Agureyev v. H.K. Second Ave. Rest., Inc.

NATALIE AGUREYEV and DARYA IGAMBERDIEV, Plaintiffs, v. H.K. SECOND AVE. RESTAURANT, INC.,SHAHEEN KHAN, and MAHA KHONDOKER, Defendants.

CIVIL ACTION NO.: 17 Civ. 7336 (SLC)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

March 5, 2021

OPINION & ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

SARAH L. CAVE, United States Magistrate Judge.

I. INTRODUCTION

In this action under the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. § 201 et seq., and New York Labor Law ("NYLL") § 190 et seq., Plaintiffs Natalie Agureyev ("Agureyev") and Darya Igamberdiev ("Igamberdiev," together with Agureyev, "Plaintiffs"), move for default judgment (the "Motion") (ECF No. 74), seeking payment of unpaid wages and related relief from Defendants H.K. Second Ave. Restaurant, Inc. ("HK"), and Shaheen Khan ("Khan," together with HK, "Defendants"). (ECF No. 1).¹ Plaintiffs allege that, when they worked at Defendants' restaurant, Bait & Hook (the "Restaurant") during 2015, Defendants compensated them solely in customer tips and did not pay them the applicable minimum, overtime, and spread-of-hours wages to which they were entitled. (ECF No. 75 at 2; see ECF No. 1 ¶¶ 2-4, 22-23, 25, 29-30, 32).

Defendants are now in default, and Plaintiffs filed the Motion, to which Defendants have failed to respond.

For the reasons that follow, Plaintiffs' Motion is GRANTED and Plaintiffs are awarded judgment against Defendants in the total amount of $35,906.34, comprised of the following:

(1) Agureyev is awarded damages in the amount of $4,508.96, comprised of: (i) $1,386.88 in unpaid minimum wages; (ii) $164.06 in unpaid overtime wages; (iii) $8.75 in unpaid spread-of-hours wages; (iv) $1,559.69 in liquidated damages; (v) $1,050.00 in statutory damages, and (vi) $339.58 in prejudgment interest;

(2) Igamberediev is awarded damages in the amount of $12,117.38, comprised of: (i) $4,145.40 in unpaid minimum wages; (ii) $35.00 in unpaid spread-of-hours wages; (iii) $4,180.40 in liquidated damages; (iv) $2,900.00 in statutory damages, and (v) $856.58 in prejudgment interest; and

(3) $19,280 in attorneys' fees.

II. BACKGROUND

A. Factual Background

Plaintiffs allege that they worked as waitresses at Defendants' Restaurant, located in Manhattan. (ECF No. 1 ¶ 1). From April 10, 2015 through May 15, 2015, Agureyev worked shifts from 4:00 p.m. until 1:00 a.m., for a total of 30 to 44 hours per week. (ECF No. 1 ¶¶ 22-24; ECF No. 75-3 ¶¶ 5, 7). During Agureyev's employment, she was compensated solely in customer tips, and Defendants did not pay her any wages. (ECF No. 1 ¶ 24; ECF No. 75-3 ¶ 8). In addition, she was not paid for the first two weeks during which she was "in training." (ECF No. 1 ¶ 26; ECF No. 75-3 ¶ 9). The W-2 form that Defendants provided Agureyev indicated her total wages as$5,600.00, when in fact, she had received less than half that amount, only in tips, during her employment. (ECF No. 1 ¶ 27; ECF No 75-3 ¶ 10). She alleges that she paid federal and state income taxes on wages she did not receive. (ECF No. 1 ¶ 28; ECF No. 75-3 ¶ 11).

From March 2015 through September 2015, Igamberdiev also worked as a waitress at the Restaurant on shifts from 3:00 p.m. to 3:00 a.m., three to five days per week, for a total of 24 to 50 hours per week. (ECF No. 1 ¶¶ 29, 31; ECF No. 75-4 ¶¶ 5-7). Like Agureyev, Igamberdiev was only compensated in customer tips, and Defendants did not pay her any wages. (ECF No. 1 ¶ 32; ECF No. 75-4 ¶ 8).

Plaintiffs allege that Khan was a principal, director, and/or officer of HK, which he actively controlled and managed, such that both Khan and HK were their "employer" for purposes of the FLSA and the NYLL. (ECF No. 1 ¶¶ 11-12; ECF No. 75-3 ¶ 12; ECF No. 75-4 ¶ 9).

Plaintiffs allege that Defendants committed several violations of FLSA and the NYLL: (i) Plaintiffs were not subject to, nor did Defendants provide them notice of, a tip credit against their wages; (ii) Plaintiffs were entitled to but Defendants did not pay them a minimum wage of $8.75 per hour; (iii) Plaintiffs were entitled to but Defendants did not pay them one-and-one-half times the minimum wage rate for the hours they worked in excess of 40 hours per workweek; (iv) Plaintiffs were entitled to but Defendants did not pay them an additional hours pay at minimum wage for every day they worked a spread-of-hours more than ten (10) hours; and (v) Plaintiffs were entitled to but Defendants did not provide wage statements indicating their regular and overtime rates of pay. (ECF No. 1 ¶¶ 36-47).

B. Procedural Background

On September 26, 2017, Plaintiffs filed their Complaint, seeking to assert claims on behalf of themselves as well as putative class and collective actions. (ECF No. 1). On December 14, 2017, following a scheduling conference, the Honorable John G. Koeltl entered a case management and scheduling order that set the close of fact discovery as March 20, 2018. (ECF No. 16). The same day, the parties consented to jurisdiction by a United States Magistrate Judge, at the time, the Honorable Henry B. Pitman. (ECF No. 17). On January 19, 2018, Defendants moved to dismiss the Complaint, which Judge Pitman denied. (ECF Nos. 20, 23). On September 26, 2018, Defendants filed their Answer to the Complaint, and the parties proceeded to discovery. (ECF No. 24). On January 9, 2019, the Honorable Kevin Nathaniel Fox conducted a settlement conference, which did not result in a settlement. (ECF minute entry Jan. 9, 2019). After Judge Pitman resolved several discovery disputes, the parties prepared for a bench trial. (ECF Nos. 33-36, 38-39). In July 2019, just before the final pre-trial conference, Defendants notified Judge Pitman that they would be imminently filing for bankruptcy (ECF No. 40), in response to which Judge Pitman stayed the action "pending further Order of the Court." (ECF No. 41).

On October 2, 2019, the action was reassigned to the undersigned. (ECF minute entry Oct. 2, 2019). On October 11, 2019, the Court ordered the parties to file a joint status report as to the details of Defendants' bankruptcy filings. (ECF No. 42). On October 25, 2019, Defendants advised the Court that, notwithstanding their representation to Judge Pitman of their imminent bankruptcy filings in July 2019, they had not yet done so. (ECF No. 43). Accordingly, the Court ordered the parties to file a further status report by December 2, 2019, warning that ifDefendants had not filed for bankruptcy by that time, the Court might lift the stay and issue a scheduling order. (ECF No. 44). The parties failed to file a joint status report by the deadline, and on December 20, 2019, the Court ordered Plaintiffs to show cause why the action should not be dismissed for failure to prosecute. (ECF No. 46). Plaintiffs timely responded to the Court's order, and the Court again ordered Defendants to file a status report as to their bankruptcy filings. (ECF Nos. 47-48). After Defendants failed to submit a timely status report, the Court scheduled a status conference, warning Defendants of the risk of sanctions should they fail to appear. (ECF No. 49). After one adjournment, at Defendants' request, the Court held a status conference on February 12, 2020, following which the Court entered a final pretrial order governing the conduct of the bench trial to be held on June 29, 2020. (ECF Nos. 50-55).

On June 9, 2020, the Court held what was intended to be the final pretrial conference, during which Defendants' counsel indicated his intent to file a motion withdraw his appearance, such that the Court adjourned the trial date sine die pending the appearance of new counsel for Defendants. (ECF minute entry June 9, 2020, ECF No. 64). On June 22, 2020, the Court granted Defendants' counsel's motion to withdraw, and granted Defendants 30 days to retain new counsel, warning HK that, as a corporation, it was required to appear through counsel. (ECF No. 66). The Court also warned Defendants that, should they fail to respond to the Court's order by July 22, 2020, Plaintiffs could request a certificate of default from the Clerk of the Court in accordance with Federal Rule of Civil Procedure 55. (Id.) Defendants failed to respond or appear, and on July 31, 2020, the Court ordered Plaintiffs to request a certificate of default. (ECF No. 67). Plaintiffs did so, and on August 5, 2020, the Clerk issued the Certificate of Default as to HK andKhan. (ECF Nos. 71-73). On August 14, 2020, Plaintiffs filed the Motion, to which Defendants have not responded. (ECF Nos. 74-75).

III. DISCUSSION

No party has requested a hearing on the issue of damages, and Defendants have not submitted any written materials. Plaintiffs also urge the Court to accept their affidavits and other documentary support for damages in lieu of an in-person inquest. (ECF No. 75 at 3-4). Accordingly, the Court has conducted the inquest based solely on the materials Plaintiffs have submitted in support of their request for damages. See Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc., 699 F.3d 230, 234 (2d Cir. 2012) ("[A] district court may determine there is sufficient evidence either based upon evidence presented at a hearing or upon a review of detailed affidavits and documentary evidence."); Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir. 1991) ("Rule 55(b)(2) of the Federal Rules of Civil Procedure . . . allows but does not require the district judge to conduct a hearing."); Perez v. 50 Food Corp., No. 17 Civ. 7837 (AT) (BCM), 2019 WL 7403983, at *3 (S.D.N.Y. Dec. 4, 2019), adopted by, 2020 WL 30344 (S.D.N.Y. Jan. 2, 2020); Fed. R. Civ. P. 55(b)(2).

A. Legal Standards

1. Determining liability

A defendant's default is deemed "a concession of all well-pleaded allegations of liability," Rovio Entm't, Ltd. v. Allstar Vending, Inc., 97 F. Supp. 3d 536, 545 (S.D.N.Y. 2015), but a default "only establishes a defendant's liability if those allegations are sufficient to state a cause of action against the defendants." Gesualdi...