Bongyong Choi v. AHC Med. Servs.

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BONGYONG CHOI on behalf of himself and all others similarly situated, Plaintiff, v. AHC MEDICAL SERVICES, PLLC, and ATAUL AKIM CHOWDHURY, M.D., Defendants.

No. 22-CV-1450-MKB-JRC

United States District Court, E.D. New York

August 1, 2023

REPORT AND RECOMMENDATION

JAMES R. CHO, UNITED STATES MAGISTRATE JUDGE:

Plaintiff Bongyong Choi (“plaintiff”) brings this action against AHC Medical Services, PLLC (“AHCMS”) and Ataul Akim Chowdhury, M.D. (“Chowdhury”) (collectively, “defendants”), pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C § 201 et seq., and New York Labor Law (“NYLL”) § 650 et seq. See generally Compl., Dkt. 1. Upon plaintiff's application and in light of defendants' failure to appear in or otherwise defend this action, the Clerk of the Court noted the default of AHCMS on April 27, 2022, and Chowdhury on September 7, 2022. See Dkts. 7, 17.

Currently pending before this Court, on a referral from the Honorable Margo K. Brodie, is plaintiff's motion for default judgment, seeking unpaid minimum wages, statutory penalties liquidated damages, prejudgment interest, attorney's fees, and costs. See Order Referring Motion dated September 12, 2022; Compl., Dkt. 1 at 5-9; Mem. in Supp. of Mot. for Default J. (“Pl. Mem.”), Dkt. 18-1; [Supplemental] Mem. of Law in Supp. of Mot. for Default J (“Supp. Pl. Mem.”), Dkt. 25. For the reasons set forth below, this Court respectfully recommends granting plaintiff's motion in part.

I. Background

The following facts are drawn from plaintiff's Complaint and affidavit and are accepted as true for purposes of adjudicating this motion. Defendants own and operate a medical office with their principal place of business at 175-20 Hillside Avenue, 2nd Floor, Queens, New York 11432. See Compl. ¶¶ 3, 9. AHCMS employs workers who engage in commerce or the production of goods for commerce and handle, sell, or otherwise work on goods or materials that have been moved in or produced for commerce. Id. at ¶¶ 10, 11. At all relevant times, the gross annual revenue of AHCMS was in excess of $500,000. Id. at ¶ 12. The individual defendant Chowdhury is the president and the owner of AHCMS and exercised sufficient control over the company's operations to be considered plaintiff's employer under the FLSA and NYLL. Id. at ¶¶ 13-15. Chowdhury had the authority to hire and fire employees at AHCMS, make all final decisions about employment practices, and to manage, supervise, establish, and administer the terms and conditions of plaintiff's employment. Id. at ¶¶ 16-18.

Defendants employed plaintiff as a physical therapist from August 20, 2021 through December 4, 2021. Id. at ¶ 8. Plaintiff worked five days per week from 12:00 p.m. to 8:00 p.m. Id. at ¶¶ 26, 27. According to the terms of his employment contract, plaintiff's hourly rate was $50 per hour to be paid every two weeks. Id. at ¶ 28; Employment Contract at 2, Dkt. 18-8. Plaintiff alleges that defendants failed to compensate him for the last three weeks of his employment from November 14, 2021 until December 4, 2021, when plaintiff's employment was mutually terminated. See Compl. ¶ 29; Termination Letter dated December 4, 2021, Dkt. 18-9. Plaintiff further alleges that defendants failed to furnish him with a wage notice at the time of his hiring, and failed to provide him with wage statements on payday reflecting his hours worked and rate of pay during the period in which he worked. See Compl. ¶¶ 30, 31.

On March 16, 2022, plaintiff timely commenced this action alleging, inter alia, violations of the FLSA (First Claim) and NYLL (Second and Third Claims). See Compl. at 5-8; id. at ¶ 1. Defendants were properly served on March 25, 2022 (AHCMS) and August 10, 2022 (Chowdhury). See Summons Returned Executed, Dkts. 5, 15. Defendants have failed to answer the Complaint or otherwise appear in this action. The Clerk of Court noted the default of AHCMS on April 27, 2022, and the default of Chowdhury on September 7, 2022. See Clerk's Entry of Default, Dkts. 7, 17. On September 12, 2022, plaintiff moved for default judgment against defendants.^[1]See Motion for Default Judgment, Dkt. 18. On January 10, 2023, this Court granted plaintiff's motion for leave to file a supplemental fee petition. See Minute Entry dated January 10, 2023. On January 19, 2023, plaintiff filed a supplemental memorandum of law seeking additional prejudgment interest, attorneys' fees and costs. See Dkt. 25.

II. Discussion

A. Default Judgment Standard

Rule 55 of the Federal Rules of Civil Procedure governs motions for default judgment. The Rule sets forth a two-step process for entry of a default judgment. See Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95-96 (2d Cir. 1993). First, the Clerk of Court enters the default pursuant to Rule 55(a) by notation of the party's default on the Clerk's record of the case. See id.; see also Fed R. Civ. P. 55(a) (providing 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”). This first step is nondiscretionary. See United States v. Conolly, 694 Fed.Appx. 10, 12 (2d Cir. 2017). Second, after the Clerk of Court enters a default against a party, if that party fails to appear or otherwise move to set aside the default pursuant to Rule 55(c), the plaintiff may apply to the court for a default judgment. See Fed.R.Civ.P. 55(a), (b)(2).

Here, on April 27, 2022 and September 7, 2022, the Clerk of the Court entered a default against defendants AHCMS and Chowdhury, respectively, after they failed to respond to the Complaint. See Dkts. 7, 17. To date, defendants have not appeared or moved to vacate the entry of default.

The Court has discretion whether to issue a default judgment. When evaluating a plaintiff's application for a default judgment, “a court is required to accept all [] factual allegations as true and draw all reasonable inferences in [plaintiff's] favor.” Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). “Nevertheless, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit conclusions of law.” Labarbera v. ASTC Labs., Inc., 752 F.Supp.2d 263, 270 (E.D.N.Y. 2010) (internal quotations and citations omitted); see also TAGC Mgmt., LLC v. Lehman, Lee & Xu Ltd., 536 Fed.Appx. 45, 46 (2d Cir. 2013) (“prior to entering default judgment, a district court is required to determine whether the plaintiff's allegations establish the defendant's liability as a matter of law”) (internal quotations and citations omitted).

“Default judgments are ‘generally disfavored and are reserved for rare occasions.'” City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 129 (2d Cir. 2011) (quoting State St. Bank & Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d at 158, 168 (2d Cir. 2004)). Providing guidance as to when a default judgment is appropriate, the Second Circuit has cautioned that since a default judgment is an extreme remedy, it should only be entered as a last resort. See Meehan v. Snow, 652 F.2d 274, 277 (2d Cir. 1981). While the Second Circuit has recognized the “push on a trial court to dispose of cases that, in disregard of the rules, are not processed expeditiously [and] . . . delay and clog its calendar,” it has held that the district court must balance that interest with its responsibility to “afford[] litigants a reasonable chance to be heard.” Enron Oil, 10 F.3d at 95-96. Thus, in light of the “oft-stated preference for resolving disputes on the merits,” doubts should be resolved in favor of the defaulting party. Id. Accordingly, plaintiff is not entitled to a default judgment as a matter of right simply because defendants are in default. See Erwin DeMarino Trucking Co. v. Jackson, 838 F.Supp. 160, 162 (S.D.N.Y. 1993) (noting that courts must “supervise default judgments with extreme care to avoid miscarriages of justice”).

A default serves as the defendant's admission that the complaint's well-pleaded factual allegations are true. See Masino v. Architectural Pavers Corp., No. 09-CV-2213, 2010 WL 415286, at *2 (E.D.N.Y. Jan. 15, 2010); Finkel, 577 F.3d at 84 (after default the “court is required to accept all of the [plaintiff's] [well-pleaded] allegations as true and draw all reasonable inferences in its favor.”). A fact is not considered “well-pleaded,” however, “if it is inconsistent with [the] other allegations of the complaint or with facts of which the court can take judicial notice or is contrary to uncontroverted material in the file of the case.” Hop Hing Produces Inc. v. Lin Zhang Trading Co., Inc., No. 11-CV-03259, 2013 WL 3990761, at *3 (E.D.N.Y. Aug. 5, 2013) (internal quotations and citations omitted). Ultimately, whether to grant a motion for default judgment is “left to the [court's] sound discretion.” Shah v. New York State Dep't of Civ. Serv., 168 F.3d 610, 615 (2d Cir. 1999); Div. 1181 Amalgamated Transit Union-New York Emps. Pension Fund v. D & A Bus Co., 270 F.Supp.3d 593, 606 (E.D.N.Y. 2017).

The Court has significant discretion to consider a number of factors in deciding whether to grant a default judgment, including: (1) whether the grounds for default are clearly established; (2) whether the claims were adequately pleaded in the Complaint, thereby placing the defendant on notice, see Fed.R.Civ.P. 54(c) (stating: “[a] default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings”); King v. STL Consulting LLC, No. 05-CV-2719, 2006 WL 3335115, at *4-*5 (E.D.N.Y. Oct. 3, 2006) (holding that Rule 54(c) is not violated in awarding damages that accrued during the pendency of a litigation, so long as the Complaint...