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Sanchez v. Ront Range Transportation

United States District Court, D. Colorado

September 15, 2017

JOHN SANCHEZ, ABBY KINDELL, MITYAH THORNTON, and TERRENCE THORNTON, Individuals, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
RONT RANGE TRANSPORTATION d/b/a Front Range Shuttle and Tours, a Colorado limited liability company, and COREY WATSON, an individual, Defendants.

          ORDER ON PARTIAL MOTION TO DISMISS

          R. Brooke Jackson United States District Judge

         Four former employees of Front Range Transportation, LLC claim that they were victims of unlawful compensation practices and retaliation by the company and its principal. Defendants have moved to dismiss three of the eight asserted claims. Having reviewed the motion and briefs, the Court grants the motion in part, finds that it is moot in part, and denies it in part, as explained in this order.

         BACKGROUND

         This case has evolved since its inception, and it will be useful briefly to describe where it began and where it now stands. Front Range provides shuttle and “executive car” service primarily between Colorado Springs or Pueblo and the Denver International Airport. The original complaint was brought by two former employees: Brandon Smith, a dispatcher and driver; and Donald Hickman, a driver. Purporting to represent themselves and a class of similarly situated individuals, these gentlemen asserted that they had not been paid for all the hours they worked, and that they had not been properly paid for overtime work, in violation of the Fair Labor Standards Act (FLSA) and the Colorado Minimum Wage Order (CMWO). They also alleged that they had been improperly classified as independent contractors during portions of their employment, allegedly supporting claims of tax fraud contrary to the Internal Revenue Code; violation of the Colorado Wage Protection Act (CWPA); and unjust enrichment. ECF No. 1.

         Plaintiffs' (First) Amended Complaint, still naming Mr. Smith and Mr. Hickman as the plaintiffs, whittled the claims down a bit. The tax fraud, CWPA and unjust enrichment claims remained. The CWPA claim was expanded into two new claims. The FLSA claims were dropped. ECF No. 6.

         Plaintiffs Second Amended Complaint named two additional plaintiffs: John Sanchez, a former administrative assistant; and Abby Kindell, a former dispatcher. Again, the tax fraud and unjust enrichment claims of Mr. Smith and Mr. Hickman remained. However, several FLSA claims were asserted on behalf of Mr. Smith and Ms. Kindell, including that they were not compensated for all hours worked (required to work “off-clock” hours). In addition, plaintiffs asserted claims of retaliation in violation of the FLSA on behalf of Mr. Hickman and Mr. Sanchez. ECF No. 16.

         Plaintiffs' Third Amended Complaint, which now is the operable complaint, added two more plaintiffs: Mityah Thornton, a former dispatcher/administrative assistant, and her husband Terrence Thornton, also a former dispatcher. ECF No. 23. Plaintiffs assert the following claims: (1) tax fraud in violation of the Internal Revenue Code (Smith, Hickman, and M.Thornton - purportedly class claims); (2) unjust enrichment (same); (3) FLSA based on unpaid “off-clock” hours (Sanchez, Kindell, M.Thornton - purportedly collective action claims); (4) FLSA based on unpaid overtime (M.Thornton); (5) CMWO based on failure to provide breaks (Kindell - purportedly a class action); (6) FLSA based on retaliation (Sanchez); (7) FLSA based on retaliation (M.Thornton); and (8) FLSA based on retaliation (T.Thornton).

         Defendants then filed the pending motion for partial dismissal, i.e., to dismiss the first, second and fifth claims under either or both of Rules 12(b)(6) and 9(b). ECF No. 25. In response, among other things, plaintiffs voluntarily dismissed the claims of the original plaintiffs Smith and Hickman, ECF No. 29, hence the change of the caption that I now order. Plaintiffs also withdrew their second claim (unjust enrichment) entirely. ECF No. 30 at 5-6. Accordingly, what remains for decision by the Court at this time are (1) whether the First Claim sufficiently states a claim for tax fraud on behalf of Mityah Thornton (and the purported class), and (2) whether the Fifth Claim sufficiently states a claim regarding the lack of breaks on behalf of Abby Kindell (and the purported class).

         STANDARD OF REVIEW

         To survive a 12(b)(6) motion to dismiss, the complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A plausible claim is a claim 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). While the Court must accept the well-pleaded allegations of the complaint as true and construe them in the light most favorable to the plaintiff, Robbins v. Wilkie, 300 F.3d 1208, 1210 (10th Cir. 2002), conclusory allegations are not entitled to be presumed true, Iqbal, 556 U.S. at 681. However, so long as the plaintiff offers sufficient factual allegations such that the right to relief is raised above the speculative level, he has met the threshold pleading standard. See, e.g., Twombly, 550 U.S. at 556; Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008).

         Federal Rule of Civil Procedure 9(b) imposes a higher pleading standard as to fraud claims: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”[1] This means that a complaint alleging fraud must “set forth the [1] time, [2] place and [3] contents of the false representation, [4] the identity of the party making the false statements and [5] the consequences thereof. Rule 9(b)'s purpose is to afford defendant fair notice of plaintiff's claims and the factual ground upon which they are based.” Koch v. Koch Indus., Inc., 203 F.3d 1202, 1236 (10th Cir. 2000) (bracketed numbers added, internal citations and quotations omitted).

         ANALYSIS

         A. Tax Fraud.

         1. Facts ...


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