United States District Court, S.D. Georgia, Statesboro Division
HAROLD H. RICKS; ROGER SMITH; SHON BUTLER; and MALIK BRANTLEY, Administrator of the Estate of Leroy Brantley, Jr., Plaintiffs,
HANDI-HOUSE MFG. CO.; and DONALD FLANDERS, Defendants.
STAN BAKER UNITED STATES DISTRICT JUDGE SOUTHERN DISTRICT OF
matter comes before the Court on Defendants HandiHouse
Manufacturing Company and Donald Flanders' Motions for
Summary Judgment. (Docs. 87, 88.) The Court has reviewed the
parties' briefs and supporting materials regarding
Defendants' Motions. During that review, the Court
resolved all factual disputes to Plaintiffs' benefit and
construed the facts in Plaintiffs' favor. Even when
affording Plaintiff those benefits, the Court finds that
Defendants are entitled to judgment as a matter of law. To be
clear, the Court does not condone the payday loan scheme at
the core of Plaintiff's claims. However, no rational
juror could find that HandiHouse Manufacturing Company or
Donald Flanders participated in or profited from that scheme.
Consequently, the Court GRANTS
Defendants' Motions for Summary Judgment, (docs. 87, 88),
and DIRECTS the Clerk of Court to
ENTER a final judgment in favor of
Defendants and to CLOSE this case.
29, 2017, Plaintiffs filed a putative class action against
Handi-House Mfg. Co., Handi-House Financial Corporation,
Handi-House Rent to Own, LLC, and employees Donald Flanders,
James Akridge, John Wilkerson, Stephanie Flanders, and Brenda
Williamson. (Doc. 1.) Alleging an illegal payday lending
scheme within the manufacturing facility of Handi-House Mfg.
Co., Plaintiffs initially asserted the following twelve
causes of action: (1) a claim pursuant to the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. §§
201-219, against all Handi-House entities for paying wages
below the federal statutory minimum; (2) a claim pursuant to
the Georgia Minimum Wage Law, O.C.G.A. § 34-4-6, against
all Handi-House entities for paying wages below the state
statutory minimum; (3) a claim pursuant to the Georgia
Industrial Loan Act, O.C.G.A. §§ 7-3-1 to -29,
against all Defendants for making payday loans of an amount
under $3, 000.00 without a license; (4) a claim pursuant to
the Georgia Payday Lending Act, O.C.G.A. §§ 16-17-1
to -10, against all Defendants for making payday loans; (5) a
common law conversion claim against all Defendants; (6) a
claim pursuant to O.C.G.A. § 7-4-1 against all
Defendants for making usurious loans; (7) a claim pursuant to
18 U.S.C. §§ 1581, 1593A, and 1595 against all
Defendants for holding Plaintiffs in debt servitude; (8) a
claim pursuant to the Federal Racketeer Influenced and
Corrupt Organizations Act (“RICO”), 18 U.S.C.
§ 1962(c), (d), against all individual defendants for
conspiring and participating in the unlawful collection of
debt; (9) a claim pursuant to the Georgia RICO Act, O.C.G.A.
§ 16-14-1, against all individual defendants for
conspiring and participating in racketeering activities; (10)
a claim pursuant to 42 U.S.C. § 1981 against all
Handi-House entities for civil rights violations and racial
discrimination; (11) a claim pursuant to O.C.G.A. §
41-2-1 against all Defendants for creating a public nuisance;
and (12) a claim for punitive damages under O.C.G.A. §
27, 2018, the Court denied Plaintiffs' motion for a
collective action class under FLSA because Plaintiffs failed
to show there are employees similarly situated to Plaintiffs
who wish to opt into a class action. (Doc. 109.) The Court
denied Plaintiffs' motion to certify a class under
Federal Rule of Civil Procedure 23 because Plaintiffs did not
identify an administratively feasible method for identifying
class members. (Id.)
February 19, 2018, Plaintiffs moved for sanctions, arguing
James Akridge and John Wilkerson, as agents of Handi-House,
perpetrated the loan scheme and intentionally destroyed lists
of employee loans. (Docs. 65, 65-1.) On May 15, 2018,
pursuant to stipulation of the parties, the Court dismissed
without prejudice all defendants except Mr. Flanders and
Handi-House Mfg. Co. (“Handi-House”) as well as
the following two causes of action: (1) the claim in count
seven, brought pursuant to 18 U.S.C. §§ 1581,
1593A, and 1595, alleging conditions of debt servitude; and
(2) the claim in count ten brought pursuant to 42 U.S.C.
§ 1981. (Doc. 85.)
11, 2018, the Court denied Plaintiffs' Motion for
Sanctions because Plaintiffs failed to carry their burden of
proving Mr. Flanders and Handi-House destroyed any loan
lists. (Docs. 106.) On July 28, 2018, Plaintiffs requested
reconsideration, and the Court conducted an evidentiary
hearing on October 30, 2018. (Docs. 108, 126, 132.) On
November 28, 2018, the Court again denied the sanctions
Motion, even though the testimony established intentional
destruction of at least one loan list by Messrs. Akridge and
Wilkerson, because Messrs. Akridge and Wilkerson were no
longer Defendants and there was no evidence of any
involvement in the loan scheme or spoliation by Handi-House
and Mr. Flanders. (Doc. 131.)
Court gleans the following facts from Defendants'
Statements of Material Facts, Plaintiffs' response, and
the evidentiary record. Handi-House manufactures portable
storage buildings in Swainsboro, Georgia, employing
approximately 150 workers, and sells them to retailers
throughout the Southeast. (Flanders Aff., doc. 87-3,
¶¶ 3, 8; Handi-House Dep., doc. 87-14, pp. 11-13.)
Defendant Don Flanders purchased Handi-House in 1979 and is
Chief Executive Officer (“CEO”). (Flanders Dep.,
doc. 87-8, p. 7.) Two former Defendants are related
Handi-House companies. Formed in 1987, Handi-House Financial
Corporation issues consumer loans to purchasers of
Handi-House portable storage buildings. (Flanders Aff.
¶¶ 4, 5.) Formed in 2009, Handi-House Rent-To-Own,
LLC, sells consumer goods on a rent-to-own basis in retail
sales lots throughout the Southeast. (Id. at
¶¶ 6, 7.) Plaintiffs are current and former
employees of Handi-House who earned hourly wages at the
manufacturing facility within the range of $7.25 to $9.00
during the period of approximately 2013 to 2018. (Butler
Dep., doc. 87-6, pp. 20-21, 31; Williamson Aff., doc. 87-15,
¶ 3; Smith Dep., doc. 87-5, p. 18; Ricks Dep., doc.
87-7, p. 24; Brantley Dep., doc. 87-4, p. 87; Brantley Aff.,
doc. 96-2, ¶ 7.)
undisputed Messrs. Akridge and Wilkerson issued payday loans
to Plaintiffs and other employees at the manufacturing
facility, typically charging an exorbitant fee of six dollars
for every twenty dollars borrowed. (Wilkerson Dep., pp.
37-38; Brantley Aff. ¶ 4; Ricks Aff., doc. 96-3, ¶
4.; Smith Aff., doc. 96-4, ¶ 4; Butler Dep., p. 50.)
James Akridge has worked at Handi-House for forty years and
is currently a sales and general manager with an annual
salary of $59, 020.00. (Akridge Dep., doc. 87-10, p. 7; doc.
103-2, p. 2; Handi-House Dep., p. 18; doc. 87-13, ¶ 5.)
John Wilkerson, now deceased, worked at Handi-House for
thirty-three years and last served as Plant Manager with an
annual salary of $39, 100.00. (Wilkerson Dep., doc. 87-11,
pp. 9-10; Thompson Economic Report, doc. 63, p. 1.) Messrs.
Akridge and Wilkerson used their own money to fund their loan
scheme and split all profits. (Akridge Dep., p.
37; Wilkerson Dep., pp. 37-38, 44; Ricks Dep., p. 81.) As
Plaintiffs' counsel conceded at the sanctions hearing,
the loan scheme was a side venture by Messrs. Akridge and
Wilkerson, and neither Handi-House nor Mr. Flanders
participated in nor profited from it. (Sanctions Hr'g
Tr., doc. 132, pp. 19-20.)
Akridge and Wilkerson collected loan payments on payday.
(Butler Dep., pp. 39-40.) Brenda Williamson, the payroll
clerk, typically asked Mr. Akridge to sign paychecks because
he was always at the plant and Mr. Flanders was frequently on
Handi-House business trips. (Williamson Dep., p. 19;
Handi-House Dep., pp. 19-20.) Ms. Williamson distributed the
signed paychecks to department heads, and they distributed
the checks to their employees. (Williamson Dep., pp. 19-20.)
However, when Ms. Williamson separated the checks by
department, she made a separate pile for employees listed on
a sheet of paper given to her by Mr. Wilkerson. (Doc. 58-2,
p. 10; Wilkerson Dep., pp. 45-46; Williamson Dep., pp.
list contained the names of employees who owed Messrs.
Akridge and Wilkerson money, but Ms. Williamson did not
understand this or know why Mr. Wilkerson asked her to
separate the checks of these employees. (Wilkerson Dep., pp.
45-46; Williamson Dep., pp. 23-29.) Messrs. Akridge and
Wilkerson delivered the segregated checks to their debtor
employees for endorsement, cashed the endorsed checks at the
bank, paid themselves the loan balances, and remitted the
remaining cash, minus any change, to the debtor employees.
(Butler Dep., pp. 39-40; Akridge Dep., pp. 23-24; Smith Dep.,
pp. 127-28; Brantley Dep., p. 64.)
Flanders was generally aware Messrs. Akridge and Wilkerson
issued loans to Handi- House employees but testified he did
not know the loan terms, i.e., the six-dollar fee for every
twenty dollars borrowed, until the filing of this lawsuit.
(Flanders Dep., pp. 37-45, 58; Williamson Dep., p. 23.) He
did not inquire because he believed it was not his business.
(Id. at 40, 45.) Immediately upon receipt of the
lawsuit, Mr. Flanders “instructed Akridge and Wilkerson
that they were to discontinue all lending activities on
[Handi-House] property.” (Flanders Aff. ¶¶
contend Mr. Flanders knew about the exorbitant fees charged
by Messrs. Akridge and Wilkerson. (Doc. 95, pp. 4-9.) The
only evidence Mr. Flanders knew about loan terms is the
testimony of Mr. Leroy Brantley, who testified he complained
to Mr. Flanders a long time ago, in the 1990s, about the high
loan fees Mr. Akridge charged him. (Brantley Dep., pp.
52-55.) Mr. Flanders purportedly responded, “he
didn't have nothing to do with it.” (Id.
at 53.) Notably, Mr. Harold Ricks testified he told Mr.
Flanders on an unknown date Mr. Akridge was taking his money
and was “wrong for it.” (Ricks Dep., pp. 97,
109-10.) In response, Mr. Flanders issued Mr. Ricks an
interest-free loan and advised him to leave Messrs. Akridge
and Wilkerson alone. (Id. at 110.)
to the lawsuit, Mr. Flanders recalled two or three occasions
when employees complained to him they needed their paychecks
to pay bills but owed Messrs. Akridge and Wilkerson too much
money. (Flanders Dep., p. 39.) On each such occasion when an
employee complained, Mr. Flanders informed the employee he or
she should always receive their paycheck, and he instructed
Messrs. Akdrige and Wilkerson any employee who “wants
their check[, ] they get the check.” (Id. at
39-42.) Any time this issue was presented to Mr. Flanders, he
instructed Messrs. Akridge and Wilkerson “at no time do
you hold this person's check.” (Id. at
40.) This is consistent with the testimony of Plaintiff Roger
Smith, who recalled one occasion when Mr. Flanders observed
employees lining up in front of Messrs. Akridge and Wilkerson
on payday. (Smith Dep., pp. 106-07.) Mr. Smith overheard Mr.
Flanders instruct Messrs. Akridge and Wilkerson to “cut
that out, clear that out” because “I don't
want this in my plant.” (Id. at 106.) Mr.
Smith believes the conversation concerned the loan scheme.
(Id. at 107.)
stark contrast to Messrs. Akridge and Wilkerson, Mr. Flanders
has personally loaned money to Handi-House employees without
charging interest or fees, and “in most instances, [he]
never required them to pay . . . back the principal . . .
.” (Flanders Aff. ¶ 23.) In addition, Mr. Flanders
operates a zero-interest, no-fee loan program at Handi-House
whereby employees can borrow $100 or $200, depending on
seniority, that is repaid “by payroll deductions upon
repayment terms decided by the borrowing employee.”
(Id. ¶ 24; Fluellen Dep., doc. 78-2, pp.
Ricks and Brantley testified Messrs. Akridge and Wilkerson
sometimes pressured them to borrow money. Mr. Ricks testified
Mr. Wilkerson might, for example, assign him work in the hot
sun if he did not borrow money. (Ricks Dep., pp. 29-30.) Mr.
Brantley testified he was not forced to take loans, but that
it “would be put in a way that you have to
sometimes.” (Brantley Dep., p. 63.) Messrs. Smith and
Shon Butler testified Messrs. Akridge and Wilkerson never
pressured or forced them to borrow money. (Smith Dep., pp.
122-24; Butler Dep., p. 53.) Mr. Ricks also testified Mr.
Akridge suspended him for one week, then terminated his
employment, because of an argument that occurred when Mr.
Ricks refused to surrender his paycheck to Mr. Akridge for
repayment of a loan. (Ricks Dep., pp. 23-24.)
generally allege they received loans from Messrs. Akridge and
Wilkerson on a weekly basis during their employment. (Smith
Dep., p. 61.; Butler Dep., pp. 96-97; Ricks Dep., pp. 146-47;
Smith Aff. ¶ 6.; Ricks Aff. ¶ 6; Smith and Ricks
Paystubs, doc. 40-20, pp. 41-109.) While the loan scheme did
not involve any formal loan documentation, Handi-House and
its bank have produced paychecks confirming Plaintiffs
endorsed paychecks to Mr. Akridge for him to cash. (Brantley
Dep., p. 47; Smith Dep., p. 35; doc. 87-9, pp. 9, 22; Peil
Aff., doc. 96-5 (summarizing Plaintiffs' pay stubs and
dual endorsed payroll checks).) Plaintiffs' counsel
reviewed the paychecks and determined Messrs. Akridge and
Wilkerson cashed 102 checks for Mr. Butler totaling $25,
432.44, seventy-nine checks for Mr. Ricks totaling $16,
949.47, and 121 checks for Mr. Smith totaling $22, 186.07.
(Peil Aff., pp. 22-29.) There is no documentation showing how
much money each Plaintiff borrowed. Mr. Ricks testified he
borrowed roughly $50 to $70 per week, Mr. Smith testified he
borrowed $20 to $180 per week, and Mr. Butler testified he
borrowed roughly sixty to $100 per week. (Ricks Dep., pp.
88-89; Smith Aff. ¶ 6; Butler Dep., p. 49.)
judgment “shall” be granted if “the movant
shows that there is no genuine dispute as to any material
fact and that the movant is entitled to judgment as a matter
of law.” Fed.R.Civ.P. 56(a). A fact is
“material” if it “might affect the outcome
of the suit under the governing law.” FindWhat
Inv'r Grp. v. FindWhat.com, 658 F.3d 1282, 1307
(11th Cir. 2011) (quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986)). A dispute is
“genuine” if the “evidence is such that a
reasonable jury could return a verdict for the nonmoving
moving party bears the burden of establishing that there is
no genuine dispute as to any material fact and that it is
entitled to judgment as a matter of law. See Williamson
Oil Co. v. Philip Morris USA, 346 F.3d 1287, 1298 (11th
Cir. 2003). Specifically, the moving party must identify the
portions of the record which establish that there are no
“genuine dispute[s] as to any material fact and the
movant is entitled to judgment as a matter of law.”
Moton v. Cowart, 631 F.3d 1337, 1341 (11th Cir.
2011). When the nonmoving party would have the burden of
proof at trial, the moving party may discharge his burden by
showing that the record lacks evidence to support the
nonmoving party's case or that the nonmoving party would
be unable to prove his case at trial. See id.
(citing Celotex Corp. v. Catrett, 477 U.S. 317,
322-23 (1986)). If the moving party discharges this burden,
the burden shifts to the nonmovant to go beyond the pleadings
and present affirmative evidence to show that a genuine issue
of fact does exist. Anderson, 477 U.S. at 257.
determining whether a summary judgment motion should be
granted, a court must view the record and all reasonable
inferences that can be drawn from the record in a light most
favorable to the nonmoving party. Peek-A-Boo Lounge of
Bradenton, Inc. v. Manatee County, 630 F.3d 1346, 1353
(11th Cir. 2011) (citing Rodriguez v. Sec'y for
Dep't of Corr., 508 F.3d 611, 616 (11th Cir. 2007)).
However, “facts must be viewed in the light most
favorable to the non-moving party only if there is a
‘genuine' dispute as to those facts.”
Scott v. Harris, 550 U.S. 372, 380 (2007).
“[T]he mere existence of some alleged factual dispute
between the parties will ...