Ramirez v. Sake II Japanese Rest.

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RUBEN RAMIREZ, Plaintiff, v. SAKE II JAPANESE RESTAURANT, INC., et al., Defendants.

No. 20-CV-9907 (JLR) (BCM)

United States District Court, S.D. New York

May 10, 2023

REPORT AND RECOMMENDATION TO THE HON. JENNIFER L ROCHON

BARBARA MOSES, United States Magistrate Judge.

In this action, filed pursuant to the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., and N.Y. Labor Law (NYLL) § 190 et seq., plaintiff Ruben Ramirez seeks damages for unpaid minimum and overtime wages statutory penalties, and related relief from defendants Sake II Japanese Restaurant, Inc. (Sake II) and Bi Shun Dong. Compl. (Dkt. 1) ¶¶ 1-2. Plaintiff's claims arose out of his work as a delivery driver for defendants' restaurant from 2012 to 2019.

On November 16, 2021, after defendants failed to answer the Complaint and failed to appear at a show-cause hearing, the Honorable Vernon S. Broderick, United States District Judge issued a Default Judgment as to liability against Sake II and Dong (Dkt. 30) and referred the matter to me for an inquest on damages. (Dkt. 29.)

For the reasons set forth below, I recommend that plaintiff be awarded damages in the aggregate amount of $387,382 against both defendants, comprising: (a) $175,158 in compensatory damages for defendants' failure to pay required minimum and overtime wages; (b) $175,158 in liquidated damages for the wage violations; (c) $15,996 for defendants' failure to provide "spread of hours" pay; (d) $15,996 in liquidated damages for the spread of hours violations; (e) $4,582 in attorneys' fees; and (f) $492 in costs, plus prejudgment interest in the amount of $47.13 per day from February 25, 2017 to the date of entry of final judgment.

I. BACKGROUND

A. Factual Allegations

Defendants owned and operated a restaurant (the Restaurant) located at 690 E. 187th Street, Bronx, New York. Compl. ¶¶ 4, 15, 16.^[1] The individual defendant, Dong, was the "owner, or part owner and principal" of the corporate defendant, Sake II, and had "the power to hire and fire employees, set wages and schedules, and maintain their records." Id. ¶ 11. "[A]t all relevant times," Sake II had "gross revenues exceeding $500,000" and "used goods and materials produced in interstate commerce." Id. ¶¶ 6-7.

From October 2012 through May 2019, plaintiff worked as a delivery driver at the Restaurant. Compl. ¶ 16; see also Ramirez Decl. (Dkt. 34-2) ¶¶ 5-6.^[2] From 2014 through 2016, plaintiff worked from 11:00 a.m. until 11:00 p.m. three days per week, from 11:00 a.m. until 11:30 p.m. two days per week, and from 12:00 p.m. until 10:30 p.m. one day per week, resulting in a six-day, 71.5-hour work week. Compl. ¶¶ 19-21; see also Ramirez Decl. ¶¶ 7-9.^[3] From 2017 through May 30, 2019, in addition to these hours, plaintiff worked an additional shift, from 11:00 a.m. to 10:30 p.m., resulting in a seven-day, 83-hour work week. Compl. ¶¶ 19-21; see also Ramirez Decl. ¶¶ 7-9. Throughout his employment, plaintiff was compensated in cash, paid on the last day of each month and at the rate of $40 per day. Compl. ¶ 22; Ramirez Decl. ¶ 10.

Plaintiff never received an "overtime 'bonus' for hours worked beyond 40 hours in a workweek," Compl. ¶ 23, was not paid the statutory minimum, id. ¶ 38, and was not provided "with an additional hour's pay at the New York minimum wage for each shift that exceeded ten hours." Compl. ¶ 25; see also Ramirez Decl. ¶¶ 10, 13. Further, defendants failed to furnish Ramirez with a "tip credit notice" or a "tip credit form." Compl. ¶¶ 28-29; see also Ramirez Decl. ¶ 14. They also failed to provide plaintiff with paystubs or any "wage acknowledgment notice." Compl. ¶¶ 26-27; see also Ramirez Decl. ¶ 14.

B. Procedural History

Plaintiff filed this action on November 24, 2020, alleging five claims against Sake II, Dong, and Brixia Lu: (1) failure to pay overtime compensation at the rate of one and one-half times his regular rate of pay for each hour worked that exceeded forty hours per work week, in violation of the FLSA, 29 U.S.C. § 207(a)(1), see Compl. ¶¶ 30-35; (2) failure to compensate at the New York minimum wage rate, in violation of NYLL § 652 and 12 N.Y. Comp. Codes R. & Regs. (NYCRR) § 146-1.2, see id. ¶¶ 36-40; (3) failure to pay overtime compensation at the rate of one and one-half times his regular rate of pay for each hour worked that exceeded forty hours per week, in violation of 12 NYCRR § 146-1.4, see id. ¶¶ 41-45; (4) failure to provide an additional hour's pay at the required minimum wage for each shift that was over 10 hours in duration, in violation of 12 NYCRR § 146-1.6, see id. ¶¶ 46-50; and (5) failure to provide the wage notices and wage statements required by the Wage Theft Prevention Act (WTPA), NYLL §§ 195(1), 195(3). See Id. ¶¶ 51-56.

On January 14 and 15, 2021, defendants Sake II and Dong were served with process but did not appear or answer the Complaint.^[4] On April 1, 2021, plaintiff requested, and the Clerk of Court issued, a certificate of default as to both defendants. (Dkts. 18-19.)^[5]

On July 21, 2021, Judge Broderick directed plaintiff, "if he intends to seek a default judgment," to do so no later than August 3, 2021. (Dkt. 21.) On July 23, 2021, plaintiff moved by order to show cause for a default judgment against Sake II and Dong (Dkt. 22), relying on an affidavit signed by attorney Michael Samuel (Samuel Aff.) (Dkt. 23), which in turn attached the relevant pleadings, the certificate of default, a damages calculation, and attorney time records. On October 6, 2021, Judge Broderick issued the Order to Show Cause (OSC) (Dkt. 25), directing defendants to appear by telephone on November 12, 2021. On October 13, 2021, plaintiff served both defendants with the OSC, as well as the proposed default judgment, the Samuel affidavit, and its attachments, through personal delivery to Jane Doe (who identified herself as a "co-worker" of Dong) at the Restaurant. (Dkts. 27-28.)

On November 12, 2021, defendants failed to appear at the show-cause hearing, and on November 16, 2021, Judge Broderick issued the Default Judgment and referred the case to me for inquest. On February 4, 2022, I issued a Scheduling Order for a Damages Inquest (Sched. Order) (Dkt. 31), directing plaintiff to file proposed findings of fact and conclusions of law concerning all damages and other monetary relief sought in connection with the default judgment by March 7, 2022, and giving defendants until April 6, 2022 to respond if they wished. Sched. Order ¶¶ 1-2, 8. I further ordered plaintiff to serve his Proposed Findings, together with all supporting materials and a copy of the Scheduling Order, on the defaulted defendants, by mail, at their last known address. Id. ¶ 7.

On March 25, 2022, after requesting and obtaining an extension of his time to do so, plaintiff filed his Proposed Findings, together with his declaration, his damages calculation, and a certificate of service by mail (Dkt. 34-1). Plaintiff seeks a total of $644,647.24, comprising: (1) $35,640 in unpaid minimum wages; (2) $143,377.50 in unpaid overtime wages; (3) $16,007.57 in unpaid spread of hours compensation; (4) $374,042.57 in liquidated damages ($195,025.07 under the NYLL and $179,017.50 under the FLSA); (5) $10,000 under the WTPA; and (6) $12,201.03 in prejudgment interest through March 25, 2022. See Damages Calculation.

On September 26, 2022, this action was reassigned to the Honorable Jennifer L. Rochon, United States District Judge. (Dkt. 35.) On October 19, 2022, plaintiff submitted a "revised proposed default judgment as to damages" in the amount of $464,418.41, comprising: (1) $460,034.74 for the plaintiff and (2) $4,383.67 in attorneys' fees, costs, and disbursements. (Dkt. 37-1.) No further explanation or support for those figures was provided.

II. ANALYSIS

A. Legal Standards

1. Determining Liability

Following a default, all well-pleaded factual allegations in the complaint as to liability are "deemed admitted." S.E.C. v. Razmilovic, 738 F.3d 14, 19 (2d Cir.), as amended (Nov. 26, 2013); accord City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011); Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004). However, a default "only establishes a defendant's liability if those allegations are sufficient to state a cause of action against the defendants." Gesualdi v. Quadrozzi Equip. Leasing Corp., 629 Fed.Appx. 111, 113 (2d Cir. 2015) (summary order). The court must therefore determine "whether the allegations in a complaint establish the defendants' liability as a matter of law." Id. (citing Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009)). If the well-pleaded factual allegations establish the defaulting party's liability, the only remaining issue is "whether plaintiff has provided adequate support for [the requested] relief[.]" Gucci Am., Inc. v. Tyrrell-Miller, 678 F.Supp.2d 117, 119 (S.D.N.Y. 2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)).

Conversely if the well-pleaded factual allegations in the complaint fail to state a claim upon which relief can be granted, no damages can be awarded, even if the post-default inquest submissions supply the missing information. See U.S. ex rel. Nat'l Dev. & Constr. Corp. v. U.S. Envtl. Universal Servs., Inc., 2014 WL 4652712, at *4 (S.D.N.Y. Sept. 2, 2014) ("[i]t is the . . . [c]omplaint, not the inquest submissions, that establishes defendants' liability") (quoting Gutman v. Klein, 2010 WL 4975593, at *10 (E.D.N.Y. Aug. 19, 2010)) (alteration in original); J & J Sports Prods., Inc. v. Abdelraouf, 2019 WL 457719, at *2 (E.D.N.Y. Feb. 5, 2019) ("It is the moving party's burden to demonstrate that it is entitled to recovery based on the factual allegations pleaded in the complaint."...