Summary
finding that a complaint was properly brought against the proprietors of a corporation because it was forfeited
Summary of this case from Nassali v. KamyaOpinion
Case No. RWT 04-CV-637.
June 10, 2004
MEMORANDUM OPINION
Plaintiffs, Latoya Francis and Norita B. Johnson ("Francis" and "Johnson"), bring this action against Defendants, Ronald R. Hunt and Rebecca J. Hunt ("the Hunts" or "Mr/Mrs Hunt"), alleging eight counts in violation of the Fair Labor Standards Act ("the FLSA"), 29 U.S.C. § 201 et seq., the Maryland Wage and Hour Law, the Maryland Wage Payment and Collection Law, and the common law of the State of Maryland and the labor law of the District of Columbia. Pending before the Court is Defendant's Motion to Dismiss Plaintiffs' Complaint with Prejudice. The Court now rules, no hearing being deemed necessary. See Local Rule 105.6. For the reasons that follow, the motion will be denied.
Defendants' reply references a letter from Norita Johnson, dated May 14, 2004, in which she expresses her desire not to pursue this action. See Reply Ex A. The Court will, by separate order, direct that the letter be docketed as a voluntary motion for dismissal; a hearing on that motion will be scheduled for July 12, 2004. Norita Johnson is directed to appear at that hearing to testify and offer argument and evidence in support of her motion.
DISCUSSION
Francis and Johnson worked at the Nexus Gold Club from July 2000 to February 2004. Compl. ¶¶ 1 and 2. The Nexus Gold Club, an adult entertainment club, is a name under which Black Ride III, Inc., a Maryland corporation, does business. Mot. to Dismiss at 1. The Hunts are the "proprietors of the Nexus Gold Club." Compl. ¶ 4. The corporate charter of Black Ride III, Inc. was forfeited by the Maryland Department of Assessment and Taxation from October 2002 to April 8, 2004, when the charter was revived. Opp. Ex 4. In the Complaint, filed on March 2, 2004, Francis and Johnson allege that "[the Hunts] have failed and refused to pay the amounts due . . . for their overtime, minimum and other wages due. . . ." Compl. ¶ 16. Defendants move to dismiss, pursuant to F.R.Civ.P. 12(b)(6), arguing that Francis and Johnson "contracted with Black Ride III, Inc., not with [the Hunts] individually and [they] have not even attempted to set forth any reasons for piercing the corporate veil." Mot. Dismiss at 4.
On May 6, 2004, Plaintiffs filed a Motion for Leave of Court to Amend Complaint, naming Black Ride III, Inc. as an additional defendant. The Court will, by separate order, grant the motion.
Taking the well-pled allegations of the Complaint are true, as the Court is required to do in the context of a motion to dismiss, see Albright v. Oliver, 510 U.S. 266, 268 (1994);Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999), Defendant's Motion to Dismiss Plaintiffs' Complaint with Prejudice must be denied. Maryland law clearly provides that a corporation whose charter has been forfeited has no legal existence, and thus no capacity to be sued. MD. CODEANN., CORP. ASS'NS § 3-515(c)(3); Psychic Research Dev. Inst. of Maryland, Inc. v. Gutbrodt, 46 Md. App. 21, 25, 415 A.2d 611 (1980) (stating "a corporation whose charter has been forfeited immediately becomes a non-entity"); Fed. Deposit Ins. Corp. v. Heidrick, 812 F. Supp. 586, 592-93 (D.Md. 1992) (a forfeited corporation has no capacity to sue). The charter of Black Ride III, Inc. was forfeited from October 2002 to April 8, 2004. This Complaint was filed on March 2, 2004, a time when Black Ride III, Inc. was, as a forfeited corporation, a nonexistent entity. Thus, the Complaint was properly brought against the alleged "proprietors" of the forfeited corporation.See MD. CODE ANN., CORP. ASS'NS § 3-5105 ("When the charter of a Maryland corporation has been forfeited . . . the directors of the corporation become the trustees. . . ." and "[t]he director-trustee may: . . . (3) [s]ue or be sued in their own names as trustees or in the name of the corporation.").
In addition, a 12(b)(6) motion ought not be granted unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of [the] claim which would entitle [her] to relief."Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Section 203(d) of the FLSA defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to the employee." 29 U.S.C. § 203(d). In their Answer to the Complaint, the Hunts admit that they are the proprietors of the Nexus Gold Club. See Answer ¶ 9. In the present motion, Mr. Hunt asserts that he "owns and operates the Nexus Gold Club." Mot. to Dimiss at 1. Thus, at this early stage, the alleged proprietors of the Nexus Gold Club appear to be persons acting directly or indirectly in the interest of an employer in relation to the employee, and thus, as employers under the FLSA.
Lastly, the Court will not address the question of whether Francis and Johnson contracted as independent contractors. That issue, which has not been properly briefed, is nonetheless premature at this stage in the proceedings. See Gale v. Greater Washington Softball Umpires Ass'n, 19 Md. App. 481, 487, 311 A.2d 817 (1973) (stating, "where the terms and manner of employment are disputed and different inferences may be drawn therefrom, the issue as to the relation that existed between the parties is a mixed question of law and fact").