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Boyke v. Superior Credit Corp.

December 28, 2006

MARY BOYKE, PLAINTIFF,
v.
SUPERIOR CREDIT CORP.; ROBERT TOUSAW, INDIVIDUALLY AND AS PRESIDENT AND OWNER OF SUPERIOR CREDIT CORP., DEFENDANTS,



The opinion of the court was delivered by: Howard G. Munson, Sr. J.

MEMORANDUM DECISION AND ORDER

On February 27, 2001, plaintiff, Mary Boyke, instituted this lawsuit against defendant, Superior Credit Corporation. It is founded on defendant's failure to pay plaintiff remuneration for the overtime work she performed for defendant as its employee from January 13, 1997 to September 28, 2006. The complaint alleges violations of the federal Fair Labor Standards Act ("FLSA") 29 U.S.C. § 201, et seq., and New York State Labor Law §650 et seq. and §190 et seq. Plaintiff sought to recover unpaid overtime salary, liquidated damages, prejudgment interest under §5001 of the New York Civil Practice Law and Rules statute, attorneys' fees, costs and disbursements. It is uncontested that the defendant in this action was an employer under both federal and state laws during the period the events in question took place.

Supplemental jurisdiction is provided by 28 U.S.C. 1367 whenever a state law claim is part of the same case or controversy as the claim over which the federal court has original jurisdiction. This criterion fits the current state law claims. Promisel v. First American Artificial Flowers, 943 F.2d 251 (2d Cir.1991), cert. denied 502 U.S. 1060, 112 S.Ct. 939, 117 L.Ed.2d 110 (1992). Duplicative litigation at multiple levels of government involving the same facts are contrary to the objectives of the Supplemental Jurisdiction Act and the public interest.

Under the FLSA, it is unlawful for any person to violate the minimum wage, overtime, and record keeping provisions of that statute. Employees who are "engaged in the production of goods for commerce" are entitled to overtime compensation for working more than forty hours in a week. See id. § 207(a).The statute further states that an employer who violates the statute's overtime compensation provision is liable for any unpaid overtime compensation and "an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). The statute's provisions are also applicable to work performed away from the premises or job site, or even at home. 29 Code of Federal Regulations § 785.12.

Defendant did not answer the complaint. Following the entry of default by the Court Clerk on March 5, 2001, plaintiff moved for a default judgment. Defendant's counsel did not enter opposition to this motion, nor did anyone make an appearance on defendant's behalf on the date the motion was heard. Hirsch v. Innovation International, Inc., 1992 WL 316143 at *2 (S.D.N.Y Oct. 19, 1992)(holding that "[the defendant's] default is crystal clear--it does not even oppose this motion").

On July 5, 2001, looking at the pleaded factual allegations of the complaint, and finding them well pleaded, this court found that defendant's failure to answer the complaint or appear at the default motion hearing was wilful and granted plaintiff's unopposed motion for a default judgment. Only "in very narrow, exceptional circumstances" may a court find an allegation not "well pleaded." Trans World Airlines Inc. v. Hughes, 449 F.2d 51 (2d Cir.1971), rev'd on other grounds, 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973).

The Supreme Court has interpreted the term "willful" as used in this statute to mean "that the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." McLaughlin v. Richland Shoe Company, 486 U.S. 128, 133, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988). Willfulness does not require intent. Majchrzak v. Chrysler Credit Corp., 537 F. Supp. 33, 36 (E.D. Mich.1981).

By virtue of defendant's default, the allegations in the complaint filed in the instant action must be accepted as true. Cotton v. Sloan, 4 F.3d 176, 181 (2d Cir. 1993). At the damage hearing, plaintiff had no obligation to introduce any evidence whatever in support of the allegations of her complaint. It must be presumed, therefore, that plaintiff has established all theories of recovery alleged in her complaint. Id. Although a defaulted defendant admits well-pleaded allegations of liability, allegations relating to the amount of damages are not admitted by virtue of default. Rather, the Court determines the amount and character of damages to be awarded. At the most, all that defendant can do is question the extent of the damages suffered by the plaintiff. TransWorld Airline, Inc. v. Hughes, 449 F.2d at 72.

While at times the repercussions of default may seem harsh, "[t]he purpose behind default judgments ... is to allow district courts to manage their dockets efficiently and effectively." Merrill Lynch Mortgage Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir.1990). "If we were to allow a defaulting party to contest liability and interpose general set-offs at the damages inquest, we would eviscerate the rule governing defaults, and for all practical purposes deprive the district courts of this important case management tool." Greyhound Exhibit Group v. E.U.L.U. Realty, 973 F.2d 155, 161 (2d Cir. 1992), cert. denied, 506 U.S. 1080, 113 S.Ct. 1049, 122 L.Ed.2d 357 (1993). There was a time to controvert plaintiff's claims and defendant cannot elect to default and then defend on the merits. It cannot have its cake and eat it to. Thompson v. Wooster, 114 U.S. 104, 5 S.Ct. 788, 29 L.Ed. 105 (1885)

On October 10, 11 and 18, 2001, a hearing was held in this court to ascertain the amount of damages due for unpaid overtime compensation under the Fair Labor Standards Act of 1938, as amended ("FLSA" or "Act"). After careful consideration of the evidence and testimony adduced at the hearing, post-hearing memoranda submitted by the parties, and in light of the entire record in this cause, the court makes the following findings of fact and conclusions of law.

Plaintiff began working for defendant, Superior, a manufactured home mortgage and financing broker, as a Financial Specialist on January 12, 1997. TR 3-4, 12, 133-34, 139. She acted as a intermediary among the manufactured home dealers, purchasers and financial institutions . TR 25. Her duties chiefly involved making sure that the paperwork between the parties was in order. TR 25. Plaintiff left defendant's employ on September 28, 2000. TR 3-4.

Her work was limited during the first three months she worked for the company, because defendant was subject to a business inhibiting injunction which resulted from a lawsuit instituted by the former partner of Mr. Tousaw. TR 27, 135-36, 178. After the injunction was dissolved at the end of march 1997, the work accelerated and intensified throughout the rest of the year. The work day expanded so quickly due to the feverish and successful solicitation of business and the establishment of a firm customer base. TR 23. At that time plaintiff, Robert Tousaw and Jim Bishop, a Marketing Representative were defendant's only employees. TR 12-14, 138-39. This meant, that in addition to plaintiff's regular duties, she had to undertake several other clerical functions, like answering the phone, ordering office supplies and filling other clerical needs. TR 13. This compelled plaintiff to be on the job for considerable number of hours each day, usually arriving at 8:30 a.m. and leaving at 7:00 or 7:30. TR 23, 27-29. Additionally, approximately four evenings per week, plaintiff brought paperwork home, where she would complete it. TR 29. This work, customarily, was performed between 9:00 p.m. and 11:00 p.m, after the family dinner, and she had put her son to bed, when the house was quiet. TR 29, 58, 90-91, 115-16.

By 1998, defendant's business had reached an optimum point. More employees had been hired, which lessened plaintiff's workload, and decreasing her hours worked proportionally. Therefore, plaintiff would get to work at 8:30 a.m., and leave between 6:00 and 6:30 p.m. TR 29. Although plaintiff still took work home for two hour work periods, she would only do so only two or three times per week. TR 30.

The trend off reduction in available work and increase in staff, resulting in fewer hours for plaintiff continued into 1999. TR 30. Consequently, during that span, she worked from 9:00 a.m. to 6:00 p.m. or 6:30 p.m. Similarly, she would only bring work home with her 1 or 2 two nights per week for two hour work sessions. TR 30-31.

The year 2000 brought a further reductio in her hours, working from 9:00 a.m. to 5:00 or 5:30 p.m. TR 31. She stopped her extra effort of bringing work home, began taking lunch breaks rather then working through lunch, and worked no overtime hours in 2000. TR 32, 34. Plaintiff also felt during this time period, that the workplace atmosphere had changed, making her feel uncomfortable and alienated. TR 31-33.

Plaintiff testified that when she brought up the subject of her unpaid overtime wages on four or five occasions in office conversations with Robert Tousaw, he replied "yeah, I know," and after the last conversation, "he kind of chuckled and said it is in contemplation." TR 19 - 22.

Plaintiff's testimony that she worked substantial overtime hours was supported by the testimony of witness Paige Cummings, who was employed as a Finance Coordinator by defendant at that time. TR 282. In responding to a question asking her to elaborate on the number of hours plaintiff worked, Ms. Cummings stated that plaintiff was "always there." TR 286. Ms. Cummings further testified that she and plaintiff would typically arrive at work between 8:00 and 8:30 a.m., and that plaintiff was customarily still working at 5:30 p.m. when Ms. Cummings left work for the day. TR 284-85.

In the course of her career with defendant plaintiff was an hourly employee. TR 3-4. Her starting pay of $8.50 per hour, was raised to $9.00 per hour on May 30, 1997, and she received no further salary raises thereafter. TR 3-4. She was also advised in a memo from her work supervisor, Nila Gibson, that she was an "hourly" employee, and never a "salaried" "employee." TR 15.

Although she worked an indeterminate number of hours, plaintiff never received any payment for overtime, TR 3-4, 17-18, 212-13, 215, she was paid for exactly 40 hours work for each and every one of the close to 200 weeks she was employed by defendant. Def.'s Ex. 6; TR 3-4.

Defendant did not maintain time records for plaintiff, although people hired after her were allowed to submit weekly time records showing the number of hours worked each day, inexplicitly, plaintiff was never asked to do so. TR 49-50, 115, 247-48. She never submitted any written records of the hours she worked, and defendant did not record the hours she worked in any other manner. Def's Ex. 6; TR 227.

Plaintiff testified that she worked a substantial amount of overtime hours, but she was not relying on her memory alone or that of witness, Paige Cummings. . She bases her claim on her memory of her typical work schedule, as well as contemporaneous written records she kept in personal calendars. Pl's. Ex. 2-5, TR 34-39, 71-72. While these records are not complete because the excessive number of hours she was working in 1997 prevented the keeping of a written record, they furnish documentary evidence, recorded contemporaneously of the specific times plaintiff arrived and departed work on certain dates. The calenders also show those times plaintiff worked overtime, the number of files she worked on at home, as well as the time she was late, left early, took a lunch break, or was absent altogether. Pl's. Ex. 2-5, TR 36.

Robert Tousaw, defendant's president and owner of defendant, testified that plaintiff, worked few, if any, overtime hours, based on his recollection, and his company's records were accurate in showing that plaintiff worked exactly 40 hours for each of the approximately 200 weeks she was in defendant's employ with no overtime work. TR 212

On direct examination, Mr. Tousaw testified that he believed that at no time during her employment by defendant, did plaintiff work any overtime hours because he worked closely with her and knew, roughly, what time she came in and went home. TR 158. However, on cross examination when asked about plaintiff's arrival and departure times on specific dates, neither he, nor defendant's payroll records, could supply any answers. It was pointed out by plaintiff's ...


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