Rowe v. CC Rest. & Bakery, Inc.

DURANT ROWE, Plaintiff, v. CC RESTAURANT & BAKERY, INC. D/B/A GOLDEN KRUST CARIBBEAN BAKERY AND GRILL and KENNETH MOXEY, Defendants.

17-CV-01423 (CBA)(PK)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

August 15, 2019

REPORT AND RECOMMENDATION

Peggy Kuo, United States Magistrate Judge:

Plaintiff Durant Rowe ("Plaintiff") brought this Motion for Default Judgment ("Motion") against Defendants CC Restaurant & Bakery, Inc. d/b/a Golden Krust Caribbean Bakery and Grill ("Corporate Defendant") and Kenneth Moxey ("Individual Defendant" and, collectively with Corporate Defendant, "Defendants"), seeking damages under the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. §§ 201 et seq., and the New York Labor Law ("NYLL") N.Y. Lab. Law §§ 650 et seq. (See Motion, Dkt. 44; see also Am. Compl., Dkt. 14.)

The Honorable Carol Bagley Amon has referred the Motion to the undersigned for a Report and Recommendation. (See Jan. 14, 2019 Order.) For the reasons stated herein, the undersigned respectfully recommends that the Motion be granted and damages be awarded as detailed below.

FACTUAL BACKGROUND

The following facts are taken from the Amended Complaint, unless otherwise stated. Corporate Defendant is a New York corporation operating a restaurant located at 200-08 Linden Boulevard, St. Albans, New York 11412. (Am. Compl. ¶¶ 6, 7.) Individual Defendant is a resident of New York. (Id. ¶ 8.) He "was and still is an officer of" Corporate Defendant. (Id. ¶ 9.) Individual Defendant controlled Corporate Defendant's operations and business functions, determined employee salaries, made hiring decisions, and determined wage and hour practices and polices. (Id. ¶ 9.)

Plaintiff worked for Defendants as a cook from May 6, 2012 until February 27, 2016. (Inquest Tr. ("Tr."), at 7, 9, Dkt. 49; see also Am. Compl. ¶ 5.) From May 6, 2012 until the end of January 2015, Plaintiff generally worked seven days per week, from 4:30 a.m. until 7:00 p.m., with no breaks. (Am. Compl. ¶ 12; Tr. at 8; Updated Damages Chart, Dkt. 48-1.) Thus, during this time, he worked a total of 101.5 hours per week, except during the week of October 12 to October 18, 2014, when he worked 58 hours. (Am. Compl. ¶ 13; Tr. at 26; Updated Damages Chart.) From February 1, 2015 until February 27, 2016, Plaintiff worked six days per week (Monday through Saturday), from 4:30 a.m. to 7:00 p.m., and every other Sunday from 4:30 a.m. to 7:00 p.m., with no breaks. (Am. Compl. ¶14; Tr. at 9-11; Updated Damages Chart.) Thus, during this period, he worked 87 hours per week when he worked Monday through Saturday, and 101.5 hours per week when he also worked on Sundays. (Am. Compl. ¶ 15; Tr. at 9-11; Updated Damages Chart.)

Defendants paid Plaintiff a flat rate of $700.00 per week.¹ (Tr. at 11; see also Tr., Pl. Ex. 1 ("Earnings Statements"); Mem. of Law at 6, Dkt. 44-1; Pl.'s Depo. at 50:11-20, Dkt. 44-11; Individual Def.'s Depo. at 210-7-22, Dkt. 44-13.) Plaintiff was paid via check on a weekly basis. (Am. Compl. ¶18.) He was not required to "clock in or out" of his shifts and Defendants did not record the hours that he worked. (Id. ¶¶ 19-20.)

Defendants failed to provide Plaintiff with written pay rate notices and accurate and complete wage payment statements. (Am. Compl. ¶¶ 24-25.)

PROCEDURAL BACKGROUND

On March 14, 2017, Plaintiff filed this FLSA and NYLL action against Defendants. (Compl., Dkt. 1.) Both Defendants were served on March 2017. (Dkts. 6, 13.) On May 10, 2017, Plaintiff filed an Amended Complaint. Defendants filed their Answer to the Amended Complaint and interposed three counterclaims that were later withdrawn by stipulation with Plaintiff.² (Answ., Dkt. 16.)

On April 13, 2018, the parties certified the close of discovery. (Dkt. 30.) During discovery, both Plaintiff and Individual Defendant were deposed. (Motion, Exs. H, J, Dkts. 44-11, 44-13.)

A pretrial conference was scheduled for June 27, 2018 to discuss trial preparations. (May 30, 2018 Order.) However, it was adjourned because, on June 25, 2018, Defendants' counsel filed a Motion to Withdraw. (Defs.' Counsel's Mot. to Withdraw, Dkt. 33; see also June 25, 2018 Order.) On July 6, 2018, the Court held a hearing during which the Motion to Withdraw was granted. (Jul. 6, 2018 Min. Entry.) Individual Defendant was present and advised by the Court that he could "proceed pro se on his own behalf, but that the corporate defendant cannot appear pro se in federal court." (Id.) The Court gave Defendants until August 6, 2018 to obtain new counsel. (Id.)

On August 14, 2018, the Court held a Status Conference at which Individual Defendant appeared, but no appearance was made on behalf of Corporate Defendant. (Aug. 14, 2018 Min. Entry.) Individual Defendant was once again reminded that Corporate Defendant "must be represented by counsel" and that "its continued nonappearance will put it at risk of being found in default." (Id.) On September 19, 2018, the Court held a Settlement Conference at which attorney Andrew P. Jones appeared on behalf of Defendants; he never filed a Notice of Appearance. (Sept. 19, 2018 Min. Entry.) The parties were unable to reach a settlement agreement. (Id.)

On December 12, 2018, after the Court twice warned Defendants' attorney to file a Notice of Appearance, Judge Amon held a pre-trial conference at which only Plaintiff's counsel appeared. (Dec. 12, 2018 Min. Entry.) Judge Amon granted Plaintiff leave "to make any motion that it deems appropriate." (Id.)

On December 21, 2018, Plaintiff requested a Certificate of Default against Defendants, which the Clerk of Court entered on December 27, 2018. (Dkts. 40, 41.)

On January 4, 2019, Plaintiff filed the Motion seeking (1) unpaid overtime compensation pursuant to the FLSA and the NYLL; (2) wage notice statutory damages pursuant to NYLL Section 195(1); (3) wage statement statutory damages pursuant to NYLL Section 195(3); (4) liquidated damages pursuant to the NYLL; (5) pre-judgment interest on all state law claims; (6) post-judgment interest pursuant to 28 U.S.C. § 1961; and (7) an automatic fifteen percent increase to any damage award pursuant to the NYLL in the event Defendants fail to meet the deadlines for payments on a judgment awarded by the Court.³ (Mem. of Law at 22-23; Damages Chart.) Additionally, Plaintiff requests leave to file a motion for attorneys' fees once the Motion is granted. (Mem. of Law at 22.)

On August 2, 2019, an inquest was held at which Plaintiff testified under oath about his damages. (Aug. 2, 2019 Min. Entry; see also Tr.) Upon the Court's direction, Plaintiff filed a supplemental letter regarding damages calculations. (Dkt. 48.)

DISCUSSION

I. Default Judgment Standard

Rule 55 of the Federal Rules of Civil Procedure establishes a two-step process regarding default judgments. Fed. R. Civ. P. 55. See City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2d Cir. 2011). First, the Clerk of the Court enters the party's default when a defendant "has failed to plead or otherwise defend." Fed. R. Civ. P. 55(a). Then, the plaintiff can apply to the court for a default judgment. Fed. R. Civ. P. 55(b)(2). A motion for default judgment must include: "(1) the Clerk's certificate of default, (2) a copy of the claim to which no response has been made, and (3) a proposed form of default judgment." Local Civ. R. 55.2(b). The moving party then must mail all relevant papers against whom default judgment is sought and the proof of such mailing must also be filed with the court. Local Civ. R. 55.2(c).

A default "constitutes admission of all well-pleaded factual allegations in the complaint." United States v. Myers, 236 F. Supp. 3d 702, 706 (E.D.N.Y. 2017). However, "just because a party is in default, the plaintiff is not entitled to a default judgment as a matter of right." GuideOne Specialty Mut. Ins. Co. v. Rock Cmty. Church, Inc., 696 F. Supp. 2d 203, 208 (E.D.N.Y. 2010). The Court must ensure that (1) jurisdictional requirements are satisfied, see Mickalis Pawn Shop, LLC, 645 F.3d at 125-26, 133; (2) plaintiff took all the required procedural steps in moving for default judgment, Local Civ. R. 55.2(c); and (3) Plaintiff's allegations, when accepted as true, establish liability as a matter of law. Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). The court exercises significant discretion in deciding whether to grant a default judgment, including whether the grounds for default are clearly established. See GuideOne Specialty Mut. Ins. Co., 696 F. Supp. 2d at 208; see also Mickalis Pawn Shop, 656 F.3d at 129.

Although a party's default is deemed to be an admission of all well-pleaded allegations as to liability, "it is not considered an admission of damages." Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 155 (2d Cir. 1992). Plaintiff's allegations as to damages are not deemed true, and courts have "an obligation to ensure that damages are appropriate." Stark Carpet Corp. v. Stark Carpet & Flooring Installations, Corp., 954 F. Supp. 2d 145, 151 (E.D.N.Y. June 20, 2013) (quoting Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997)).

"Where a party initially appears and answers, but subsequently fails to continue in the case, a default judgment can still issue" if the party fails to continue defending the case. Mister Softee, Inc. v. Tsirkos, No. 14 CV-1975 (LTS) (RLE), 2015 WL 7458619, at *3 (S.D.N.Y. Nov. 23, 2015); see also Guggenheim Capital, LLC v. Birnbaum, 722 F.3d 444, 454 (2d Cir. 2013); Mickalis Pawn Shop, LLC, 645 F.3d at 129; Eagle Assocs. v. Bank of Montreal, 926 F.2d 1305 (2d Cir. 1991) When that is the case, district courts should accept "as true all of the factual allegations in the complaint, except those relating to damages." See, e.g., Eagle Assocs., 926 F.2d at 1305.

II. Jurisdictional and Procedural Requirements

This Court has original subject matter jurisdiction over this action because it arises under the FLSA, which is a federal statu...