Case 2:17-cv-02321-DDC-KGG Document 8 Filed 12/21/17 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF KANSAS AT KANSAS CITY

Regina Sergiyenko and Russell Joly, )

)
Plaintiffs, )
)
v. ) Case No. 17-cv-2321
)
McCusker Holdings Corp., and )
William McCusker, )
)
Defendants. )

PLAINTIFFS’ MOTION FOR DEFAULT JUDGMENT

AND INCORPORATED SUGGESTIONS IN SUPPORT THEREOF

On September 14, 2017, the Clerk issued a Clerk’s Entry of Default, after Defendant

McCusker Holdings, Inc., failed to answer or otherwise respond to Plaintiffs’ complaint. Presently,

Plaintiffs seek default judgment against Defendant McCusker Holdings, Corp.in this matter, and

respectfully submit the following in support of their Motion for Default Judgment against this

Defendant McCusker Holding Corp.:1 

FACTUAL BACKGROUND2

Plaintiffs initiated the present action on June 1, 2017, asserting claims under the Fair Labor

Standards Act, the Kansas Wage Payment Act, and Breach of Contract. Plaintiffs obtained

personal service on Defendants McCusker Holding Corp. and Willard McCusker on July 10, 2017

                                                            
1
Plaintiffs are not seeking a Default Judgment against Willard McCusker at this time. On September 18, 2017,
Plaintiffs received notice that Willard McCusker, individually had filed for Bankruptcy in the Northern District of
Texas. Accordingly, those claims are subject to an automatic stay under the Bankruptcy code, and Plaintiffs are unable
to seek relief against Willard McCusker individually. See, Exh. A, Notice of Bankruptcy.
2
In support of this Factual Background, counsel for Plaintiffs submits an affidavit in accordance with Rule 55,
a copy of which is attached hereto as Exhibit B.

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by serving Willard McCusker, individually and as registered agent for McCusker Holding Corp.

(ECF Doc. No. 4).

JURISDICTION

This Court has original federal question jurisdiction under 28 U.S.C. § 1311 for the claims

brought under the FLSA, 29 U.S.C. § 201, et seq. The United States District Court for the District

of Kansas has personal jurisdiction because Defendants conduct business in Johnson County,

Kansas, which is within this District. Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b),

inasmuch as Defendants contracted with Ms. Sergiyenko, a Kansas resident, and the cause of

action set forth herein has arisen and occurred in substantial part in the District of Kansas. The

claims for violations of the KWPA are based upon the statutory law of the State of Kansas.

This Court has supplemental jurisdiction for the common law claims asserted herein in that

the claims are asserted as part of the same case and controversy as the FLSA claim, the state and

federal claims derive from a common nucleus of operative facts, the state claim will not

substantially dominate over the FLSA claim, and exercising supplemental jurisdiction would be in

the interests of judicial economy, convenience, fairness, and comity.

"In a federal question case where a defendant resides outside the forum state, a federal

court applies the forum state's personal jurisdiction rules." To establish personal jurisdiction over

a defendant, plaintiff must show that jurisdiction is proper under the laws of the forum state and

that the exercise of jurisdiction would not offend due process. The Kansas long-arm statute is

construed liberally so as to allow jurisdiction to the full extent permitted by due process.  Emp'rs

Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1159-60 (10th Cir. 2010) (citing OMI

Holdings, Corp.v. Royal Ins. Co. of Can., 149 F.3d 1086, 1091 (10th Cir. 1998).

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POINTS AND AUTHORITIES

“Rule 55 governs default judgments, and this Court has previously explained that Fed. R.

Civ. P. 55 contemplates a two-step process in which a plaintiff must first apply to the clerk for

entry of default under subsection (a). Under subsection (a), when a party against whom a

judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is

shown by affidavit or otherwise, the clerk must enter the party's default. If the clerk enters default,

the plaintiff may file a motion for default judgment under Fed. R. Civ. P. 55(b). Under 55(b), a

party may seek default judgment from the clerk or from the court. If plaintiff's claim is for a sum

certain, or a sum that can be calculated, the defendant has defaulted for not appearing, and is not a

minor or incompetent person, the clerk must enter default judgment upon request of the

plaintiff. Fed. R. Civ. P. 55(b)(1). In all other cases, a plaintiff must seek default from the

court. Fed. R.Civ. P. 55(b)(2). The court has wide discretion to grant or deny a default judgment

motion. Christenson Media Grp., Corp.v. Lang Indus., 782 F. Supp. 2d 1213 (D. Kan. 2011).

In this case, McCusker Holdings, Corp.has received ample notice of this litigation via

service of process – notice that triggered its obligation to “plead or otherwise defend” under the

applicable Rule. Fed. R. Civ. P. 55(a). The Plaintiff’s complaint was delivered to Willard

McCusker, individually and as registered agent and/or officer for McCusker Holdings Corp, and

it compelled McCusker to respond to the lawsuit; McCusker has failed to do so.

DISCUSSION

McCusker Holdings, Corp.has been provided sufficient notice of this lawsuit and
opportunity to respond.

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Defendant McCusker Holdings, Corp.has received ample notice of this litigation, for

example:

- McCusker Holdings, Corp.been lawfully served with the summons and complaint in

this case, McCusker Holdings, Inc., by personal service upon its manager and

registered agent, Willard McCusker. ECF Doc. No. 4.

- After receiving service, Willard McCusker contacted Plaintiffs’ counsel on July 19,

2017 and indicated that he had prepared a potential settlement for Plaintiffs and sought

to conduct a teleconference regarding the same.

- McCusker then called and spoke with Plaintiffs’ counsel on July 20, 2017 to follow

up with those discussions. McCusker offered to send counsel for Plaintiffs a form

showing the manner in which he proposed to structure a resolution of Plaintiffs’ claims.

- On July 21, 2017, McCusker sent a document which he proposed using to the settle

plaintiffs’ claims.

- On July 25, 2017 Plaintiffs’ counsel contacted McCusker via email to further discuss

settlement framework and proposed resolution of this case.

- McCusker replied that day, and the parties agreed to conduct an additional

teleconference the following day to discuss the matter.

- Counsel, is sending copies of this motion to McCusker Holdings Corp.’s registered

agent in Nevada, address listed in Colleyville TX,3 and directly to Mr. McCusker via

electronic mail at the address he has previously communicated from.

                                                            
3
 A copy of the Nevada Secretary of State search results for McCusker Holdings Corp is attached as Exhibit C. 

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Since that time, Counsel has made multiple attempts to contact McCusker, on or about July

26th as well as several occasions after that date. McCusker did not respond to counsel’s calls or

emails. McCusker has not responded or had further contact with counsel to present.

Plaintiff is entitled to recover damages relating to

Defendant’s violation of state and federal wage and hour laws.

Because Defendant McCusker Holdings, Corp.is subject to the personal and subject matter

jurisdiction of this Court, and because Defendant has failed to defend itself from Plaintiffs’

complaint for violation of the federal Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”),

the Kansas Wage Payment Act, K.S.A. § 44-313, et seq. (“KWPA”), and for breach of contract,

the only issue remaining for this Court is the determination of Plaintiffs’ damages.

Plaintiff’s damages for breach of contract are subsumed in Plaintiffs’ damage calculations

for violations of the FLSA. Because Plaintiff Sergiyenko was employed in Kansas, she is also

entitled to additional recovery under the KWPA for expense reimbursements, and any award to

plaintiff Sergiyenko includes liquidated damages as statutory penalties under the KWPA. K.S.A.

§ 44-315.

Under the FLSA, Plaintiffs are entitled to recover all unpaid wages due and owing to them

based on the rates agreed to by defendant McCusker Holdings, Corp. Plaintiffs Sergiyenko and

Joly can both prove this rate of compensation by way of a written employment agreement with

McCusker Holdings, Corp.

Defendant McCusker Holdings, Corp.is also liable to Plaintiffs for all hours worked in

excess of forty hours a week at one and one-half times the rate of their hourly compensation.

McCusker Holdings, Corp.cannot benefit from Plaintiffs being described as “salaried” workers in

their employment agreements because McCusker Holdings, Corp.has failed to pay plaintiffs under

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the terms of its own agreement, and because McCusker Holdings, Corp.has failed to allege

exemption as an affirmative defense to Plaintiffs’ claims.

First, even though Plaintiffs were employed by Defendants for several months, Plaintiffs

did not receive their salary. Because Plaintiffs were not paid any salary during the period in

question, Defendants violated the salary basis test, one of two mandatory parts that must be met,

in order for them to fall under any of the FLSA’s applicable exemptions from overtime

compensation. As a result, Defendants misclassified Plaintiffs as exempt from overtime

compensation. Defendants further failed to compensate Plaintiffs at least the federal minimum

wage for work performed, and also for overtime at a rate of not less than one and one-half times

the regular rate of pay for work performed in excess of forty hours in a work week, and therefore,

Defendants have violated, and continue to violate, the FLSA, 29 U.S.C. § 201, et seq., including

29 U.S.C. § 207(a)(1).

An employer may lose the right to treat otherwise eligible employees as exempt

"executives" in certain situations. For instance, an employer who makes improper deductions from

salary shall lose the exemption if the facts demonstrate that the employer did not intend to pay

employees on a salary basis. 29 C.F.R. § 541.603(a). Ellis v. J.R.'s Country Stores, Inc., 779 F.3d

1184, 1186 (10th Cir. 2015).

Second, Defendant McCusker Holdings, Corp.is liable to Plaintiffs for overtime

compensation because it has failed to answer or otherwise defend itself in this matter. “The FLSA

exempts from its overtime requirement any "employee employed in a bona fide executive,

administrative, or professional capacity." 29 U.S.C. § 213(a)(1); see Archuleta v. Wal-Mart Stores,

Inc., 543 F.3d 1226, 1228 (10th Cir. 2008). "While it is the employee's burden to prove that the

employer is violating the FLSA, it is the defendant employer's burden to prove that an employee

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is exempt from FLSA coverage." Archuleta, 543 F.3d at 1233 (internal citation omitted). Because

exemption under the FLSA is an affirmative defense, it must be asserted in an answer or other

responsive pleading under Fed. R. Civ. P. 12. McCusker Holdings, Corp.has failed to defend itself

in this matter, and this this Court should award Plaintiffs one and one-half times their regular rate,

based on the agreed compensation structure for all hours worked in excess of forty hours per week.

Because plaintiff Sergiyenko was employed in Kansas, she is also entitled to recover any

unreimbursed expenses under the KWPA. While the FLSA only provides for minimum wage and

overtime enforcement, the KWPA goes beyond those protections to also permit an employee to

recover for any unreimbursed expense. See K.S.A. § 44-314.

Defendant McCusker Holdings, Corp.should also be held liable for liquidated damages for

all amounts awarded in this matter under the FLSA. Under Section 16 of the FLSA, liquidated

damages in an amount equal to the amount of unpaid minimum wages or overtime assessed against

an employer must be awarded to either private plaintiffs (29 USC § 216(b); 29 CFR § 790.22(a))

or the Secretary of Labor. 29 U.S.C. § 216(c). Unless an employer presents a proper defense,

liquidated damages are mandatory. Walton v. United Consumers Club, 786 F.2d 303, 310 (7th Cir.,

1986); Sanders v. Elephant Butte Irrigation District of New Mexico, 112 F.3d 468, 471 (10th Cir.,

1997); Ackley v. Department of Corrections, 844 F. Supp. 680, 688 (D. Kan. 1994) (citing Doty

v. Elias, 733 F.2d 720, 725-26 (10th Cir. 1984). McCusker’s lack of any response mandates that

the Court award liquidated damages.

Plaintiffs believe the most appropriate means by which to present their evidence of unpaid

compensation is by way of and in-person hearing before this Court. Plaintiffs respectfully request

that this Court provide Plaintiffs with a hearing in which they can present evidence of their unpaid

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compensation, in order for this Court to substantiate its award in default judgment of unpaid

compensation, unpaid overtime, unreimbursed expenses and liquidated damages thereon.

WHEREFORE, Plaintiffs move that the Court enter an Order:

1. entering default judgment against McCusker Holdings, Corp.under Rule 55, and

2. establishing a protocol for determining the amount of Plaintiffs’ damages either

through the submission of written evidence or an evidentiary hearing.

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DATE: Respectfully submitted,

The Hodgson Law Firm, LLC

/s/ Michael Hodgson

Michael Hodgson KS Bar No. 21331
3699 SW Pryor Road
Lee’s Summit, MO 64082
Tel: 816.600.0117
Fax: 816.600.0137
mike@thehodgsonlawfirm.com

Counsel For Plaintiffs

CERTIFICATE OF SERVICE

The undersigned certifies that on December, 2017, a copy of the foregoing was mailed,

first class, postage prepaid to Willard McCusker as Officer for McCusker Holdings Corp. at the

following address of record:

4508 COLLEYVILLE BLVD STE 100

COLLEYVILLE, TX 76034 USA

Additionally, a copy of the foregoing was electronically mailed to Willard McCusker at

will@mccuskerco.com, the email address he has used to correspond with Plaintiffs’ counsel in this

matter, using delivery confirmations.

/s/Michael Hodsgon
Counsel for Plaintiffs

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