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Gunawan v. Sake Sushi Restaurant

United States District Court, E.D. New York

September 24, 2012

Fanny

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Daniel Maimon Kirschenbaum, Joseph Herzfeld Hester & Kirschenbaum LLP, Matthew David Kadushin, Joseph Herzfeld Hester & Kirschenbaum, New York, NY, for Plaintiff.

John Troy, Troy & Associates, PLLC, Flushing, NY, for Defendant.

MEMORANDUM AND ORDER

JAMES ORENSTEIN, United States Magistrate Judge.

Plaintiff Fanny " Fei Fei" Gunawan (" Gunawan" ) has sued defendant Sake Sushi Restaurant, Inc. (the " Restaurant" ) for its alleged failure to pay her the wages required under federal and state law. Docket entry (" DE" ) 1 (Complaint). The Restaurant initially answered the Complaint, DE 5, and the parties thereafter consented to refer the case to a magistrate judge for all purposes including the entry of judgment. DE 7; see 28 U.S.C. § 636(c); Fed.R.Civ.P. 73. Later, after the parties had completed discovery and dispositive motion practice, the Restaurant fell out of communication with its counsel

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and failed to participate in the submission of a joint pretrial order, and has made no effort to participate in the proceedings since then. I therefore directed the Clerk to strike the Restaurant's Answer and enter its default. See DE 32. Gunawan now seeks a default judgment in her favor. DE 33. For the reasons set forth below, I grant Gunawan's motion and award judgment against the Restaurant in the total amount of $68,431.84.

I. Background

The following recitation of facts is drawn primarily from allegations in the Complaint, which are deemed to be true as a result of the Restaurant's default, see Finkel v. Romanowicz, 577 F.3d 79, 83 n. 6 (2d Cir.2009), as well as other uncontested evidence in the record. That record includes the parties' submissions with respect to Gunawan's motion for summary judgment, which the court decided prior to the Restaurant's default, see Gunawan v. Sake Sushi Restaurant, 2011 WL 3841420, at *1 (E.D.N.Y. Aug. 26, 2011), as well as Gunawan's uncontroverted submissions in support of the instant motion. DE 33. [1]

The Restaurant, located in Queens, New York, is an employer and an enterprise engaged in interstate commerce within the meaning of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (the " FLSA" ). Gunawan worked as a waitress at the Restaurant from May 2006 until approximately June 2007. Gunawan, 2011 WL 3841420, at *1; Complaint ¶ 5; DE 33-6 (Affidavit of Fanny " Fei Fei" Gunawan) (" Gunawan Aff." ) ¶ 3. During that time she worked approximately 67 hours per week. Gunawan Aff. ¶ 5.[2] The Restaurant paid Gunawan a flat rate of $500 per month, regardless of the amount hours she worked; it also retained a " significant percentage" of Gunawan's tips paid via credit card and required her to share the remaining cash tips with her coworkers in the kitchen and sushi bar. Complaint ¶¶ 10, 12.[3]

On the basis of those facts, Gunawan filed the Complaint on November 16, 2009, in which she asserted two causes of action under the minimum wage and overtime provisions of the FLSA, as well as four additional claims under the labor laws of New York State. Complaint ¶¶ 13-28; see 29 U.S.C. § 201, et seq. ; New York Labor Law (" NYLL" ) §§ 196-d, 650, et seq. In support of the claims under federal law, Gunawan asserted that " [a]t all relevant times, [the Restaurant] has been, and continues

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to be, ‘ employers' [sic] engaged in interstate ‘ commerce’ and/or in the production of ‘ goods' for ‘ commerce,’ within the meaning of [the] FLSA," Complaint ¶ 14, and that it committed all " alleged acts knowingly, intentionally, and willfully," id. ¶ 16.

As mentioned above, the Restaurant originally defended the case, and the parties litigated a motion for summary judgment brought by Gunawan. See DE 12 through 26. Judge Carter denied the motion, identifying several outstanding questions of fact requiring resolution— including, as relevant to this decision, questions regarding both " the appropriate statute of limitations and [the] period (if any) for which it should be tolled." Gunawan, 2011 WL 3841420, at *3. With respect to the statute of limitations issue, Judge Carter began by observing that the relevant period under the FLSA is two years, except when the violation is " willful," in which case the limitations period is extended an additional year. Id. at *2 (citing 29 U.S.C. § 255(a)). Because a claim for unpaid wages ripens on the date the employee should have been paid, and Gunawan alleged that her wages were paid on a monthly basis, Judge Carter held that Gunawan's wage claim first accrued when she received her first paycheck from the Restaurant in June 2006. Id. Judge Carter further observed that because Gunawan's

Complaint was not filed until November 2009[,] [a]pplying the two year statute of limitations would result in the dismissal of her FLSA claims in their entirety. However, if the three year statute of limitations were applied, that portion of her claim[s] accruing on or after November 2006 ( i.e., those related to wages earned from October 2006 to June 2007) would be timely.

Id.; see also, e.g., Hosking v. New World Mortg., Inc., 602 F.Supp.2d 441, 446 (E.D.N.Y.2009) (noting that " for the purposes of establishing the statute of limitations under the FLSA, a new cause of action accrues with each payday following an allegedly unlawful pay period" ) (internal citation omitted).

Judge Carter's task in evaluating the statute of limitations question at that stage of the proceedings was complicated, however, by Gunawan's failure to argue that the longer limitations period applied in her case, notwithstanding the fact that the legal burden to show willfulness, and hence to prove her entitlement to it, belonged to her as the plaintiff. Gunawan, 2011 WL 3841420, at *2 (citing Young v. Cooper Cameron Corp., 586 F.3d 201, 207 (2d Cir.2009)). Instead, Gunawan argued that the court should equitably toll the statute of limitations for the entire period of her employment, on the theory that the Restaurant's failure to post a notice of worker's rights, as required by 29 C.F.R. § 516.4, or to otherwise inform her of those rights, entitled her to such tolling. Id. at *2-3. Judge Carter rejected this argument, holding that " ‘ the failure to provide an employee the notice required by the FLSA’ ... is insufficiently extraordinary [to justify the court's use of tolling] in the absence of ‘ some sort of deception.’ " Id. at *3 (quoting Copantitla v. Fiskardo Estiatorio, Inc., 788 F.Supp.2d 253, 319 (S.D.N.Y.2011)). He further noted that, in any case, because Gunawan had " testified that she learned of the [relevant labor] laws in June 2007 when she was fired[,]" " [e]ven if the statute of limitations were tolled until that date, her FLSA claims would [still] be untimely under the two year statute of limitations." Id.

In summary, then, as Judge Carter correctly observed, Gunawan cannot proceed with any portion of her FLSA claims without establishing the Restaurant's willfulness in violating that statute, and

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therefore her entitlement to the longer three-year limitations period. Secondly, even under the three-year limitations period, only " that portion of her claim[s] accruing on or after November 2006 ( i.e., [the portion] related to wages earned from October 2006 to June 2007) would be timely" without the separate and additional application of equitable tolling to the period of her employment with the Restaurant. Id. at *2. Finally, Judge Carter held that the court cannot properly toll Gunawan's claims on the stand-alone basis of the Restaurant's failure to post a notice of worker's rights; rather, Gunawan must additionally demonstrate " some sort of deception" on the part of the Restaurant in order to earn the benefit of such tolling. See id. at *3.

Shortly after Judge Carter denied Gunawan's summary judgment motion, the Restaurant's owner, without any explanation, cut off contact with his attorney. When counsel's efforts to locate his client repeatedly failed, I directed the clerk to strike the Restaurant's answer and enter its default, and this motion for default judgment followed. See minute entries dated November 9, November 16, and December 6, 2011, and January 27, 2012; DE 32; DE 33.

II. Discussion

A. Applicable Law

1. Default

When a defendant defaults, the court must accept as true all well-pleaded allegations in the complaint, except those pertaining to the amount of damages. Fed.R.Civ.P. 8(b)(6); see Romanowicz, 577 F.3d at 83 n. 6 (2d Cir.2009) (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir.1992)). The fact that a complaint stands unanswered does not, however, suffice to establish liability on its claims: a default does not establish conclusory allegations, nor does it excuse any defects in the plaintiff's pleading. Thus, with respect to liability, a defendant's default does no more than concede the complaint's factual allegations; it remains the plaintiff's burden to demonstrate that those uncontroverted allegations, without more, establish the defendant's liability on each asserted cause of action. See, e.g., Romanowicz, 577 F.3d at 84; DIRECTV, Inc. v. Neznak, 371 F.Supp.2d 130, 132-33 (D.Conn.2005) (denying default judgment on several claims based only on conclusory allegations which lacked a sufficient factual basis for a finding of liability); see also Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 69 (2d Cir.1971) (default-based liability is established by " well-pleaded allegations in a complaint" ), rev'd on other grounds, 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973); Levesque v. Kelly Commc'ns, Inc., 1993 WL 22113, at *5 (S.D.N.Y. Jan. 25, 1993) (" the Court must be satisfied initially that the allegations of the complaint are ‘ well-pleaded’ " ) (citing Hughes, 449 F.2d at 63).

If the defaulted complaint suffices to establish liability, the court must conduct an inquiry sufficient to establish damages to a " reasonable certainty." Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir.1999) (quoting Transatl. Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir.1997)). Detailed affidavits and other documentary evidence can suffice in lieu of an evidentiary hearing. Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir.1991); Credit Lyonnais, 183 F.3d at 155. When a defendant defaults in an action brought under the FLSA, the plaintiff's recollection and estimates of hours worked are presumed to be correct. Chun Jie Yin v. Kim, 2008 WL 906736, at *3 (E.D.N.Y. Apr. 1, 2008) (citing

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Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946); Reich v. S. New England Telecomms. ...


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