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DELEU v. SCAIFE

October 24, 1991

CYNTHIA A. DELEU, PLAINTIFF,
v.
FRANCES G. SCAIFE, DEFENDANT.



The opinion of the court was delivered by: Edelstein, District Judge:

OPINION & ORDER

BACKGROUND

This action arises out of defendant's alleged failure to make certain payments on behalf of her employee, Jose A. Deleu, as required by federal and state law. Because Mr. Deleu has died since initiating this action, his sister-in-law Cynthia Deleu is now prosecuting this action as executrix of his will. While the parties provide contrasting accounts of the circumstances surrounding the termination of Mr. Deleu's employment, the genesis of this conflict does not appear to be in dispute. Plaintiff alleges that from approximately September 1983 through December 1989, Mr. Deleu worked as a domestic servant in defendant's Fifth Avenue apartment. In this capacity, he cleaned and maintained the apartment, prepared meals for defendant's family and generally attended to the family's needs. Between May and December 1989, Mr. Deleu experienced various physical ailments that kept him out of work. In November 1989, Mr. Deleu was diagnosed as having the AIDS virus. Defendant dismissed Mr. Deleu the following month.

For at least a portion of Mr. Deleu's employment, defendant admittedly failed to pay on Mr. Deleu's behalf federal social security taxes, and also failed to remit payments to the unemployment insurance fund as required under the New York Labor Law. In addition, defendant failed to purchase insurance for Mr. Deleu's benefit as required by the New York Workmen's Compensation Law.

Plaintiff further alleges, though the allegation is denied, that defendant informed Mr. Deleu that she did not have to furnish him with a W-2 statement of earnings because he did not earn enough money to pay taxes. Plaintiff alleges that in reliance on this statement, Mr. Deleu failed to pay income taxes for the next five years. Defendant also contests plaintiff's assertion that she knew of her obligations to make the required payments under federal and New York law, and also knew that she had to furnish the W-2 form, but wilfully failed to comply with the laws. In addition, defendant contends that she has now made all payments and has furnished all required W-2 forms.

PROCEDURAL HISTORY

In March 1990, Mr. Deleu commenced a lawsuit in New York State Supreme Court that alleged five causes of action, including claims for: (1) earned but unpaid overtime salary; (2) unpaid vacation time; (3) breach of contract and breach of the covenants of good faith and fair dealing due to defendant's failure to make various payments required under state and federal law; (4) breach of fiduciary duty due to defendant's failure to make these payments; and (5) unlawful discharge under the New York State Human Rights Law on the grounds that defendant fired Mr. Deleu because he contracted AIDS. Defendant then removed the case to the United States District Court for the Southern District of New York on diversity grounds.

Plaintiff subsequently filed an amended verified complaint that was identical to the original complaint, except that it also asserted a claim for damages due to supposedly fraudulent misrepresentations made by defendant to Mr. Deleu concerning both Mr. Deleu's tax liability and defendant's obligation to provide him with a W-2 form; in addition, the complaint asserted a claim for damages based on defendant's violation of the federal tax laws. Finally, Mr. Deleu abandoned the AIDS discrimination claim.

Defendant has moved to dismiss all causes of action, except those that state claims for overtime and vacation pay, under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim on which relief can be granted. In the alternative, defendant has moved for summary judgment on these causes of action pursuant to Rule 56. This Court has ruled that the parties could not conduct discovery until it decided defendant's motion.

In her memorandum of law in opposition to defendant's motion ("Plaintiff's Memo."), plaintiff states that she does not oppose the motion as to the Fifth and Sixth causes of action, which concern the fraudulent misrepresentation claim and the claim of breach of fiduciary duty premised upon that misrepresentation. See Plaintiff's Memo. at 10. In addition, pursuant to Rule 41(a)(2), plaintiff has requested that this Court dismiss the First and Fourth causes of action, which concern vacation and overtime pay. Accordingly, the First, Fourth, Fifth and Sixth causes of action of plaintiff's amended complaint are dismissed.

Therefore, this Court will consider defendant's motion only as it relates to the Second, Third and Seventh causes of action, which assert claims for: (1) breach of contract based upon defendant's failure to make payments on Mr. Deleu's behalf as required by federal and state law; (2) breach of fiduciary duty based upon failure to make these payments; and (3) damages based upon defendant's supposedly willful failure to comply with federal and state tax laws.

DISCUSSION

I. Breach of Contract and Breach of ...


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