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Raymond Satterfield, and Others Similarly Situated v. Cfi Sales & Marketing

February 28, 2012



Plaintiffs*fn1 bring this Fair Labor Standards Act ("FLSA") case against Defendants alleging that Defendants failed to pay Plaintiffs overtime wages as required by law. (Am. Compl., Doc. 72). Defendants filed a counterclaim, (Doc. 99 at 5-10), alleging breach of contract. This case is currently before the Court on Plaintiffs' Motion for Partial Summary Judgment (Doc. 152) and Defendants' Omnibus Motion for Summary Judgment (Doc. 155).*fn2

As discussed below, each motion shall be granted in part and denied in part.

I. Summary Judgment Standard

"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 judgment as a matter of law." Fed. R. Civ. P. 56(a). When faced with a "properly supported motion for summary judgment, [the nonmoving party] must come forward with specific factual evidence, presenting more than mere allegations." Gargiulo v. G.M. Sales, Inc., 131 F.3d 995, 999 (11th Cir. 1997). However, the failure to respond and create a factual dispute by the nonmoving party "does not automatically authorize the entry of summary judgment for the moving party." Dixie Stevedores, Inc. v. Marinic Maritime, Ltd., 778 F.2d 670, 673 (11th Cir. 1985).

In ruling on a motion for summary judgment, the Court construes the facts and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). "[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249. Some degree of factual dispute is expected, but to successfully counter a motion for summary judgment the factual dispute must be material and genuine. That is, the factual evidence must "affect the outcome of the suit" and must be "such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248.

II. Background

It is undisputed that Plaintiffs were employed by Defendants*fn3 at various times since 1996 as closing officers for Defendants' timeshare sales. Plaintiffs allege that they were not paid the legally-required overtime wages when they worked as closing officers. In their counterclaim, Defendants assert that even if this were true, any damages that Plaintiffs would be entitled to under the FLSA should be off-set by Defendants' damages from Plaintiffs' breach of contract.

The contracts at issue are the Independent Contractor Agreements that Plaintiffs signed when they were hired by Defendants as timeshare sales representatives--not as closing officers. Pursuant to these agreements, Plaintiffs were entitled to commissions on timeshare sales that they made. Plaintiffs were paid those commissions, minus a ten percent reserve, as soon as the sale closed even though the commission was not actually earned until the purchaser had successfully placed ten percent down and made six timely, consecutive payments. The ten percent reserve was kept to off-set any unearned commissions; if a purchaser failed to make the required payments, Plaintiffs' commissions would be "charged back" against the reserve. Additionally, the agreements provide:

In the event [Plaintiff] is no longer engaged by CFI, irrespective of the reason for the termination of engagement, [Plaintiff] shall be charged back for all sales upon which commission[s] have been paid in the event the purchaser(s) has/have not made six (6) timely and consecutive monthly payments as well as ten percent (10%) minimum down payment.

(See e.g., Satterfield Agreement,*fn4 Ex. D to Doc. 155, at 7).

III. Analysis

Neither party is seeking summary judgment on the merits of Plaintiffs' FLSA claims. Rather, the parties are seeking a determination as to whether the FLSA limitations period is two or three years. Additionally, Plaintiffs seek summary judgment on Defendants' counterclaim for breach of contract, asserting that Defendants' claim is barred by the statute of limitations and that even if it were not, Defendants failed to prove damages. Defendants argue, on the other hand, that Plaintiffs are not entitled to summary judgment on the breach of contract claim because it is a compulsory counterclaim for recoupment and therefore not time-barred and that they have at least established the existence of a genuine issue of material fact as to whether or not they incurred damages.*fn5

A. FLSA Limitations Period

"The statute of limitations for a claim seeking unpaid overtime wages under the FLSA is generally two years. But if the claim is one 'arising out of a willful violation,' the statute of limitations is extended to three years." Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1280 (11th Cir. 2008) (quoting 29 U.S.C. § 255(a)). "To establish that the violation of the [FLSA] was willful in order to extend the limitations period, the employee must prove by a preponderance of the evidence that his employer either knew that its conduct was prohibited by the statute or showed reckless disregard about whether it was." Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 515 F.3d 1150, 1162-63 (11th Cir. 2008). As defined in the Code of Federal Regulations, "[r]eckless disregard . . . means failure to make adequate inquiry into whether conduct is in ...

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