Cazares v. 2898 Bagel & Bakery Corp.

HONORABLE ALISON J. NATHAN, U.S.D.J.

REPORT AND RECOMMENDATION

DEBRA FREEMAN UNITED STATES MAGISTRATE JUDGE

This wage-and-hour case, brought under the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. §§ 201, et seq., and the New York Labor Law (the “NYLL”), §§ 190, et. seq., and 650, et seq., has been referred to this Court for an inquest, to determine the amount of damages and attorneys' fees to which the 12 named plaintiffs:

(1) Ascencion Cazares (“Cazares”)

(2) Benjamin F. Delacruz (“Delacruz”)

(3) Fanny Jisselle Lizardo Fabre (“Lizardo”)

(4) Gabino Romano Hernandez (“Romano”)

(5) Hermenejildo Angel Prudente (“Angel”),

(6) Idor Jean Luckner (“Luckner”),

(7) Jose Cedano (“Cedano”),

(8) Jose G. Reyes (“Reyes”),

(9) Luis Alberto Salas Umana (“Salas”),

(10) Wendy Patricia Damas (“Damas”),

(11) Poco J. Ouedraogo (“Ouedraogo”), and

(12) Susana E. Robles Martinez (“Robles”)

(collectively, “Plaintiffs”) are entitled, upon the default of defendants 2898 Bagel & Bakery Corp., d/b/a Nussbaum & Wu (“2898 Bagel”) and Shlomo Sela (“Sela”) (collectively, “Defendants”).^[1] For the reasons discussed below, I recommend no damages be awarded to plaintiffs Lizardo, Luckner, Cedano, Reyes, Salas, Damas, and Ouedraogo, and that, as to the remaining plaintiffs (Cazares, Delacruz, Romano, Angel, and Robles), judgment be entered against Defendants, jointly and severally, for the damages amounts and fees calculated herein.

BACKGROUND

A. Factual Background^[2]

In their Amended Complaint, Plaintiffs alleged that they were all previously employed by Defendants at a bagel shop in New York City known as “Nussbaum & Wu, ” which Defendants owned, operated, or controlled. (See Am. Comp. ¶¶ 1-2, 45.) Plaintiffs allegedly worked in a

variety of capacities at the bagel shop; some, for example, claimed to have prepared food, while others served in roles like delivery workers or cashiers. (See id. ¶ 4.)

Plaintiffs mostly claimed that, during their employment, they were not paid the required minimum wage, and/or were not properly compensated for overtime hours or given “spread-of-hours” pay, as required by the NYLL. (See id. ¶ 6, see also, e.g., ¶¶ 7, 16-17, 79, 267.) In connection with their claims for unpaid wages, certain of the Plaintiffs alleged that Defendants deprived them of breaks or meal periods, but nonetheless reduced their pay as if such breaks had been given. (See id. ¶¶ 77, 106-07, 184-86, 220, 238-39.) Some of the Plaintiffs also alleged that Defendants improperly characterized them as “tipped” employees so as to pay them at the lower “tip credit” wage rate, while still requiring them to perform a substantial amount of non-tipped work (id. ¶¶ 5, 10-13, 113-15, 155-56, 207-08), and/or that Defendants unlawfully misappropriated their tips and made improper deductions from their wages because of their tips (id. ¶ 14, see also id. ¶¶ 165-66, 221-22). Certain of the Plaintiffs further alleged that they were required to spend their own funds to purchase “tools of the trade” - such as clothing required for their jobs, or knives for use in the kitchen, or a bicycle for use in making deliveries. (See id. ¶¶ 82, 97, 152, 171, 226.) Finally, Plaintiffs alleged that none of them were given the wage statements and wage notices required under the NYLL (see id. ¶¶ 295, 326-28), and they generally alleged that Defendants failed “to maintain accurate recordkeeping” with respect to the hours that they worked (id. ¶ 7).

B. Procedural History

1. Defendants' Default

Plaintiffs filed their Amended Complaint on July 25, 2018 (Dkt. 11), and then filed affidavits of service, reflecting that Defendants were duly served with process by at least

August 22, 2018 (see Dkts. 16, 17, 18, 20). When Defendants then failed to respond, Plaintiffs eventually sought to have defaults entered against Defendants, and Clerk of the Court issued Certificates of Default on February 28, 2019. (Dkts. 43, 44.)

On March 4, 2019, Plaintiffs proceeded to file a motion for a default judgment against both Defendants (Dkt. 45), and, on May 31, 2020, the Honorable Alison J. Nathan, U.S.D.J. granted that motion in part, entering a default judgment against Defendants on most of Plaintiffs' claims (see generally 5/31/20 Order (Dkt. 56)).^[3] In her decision, Judge Nathan found that Plaintiffs' well-pleaded allegations were sufficient to establish that, during the relevant times, Defendants had served as Plaintiffs' joint employers for purposes of the FLSA; that Plaintiffs' work had involved interstate activities, sufficient to give rise to FLSA coverage; and that Defendants were jointly and severally liable for any damages awards made in Plaintiffs' favor, for violations of either the FLSA or NYLL. (See id., at 7-8, 10.) Also finding, however, that there were certain obvious flaws in the damages calculations that Plaintiffs had submitted, Judge Nathan referred the case to this Court for an inquest on the amount of damages and attorneys' fees that should be awarded. (See Order of Reference, dated June 5, 2020 (Dkt. 58).)

2. This Court's Initial Scheduling Order For an Inquest

Noting that, in connection with their motion for a default judgment, Plaintiffs had already filed papers setting out the amounts claimed to be due from Defendants in damages, interest, attorneys' fees, and costs, as well as the basis for those claims (see Faillace Decl. (Dkt. 46) and exhibits thereto), this Court issued a Scheduling Order on June 25, 2020 that afforded

Defendants an opportunity to respond to Plaintiffs' damages calculations by July 31, 2020 (Dkt. 60). This Court expressly cautioned Defendants that, if they failed to respond to Plaintiffs' submissions by that date, then this Court would proceed to issue a report and recommendation concerning damages on the basis of Plaintiffs' submissions alone. (See id.) Defendants did not file a response to Plaintiffs' submissions.

3. This Court's Order Directing Plaintiffs To Supplement Their Inquest Submissions

After reviewing Plaintiffs' inquest submissions, however, this Court issued an Order on June 7, 2021 (“6/7/21 Order”) (Dkt. 62), directing Plaintiffs to supplement those submissions with respect to the damages claims of seven of the 12 named Plaintiffs. Specifically, as to six plaintiffs - Lizardo, Luckner, Reyes, Salas, Damas, and Ouedraogo - this Court noted that no affidavits, declarations, or documentary evidence had been submitted to support the damages that were being claimed, as necessary to enable this Court to determine whether those plaintiffs were, in fact, entitled to the damages sought. (See id.) Further, this Court observed that, although plaintiff Cedano did submit a Declaration in support of his damages claims, that Declaration (like the Amended Complaint) described Cedano as having been a “manager” when he worked for Defendants and provided no detail regarding his job duties, raising a question as to whether he was exempt from statutory minimum-wage and overtime requirements. (See id.) As, in the absence of sufficient evidence, this Court could not make a recommendation as these plaintiffs' proposed damages, this Court directed Plaintiff to provide the missing evidence no later than June 25, 2021. (Id.)

4. Counsel's Motion To Withdraw From Representing Plaintiff Damas, and Request For an Extension of Time To Make Supplemental Inquest Submissions

Plaintiffs did not supplement their inquest submissions, as directed, by June 25, 2021. Rather, Plaintiffs' counsel, then Michael Faillace, Esq. (“Faillace”) of the firm Michael Faillace & Associates, P.C. (the “Faillace Firm”), wrote to this Court on that date, requesting leave to withdraw from representing one of the named plaintiffs, Damas, based on her reported lack of responsiveness to counsel's efforts to contact her, and seeking a “brief” extension of time to supplement Plaintiffs' inquest submissions until Damas either “resurfaced” or the Court granted the firm leave to withdraw from representing her. (Dkt. 64.)

After the motion to withdraw was referred to this Court (see Amended Order of Reference, dated Sept. 13, 2021 (Dkt. 67)), this Court issued an Order directing the Faillace Firm to serve its motion to withdraw on Damas, with a Spanish translation, and affording her an opportunity to be heard with respect to the motion (Dkt. 68). By that same Order, this Court directed both the Faillace Firm and Damas to appear for a telephone conference on November 9, 2021. (Id.) Further, by separate Order dated October 6, 2021 (Dkt. 70), this Court extended to November 23, 2021 Plaintiffs' deadline to make supplemental inquest submissions (see id.).

5. Faillace's Withdrawal From Practice

On November 6, 2021, three days before the scheduled conference, Faillace filed a motion seeking to withdraw from representing all Plaintiffs in the action, informing the Court that his last day of work with the Faillace Firm would be November 7, 2021, that it was “expected that he [would] be suspended from practice by the Southern District of New York effective November 8, 2021, ” that the Faillace Firm was “under new ownership and ha[d] been renamed CSM Legal P.C.” (“CSM Legal”), and that CSM Legal would “continue to represent

the Plaintiff(s) in this matter.” (Dkt. 74.) This Court granted Faillace's motion to withdraw by Order dated November 8, 2021. (Dkt. 75.)

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