Lai Chan v. Chinese-American Planning Council Home Attendant Program, Inc.

50 Misc.3d 201

21 N.Y.S.3d 814

LAI CHAN, Hui Chen, Xue Xie, individually and on behalf of all others similarly situated, Plaintiff,

v.CHINESE–AMERICAN PLANNING COUNCIL HOME ATTENDANT PROGRAM, INC., Defendant.

Supreme Court, New York County, New York.

Sept. 9, 2015.

Liane Fisher of Serrins Fisher LLP, New York, for plaintiffs.

Kenneth H. Kirschner of Hogan Lovells LLP, New York, for defendant.

MEMORANDUM DECISION

CAROL R. EDMEAD, J.

In this class action suit alleging, inter alia, violations of the New York Labor Law ("NYLL"), defendant Chinese–American Planning Council Home Attendant Program, Inc. ("defendant") moves pursuant to CPLR 3211(a) (1), (a)(5), and (a)(7) to dismiss plaintiffs' complaint or, in the alternative, to compel arbitration pursuant to CPLR 7503(a).

Plaintiffs (or "class members") are current and former employees of defendant, a not-for-profit corporation that provides home health care services to elderly and disabled residents of New York City.¹

Plaintiffs assert claims against defendant for unpaid minimum wages under NYLL § 652 and 12 NYCRR § 142–3.1 (Count I), unpaid overtime wages under NYLL § 650 and 12 NYCRR § 142–3.2 (Count II), unpaid spread of hours wages under NYLL § 650 and 12 NYCRR § 142–3.4 (Count III), wages due and attorneys' fees, costs, and interests under NYLL § 653 (Count IV), and failure to comply with proper notification requirements set forth in NYLL §§ 195 and 661, and 12 NYCRR § 142–3.8 (Count V). Plaintiffs also assert a third party beneficiary claim for breach of contract (Count VI) and unjust enrichment (Count VII) for failing to properly pay plaintiffs pursuant to New York Public Health Law § 3614–c ("Public Health Law"), a/k/a the N.Y. Home Care Worker Wage Parity Act ("Wage Parity Act"), and New York City's Fair Wages for New Yorkers Act, a/k/a the Living Wage Law ("Fair Wages Act") as required under defendant's various contracts with government agencies.

A motion to dismiss pursuant to CPLR 3211(a)(1) on the basis of a defense founded upon documentary evidence may be granted "only where the documentary evidence utterly refutes [the complaint's] factual allegations, conclusively establishing a defense as a matter of law" (Mill Financial, LLC v. Gillett, 122 A.D.3d 98, 992 N.Y.S.2d 20 [1st Dept. 2014] ; Goshen v. Mutual Life Ins. Co. of NY, 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 746 N.Y.S.2d 858, 774 N.E.2d 1190 [2002] ). "Dismissal pursuant to CPLR 3211(a)(1) is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (art and fashion Group coRp. v. cYclopS productiOn, inc., 120 a.d.3d 436, 992 N.Y.S.2d 7 [1st Dept.2014] ).

When considering a motion to dismiss pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the pleadings must be liberally construed (see, CPLR § 3026 ; Siegmund Strauss, Inc. v. East 149th Realty Corp., 104 A.D.3d 401, 960 N.Y.S.2d 404 [1st Dept.2013] ) and the court must "accept the facts as alleged in the complaint as true", accord plaintiffs "the benefit of every possible favorable inference," and "determine only whether the facts as alleged fit into any cognizable legal theory" (Siegmund Strauss, Inc. v. East 149th Realty Corp., supra; Nonnon v. City of New York, 9 N.Y.3d 825, 842 N.Y.S.2d 756, 874 N.E.2d 720 [2007] ; Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994] ).

However, "allegations consisting of bare legal conclusions as well as factual claims flatly contradicted by documentary evidence" or evidentiary material, including affidavits are not presumed to be true or accorded every favorable inference (David v. Hack, 97 A.D.3d 437, 948 N.Y.S.2d 583 [1st Dept.2012] ; Biondi v. Beekman Hill House Apt. Corp., 257 A.D.2d 76, 81, 692 N.Y.S.2d 304 [1st Dept.1999], affd. 94 N.Y.2d 659, 709 N.Y.S.2d 861, 731 N.E.2d 577 [2000] ; Kliebert v. McKoan, 228 A.D.2d 232, 643 N.Y.S.2d 114 [1st Dept.], lv. denied 89 N.Y.2d 802, 653 N.Y.S.2d 279, 675 N.E.2d 1232 [1996] ), and the criterion becomes "whether the proponent of the pleading has a cause of action, not whether he has stated one" (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17 [1977] ; see also Leon v. Martinez, 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994] ; Ark Bryant Park Corp. v. Bryant Park Restoration Corp., 285 A.D.2d 143, 150, 730 N.Y.S.2d 48 [1st Dept.2001] ; WFB Telecom., Inc. v. NYNEX Corp., 188 A.D.2d 257, 259, 590 N.Y.S.2d 460 [1st Dept.1992], lv. denied 81 N.Y.2d 709, 599 N.Y.S.2d 804, 616 N.E.2d 159 [1993] ).

Affidavits submitted by a plaintiff may be considered for the limited purpose of remedying defects in the complaint (Dollard v. WB/Stellar IP Owner, LLC, 96 A.D.3d 533, 948 N.Y.S.2d 243 [1st Dept.2012] (the "court may freely consider affidavits submitted by the [non-moving party] to remedy any defects in the complaint and the criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one") citing Leon v. Martinez,

84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994] [internal quotation marks and citations omitted]; R.H. Sanbar Projects, Inc. v. Gruzen Partnership, 148 A.D.2d 316, 538 N.Y.S.2d 532 [1st Dept.1989] ; Rovello v. Orofino Realty Co., 40 N.Y.2d 633, 635–36, 389 N.Y.S.2d 314, 357 N.E.2d 970 [1976] ; Arrington v. New York Times Co., 55 N.Y.2d 433, 442, 449 N.Y.S.2d 941, 434 N.E.2d 1319 [1982] ). Yet, as to affidavits submitted by the defendant/respondent, "[a]ffidavits submitted by a respondent will almost never warrant dismissal under CPLR 3211 unless they ‘establish conclusively that [petitioner] has no [claim or] cause of action’ " (Lawrence v. Miller, 11 N.Y.3d 588, 873 N.Y.S.2d 517, 901 N.E.2d 1268 [2008]citing Rovello v. Orofino Realty Co., 40 N.Y.2d 633, 636, 389 N.Y.S.2d 314, 357 N.E.2d 970 [1976] ).

Defendant's contention that plaintiffs' claims require interpretation of a collective bargaining agreement, and thus, must be submitted to the contractual grievance process, as required by Section 301 of the Labor Management Relations Act ("Section 301") lacks merit. Contrary to defendant's contention, plaintiffs' claims are not preempted by Section 301.

Section 301 of the Labor Management Relations Act provides that:

Suits for violation of contracts between an employer and a labor organization representing employees ... may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

When "a state claim alleges a violation of a labor contract, the Supreme Court has held that such claim is preempted by section 301 and must instead be resolved by reference to federal law" (Vera v. Saks & Co., 335 F.3d 109 [2d Cir.2003] ). Similarly, "[W]hen resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a § 301 claim, or dismissed as pre-empted by federal labor-contract law." (Id. ).

However, not "every suit concerning employment or tangentially involving a [collective bargaining unit], is preempted by section 301." (id. ). "For example, if a state prescribes rules or establishes rights and obligations that are independent of a labor contract, actions to enforce such independent rules or rights would not be preempted by section 301.... Nor would a state claim be preempted if its application required mere referral to the [collective bargaining unit] for information such as rate of pay and other economic benefits that might be helpful in determining the damages to which a worker prevailing in a state-law suit is entitled" (id., internal citations omitted).

In Vera, a collective bargaining agreement ("CBA") between a retailer and a union covering the retailer's shoe salespersons detailed plaintiffs' commission compensation and the method for charging shoe returns against a salesperson's commissions. Plaintiff filed suit alleging that the returns policy set forth in the CBA and defendant's compliance with such policy violated the NYLL and common law concerning commissions, wage deductions and charges against wages. The Court found that the case required an interpretation of the CBA because the Court had to determine whether the CBA "embodies an agreement between the parties to alter the common law rule regarding when commissions are earned." The Court further held, that "Moreover," plaintiff challenged "the legality of a term of the CBA, namely the ... returns provision" and claimed that the provision violated the Labor Law. Thus, the Court held, plaintiff's "challenge to the lawfulness of a term of the CBA will require substantial interpretation of the CBA" and held that section 301 preempted plaintiff's claim.

"The boundary between claims requiring interpretation of a CBA and ones that merely require such an agreement to be consulted is elusive" (Vera, 335 F.3d at 115 ; see also, e.g., Ferrara v. Leticia, Inc., 2012 WL 4344164, at *3 [E.D.N.Y. Sept. 21, 2012] (same)). However, caselaw indicates three categories under which plaintiffs' claims have been preempted under § 301:(1) cases in which a plaintiff alleges that defendant violated the CBA itself, (2) cases in which a plaintiff claims that a provision of the CBA itself violates state law, and, (3) cases in which a CBA provision relevant to the plaintiff's claim is ambiguous, none of which apply to the first, second, third, and fourth counts of the petition (Kaye v. Orange Regional Medical Center, 975 F.Supp.2d 412, 424 [S.D.N.Y.2013] (internal citations omitted)).

Kaye, supra is instructive. In Kaye, the court noted how one district court "attempted to clarify this elusive' line by crafting a two-part test to determine whether a claim is preempted: First, a court must analyze the legal character' of the claim and whether it is truly independent of rights under the [CBA]. The...