Zimnicki v. Krysiak Constr. Corp.

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KAROL ZIMNICKI and DAWID ZIMNICKI, individually and on behalf of all other persons similarly situated, Plaintiffs, v. KRYSIAK CONSTRUCTION CORP., BOGUSLAWA KRYSIAK, MAREK WUJCIK, and ARKADIUSZ MAKOWSKI, Defendants.

No. 21-CV-4634-RPK-JRC

United States District Court, E.D. New York

August 29, 2023

REPORT AND RECOMMENDATION

JAMES R. CHO, UNITED STATES MAGISTRATE JUDGE:

Plaintiffs Karol Zimnicki (“Karol”) and Dawid Zimnicki (“Dawid”) (collectively “plaintiffs”) filed this action against Krysiak Construction Corp. (the “Corporate Defendant” or “Krysiak Construction”), Boguslawa Krysiak (“Ms. Krysiak”), Marek Wujcik (“Mr Wujcik”), and Arkadiusz Makowski (“Mr Makowski”) (collectively, “defendants”) seeking unpaid wages and overtime compensation under the Fair Labor Standards Act (“FLSA”), 29 U.S.C §§ 201 et seq., and New York Labor Law (“NYLL”) §§ 650 et seq., and related damages. See Second Amended Compl. (“Sec. Am. Compl.”), Dkt. 35. Plaintiffs further allege New York common law claims for breach of contract and quantum meruit. Id.

Currently pending before this Court, on referral from the Honorable Rachel P. Kovner, is Ms. Krysiak's motion to dismiss plaintiffs' claims against her as set forth in the Second Amended Complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. See generally Defendants' Memorandum of Law in Support of Their Motion to Dismiss Plaintiffs' Second Amended Complaint (“Defs. Mem.”), Dkt. 45-1. In addition, defendants move to dismiss plaintiffs' claims for breach of contract and quantum meruit. See id. For the reasons set forth below, this Court respectfully recommends denying Ms. Krysiak's motion as it relates to the wage and hour claims against her, granting defendants' motion with respect to plaintiffs' breach of contract claim (and the contract claim against Ms. Krysiak based on a theory of alter ego liability), and denying defendants' motion with respect to the quantum meruit claim.

I. Background

A. Factual Background

The following facts are taken from the Second Amended Complaint and assumed to be true for the purposes of the instant motion to dismiss.

The Corporate Defendant, Krysiak Construction, is a general contractor providing patio construction, renovation, new home construction, and other services. Sec. Am. Compl. ¶ 23. Krysiak Construction employed between 40 and 100 employees during the relevant time period. Id. ¶¶ 26-27. Employees of Krysiak Construction work interchangeably among the company's project worksites and are subject to the same wage practices. Id. ¶ 28. Ms. Krysiak is the CEO and sole shareholder of Krysiak Construction. Id. ¶ 7(a). She had the power to control the company's employees and paid their wages. Id.

Mr. Wujcik and Mr. Makowski serve as supervisors for Krysiak Construction, and are directly involved in all aspects of managing employees, including employee payroll, work schedules, time tracking, payment of wages, and hiring and firing of employees. Id. ¶¶ 7(b), 7(c), 12. Mr. Wujcik and Mr. Makowski generally paid employees in cash “every Tuesday,” but sometimes paid employees on Wednesdays. Id. ¶¶ 8-9. Mr. Wujcik and Mr. Makowski controlled all aspects of each employee's tasks and work schedules, including tracking hours worked, but Ms. Krysiak supervised and approved the payment of wages to each employee in cash on a weekly basis. Id. ¶ 12.

Plaintiffs were employed as construction workers and carpenters by defendants. Id. ¶ 24. Karol and Dawid each worked for the defendants “from approximately January 2014 through March 2020.” Id. ¶¶ 34, 45.^[1] Defendants paid plaintiffs their wages in cash. Id. ¶ 29. Plaintiffs allege that they were paid only straight time for hours worked in excess of 40 hours per week. Id. ¶ 70. In addition, plaintiffs allege that they were not paid “for time spent waiting to be engaged and traveling to and from each project work site in the company van.” Id. ¶ 59.

Plaintiffs further contend that defendants did not provide plaintiffs with written wage statements, as required by New York State law. See id. ¶ 79. Plaintiffs allege that defendants willfully failed to pay plaintiffs and other similarly situated employees overtime wages and to make, keep and preserve proper payroll records. See id. ¶¶ 84-86.

According to plaintiffs, Ms. Krysiak exercised complete dominion over the Corporate Defendant after her husband died in 2014. Id. ¶ 98. Plaintiffs also allege that Ms. Krysiak abused the corporate form in conducting the Corporate Defendant's affairs by “fail[ing] to comply with the required corporate formalities, including recordkeeping, governance requirements, and other formalities.” Id. ¶ 96. Plaintiffs further allege that Ms. Krysiak “intermingled the funds of the Corporate Defendant with her own personal funds” and “intentionally undercapitalized the Corporate Defendant. Id. ¶¶ 104-05.

B. Procedural History

On August 17, 2021, plaintiffs commenced this action against defendants seeking, inter alia, unpaid wages and overtime compensation, liquidated damages, prejudgment and post- judgment interest, and attorney's fees and costs. See Complaint, Dkt. 1. On October 12, 2021, the Court granted plaintiffs' application for leave to file an amended complaint. See Minute Entry dated October 12, 2021.

On February 4, 2022, Ms. Krysiak moved to dismiss the First Amended Complaint. See Dkt. 30. On September 14, 2022, this Court issued a Report and Recommendation that the Court grant Ms. Krysiak's motion to dismiss. See Report and Recommendation (“9/14/22 R&R”), Dkt. 31. There, the Court found that plaintiffs had asserted in the First Amended Complaint only “vague and conclusory allegations” in support of their claim that Ms. Krysiak qualified as plaintiffs' employer. See id. at 8, 11. Although plaintiffs submitted the affidavit of plaintiff Karol setting forth additional facts regarding Ms. Krysiak's conduct, the Court rejected plaintiffs' reliance on the affidavit because it included facts that were not contained in the First Amended Complaint. Id. at 11.

In addition, this Court recommended dismissing plaintiffs' claims for breach of contract and quantum meruit. The Court determined that the First Amended Complaint contained insufficient information to sustain a claim for breach of contract. Id. at 13. The Court further concluded that plaintiffs had “fail[ed] to plead sufficient facts that would merit piercing the corporate veil.” Id. at 14. Finally, the Court found insufficient plaintiffs' allegations as to the reasonable value of their services in connection with their quantum meruit claim. Id. at 16.

In response to this Court's Report and Recommendation, on September 23, 2022, plaintiffs moved for leave to file a Second Amended Complaint. See Dkt. 32. This Court granted plaintiffs' application over defendants' opposition. See Order dated Sept. 28, 2022. On September 28, 2022, defendants filed a timely objection to this Court's Report and Recommendation. See Dkt. 36. However, Judge Kovner found that plaintiffs' intervening filing of a Second Amended Complaint rendered moot defendants' motion to dismiss the First Amended Complaint and the corresponding Report and Recommendation. See Order dated Sept. 29, 2022. On January 11, 2023, defendants filed the instant motion to dismiss, raising the same arguments that this Court found persuasive in defendants' original motion to dismiss. However, the Second Amended Complaint contains additional factual allegations that the Court could not consider in analyzing defendants' original motion.

II. Discussion

A. Legal Standards for Motion to Dismiss

Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a party to move to dismiss for “failure to state a claim upon which relief may be granted[.]” Fed.R.Civ.P. 12(b)(6). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); accord Lynch v. City of New York, 952 F.3d 67, 74 (2d Cir. 2020). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. A plaintiff need not allege “detailed or elaborate factual allegations, but only allegations sufficient to raise an entitlement to relief above the speculative level.” Keiler v. Harlequin Enters. Ltd., 751 F.3d 64, 70 (2d Cir. 2014). “[A] formulaic recitation of the elements of a cause of action will not do”; the claim must set forth “more than labels and conclusions[.]” Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 678.

A court must accept the complaint's well-pleaded factual allegations as true, and draw all reasonable inferences in favor of the plaintiff. See, e.g., Lynch, 952 F.3d at 74-75; Sherman v. Town of Chester, 752 F.3d 554, 560 (2d Cir. 2014). In considering whether a complaint states a claim upon which relief can be granted, the court “begin[s] by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth,” and then determines whether the remaining well-pleaded factual allegations, accepted as true, “plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679. Deciding whether a complaint states a plausible claim for relief is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

B. The Second Amended Complaint Sufficiently Alleges Ms. Krysiak Was Plaintiffs' Employer Under the FLSA and NYLL

Ms Krysiak argues that the Second Amended Complaint does...