Opinion
3:18-cv-00030-SB
07-11-2024
CHRIS ANDRADE, Plaintiff, v. WALL TO WALL TILE & STONE, LLC, Defendant.
FINDINGS AND RECOMMENDATION
HON. STACIE F. BECKERMAN United States Magistrate Judge.
Plaintiff Chris Andrade (“Andrade”) filed this action against his former employer, Defendant Wall to Wall Tile & Stone, LLC (“Wall to Wall”), alleging claims of employment discrimination under the Oregon Rehabilitation Act and Title I of the Americans with Disabilities Act (“ADA”). Andrade moves pursuant to Federal Rule of Civil Procedure (“Rule”) 55(b) for entry of default judgment. (See Pl.'s Mot. Default J. (“Pl.'s Mot.”), ECF No. 56.) The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1367. The Court has personal jurisdiction over Wall to Wall, an Oregon corporation which filed an answer to Andrade's complaint.(See Compl. ¶ 6, ECF No. 1; Def.'s Answer to Compl. (“Def.'s Answer”), ECF No. 9.) For the reasons explained below, the Court recommends that the district judge grant Andrade's motion.
See Blumenthal Distrib., Inc. v. Comoch Inc., 652 F.Supp.3d 1117, 1126-27 (C.D. Cal. 2023) (“The court finds it may exercise personal jurisdiction over Defendants [companies] because they previously filed an Answer to the Complaint, and thus consented to the court's jurisdiction.”) (citations omitted).
BACKGROUND
I. THE PARTIES
Andrade is a resident of Oregon. (Compl. ¶ 9.) He lives with insulin-dependent diabetes which substantially limits his endocrine function. (Id. ¶¶ 13-14.) Wall to Wall employed Andrade from October 2013 to July 29, 2016. (Id. ¶¶ 11, 16.) The present action arises from Andrade's termination, allegedly because of his diabetes. (Id. ¶¶ 17-30.)
When Andrade filed his complaint, Wall to Wall was a registered and incorporated limited liability company operating in Oregon and Washington. (Def.'s Answer ¶ 6.) Tyler Krukenberg (“Krukenberg”) was the member manager listed in each of Wall to Wall's business filings, and Wall to Wall's principal place of business was in Vancouver, Washington. (Compl. ¶ 6; see also Def.'s Answer ¶ 6, answering affirmatively that Krukenberg is a “member” of Wall to Wall.) Both Krukenberg and Jeff Dyson (“Dyson”), a sales manager previously employed with Wall to Wall, initiated Andrade's termination on July 29, 2016. (Compl. ¶ 16.)
II. ANDRADE'S EMPLOYMENT AND TERMINATION
In October 2013, Andrade began working as an account manager for Wall to Wall, where he managed eight customer accounts across Oregon and Washington. (Id. ¶¶ 11-12; see also Def.'s Answer ¶¶ 11-12.) Andrade alleges that during his employment, he informed Wall to Wall that he is diabetic. (Compl. ¶ 15.) Andrade asserts that Wall to Wall did not require him to provide verifying medical information or documentation regarding potential limitations on his ability to perform the functions of his job due to his disability. (Decl. Chris Andrade (“Andrade Decl.”) ¶ 3, ECF No. 57.)
During his three years of employment with Wall to Wall, Andrade alleges that he never received “negative performance reviews, write-ups, or . . . comments that [he] was not performing [his] job satisfactorily.” (Id.) Nevertheless, on July 29, 2016, Dyson and Krukenberg called Andrade into a meeting and expressed “concerns” for Andrade's health as the company expanded into new markets. (Compl. ¶ 16.) After sharing their health-specific concerns, Dyson and Krukenberg suggested that Andrade should find employment in a field “better suited” for him. (Id.)
Ultimately Dyson, acting on behalf of Wall to Wall, terminated Andrade's employment, citing “the ‘stress' of [Andrade's] position and concerns regarding [his] health.” (Id.) As a result of his termination, Andrade alleges that he lost the ability to earn approximately $141,916.80 from August 2016 to December 2017, and suffered emotional distress because of the nature of his termination. (Andrade Decl. ¶¶ 5-6.)
III. PROCEDURAL HISTORY
Andrade filed this action on January 5, 2018, asserting two causes of action: (1) disability-based discrimination under the ADA, 42 U.S.C. § 12112, and (2) discrimination against persons with disabilities under the Oregon Rehabilitation Act, Oregon Revised Statutes (“ORS”) § 659A.103 et seq. (Compl. ¶ 1.)
On February 23, 2018, Wall to Wall, through counsel, filed an answer to Andrade's complaint and asserted a counterclaim, stating that Andrade's action is frivolous, unreasonable, and groundless and seeking to recover “reasonable attorney['s] fees, expert witness fees[,] and other costs and disbursements incurred herein,” citing Federal Rule of Civil Procedure 11, ORS § 659A.885, 42 U.S.C. § 12205, 28 U.S.C. § 1927, and “common law principles.” (Def.'s Answer ¶ 47.) On March 26, 2018, Andrade filed an answer to Wall to Wall's counterclaim, denying its allegations. (Pl.'s Answer to Counterclaim ¶¶ 1-3; ECF No. 12.)
On July 22, 2019, Wall to Wall filed in this Court a Notice of Bankruptcy Petition and Automatic Stay, which, pursuant to 11 U.S.C. § 362, “prevent[ed] further prosecution of [Wall to Wall.]” (Notice, ECF No. 23.) The Court stayed this case on July 23, 2019. (Order, ECF No. 24.) On May 8, 2020, Wall to Wall formally filed for bankruptcy. (See Def.'s Counsel's Mot. Withdraw as Counsel (“Withdrawal Mot.”) at 2, ECF No. 36.)
On April 14 and 15, 2021, Wall to Wall's counsel exchanged emails with the bankruptcy trustee's attorney who confirmed that the bankruptcy trustee had taken over administration of Wall to Wall's assets:
You can represent that the chapter 7 bankruptcy trustee Amy Mitchell has been appointed to administer [Wall to Wall], and that she now stands in the shoes of [Wall to Wall]. You have consulted with her counsel regarding your Motion to Withdraw, and her counsel confirms that the Trustee does not object to the proposed [motion for] withdrawal.(Id.)
On April 19, 2021, counsel filed a motion to withdraw, citing one of the attorney's upcoming retirement in May 2021 and two other confidential concerns. (Id.) Andrade did not oppose the motion, and this Court granted the withdrawal motion on April 19, 2021. (Order, ECF No. 37.)
On November 3, 2022, U.S. Bankruptcy Judge David Hercher entered a stipulated Order on Relief from Stay in the bankruptcy court, granting Andrade's relief from stay to pursue a federal court judgment for damages, stipulating that recoverable damages would be limited to Wall to Wall's insurance policy and only to the extent that coverage is available. (Pl.'s Mot. Relief from Stay at 2, ECF No. 49.) On December 20, 2022, Andrade filed a motion for relief from stay (id.), which this Court granted on December 21, 2022. (Order, ECF No. 50.)
The bankruptcy trustee, on behalf of Wall to Wall, has not appeared in this case, responded to further motions, nor otherwise defended this action. (See Order, ECF No. 53.) Specifically, Wall to Wall failed to respond to Andrade's October 30, 2023, motion for order to show cause (ECF No. 51); November 29, 2023, motion for entry of default (ECF No. 54); and Andrade's April 26, 2024, motion for default judgment. Andrade attempted to serve all three motions on the bankruptcy trustee via U.S. mail, email, and Krukenberg's last known address. (See ECF Nos. 51, 54, 56.)
Andrade now seeks entry of default judgment on his discrimination claim and a $50,000 award of damages, reflecting the policy limit of Wall to Wall's insurance policy and only to the extent coverage is available. (See generally Pl.'s Mot.)
DISCUSSION
I. LEGAL STANDARDS
Entry of default judgment is a two-step process. Pursuant to Rule 55(a), the Clerk of Court (“Clerk”) is required to enter an order of default if a party against whom affirmative relief is sought has failed to timely plead or otherwise defend an action. See FED. R. CIV. P. 55(A). Upon entry of default, “the factual allegations of the complaint, except those relating to the amount of damages, [are] taken as true.” Geddes v. United Fin. Group, 559 F.2d 560 (9th Cir. 1977) (citations omitted).
After the Clerk enters default, the plaintiff may move for entry of default judgment. See FED. R. CIV. P. 55(B)(2). The decision whether to enter default judgment is a discretionary one. See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (so explaining). In exercising this discretion, courts in the Ninth Circuit consider seven factors, known as the “Eitel factors.” See generally Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986). Under Eitel, the Court may consider: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claims; (3) the sufficiency of the operative complaint; (4) the sum of money at stake in the litigation; (5) the possibility of dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the underlying policy that favors decisions on the merits. Id. at 1471-72.
II. ANALYSIS
The Court accepts as true the well-pleaded factual allegations in Andrade's complaint because the Clerk has entered Wall to Wall's default. Accepting those allegations as true, the Court finds that the Eitel factors weigh in favor of granting Andrade's motion for entry of default judgment.
A. Possibility of Prejudice to Andrade
First, Andrade will suffer prejudice if the Court declines to enter default judgment because, although Wall to Wall initially filed an answer, Wall to Wall has subsequently failed to defend this case, leaving Andrade with no alternative means for relief. See Blumenthal Distrib., Inc., 652 F.Supp.3d at 1128 (concluding that although two defendants had filed an answer, they had otherwise stopped participating in the suit for approximately ten months, and “[a]s a result, the court finds Plaintiff will be prejudiced if default judgment is not entered”); Wecosign, Inc. v. IFG Holdings, Inc., 845 F.Supp.2d 1072, 1082 (C.D. Cal. 2012) (concluding that the plaintiff would suffer prejudice without default judgment where two defendants “initially appeared but then withdrew their participation in this action”); see also Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 499 (C.D. Cal. 2003) (holding that the “[p]laintiff would suffer prejudice if the default judgment is not entered because Plaintiff would be without other recourse for recovery”). As such, the first factor weighs in favor of default judgment.
B. Merits of Andrade's Substantive Claim and Sufficiency of the Complaint
Evaluating the second and third Eitel factors in tandem, both the merits and sufficiency of Andrade's complaint support entry of default judgment. See Progressive Univ. Ins. Co. v. Johnson, No. 3:21-cv-00263-JR, 2021 WL 4163987, at *2 (D. Or. Aug. 13, 2021) (“For ease of analysis, the merits of Plaintiff[']s substantive claims and sufficiency of the complaint are considered together.” (quoting Yelp Inc. v. Catron, 70 F.Supp.3d 1082, 1098 (N.D. Cal. 2014))), findings and recommendation adopted, 2021 WL 4165370 (D. Or. Sept. 11, 2021).
To the extent possible, courts interpret the Oregon Rehabilitation Act consistently with the ADA to determine whether disability-based discrimination occurred. See ORS § 659A.139(1) (“ORS 659A.103 to 659A.144 shall be construed to the extent possible in a manner that is consistent with any similar provisions of the federal Americans with Disabilities Act of 1990, as amended by the federal ADA Amendments Act of 2008 and as otherwise amended.”) (footnote omitted). Therefore, to establish the merits and sufficiency of his disability discrimination claims, Andrade must demonstrate that he (1) was disabled under the meaning of the ADA, (2) was a qualified individual who was able to perform the essential functions of his job with or without accommodations, and (3) suffered an adverse employment action because of his disability. See Dunlap v. Liberty Natural Products, Inc. 878 F.3d 794, 798-99 (9th Cir. 2017). Here, the allegations in Andrade's complaint, which the Court must take as true upon entry of default, establish those three elements.
1. Andrade's Disability
Andrade is an insulin-dependent diabetic, who experiences substantial limitations to his endocrine function. (See Compl. ¶¶ 13-14.) The ADA defines “disability” broadly as a “physical or mental impairment that substantially limits one or more major life activities.” 42 U.S.C. § 12102(1)(A). “Major life activities” include “the operation of a major bodily function, including but not limited to, functions of the . . . endocrine[.]” Id. § 12102(2)(B). Here, because Andrade is an insulin-dependent diabetic who experiences substantial limitations to his endocrine function as the result of his diabetes, he has a disability under the meaning of the ADA. See Fraser v. Goodale, 342 F.3d 1032, 1038 (9th Cir. 2003) (concluding that “[d]iabetes is a physical impairment under the ADA because it is a physical condition affecting the digestive, hemic, and endocrine systems”); Rohr v. Salt River Ag. and Power Dist., 555 F.3d 850, 861-62 (9th Cir. 2009) (explaining that “[i]mpairments are to be evaluated in their unmitigated state, so that, for example, diabetes will be assessed in terms of its limitations on major life activities when the diabetic does not take insulin injections or medicine” (citing H.R. REP. NO. 110-730, AT 8 (2008))).
2. Andrade Is a Qualified Individual
Andrade has established that he is a qualified individual within the meaning of the ADA. After establishing that a person is disabled, a plaintiff claiming discrimination must also establish that they are a “qualified individual.” SeeBates v. United Parcel Serv., Inc., 511 F.3d 974, 98994 (9th Cir. 2007) (examining whether the class members were qualified individuals). Under the ADA, an individual is “qualified” if the employee “with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds[.]” 42 U.S.C. § 12111(8).
Andrade's tenure at Wall to Wall demonstrates that he could perform the essential functions of his position. As an account manager, Andrade managed accounts in Oregon and Washington. (Compl. ¶ 12.) Before his termination on July 29, 2016, Andrade had earned $19,442.22 in sales commissions on top of his base salary in 2016. (Andrade Decl. ¶ 4.) At all relevant times, Andrade was able to perform the essential functions of his role and, over the course of three years, Andrade had not received any feedback to indicate he was not performing his job satisfactorily. (Id. ¶ 3.) Accordingly, Andrade is a qualified individual within the meaning of the ADA. See Rohr, 555 F.3d 850 at 864 (concluding that the district court erred in finding that the plaintiff was not a qualified individual, because he had provided “sufficient evidence that he satisfied all of [the defendant's] job-related requirements and could perform the essential functions of his position”).
3. Termination of Employment Because of Andrade's Disability
Finally, the record reflects that Wall to Wall discriminated against Andrade when it terminated his employment because of his disability.
The ADA prohibits employers from “discriminat[ing] against a qualified individual on the basis of disability in regard to . . . discharge of employees[.]” 42 U.S.C. § 12112(a). Furthermore, an employer has an affirmative duty under the ADA to explore arrangements to offer a reasonable accommodation before terminating an employee with a disability. See Humphrey v. Mem'l Hosps. Ass'n, 239 F.3d 1128, 1137 (9th Cir. 2001) (holding that an employer was obligated to explore further methods of accommodation before terminating an employee who suffered from obsessive compulsive disorder).
During his employment, Andrade informed Wall to Wall that he had diabetes. (Compl. ¶ 15.) On July 29, 2016, Andrade met with Dyson and Krukenberg, where Dyson, acting on behalf of Wall to Wall, informed Andrade that they were terminating his employment, “due to the ‘stress' of his position and concerns regarding his health.” (Id. ¶ 16.) After Krukenberg expressed additional concerns over Andrade's health, he suggested that Andrade take a position, outside of the company, that he was “better suited” for, given that Wall to Wall was on the brink of expansion into new markets and the “stress would only increase.” (Id.) Wall to Wall never raised job-related concerns related to Andrade's health and ability to travel, nor engaged in an interactive process to identify potential accommodations, prior to terminating him. (Id. ¶ 29; Andrade Decl. ¶ 3.)
The operative complaint is sufficient to establish that Wall to Wall terminated Andrade because of his disability. As a result, the second and third Eitel factors weigh in favor of entering default judgment. See Bedwell v. Hampton, Tr. of Hampton Fam. Bypass Tr., No. 22-cv-138-LL-BGS, 2023 WL 3103806, at *3 (S.D. Cal. Apr. 26, 2023) (concluding that the second and third Eitel factors weighed in favor of the plaintiff having established a claim for discrimination under Title III of the ADA).
C. Amount of Money at Stake
The fourth Eitel factor requires the court to “consider the amount of money at stake in relation to the seriousness of Defendant's conduct.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1176 (C.D. Cal. 2002). Pursuant to the stipulated order for relief from the stay in light of Wall to Wall's bankruptcy, Andrade is only entitled to pursue damages in accordance with Wall to Wall's insurance policy limits, and only to the extent coverage is available, which totals $50,000. (Pl.'s Mot. at 6.) This damages amount is not unreasonable relative to Wall to Wall's conduct, and the Court finds that the fourth factor also weighs in favor of default judgment. See Briteramos v. King's of Cuts, No. 2:18-cv-06400-AB (MAAx), 2019 WL 13252466, at *3 (C.D. Cal. Mar. 18, 2019) (concluding that $75,000 in actual damages on the plaintiff's ADA claim weighed in favor of entering default judgment).
D. Possibility of Dispute About Material Facts
The fifth Eitel factor, which concerns the possibility of dispute about material facts, weighs in favor of default judgment because “[w]hen default has been entered, courts find that there is no longer the possibility of a dispute concerning material facts because the court must take the plaintiff's factual allegations as true.” Curtis v. Illumination Arts, Inc., 33 F.Supp.3d 1200, 1212 (W.D. Wash. 2014) (citation omitted). Although prior counsel for Wall to Wall initially filed an answer disputing facts in Andrade's complaint, Wall to Wall filed no further pleadings or responses before the Court entered default. Because Wall to Wall has been unresponsive to all further proceedings, the Court concludes that the fifth Eitel factor weighs in favor of default judgment. See Blumenthal Distrib., Inc., 652 F.Supp.3d at 1131 (concluding that there was no dispute of the plaintiff's allegations “because Defendants have failed to . . . otherwise defend in this action and the court must accept all well-pleaded facts . . . as true”)
E. Default Due to Excusable Neglect
The sixth Eitel factor evaluates whether Wall to Wall's default is due to excusable neglect. See Eitel, 782 F.2d at 1472. “This factor favors default judgment when the defendant has been properly served or the plaintiff demonstrates that the defendant is aware of the lawsuit.” Wecosign, Inc., 845 F.Supp.2d at 1082 (citations omitted).
On April 19, 2021, the bankruptcy trustee's counsel confirmed awareness of the instant case (see Withdrawal Mot. at 2), but Wall to Wall abandoned this litigation from that point forward. In light of Wall to Wall's knowing failure to defend, the sixth Eitel factor favors entry of default judgment. See Progressive, 2021 WL 4163987, at *3 (“[D]efendant was served with the summons and complaint . . . [t]hus, it is clear defendant is aware of the suit, and it is unlikely the failure to respond resulted from excusable neglect.”) (citation omitted); Wecosign, Inc., 845 F.Supp.2d at 1082 (holding that the defendants “were properly served and initially participated in litigation, and thus their default did not occur because of excusable neglect”).
F. Policy Favoring Decisions on the Merits
The final Eitel factor requires the Court to consider the strong policy favoring resolving disputes on the merits. See Eitel, 782 F.2d at 1472. While that factor weighs against entry of default judgment, “this preference, standing alone, is not dispositive.” PepsiCo, 238 F.Supp.2d at 1177 (citation omitted). Here, Wall to Wall's failure to participate, respond, or otherwise defend has rendered a decision on the merits impractical. As such, the seventh and final Eitel factor favors entry of default judgment.
In sum, the Court concludes that the Eitel factors, on balance, support granting Andrade's motion for default judgment.
G. Damages
The Court must separately consider damages because “[a]lthough a party's default conclusively establishes that party's liability, it does not establish the amount of damages.” United States v. Chapman, No. 1:19-cv-01139-CL, 2020 WL 2069216, at *5 (D. Or. Apr. 2, 2020) (citation omitted). Under the ADA and the Oregon Rehabilitation Act, a victim of discrimination in employment may recover lost back pay, front pay, and compensatory damages, which include all damages that will make an injured person whole for the injury sustained. See 42 U.S.C. § 1981a(b); ORS § 659A.885(1); ORS § 659A.885(3).
According to his W2, Andrade earned $62,088.60 in total compensation in 2016. (Andrade Decl. ¶ 4, Att.) After his termination, Andrade was unable to find new employment until mid-2017 and received his first commission in December 2017. (Id. ¶ 5). Between August 2016 and December 2017, Andrade lost approximately $141,916.80 in earnings based on his average monthly earning at the time of termination. (Id.)
U.S. Bankruptcy Judge Hercher ordered that “recoverable damages [shall] be limited to the policy limits of [Wall to Wall's] insurance and only to the extent of the coverage available.” (Pl.'s Mot. Relief from Stay at 2.) For this reason, the Court recommends that the district judge award Andrade economic damages in the amount of $50,000, in accordance with Wall to Wall's insurance policy limits and only to the extent that coverage is available. See Piccarreta v. Harmony Hospice of Scottsdale LLC, No. 12-cv-00533-PHX-DGC, 2014 WL 1795696, at *1 (D. Ariz. May 6, 2014) (awarding $213,660 in damages upon entry of default judgment for failure to accommodate in violation of the ADA).
CONCLUSION
For the reasons stated, the Court recommends that the district judge GRANT Andrade's motion for default judgment (ECF No. 56), and enter judgment awarding Andrade $50,000 in damages to the extent insurance coverage is available in that amount.
SCHEDULING ORD
The Court will refer its Findings and Recommendat any, are due within fourteen (14) days. If no objections are Recommendation will go under advisement on that date. If within fourteen (14) days. When the response is due or file Findings and Recommendation will go under advisement.