Astudillo v. Fusion Juice Bar Inc.

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CECIL CELIA ASTUDILLO and BERNABE ASTUDILLO, Plaintiffs, v. FUSION JUICE BAR INC.; FUSION BAR 3 INC.; and FLORENTINO ORTEGA, individually, Defendants.

No. 19 CV 2590 (EK) (CLP)

United States District Court, E.D. New York

March 23, 2023

REPORT AND RECOMMENDATION

Cheryl L. Pollak, United States Magistrate Judge

On May 2, 2019, plaintiffs Cecil Celia Astudillo and Bernabe Astudillo (collectively, “plaintiffs”) commenced this action against defendants Fusion Juice Bar Inc., Fusion Bar 3 Inc., and Florentino Ortega, individually, alleging violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq., and the New York Labor Law (“NYLL”) §§ 190 and 650, et seq., seeking inter alia, unpaid minimum and overtime compensation under the FLSA and NYLL, unpaid spread of hours premium under the NYLL, statutory penalties under the Wage Theft Prevention Act, liquidated damages, prejudgment and post-judgment interest, and attorney's fees and costs. (Compl.^[1] ¶¶ 1-2).

Currently pending before this Court on referral from the Honorable Eric Komitee is plaintiffs' motion for default judgment. (ECF Nos. 33, 34, 35, 36, 37). For the reasons set forth below, it is respectfully recommended that plaintiffs' motion be granted and that they be awarded $178,500 in damages, as well as pre- and post-judgment interest, and $18,338 in attorney's fees and costs.

FACTUAL AND PROCEDURAL HISTORY

Plaintiffs allege that defendant Fusion Juice Bar Inc. (“Fusion Juice Bar Inc.”) is a New York corporation, with its principal place of business located at 30-93 38^th Street, Astoria, New York 11103. (Compl. ¶ 6). Defendant Fusion Bar 3 Inc. (“Fusion 3”) is alleged to be a New York corporation, with its principal place of business located at 34-02 36^th Avenue, Astoria, New York 11106. (Id. ¶ 7). Although the entities located at these two business locations are alleged to be separate corporations, plaintiffs allege that they are engaged in related activities and share similarly situated employees. (Id. ¶ 15). Each corporation allegedly provides mutually supportive services to the other, shares a common business purpose, shares the services of their employees including plaintiffs and shared control over plaintiffs. (Id. ¶¶ 18-20). Thus, plaintiffs allege that the two locations and entities may be considered to be a single enterprise or joint employer (id. ¶ 18) and as such, plaintiffs refer to them together as “Fusion Juice Bar.”

Plaintiffs allege that Fusion Juice Bar was and continues to be an enterprise engaged in commerce within the meaning of the FLSA in that it has an annual gross volume of sales of at least $500,000 and has employees engaged in commerce or the production of goods for commerce or who handle, sell or otherwise move goods that have moved in commerce. (Id. ¶ 12).

Defendant Florentino Ortega is alleged to be the owner, general manager, officer, director and/or managing agent of Fusion Juice Bar, who participated in the day-to-day operations of Fusion Juice Bar, and who exercised control over the terms and conditions of plaintiffs' employment, including the power to hire and fire employees, to determine their rates and methods of pay, to determine work schedules and to supervise and control the plaintiffs' employment. (Id. ¶¶ 8, 9, 17).

According to the Complaint, from February 2018 through March 3, 2019, plaintiff Cecil Celia Astudillo (“C. Astudillo”) was employed by Fusion Juice Bar, which operated as a pair of healthy fast food juice bars located at 30-93 38^th Street and 34-02 36^th Avenue in Astoria, New York. (Id. ¶ 10). Plaintiff Bernabe Astudillo (“B. Astudillo”) alleges that he was employed by the Fusion Juice Bar located at 30-93 38^th Street in Astoria from February 2016 through December 2018. (Id. ¶ 11). Plaintiffs claim that they were paid in cash and that at all relevant times, defendants knowingly and willfully failed to pay them the proper wages, including failing to pay minimum wages, and overtime wages in contravention of the FLSA and NYLL. (Id. ¶¶ 16, 22-25).

Plaintiff C. Astudillo alleges that during her employment with defendants, she worked as a counterperson and cashier. (Id. ¶ 27). She worked a regular schedule of 45 hours per week, Mondays through Fridays from 7:00 a.m. to 4:00 p.m. (Id. ¶ 29). During this time, she was paid a flat payment of $400 per week, or an hourly rate of $10 per hour for 40 hours, with no compensation for her overtime hours over 40. (Id. ¶¶ 30, 31). She also claims that she did not receive any tips in connection with her employment. (Id. ¶ 32).

Plaintiff B. Astudillo alleges that during his employment with defendants, he worked as a counterperson and general helper. (Id. ¶ 33). He worked a regular schedule of 60 hours per week, Mondays through Saturdays from 8:00 a.m. through 6:00 p.m. (Id. ¶ 35). During the last two months of his employment, plaintiff B. Astudillo worked five days a week for a total of 50 hours per week. (Id.) During the first period of his employment, he was paid $700 per week at an hourly rate of $17.50 per hour for 40 hours, with no compensation for overtime. (Id. ¶ 36). His wages were reduced to $600 per week during the last two months of his employment. (Id. ¶ 37). Like C. Astudillo, plaintiff B. Astudillo also did not receive tips, nor did either plaintiff receive wage statements or other receipts. (Id. ¶¶ 30, 36, 39). Plaintiffs also allege that defendants knowingly and willfully had a policy of not paying proper overtime or minimum wages in violation of the FLSA and NYLL and had a policy of not paying spread of hours pay when plaintiffs' shifts exceeded 10 hours, in violation of NYLL. (Id. ¶¶ 41, 42).

The Complaint sets forth three claims: 1) a violation of the FLSA for failure to pay minimum and overtime rates and failure to pay any wages for certain hours worked (Count 1); 2) a violation of the NYLL for failure to pay minimum and overtime rates, failure to pay any wages for certain hours worked, and failure to pay spread of hours premiums (Count 2); and 3) a violation of the New York State Wage Theft Prevention Act for failure to maintain accurate records and failure to provide proper written wage notices and wage statements (Count 3).

Following the filing of the Complaint on May 2, 2019, defendants filed an Answer on July 22, 2019. (ECF No. 12). An initial conference was held on October 2, 2019, at which time counsel for defendants was given 30 days to provide relevant records and a settlement conference was then scheduled for November 15, 2019. On April 17, 2020, the Court held a conference at which defendants' counsel failed to appear. Thereafter, on September 4, 2020, counsel notified the Court that he had been unable to reach his clients, and on October 8, 2020, he reported that the defendants were closing one business.

On January 8, 2021, defendants' counsel moved to withdraw and defendants were given time to respond. (ECF Nos. 17, 18). The Court granted the motion in a conference on February 4, 2021 and memorialized its Order on March 16, 2021, giving defendants 30 days to obtain new counsel. (ECF No. 19). In that Order, defendant Ortega was informed that he could proceed pro se but that the corporate defendant entities could not. (Id.). When defendants failed to appear or have counsel appear at the subsequent status conference set for April 22, 2021, the Court extended the deadline to May 14, 2021, warning that a default would enter if defendants failed to appear.

On May 20, 2021, the Court issued a final warning (ECF No. 20), which plaintiffs served on defendants by United States First Class Mail and by email. (ECF No. 21). When defendants still failed to appear, this Court issued a sua sponte Report and Recommendation on September 21, 2021, recommending that a default enter against the defendants for failure to appear. (ECF No. 26). Plaintiffs served a copy of this Report and Recommendation on defendants (ECF No. 27), and defendants failed to object to the Report and Recommendation. The District Court then entered an Order on June 1, 2022, adopting the Report and Recommendation in its entirety and directing the entry of default and the filing of the motion for default judgment. (ECF No. 28). This motion for default judgment was then referred to the undersigned to prepare a recommendation as to damages.

On December 19, 2022, this Court issued an Order warning defendants that plaintiffs' motion for default judgment and request for damages would be decided based upon plaintiffs' submissions unless defendants requested a hearing by January 5, 2023. (ECF No. 40). Defendants were also invited to submit papers. (Id.) Plaintiffs served a copy of that Order on defendants (ECF No. 41), and this Court received nothing from defendants by January 5, 2023, nor have defendants contacted the Court since that time.

DISCUSSION

I. Default Judgment

Rule 55(a) of the Federal Rules of Civil Procedure provides that “[w]hen 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.” Fed.R.Civ.P. 55(a).

Rule 55 sets forth a two-part procedure for entering a default judgment. Priestley v. Headminder, Inc., 647 F.3d 497, 504-05 (2d Cir. 2011); Enron Oil Corp. v Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993); see also Seaford Ave. Corp. v. ION Ins. Co., Inc., No. 22 CV 3449, 2022 WL 17669438, at *2 (E.D.N.Y. Dec. 14, 2022). The court clerk first enters a default by noting the defaulting party's failure to respond or appear. Fed R. Civ. P. 55(a). Second, if the defaulting party then fails to successfully vacate the entry of default pursuant to Rule 55(c), the appearing party may seek a default judgment. Fed R. Civ. P. 55(b)...