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Green v. Platinum Restaurants Mid America LLC

United States District Court, W.D. Kentucky, Louisville Division

December 11, 2017

LAURA GREEN, et al. PLAINTIFFS
v.
PLATINUM RESTAURANTS MID-AMERICA, LLC DEFENDANT

          MEMORANDUM OPINION & ORDER

          Greg N. Stivers, Judge United States District Court.

         This matter is before the Court on Plaintiffs' Renewed Motion to Dismiss Defendant's Counterclaim (DN 128). For the reasons set forth below, the motion is GRANTED.

         I. BACKGROUND

         Plaintiffs-a class of similarly situated servers, cocktail servers, and bartenders (collectively “Plaintiffs”)-filed this action against their employer, Platinum Restaurants Mid-America, LLC (“Defendant”), alleging that Defendant violated the Fair Labor Standards Act (“FLSA”) and Kentucky Wage and Hours Act (“KWHA”) when it forced them to participate in a tip pooling agreement (the “TPA”) under which it shared their tips with non-tipped employees. (Fourth Am. Collective Action ¶¶ 46-56, DN 119). Plaintiffs contend that based on the invalidity of the TPA, they are entitled to various forms of relief, including monetary damages equal to the difference between the wage Defendant paid them ($2.13 per hour) and the applicable minimum wage ($7.25 per hour). (Fourth Am. Collective Action ¶¶ 117, 120).

         In response, Defendant asserted a counterclaim for unjust enrichment against certain Plaintiffs-namely, the bartenders. (Def.'s Answer & Countercl. ¶¶ 1-76, DN 120). Defendant specifically claims that the servers and other tipped employees paid a share of their nightly tips to the bartenders under the TPA. (Def.'s Answer & Countercl. ¶ 21). Accordingly, Defendant asserts that, if the TPA is invalid, the bartenders will owe the servers a debt in an amount equal to the tips they received under the pooling agreement, and, if Defendant is required to pay the servers damages based on the invalid TPA, Defendant would effectively be discharging that debt-thereby conferring a benefit upon the bartenders at its own expense. (Def.'s Answer & Countercl. ¶¶ 77-78, 80). Thus, Defendant concludes, “it would be inequitable for [the bartenders] to retain the tips they received under the [TPA].” (Def.'s Answer & Countercl. ¶¶ 81-82).

         Plaintiffs now move the Court to dismiss Defendant's counterclaim, alleging that it fails to state a claim on which relief can be granted. (Pls.' Renewed Mot. Dismiss, DN 128 [hereinafter Pls.' Mot. Dismiss]). Defendant has responded, and Plaintiffs have submitted a reply. (Def.'s Resp. Pls.' Renewed Mot. Dismiss, DN 132 [hereinafter Def.'s Resp.]; Pls.' Reply, DN 135). The subject motion is thus ripe for adjudication.

         II. JURISDICTION

         This action arises under the laws of the United States and the Court has jurisdiction pursuant to 28 U.S.C. § 1331.

         III. STANDARD OF REVIEW

         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” and is subject to dismissal if it “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 8(a)(2); Fed.R.Civ.P. 12(b)(6). When considering a motion to dismiss, courts must presume all factual allegations in the complaint to be true and make all reasonable inferences in favor of the non-moving party. Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008) (citing Great Lakes Steel v. Deggendorf, 716 F.2d 1101, 1105 (6th Cir. 1983)). “But the district court need not accept a bare assertion of legal conclusions.” Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (citation omitted).

         To survive a motion to dismiss under Rule 12(b)(6), the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Traverse Bay Area Intermediate Sch. Dist. v. Mich. Dep't of Educ., 615 F.3d 622, 627 (6th Cir. 2010) (internal quotation marks omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim becomes plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). On the other hand, a claim is implausible if “no law supports” it. Southfield Educ. Ass'n v. Southfield Bd. of Educ., 570 F. App'x 485, 487 (6th Cir. 2014) (citing Twombly, 550 U.S. at 561-64).

         IV. DISCUSSION

         Defendant asserts a counterclaim is for unjust enrichment/equitable subrogation. To state a claim for unjust enrichment under Kentucky law, a party must present facts supporting three elements: “(1) [a] benefit conferred upon defendant at plaintiff's expense; (2) a resulting appreciation of benefit by defendant; and (3) inequitable retention of benefit without payment for its value.” Guerin v. Fulkerson, 354 S.W.3d 161, 165 (Ky. App. 2011) (internal quotation marks omitted) (citing Jones v. Sparks, 297 S.W.3d 73, 78 (Ky. App. 2009)). In addition, to prevail on a claim for equitable subrogation, a party must show, among other things, that he has or will pay the debt of another. Bryan v. Henderson Elec. Co., 566 S.W.2d 823, 825 (Ky. App. 1978). A claim for equitable subrogation “prevent[s] unjust enrichment by assuring that the person who in equity and good conscience is responsible for the debt is ultimately answerable for its discharge.” In re Air Crash Disaster, 86 F.3d 498, 549 (6th Cir. 1996) (alteration in original) (internal quotation marks omitted) (citation omitted).

         Plaintiffs argue that Defendant's counterclaim is not cognizable, and, therefore, must be dismissed. (Pls.' Mot. Dismiss 5-12). Specifically, they aver that Defendant cannot satisfy the first element of its claim because the bartenders never received a benefit “at Defendant's expense”-rather, the benefit the bartenders received (the tips) came at the expense of other employees. (Pls.' Mot. Dismiss 10 (emphasis removed)). Defendant counters that Plaintiff misunderstands its claim. In particular, Defendant contends that the bartenders will receive a benefit at its expense “if it is required to reimburse [the servers] for a debt”-namely, the tips the ...


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