Sanchez v. Ms. Wine Shop Inc.

643 F.Supp.3d 355

Jose Barrera SANCHEZ, individually and on behalf of others similarly situated, Plaintiff, v. MS. WINE SHOP INC. d/b/a/ Best Buy Wine & Spirits and Juan Lopez, Defendants.

22-CV-2178 (PKC) (TAM)

United States District Court, E.D. New York

Signed November 30, 2022

Avraham Y. Scher, Roman M. Avshalumov, Helen F. Dalton & Associates, P.C., Kew Gardens, NY, James Patrick Peter O'Donnell, Kew Gardens, NY, for Plaintiff.

ORDER ADOPTING REPORT AND RECOMMENDATIONS:

Pamela K. Chen, Judge

The Court adopts Magistrate Judge Taryn A. Merkl's 19 Report and Recommendation ("R&R") in its entirety. Plaintiff filed his 15 motion for default judgment on July 7, 2022. This Court referred the motion to Judge Taryn A. Merkl on July 10, 2022. (07/10/2022 Docket Order.) Judge Merkl issued the 19 R&R on November 15, 2022. Any objections were due by November 29, 2022. No objections have been filed. "When no timely objection is filed" to a magistrate judge's R&R on a referred motion, "the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation." Fed. R. Civ. P. 72(b), advisory committee's note to 1983 amendment; Colvin v. Berryhill, 734 F. App'x 756, 758 (2d Cir. 2018); see also Thomas v. Arn, 474 U.S. 140, 153, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985) ("Congress would not have wanted district judges to devote time to reviewing magistrate's reports except to the extent that such review is requested by the parties or otherwise necessitated by Article III of the Constitution.").

The Court has reviewed Judge Merkl's thorough and well-reasoned R&R and finds no clear error on the face of the record. Accordingly, Plaintiff's 15 motion for default judgment is granted and Plaintiff is awarded $177,065.78 in compensatory damages and $177,065.78 in liquidated damages. Additionally, the Court awards prejudgment interest on Plaintiff's unpaid overtime wages, minimum wage damages, and spread of hours compensation of $177,065.78 at a per diem interest rate of $43.66 from March 10, 2019, to the date of this Courts judgment. Lastly, post-judgment interest is awarded at the rate set forth in 28 U.S.C. § 1961(a) and a fifteen-percent (15%) increase in damages, not including post-judgment interest, is awarded for any amounts that are not paid within ninety days of judgment or the expiration of time to appeal.

REPORT AND RECOMMENDATION

TARYN A. MERKL, United States Magistrate Judge:

Plaintiff Jose Barrera Sanchez commenced this action against Defendants Ms. Wine Shop Inc. d/b/a Best Buy Wine & Spirits and Juan Lopez on April 15, 2022. (Complaint ("Compl."), ECF No. 1.) Plaintiff alleges various claims, including violations of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA") and the New York Labor Law ("NYLL"), Art. 6 § 190 et seq.

On June 14, 2022, the Clerk of Court certified the default of both Defendants for failing to file an answer or to otherwise move with respect to the Complaint pursuant to Rule 55(a) of the Federal Rules of Civil Procedure. (Clerk's Entry of Default, ECF No. 13.) Plaintiff subsequently moved for default judgment on July 7, 2022. (Mot. for Default J., ECF No. 15.) For the reasons set forth below, this Court recommends that Plaintiff's Motion for Default Judgment be granted.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Plaintiff alleges that Defendants employed him as a delivery worker, helper, and cleaner from approximately February 2009 to January 2022. (Compl., ECF No. 1, ¶ 20.) During this period, he regularly worked six days per week. (Id. ¶ 21.) Plaintiff claims that he was routinely required to work seventy hours or more hours during the relevant time period. (Id. ¶¶ 22-23.) Specifically, he alleges that he was paid a flat weekly rate of approximately $460 until December 2017, approximately $550 until December 2019, approximately $750 until December 2020, and approximately $800 until January 2022. (Id. ¶ 24.) Plaintiff further claims that, although he worked seventy or more hours each week, Defendants did not pay him the required overtime compensation of time and a half (1.5x) for hours worked in excess of 40 hours per work week. (Id. ¶ 25.)

According to the Complaint, Ms. Wine Shop Inc. d/b/a/ Best Buy Wine & Spirits ("Corporate Defendant") was an enterprise engaged in interstate commerce. (Id. ¶ 18.) Plaintiff avers that the individual defendant named in the complaint, Defendant Lopez, is the owner and agent of Corporate Defendant. (Id. ¶¶ 9-10.)

Based on these allegations, Plaintiff asserts claims against Defendants for willfully violating the overtime pay provisions of the FLSA and NYLL. (Compl., ECF No. 1, ¶¶ 45-55.) Plaintiff also alleges that Defendants failed to pay minimum wage, in violation of the FLSA and NYLL (id. ¶¶ 56-66); that he is entitled to spread-of-hours pay under the NYLL (id. ¶¶ 67-69); and that Defendants violated the New York Wage Theft Prevention Act, NYLL §§ 195-1 and 195-3, by failing to provide proper notice of pay and wage statements. (Id. ¶¶ 70-75.)

Service of the Summons and Complaint upon Individual Defendant Juan Lopez was effected by in-person service on a person identified as a "Manager" of the Corporate Defendant, at the location of the Corporate Defendant's store, at 701 Fulton St., Brooklyn, NY 11217, on April 20, 2022, and by mail to the business address, on April 22, 2022. (See Aff. of Service, ECF No. 8-1; see also Compl., ECF No. 1, ¶ 1 (specifying address of Corporate Defendant as 701 Fulton St., Brooklyn, NY 11217).) Service was made on Corporate Defendant by serving the New York Secretary of State on April 21, 2022. (See Aff. of Service, ECF No. 9.) On July 7, 2022, Plaintiff filed the Motion for Default Judgment and accompanying documents. (Mot. for Default J., ECF No. 15; Aff./Decl. in Supp. of Mot. for Default J., ECF No. 16.) Plaintiff certified that the default motion paperwork was sent to Defendants by mail on July 8, 2022. (Aff. of Service of Mot. for Default J., ECF No. 17.) On July 13, 2022, this Court issued notice of a status conference on the default motion and directed that the notice be sent to three addresses associated with Defendants, together with a full copy of the docket sheet. (July 13, 2022 ECF Scheduling Order, ECF No. 18.) On August 11, 2022, Defendants failed to appear for the status conference. (See Aug. 11, 2022 ECF Minute Entry and Order.)

DISCUSSION

I. Legal Standards

Federal Rule of Civil Procedure 55 provides a "two-step process" for the entry of judgment against a party who fails to defend: first, the entry of a default, and second, the entry of a default judgment. New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). The Clerk of Court enters a default when a defendant "has failed to plead or otherwise defend" in an action. Fed. R. Civ. P. 55(a). After a certificate of default is entered, the district court may, on a plaintiff's application, enter a default judgment. Fed. R. Civ. P. 55(b); see also E.D.N.Y. Local Civ. R. 55.2(b).

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 "may first assure itself that it has personal jurisdiction over the defendant." Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d 207, 213 (2d Cir. 2010). In addition, the plaintiff must take several steps before the court will grant default judgment. The plaintiff must demonstrate proper service of the summons and complaint. See Advanced Cap. Com. Grp., Inc. v. Suarez, No. 09-CV-5558 (DRH) (GRB), 2013 WL 5329254, at *2 (E.D.N.Y. Sept. 20, 2013). The plaintiff must also establish compliance with the procedural requirements of E.D.N.Y. Local Civil Rules 7.1, 55.1, and 55.2.¹

The court must then determine whether the plaintiff's "allegations establish [the defendant's] liability as a matter of law." Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). In making this determination, a court accepts a plaintiff's "factual allegations as true and draw[s] all reasonable inferences in [the plaintiff's] favor." Id. However, "a pleading's legal conclusions are not assumed to be true." Chen v. JP Standard Constr. Corp., No. 14-CV-1086 (MKB) (RLM), 2016 WL 2909966, at *4 (E.D.N.Y. Mar. 18, 2016), report and recommendation adopted, No. 14-CV-1086 (MKB) (RLM), 2016 WL 2758272 (E.D.N.Y. May 12, 2016). Rather, "on a motion for a default judgment, the factual allegations in the complaint must themselves be sufficient to establish a right to relief." Id.

Moreover, while a default constitutes an admission of liability as to wellpleaded allegations, a default is "not considered an admission of damages." Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). "The plaintiff bears the burden of presenting proof of damages, which may take the form of documentary evidence or detailed affidavits." Joe Hand Promotions, Inc. v. Benitez, No. 18-CV-6476 (ARR) (PK), 2020 WL 5519200, at *3 (E.D.N.Y. Aug. 27, 2020), report and recommendation adopted, No. 18-CV-6476 (ARR), 2020 WL 5517240 (E.D.N.Y. Sept. 14, 2020). The court "possesses significant discretion" in granting a motion for default judgment, "including [determining] whether the grounds for default are clearly established." Klideris v. Trattoria El Greco, No. 10-CV-4288 (JBW) (CLP), 2011 WL 7114003, at *2 (E.D.N.Y. Sept. 23, 2011), report and recommendation adopted, No. 10-CV-4288 (JBW), 2012 WL 273078 (E.D.N.Y. Jan. 30, 2012).

II. Entry of Default Judgment

A threshold question before reaching liability or damages is whether the Defendants' conduct is sufficient to warrant a default judgment being entered. In determining whether to enter a default judgment, the Court is guided by the same factors that apply to a motion to set aside entry of a default. See Pecarsky v. Galaxiworld.com, Ltd., 249 F.3d 167, 170-71 (2d Cir. 2001...