Campos v. Bkuk 3 Corp.

ABRAHAM CAMPOS, et al., Plaintiffs, v. BKUK 3 CORP. D/B/A LA CARBONARA, et al., Defendants.

BRYAN MACANCELA et al., Plaintiffs, v. BESIM KUKAJ D/B/A BKUK GROUP and BKUK NYC RESTAURANT GROUP, et al., Defendants.

Nos. 18-CV-4036 (JGK) (KHP), 18-CV-7507 (JGK) (KHP)

United States District Court, S.D. New York

August 10, 2021

TO THE HONORABLE JOHN G. KOELTL, UNITED STATES DISTRICT JUDGE

REPORT AND RECOMMENDATION FOLLOWING DAMAGES INQUEST

KATHARINE H. PARKER, United States Magistrate Judge.

Plaintiffs are all former employees of Defendant's restaurants and assert claims under the Fair Labor Standards Act (“FLSA”) 29 U.S.C. § 201 et seq., as well as pendent state claims under the New York Labor Law §§ 190 et seq. and 650 et seq. (“NYLL”), for unpaid wages, penalties and attorneys' fees and costs. After entry of default against the Defendants, the Honorable John G. Koeltl referred this action to me for a report and recommendation on damages. Defendants did not file an opposition to the Plaintiffs' Motion for a Default Judgment, nor did they appear at any point in the damages inquest proceedings. After review of the submissions, I respectfully recommend that Plaintiffs be awarded damages as set forth in detail below.

FACTUAL BACKGROUND

Plaintiffs are all former employees who worked for Defendant Besim Kukaj and Corporate Defendants^[1] at sixteen of the Defendants' seventeen restaurant^[2] locations throughout New York City during the relevant time period. There are two categories of Plaintiffs: Campos Plaintiffs and Macancela Plaintiffs. The Campos Plaintiffs^[3] commenced their action on May 4, 2018; the Macancela Plaintiffs^[4] commenced their action on August 17, 2018. Plaintiffs were front-of-the-house employees who received tips and worked as servers, bussers, counter workers runners, and bartenders; and back-of-the-house employees who were nontipped and prepared and cooked food, cleaned, moved inventory and washed dishes. (ECF No. 203 ¶ 26.)

All of the restaurants are owned and operated by Defendant Kukaj, who frequently transferred employees between locations, determined the wages and compensation of the employees at the restaurant, and controlled the hiring and firing of employees. (ECF No. 203 ¶¶ 19, 20, 24.) Kukaj sits at the top of all of the Corporate Defendants, which are all active New York corporations and limited liability companies that issued paychecks, paystubs and other employment records to employees for their work at BKUK restaurants. (ECF No. 203, ¶ 11.)

Each of the Plaintiffs submitted sworn declarations in connection with their motion for a default judgment and damages. (Campos and Macancela Decls. ECF No. 205 Exs. 1-21, see also Suppl Decls. at ECF Nos. 212, 213.) Each Plaintiff provided their employment position and duration of employment with the Defendants. Id. Plaintiffs attested that they regularly worked in excess of forty hours per week and in some cases more than ten hours in a day, and that the Defendants failed to pay them the proper amount of wages. (ECF No. 203 ¶¶ 30-34.) All Plaintiffs allege that Defendants required them to record fewer hours than they actually worked, did not provide accurate statements of wages, and rarely granted Plaintiffs any breaks. (ECF No. 203, ¶¶ 20, 21.) Additionally, Plaintiffs assert they were required to sign a document misrepresenting their hours worked and never received any notification about their pay rates as required under the NYLL. (ECF No. 203, ¶¶ 20-23.) Consequently, Plaintiffs seek unpaid minimum wages, overtime wage damages, spread of hours wage payments, liquidated damages, statutory damages, attorneys' fees, and costs. The details of the work performed, and amounts claimed are discussed below.

PROCEDURAL HISTORY

A. Campos Plaintiffs - 18-CV-4036

The Campos Plaintiffs commenced this action on May 4, 2018. (Campos ECF No. 1.) Plaintiffs served the Complaint on all Defendants by personal service on May 30, 2018 asserting the following causes of action: (1) violation of the minimum wage provisions of the FLSA; (2) violation of the overtime provisions of the FLSA; (3) violation of the New York minimum wage act; (4) violation of the overtime provisions of the New York State Labor Law; (5) violation of the spread of hours wage order of the New York Commissioner of Labor; and (6) a number of violations of the New York Labor Law including violation of wage statement and notice requirements, unreimbursed business expenses, and unlawful withholding of gratuities. (Campos ECF Nos. 1, 23-32.) Even though Defendants briefly appeared - they filed an answer (Campos ECF No. 39.) and made an appearance two separate times before both counsels withdrew (Campos ECF Nos. 54-55.) - they have failed to appear or respond to Plaintiffs in any substantial way since December 14, 2018.

On May 20, 2020, the Clerk of the Court entered a certificate of default.^[5] (Campos ECF No. 136.) On July 21, 2020, Defendants were ordered to show cause by August 3, 2020 as to why a default judgment should not be entered against them, but they failed to appear. (Campos ECF No. 140.) On October 30, 2020, Plaintiffs submitted a request to enter a default judgement and provided information on damages with supporting declarations. (Campos ECF Nos. 146-150.) These papers were served on Defendants on October 30, 2020. (Campos ECF No. 151.)

B. Macancela Plaintiffs - 18-CV-7507

The Macancela Plaintiffs commenced this action on August 20, 2018. (Macancela ECF No. 20.) Plaintiffs served the Complaint on all Defendants, by personal service on September 5, 2018, asserting the same causes of action delineated above. (Macancela ECF Nos. 20, 55-70, 73.) Defendants never filed an answer and failed to appear or respond to Plaintiffs. On October 16, 2018, the Clerk of the Court entered a certificate of default. (Macancela ECF No. 83.) On October 22, 2018, Defendants were ordered to show cause at a hearing scheduled for November 8, 2018. (Macancela ECF No. 89.) Notice of the order to show cause hearing was served on all of the Defendants on October 30, 2018. (Macancela ECF Nos. 90-105.)

On November 7, 2018, Defendants made a notice of appearance and sought a premotion conference to file a motion to dismiss. (Macancela ECF Nos. 106-108.) As a result of Defendants' appearance, the show cause hearing was adjourned and defense counsel filed a letter motion requesting a conference to file a motion to dismiss. (Macancela ECF No. 114.) Shortly thereafter, defense counsel withdrew from representation. (Macancela ECF Nos. 119121.)

On February 15, 2019 a motion was filed to consolidate the case with 18-CV-4036 (i.e., the Campos case). (Macancela ECF No. 132.) On April 3, 2019, the Honorable John G. Koeltl certified this case as a Rule 23 Class Action. (Macancela ECF No. 140.)

On May 20, 2020, Plaintiffs submitted a proposed certificate of default. (Macancela ECF No. 188.) Also on May 20, 2020, the Clerk of the Court entered the certificate of default. (Macancela ECF No. 190.) On July 21, 2020, the Honorable John G. Koeltl ordered that the Defendants show cause by August 3, 2020 as to why a default judgement should not be entered against the, but they failed to appear. (Macancela ECF No. 195.) Plaintiffs submitted a motion for default judgement and provided information on damages with supporting declarations. (Macancela ECF Nos. 201-205.) These papers were served on Defendants on October 30, 2020. (Macancela ECF No. 206.)

The following recommendations are based on the facts asserted in both Complaints, as well as evidence presented in Plaintiffs' declarations and moving papers.

DISCUSSION

I. Default Judgment

Federal Rule of Civil Procedure (“Rule”) 55 governs judgments against a party that has failed to plead or otherwise defend itself in an action. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61 (2d Cir. 1981) (defendant's ongoing failure to appear supported failure to plead for the purpose of entry of default). Rule 55 requires a two-step process for an entry of a default judgement. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). First, upon notification from the moving party, the court clerk enters a default of the party who failed to defend. Priestley v. Headminder, Inc., 647 F.3d 497, 505 (2d Cir. 2011) (citing Fed.R.Civ.P. 55(a)). Second, once the clerk issues a certificate of default, the moving party may apply for entry of default judgment pursuant to Rule 55(b). Id. A default constitutes an admission of all well-pleaded factual allegations in the complaint, and the allegations as they pertain to liability are deemed true. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). However, plaintiffs are not entitled to a default judgment as a matter of right merely because the opposing party is in default. Finkel v. Universal Elec. Corp., 970 F.Supp.2d 108, 118 (E.D.N.Y. 2013). Plaintiffs bear the burden to demonstrate that their uncontroverted allegations, without more, establish the defendant's liability on each asserted cause of action. La Barbera v. Fed. Metal & Glass Corp., 666 F.Supp.2d 341, 348 (E.D.N.Y. 2009).

To determine whether a motion for default judgment is warranted, courts within this district consider three factors: (1) whether the defendant's default was willful; (2) whether the defendant has a meritorious defense to plaintiff's claims; and (3) the level of prejudice the nondefaulting party would suffer as a result of the denial of the motion for default judgment. Guggenheim Capital, LLC v. Birnbaum, 722 F.3d 444, 455 (2d Cir. 2013) (applying these factors in review of lower court's grant of a default judgment).

Here Plaintiffs have satisfied the two-step procedural requirements of Rule 55 by submitting a request for both entry...