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Sabo v. Reo Property Management, LLC

United States District Court, M.D. Pennsylvania

April 30, 2015



JOSEPH F. SAPORITO, Jr., Magistrate Judge.

I. Background:

The plaintiff, Elizabeth Sabo ("Sabo") filed a complaint (Doc. 1) on January 21, 2015 against the defendant REO Property Management, LLC ("REO") seeking damages under the Fair Labor Standards Act ("FLSA") 29 U.S.C §§201, et seq., and the Pennsylvania Minimum Wage Act ("PMWA"), 43 P.S. §§ 333.101, et seq. REO filed a motion to dismiss (Doc. 4)[1] pursuant to F.R.Civ.P. No. 12(b) (6). Upon consent of the parties, the court (Mannion, J.) reassigned the case to the undersigned for all further proceedings (Doc. 14). The motion has been briefed (Docs. 5 and 8), and is now ripe for disposition. For the reasons set forth below, we will deny the motions set out in Doc. 4.

II. Facts:

For purposes of resolution of REO's motion to dismiss, all of the facts are taken from Sabo's complaint (Doc. 1) unless otherwise noted.

From approximately 2006 until June, 2014, REO employed Sabo to work at the Hickory Inn Motel in Albrightsville, Pennsylvania (the "Motel"). At the same time, Sabo lived at the Motel in a room provided by REO. The parties agreed that the room was valued at One Hundred Fifty ($150.00) Dollars per week in rent (the "weekly rent"). REO paid Sabo on a piece-rate basis whereby Sabo received weekly pay credits based on (i) the number of motel rooms rented to customers during the week and (ii) the performance of certain tasks (e.g., cleaning a motel room) during the week. Thereafter, REO paid Sabo the monetary value of all credits minus the weekly rent.

During those weeks in which Sabo's credits did not exceed the weekly rent, Sabo was required to pay REO the difference between the weekly rent and Sabo's total credits for the week. Sabo alleges that she generally worked approximately 86 hours each week and REO failed to meet its overtime and minimum wage obligations during every week of her employment pursuant to the FLSA and PMWA.

In its motion to dismiss (Doc. 4), REO maintains that Sabo did not allege that she was paid any wages by REO and, further that Sabo's income was derived by her as an independent contractor wherein she received a percentage of REO's revenues collected. (Doc. 4 ¶¶ 4 and 5). Consequently, REO maintains that neither the FLSA nor the PMWA apply and that Sabo's complaint should be dismissed.

III. Discussion:

A. Standard of Review.

REO's motion to dismiss is brought pursuant to Fed. R. Civ.P. 12(b)(6). This rule provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated, Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005), and dismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974 (2007) (abrogating "no set of facts" language found in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). The facts alleged must be sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. 544, 127 S.Ct. at 1965. This requirement "calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [necessary elements]" of the plaintiff's cause of action. Id. Furthermore, in order to satisfy federal pleading requirements, the plaintiff must "provide the grounds of his entitlement to relief, " which "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (brackets and quotations marks omitted) (quoting Twombly, 550 U.S. 544, 127 S.Ct. at 1964-65).

In considering a motion to dismiss, the court generally relies on the complaint, attached exhibits, and matters of public record. Sands v. McCormick, 502 F.3d 263 (3d Cir. 2007). The court may also consider "undisputedly authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] documents." Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Moreover, "documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered." Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir. 2002). However, the court may not rely on other parts of the record in determining a motion to dismiss. See Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).

Generally, the court should grant leave to amend a complaint before dismissing it as merely deficient. See, e.g., Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247, 252 (3d Cir. 2007); Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002); Shane v. Fauver, 213 F.3d 113, 116-17 (3d Cir. 2000). "Dismissal without leave to amend is justified only on the grounds ...

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