasoning that appellant was not
a prevailing party, as appellees had prevailed on two of the state law
actions at trial. Reliance on the prevailing party standard in the
assessment of attorney’s fees was error. FLSA mandates that a plaintiff
who recovers a judgment in his/her favor shall be allowed a “reasonable
attorney fee.” See 29 U.S.C. § 216(b). We therefore reverse the denial of
fees and remand for further proceedings to determine a “reasonable fee”
under all the circumstances of this case.

                                    6
                               Conclusion

   For the foregoing reasons, we affirm the award of costs under the tipsy
coachman doctrine, as we conclude that the costs should have been
awarded under 28 U.S.C. § 1920. The amount of the award was not an
abuse of discretion under that statute. We reverse the denial of liquidated
damages but on remand any amount should be offset by prejudgment
interest awarded. Finally, we reverse the denial of attorney’s fees and
remand for a hearing to determine a reasonable fee in this proceeding.

   Affirmed in part; reversed in part and remanded with directions.

GROSS and DAMOORGIAN, JJ., concur.

                           *         *        *

   Not final until disposition of timely filed motion for rehearing.

                                    7