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Daniel Bogosian, et al., Individually and On Behalf of Others Similarly v. All American Concessions

September 26, 2011

DANIEL BOGOSIAN, ET AL., INDIVIDUALLY AND ON BEHALF OF OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
ALL AMERICAN CONCESSIONS, ALL AMERICAN CONCESSIONS, INC., ALL AMERICAN CONCESSIONS ENTERPRISES, INC., MITCH STEINBERG, MARTY ROSEN, RESTAURANT ASSOCIATES, UNITED STATES TENNIS ASSOCIATION, DEFENDANTS.



The opinion of the court was delivered by: Mauskopf, United States District Judge.

MEMORANDUM AND ORDER

Plaintiffs brought this putative class and collective action pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and state law, to recover allegedly unpaid wages. On June 1, 2010, the parties reported that the named plaintiffs had settled all claims against defendant Restaurant Associates ("Restaurant"). (See Minute Entry for Status Conf. before Magistrate Judge Robert M. Levy, June 1, 2010.) On October 13, 2010, this Court, on consent, ordered dismissal of plaintiffs' claims against Restaurant and the United States Tennis Association ("USTA"). (Stipulation and Order (Doc. No. 80).) Presently before the Court is Restaurant's motion for summary judgment on its cross-claim for indemnity against defendants All American Concessions, Inc. ("All American"), a Florida corporation, and Marty Rosen, All American's principal. (Cross-cl. (Doc. No. 46); Restaurant's Mot. for Summ. J. (Doc. No. 81).) For the reasons below, Restaurant's motion is GRANTED.*fn1

BACKGROUND*fn2

USTA contracted with a subsidiary of Restaurant to provide catering services for the 2005 United States Open tennis tournament (the "U.S. Open"). (Restaurant's 56.1 Stmt. (Doc. No. 81-1) ¶ 20.) Restaurant, in turn, subcontracted with All American, a Florida corporation, to sell coffee, tea, and other products at U.S. Open concession stands (the "Contract"). (Id. ¶ 21.) The Contract provided for All American's indemnification of Restaurant. (Decl. of Andrew P. Marks ("Marks Decl."), Ex. 7 (Doc. 81-10) (the Contract), at ¶ 5.2.) The indemnification clause is discussed in greater detail below. Also according to the Contract, All American was responsible to "recruit, hire, train, direct and discipline the necessary employees" for the concession stands. (Contract ¶ 2.9; see Restaurant's 56.1 Stmt. ¶ 26; All American's and Rosen's Joint Cntrstmt. (Doc. No. 82-1) ("Rosen's Cntrstmt.") ¶ 26.) The Contract also obligated All American to procure various insurance policies, including general liability insurance, employer's liability insurance, and umbrella or excess liability insurance, each naming Restaurant and USTA as additional insureds. (Contract ¶ 5.1; Restaurant's 56.1 Stmt. ¶ 9.) All American never procured any insurance, however. (Restaurant's 56.1 Stmt. ¶ 9.)

Rosen was All American's sole incorporator, director, president, registered agent, and majority shareholder, until its administrative dissolution in September 2006 for failure to file annual reports required under Florida law. See Restaurant's 56.1 Stmt. ¶¶ 1, 14; Rosen's Cntrstmt. ¶ 14; Marks Decl., Ex. 1 (Doc. 81-4) (Report of Fl. Dep't of State, Div. of Corps.). Rosen operated All American from his Florida home, but traveled to New York to help supervise the concession stands. (Restaurant's 56.1 Stmt. ¶ 30.) All American never owned an insurance policy or any other real or personal property. (Id. ¶ 9.) With the exception of tax returns for fiscal years 2005 and 2006, All American failed to produce in discovery any formation documents, financial books or records, documents relating to bank accounts, records of shareholder or director meetings, paid invoices, or other accounting records, despite Restaurant's discovery requests. (See id. ¶¶ 4, 5; Rosen's Cntrstmt. ¶ 5.)

Plaintiffs were workers at the concession stands provided for in the Contract. (Restaurant's 56.1 Stmt. ¶¶ 35--36; Rosen's Cntrstmt. ¶¶ 35--36.) In their Complaint, plaintiffs alleged that defendants failed to pay straight time at the promised hourly wage and overtime at time and a half, as required by the FLSA. (Compl. (Doc. No. 1) ¶¶ 16--21, 107, 113; see 29 U.S.C. § 207(a)(1).) Plaintiffs alleged that All American hired them to work at the U.S. Open, and that All American, the USTA and Restaurant were "joint employers," each liable for the unpaid wages. (Compl. ¶¶ 14, 15, 22.) Restaurant and USTA subsequently moved to dismiss all claims against them, arguing that they were not "joint employers" of plaintiffs. (Defs. Restaurant's and USTA's Mot. to Dismiss (Doc. No. 24); Defs. Restaurant's and USTA's Mem. in Supp. of Mot. to Dismiss (Doc. No. 25) 1.) This Court denied that motion in September of 2008, finding that the fact-intensive nature of the test for joint employment precluded dismissal at such an early stage of the proceedings. Bogosian v. All Am. Concessions, No. 06-CV-1633 (RRM)(RML), 2008 WL 4534036, at *4 (E.D.N.Y. Sept. 30, 2008). By June of 2010, Restaurant settled with plaintiffs for $92,000. (See Minute Entry for Status Conf. before Magistrate Judge Robert M. Levy, June 1, 2010; Restaurant's 56.1 Stmt. ¶¶ 86--89; Rosen's Cntrstmt. ¶¶ 86--89.) Rosen and All American declined to participate in the settlement, although plaintiffs and Restaurant presented the opportunity to do so. (Restaurant's 56.1 Stmt. ¶¶ 89--90; Rosen's Cntrstmt. ¶ 89.)

Restaurant's instant motion for summary judgment on its cross-claim for indemnity is based on the Contract's indemnity provision. Restaurant seeks also to pierce All American's corporate veil to hold Rosen personally liable for All American's contractual obligation to indemnify Restaurant. For the reasons set forth below, the Court agrees with Restaurant on both fronts, and finds both All American and Rosen jointly and severally liable to Restaurant for the settlement amount of $92,000, and for reasonable attorney's fees and costs.

STANDARD OF REVIEW

Summary judgment is appropriate when the pleadings, depositions, interrogatories, admissions, and affidavits demonstrate that there are no genuine issues of material fact in dispute and that one party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248 (1986).

In deciding a summary judgment motion, a district court must draw all reasonable inferences in favor of the nonmoving party. See id. at 249 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158--59 (1970)); Castle Rock Entm't, Inc. v. Carol Publ'g Grp., Inc., 150 F.3d 132, 137 (2d Cir. 1998). Thus, the court must not "weigh the evidence but is instead required to view the evidence in the light most favorable to the party opposing summary judgment, to draw all reasonable inferences in favor of that party, and to eschew credibility assessments." Amnesty Am. v. Town of W. Hartford, 361 F.3d 113, 122 (2d Cir. 2007) (quoting Weyant v. Okst, 101 F.3d 845, 854 (2d Cir. 1996)). Any evidence in the record of any material fact from which an inference could be drawn in favor of the non-moving party precludes summary judgment. See Castle Rock Entm't, 150 F.3d at 137.

Once the movant has demonstrated that no genuine issue of material fact exists, such that it is entitled to judgment as a matter of law, then "the nonmoving party must come forward with 'specific facts showing that there is a genuine issue for trial.' " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ. P. 56(e)) (emphasis in original). However, there must exist more than mere "metaphysical doubt as to the material facts" to defeat a summary judgment motion. Id. at 586. Instead, the non-moving party must present "concrete evidence from which a reasonable juror could return a verdict in his favor." Anderson,477 U.S. at 256. Only disputes over material facts "that might affect the outcome of the suit under the governing law" will properly preclude the entry of summary judgment. Id. at 248; see also Matsushita, 475 U.S. at 586.

DISCUSSION

I.Contractual Indemnity

Section 5.2 of the Contract, entitled ...


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