De Soto Soto v. Julio H. Baez Lolo Grocery Corp.

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REYNALDO DE SOTO SOTO, Plaintiff, v. JULIO H. BAEZ LOLO GROCERY CORP, B BROTHER GROCERY CORP, RICHARD O. BAEZ, and PASQUALE ORTIZ, Defendants.

No. 22 CV 700 (HG)(RML)

United States District Court, E.D. New York

December 14, 2022

REPORT AND RECOMMENDATION

ROBERT M. LEVY United States Magistrate Judge

By order dated August 30, 2022, the Honorable Hector Gonzalez United States District Judge, referred plaintiff's motion for default judgment to me for report and recommendation. For the reasons stated below, I respectfully recommend that plaintiff's motion be granted, and that plaintiff be awarded $100,537.56 in damages, plus pre- and post-judgment interest, and $7,309.50 in attorney's fees and costs.

Background and Facts

Plaintiff Reynaldo De Soto Soto (“plaintiff”) commenced this wage and hour action on February 8, 2022, against defendants Julio H. Baez Lolo Grocery Corp (“Lolo Grocery”), B Brother Grocery Corp (“Brother Grocery,” together with Lolo Grocery, the “corporate defendants”), Richard O. Baez (“Baez”), and Pasquale Ortiz (“Ortiz,” together with Baez, “individual defendants,” or together with corporate defendants, the “defendants”) asserting claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C §§ 201, et seq., and the New York Labor Law (“NYLL”) §§ 190, et seq. (Complaint, dated Feb. 8, 2022 (“Compl.”), Dkt No. 1.) The individual defendants are alleged to be owners officers, principals, or agents of Lolo Grocery, a domestic corporation located at 212 Ralph Avenue, Brooklyn, New York, and Brother Grocery, a domestic corporation located at 325 Quincy Street, Brooklyn, New York. (Id. ¶¶ 9-36.) Defendants allegedly employed plaintiff as a deli counter worker, cook, and food preparer from approximately March 22, 2021 to on or about November 6, 2021. (Id. ¶ 6.)

All defendants were properly served with the summons and the complaint. (See Affidavits of Service of Teddy Mihalios, sworn to Feb. 23, 2022, Dkt. Nos. 12, 15; Affidavits of Service of Robert Guyette, sworn to Apr. 26, 2022, Dkt. Nos. 22, 22-1.) Defendants have failed to answer or otherwise move with respect to the complaint.

Plaintiff moved for entry of default pursuant to Federal Rule of Civil Procedure 55(a) as to the individual defendants on April 14, 2022. (See Request for Certificate of Default, filed Apr. 14, 2022, Dkt. No. 18.) On April 20, 2022, the Clerk of the Court noted the defaults of the individual defendants. (See Clerk's Entry of Default, dated Apr. 20, 2022, Dkt. No. 20.) Plaintiff moved for entry of default as to the corporate defendants on June 15, 2022. (See Requests for Certificate of Default, filed June 15, 2022, Dkt. Nos. 24, 25.) On June 23, 2022, the Clerk of the Court noted the defaults of the corporate defendants. (See Clerk's Entry of Default, dated June 23, 2022, Dkt. No. 27.) On June 23, 2022, plaintiff moved for default judgment. (See Motion for Default Judgment, dated June 23, 2022, Dkt. No. 28.) Judge Gonzalez referred plaintiff's motion to me on August 30, 2022. (See Order Referring Motion, dated Aug. 30, 2022.)

Plaintiff seeks a default judgment on claims under the FLSA and NYLL for defendants' failure to (1) pay him minimum wages and overtime compensation, (2) pay him spread of hours wages, and (3) provide proper wage notices and wage statements. (Compl. ¶¶ 2, 54, 85-94; see also Declaration of Clifford Tucker, Esq. in Support of Plaintiff's Motion for Default Judgment, dated June 23, 2022 (“Tucker Decl.”), Dkt. No. 28-1.) Plaintiff requests an award of minimum wages, overtime wages, spread of hours wages, liquidated damages, statutory damages, pre-judgment interest, post-judgment interest, and attorney's fees and costs.^[1](Tucker Decl. ¶ 101.)

Discussion

The Federal Rules of Civil Procedure provide a two-step process for plaintiffs to obtain a default judgment. First “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default,” as it has done here. Fed.R.Civ.P. 55(a). Second, after a default has been entered against the defendant and the defendant fails to appear or move to set aside the default under Rule 55(c), the court may, on a plaintiff's motion, enter a default judgment. Fed.R.Civ.P. 55(b)(2). To grant a default judgment, the court must ensure that the plaintiff took all the required steps in moving for default judgment, including providing proper notice to defendants of the lawsuit. Here, as explained above, plaintiff has demonstrated that he properly served defendants with the summons and complaint. Plaintiff has also demonstrated that he served the Motion for Default Judgment and accompanying submissions on defendants in compliance with Local Rule 55.2(c). (See Affidavit of Service of Zafer Alsalvar, dated Aug. 8, 2022, Dkt. No. 29.)

A. Liability

A defendant's “default is deemed to constitute a concession of all well pleaded allegations of liability.” Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). Where a plaintiff moves for default judgment, all factual allegations must be accepted as true, however the court must also “determine whether [plaintiff's] allegations establish [defendants'] liability as a matter of law.” Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). Plaintiff has sufficiently pleaded factual allegations that give rise to liability for unpaid overtime wages under the FLSA and NYLL (Compl. ¶¶ 75-77, 81-83) and unpaid spread of hours wages under the NYLL. (Id. ¶¶ 85-87.) The extent to which plaintiff can recover damages for these violations initially depends on whether: (1) his claims were timely; (2) he is a covered employee under the FLSA and the NYLL; and (3) defendants were plaintiff's employers under the FLSA and NYLL.

1. Timeliness

For claims to be timely under the FLSA, they must have arisen within the two years prior to filing of the complaint, or--for willful violations--within the three years prior. 29 U.S.C. § 255(a). Here, the complaint, which was filed on February 8, 2022, alleges willful violations of the FLSA. (See Compl. ¶¶ 53, 54, 56, 70, 82, 85.) Therefore, the FLSA's three-year statute of limitations applies. Regardless of willfulness, plaintiff's claims must arise within six years prior to the filing of the complaint to be timely under the NYLL. See N.Y. Lab. L. §§ 198(3), 663(3). Because plaintiff alleges that he was not properly paid wages from March 22, 2021 through November 6, 2021, I find that his claims are timely under both the FLSA and the NYLL. (See Compl. ¶¶ 42-45.)

2. Employee Coverage

A plaintiff in a wage and hour action must show that he or she was the defendants' employee, and that defendants were employers under the FLSA and NYLL. For purposes of the FLSA, an employee is “any individual employed by an employer,” meaning any individual whom an employer “suffer[s] or permit[s] to work.” 29 U.S.C. §§ 203(e)(1), (g). An employer is defined as any “individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons . . . acting directly or indirectly in the interest of an employer in relation to an employee.”^[2] 29 U.S.C. § 203(a), (d). In addition, for employees to be covered by the FLSA, they must show either that their employer was an enterprise engaged in interstate commerce or that their work as employees regularly involved them in interstate commerce. See id. § 203(s)(1).

Plaintiff has adequately pleaded that he was an employee to whom no statutory exemption applies, insofar as he alleges that he was hired as a deli counter worker and cook at Lolo Grocery and Brother Grocery and he worked for defendants from approximately March 22, 2021 until November 6, 2021. (Compl. ¶¶ 1, 6, 42-45; see also Declaration of Reynaldo De Soto Soto, dated Apr. 11, 2022 (“De Soto Soto Decl.”), Dkt. No. 28-5.) In addition, plaintiff alleges that the corporate defendants each had a gross volume of sales greater than $500,000 per year during the relevant period, and both were engaged in interstate commerce as defined by the FSLA. (Compl. ¶¶ 10-12, 37-39.) While these allegations are conclusory on their face, courts in this district have held that similarly conclusory allegations of enterprise coverage may be accepted on a motion for default judgment where it may be inferred from the type of business enterprise that it was engaged in interstate commerce. See, e.g., Newman v. W. Bar & Lounge, Inc., No. 20 CV 1141, 2021 WL 2401176, at *5 (E.D.N.Y. June 11, 2021) (“[T]he court can reasonably infer that at least some materials handled by the plaintiff-employee have moved or engaged in interstate or international commerce, such as the food, beverages, products, materials, and equipment utilized by the defendants.”); Acosta v. DRF Hosp. Mgmt. LLC, No. 18 CV 346, 2019 WL 1590931, at *9 (E.D.N.Y. Mar. 13, 2019) (finding that an allegation that a restaurant “had employees engaged in commerce or in the production of goods for commerce and had annual gross revenues of at least $500,000” is sufficient to satisfy the interstate commerce requirement), report and recommendation adopted, 2019 WL 1585225 (E.D.N.Y. Apr. 12, 2019). I agree with the courts that have adopted this approach, and therefore find that plaintiff has established that he is a covered employee under the FLSA and the NYLL.

3. Employer Status of Corporate and Individual Defendants

Plaintiff seeks to hold four defendants liable for his unpaid wages two corporations and two individuals. (Compl. ¶¶ 1, 20-35.) To establish the corporate defendants' liability under the FLSA and NYLL,...