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Jennifer Troncone v. Efthemios Velahos

July 28, 2011

JENNIFER TRONCONE, PLAINTIFF,
v.
EFTHEMIOS VELAHOS, NANCY VELAHOS, THE VELAHOS LAW FIRM AND THE NATIONAL FORECLOSURE CONSULTANT GROUP, DEFENDANTS.



The opinion of the court was delivered by: Kugler, United States District Judge:

NOT FOR PUBLICATION (Doc. No. 7)

OPINION

This matter arises out of allegedly unlawful employment compensation practices by a company that provides foreclosure prevention services. Presently before the Court is the motion by Plaintiff Jennifer Troncone to: (1) certify a proposed collective action pursuant to Section 216(b) of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and (2) certify a proposed class action pursuant to Federal Rule of Civil Procedure 23; and (3) for default judgment pursuant to Federal Rule of Civil Procedure 55. The Complaint alleges that Defendants Efthemios Velahos, Nancy Velahos, the Velahos Law Firm, and the National Foreclosure Consulting Group ("NFC") failed to pay Plaintiff and others similarly situated minimum wage and overtime pursuant to the FLSA and the New Jersey Wage and Hour Law ("NJWHL"), N.J. Stat. Ann. § 34:11-56a et seq., and that Defendants failed to pay Plaintiff earned salary and commissions under the New Jersey Wage Payment Law ("NJWPL"), N.J. Stat. Ann. § 34:11-4.1 et seq. The Complaint also alleges unjust enrichment under New Jersey law. For the reasons expressed below, Plaintiff's motions are DENIED.

I. BACKGROUND

A.Factual Background

Defendant Efthemios Velahos is an attorney licensed to practice law in the State of New Jersey, and operates the Velahos Law Firm ("the Firm") with his wife Nancy Velahos. NFC is an organization that provides "mortgage modification and foreclosure prevention services." (Compl. ¶ 6). NFC advertises to the public that "for a fixed fee of several thousand dollars," it can delay or prevent mortgage foreclosures. (Id. ¶¶ 10, 11). NFC employs sales representatives who market its services to the general public and initiate the mortgage modification process with each of their clients. After NFC's sales representatives obtain the mortgage and foreclosure documents from their clients, they transfer the documents to the Firm. The Complaint alleges that NFC's sales representatives were promised a commission of twenty-five percent of the fees they brought in to the company.

NFC employed Plaintiff as a sales representative between July 2009 and February 2010. Plaintiff alleges that Defendants failed to pay her and other similarly situated employees (1) minimum wage; (2) overtime; and (3) "the full salary or commissions that they were promised." (Id. ¶ 18). In addition, Plaintiff alleges that "[i]n or around October or November of 2009, the Defendants wrongfully designated Plaintiff and other employees as independent contractors and stopped withholding taxes and stopped paying [Defendants'] share of wage withholdings such as social security and medicare." (Id. ¶ 22).

B.Procedural Background

On June 10, 2010, Plaintiff filed the Complaint. Count One of the Complaint alleges that:

Defendants violated the [FLSA] by failing to pay Plaintiff and similarly situated employees a minimum wage for all hours worked.

Defendants violated the FLSA by failing to pay employees overtime pay at one and one-half times their regular rate of pay for all hours worked over forty in a week. (Compl. ¶¶ 38, 39). Count Two alleges:

Defendants violated [the NJWHL] and Regulations by failing to pay Plaintiff and similarly situated employees a minimum wage for all hours worked.

Defendants violated [the NJWHL] and Regulations by failing to pay employees overtime pay at one and one-half times their regular rate of pay for all hours worked over forty in a week. (Id. ¶¶ 42, 43). Count Two also alleges that Defendants violated "[the NJWHL] and Regulations" by failing to pay Plaintiffs their promised salaries and commissions.*fn1 Count Three, Plaintiff's unjust enrichment claim, alleges that Defendants "improperly classified Plaintiff and similarly situated employees as independent contractors, thereby shifting costs for the employers' share of wage withholding taxes such as social security and medicare from themselves to Plaintiff . . . ." (Id. ¶ 45).

On June 17, 2010, Plaintiff served the Summons and Complaint upon all Defendants.*fn2

Defendants failed to answer or otherwise enter a responsive pleading within twenty-one days as required by Federal Rule of Civil Procedure 12(a). As a result, the Clerk made an entry of default on August 18, 2010. On February 22, 2011, Plaintiff moved (1) to certify an FLSA "optin" collective action and a Rule 23 "opt-out" class action, and (2) for entry of default judgment as to all claims against Defendants. Plaintiff's proposed "opt-in" class consists of "all sales representatives that worked for Defendants' mortgage modification ...


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