United States District Court, E.D. New York
JOSE GALVEZ, ELIGIO HERNANDEZ, DOUGLAS LUND, DONALD A. MORRIS, and WILLIAM SCHAFER, Plaintiffs, -
- ASPEN CORPORATION and/or ASPEN IRRIGATION INC. and/or MANAGEMENT CONSULTING LABORERS and any related corporate entities, DONALD ADKINS, RONALD ADKINS, and THE CINCINNATI INSURANCE COMPANY, Defendants
[Copyrighted Material Omitted]
For Jose Galvez, Eligio Hernandez, Douglas Lund, Donald A. Morris, William Schafer, Plaintiffs: Lloyd Robert Ambinder, Virginia & Ambinder LLP, New York, NY.
For All Plaintiffs, Plaintiff: Lloyd Robert Ambinder, Suzanne B. Leeds, Virginia & Ambinder, LLP, New York, NY.
For Aspen Corporation, Aspen Irrigation Inc., Management Consulting Laborers and any related corporate entities, Donald Adkins, Ronald Adkins, Cincinnati Insurance Company, Defendants: Jeltje DeJong, Joshua S Shteierman, Kelly E Wright, Devitt Spellman Barrett, LLP, Smithtown, NY.
REPORT AND RECOMMENDATION
A. KATHLEEN TOMLINSON, Magistrate Judge.
Plaintiffs Jose Galvez, Eligio Hernandez, Douglas Lund, Donald A. Morris, and William Schafer (" Plaintiffs" ) initiated this action on October 20, 2009. The Complaint alleges violations of the Fair Labor Standards Act (" FLSA" ), 29 U.S.C. § § 207, et seq . on the part of Defendants Aspen Corporation, Aspen Irrigation Inc., Management Consulting Laborers (" Aspen" ) and Donald and Ronald Adkins (the " Adkins" and, together with Aspen, the " Employers" ). Plaintiffs have also asserted claims against the Employers' surety, Defendant Cincinnati Insurance Company (" Cincinnati Insurance" and, together with the Employers, the " Defendants" ). Virginia & Ambinder, LLP (" V& A" ), Plaintiffs' counsel, now seeks to enforce a charging lien upon Defendants pursuant to New York Judiciary Law § 475 based upon a settlement reached by the Defendants with the New York State Department of Labor (" NYSDOL" ) in a separate proceeding [DE 35] concerning the Plaintiffs' wages. For the reasons that follow, the Court recommends that V& A's motion be DENIED.
The Plaintiffs were employed to perform construction-related work for Aspen from October 2008 until January 2009. Compl. ¶ ¶ 6-10. Plaintiffs allege that Defendants failed to pay them overtime at the prevailing wage rate in connection with a Public Works Project at the Bellport Golf Course in Bellport, New York (the " Project" ) during the relevant period. Id . ¶ ¶ 2-3. Defendants' contract for the Project required payment to laborers at the prevailing wage rate, including supplements. Id . ¶ ¶ 20-22. Defendant Cincinnati Insurance issued a labor and materials payment bond (the " Bond" ) in connection with the Project, pursuant to the terms of which Cincinnati Insurance assumed joint and several liability with the Employers for payment of wages due. Id . ¶ ¶ 16, 26. Based on these allegations, Plaintiffs sought overtime compensation from the Employers pursuant to the FLSA, id . ¶ ¶ 32-33, and prevailing wages and supplements from Cincinnati Insurance pursuant to the Bond and New York Labor Law § 220-g, id . ¶ ¶ 41-50.
Defendants, through their attorneys Devitt Spellman Barrett, LLP answered the Complaint on December 9, 2009 and asserted several affirmative defenses, including: (1) Plaintiffs received full payment for all work performed; (2) some or all of the employees were exempt under the FLSA; (3) accord and satisfaction; and (4) estoppel, etc. Answer [DE 4], ¶ ¶ 18-26. An Initial Conference was held on January 25, 2010, at which time this Court entered a Case Management and Scheduling Order. DE 7, 8.
At the June 8, 2010 Discovery Status Conference, Defendants' counsel advised the Court that a related criminal action was pending against the Defendants in state court. DE 10. Thereafter, Defendants moved for a protective order " prohibiting the depositions of Ronnie and Donnie Adkins until the conclusion of the underlying criminal proceedings" because the depositions would infringe upon the Adkins' Fifth Amendment rights against self-incrimination since the state court proceeding involved the same underlying matters as the instant litigation. DE 11. Counsel for Plaintiffs did not oppose the motion on the condition that Plaintiffs be given the opportunity to depose the Adkins Defendants at the conclusion of the criminal action and before trial in this case. DE 12. The motion for protective order was therefore granted. DE 13.
On October 4, 2010, at Defendants' request, the discovery deadlines were extended and the Court entered an Amended Case Management and Scheduling Order. DE 15. Defendants sought another extension on November 19, 2010 because the criminal proceedings in state court remained pending. DE 16. That request was granted and the Court entered a Second Amended Case Management and Scheduling Order. See DE 17.
On March 11, 2011, Defendants requested a further extension. DE 18. In that request, Defendants advised the Court that settlement discussions in the criminal matter had ceased and the matter was likely to proceed to trial. Id . The Court granted Defendants' requests and held all deadlines in abeyance pending a status conference set for July 8, 2011. See Electronic Order dated March 14, 2011. At the July 8 status conference, Defendants' counsel advised the Court that settlement discussions in the criminal proceeding had resumed and that a resolution was expected in the next 60 to 90 days. DE 20. In light of the impact of the criminal proceeding on this case, the Court continued to stay discovery; however, the Court advised the parties that this case could not " remain in limbo for an extended period" and directed the parties to be prepared to proceed with discovery at the next status conference scheduled for October 6, 2011. Id . At the October 6, 2011 conference, the Court was advised that complications in the criminal matter were still preventing the depositions of both Adkins Defendants although the Plaintiffs had been deposed. DE 21. A further conference was scheduled for January 12, 2012. Id .
At the January 12, 2012 Status Conference, Defendants' counsel reported that the state criminal proceeding had been resolved with the entry of a plea and that the NYSDOL proceeding was being handled
in tandem with the resolution of the criminal case. DE 22. The Civil Conference Minute Order from the January 12, 2012 conference contained the following statement: " Counsel for both sides agree that if the DOL action is resolved, that outcome may well result in a resolution of the current matter as well. . . . I am putting this case over for a telephone conference on February 15 so that the parties can advise if the instant case has been resolved." Id .
On February 14, 2012, Defendants' counsel filed a letter on ECF requesting an adjournment of the status conference scheduled for the next day. DE 23. In that letter, counsel stated:
. . . since the last conference on January 12, 2012, defendants have reached a settlement with the Department of Labor and are working with plaintiff to reconcile the resolution of that administrative matter with the instant civil lawsuit.
In light of the foregoing, with the consent of the plaintiffs, defendants respectfully request that tomorrow's telephone conference be adjourned until the end of next week.
Id . The next conference ultimately went forward on March 2, 2012 at which time Defendants' counsel advised the Court that the New York DOL proceeding had been resolved. In the Civil Conference Minute Order posted as a result of that conference, the Court noted the following information:
1. Defendants' counsel reported today that one of the corporations pleaded guilty to a violation in the criminal proceeding without an allocution. In addition, defendants' counsel stated that the Department of Labor action has been resolved and payments have been made to the plaintiffs through the auspices of the Department of Labor.
Plaintiffs' counsel stated that his office was not aware of any payments being made in the Department of Labor investigation. On that basis, counsel added that he was not aware whether the plaintiffs had signed releases and whether the DOL resolution involved only the state prevailing wage claims or the federal claims for overtime as well. Counsel also noted that there is an issue of payment of plaintiffs' counsel fees.
According to defendants' counsel, the DOL resolution encompassed both the prevailing wage claims and the overtime claims. However, defendants' counsel does not know whether the plaintiffs signed releases.
2. In light of the foregoing information, I have directed counsel for both sides to engage in a good faith meet-and-confer to determine whether the instant case can be finally resolved. . . .
When the Court spoke with the parties again on March 27, 2012, counsel represented that they had not yet settled the case but that they had continued to make progress. DE 28. The Court reiterated that this matter had been complicated by the related criminal proceeding and the NYSDOL action which had apparently reached its own resolution with the Defendants, which, as the Court noted, was " not known to plaintiffs' counsel until recently." Id .
On April 16, 2012, counsel for the Plaintiffs reported that the parties had not reached a settlement and that only three of the five named Plaintiffs were interested in pursuing this litigation in the aftermath of the NYSDOL settlement. DE 29. Since the last conference, a settlement proposal was made and rejected and a subsequent proposal had been made by ...