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Joseph v. HDMJ Rest., Inc.

United States District Court, E.D. New York

August 19, 2013

GERMELIA JOSEPH, Plaintiffs, -
v.
- HDMJ RESTAURANT, INC., Defendants

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For Germelia Joseph, Plaintiff: Edward Lee Sample, II, LEAD ATTORNEY, Farmingdale, NY.

OPINION

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REPORT AND RECOMMENDATION

A. KATHLEEN TOMLINSON, U.S. Magistrate Judge.

I. Preliminary Statement

Plaintiff Germelia Joseph brings this action against Defendant HDMJ Restaurant, Inc. (" Defendant" or " HDMJ" ), seeking redress for violations of the Americans with Disabilities Act of 1990, 42 U.S.C. § 12112, et seq . (" ADA" ) and Title VII of the Civil Rights Act of 1964, as amended, (" Title VII" ), 42 U.S.C. § 2000e et seq . On December 5, 2012, Plaintiff moved for a default judgment against the Defendant. DE 46. By Order dated December 17, 2012, Judge Seybert referred Plaintiff's motion to this Court for a Report and Recommendation as to whether Plaintiff has demonstrated that the allegations in the Complaint establish Defendant's liability such that the motion for default should be granted, and if so, what damages, costs, and/or fees, if any, should be awarded. See Electronic Order, Dec. 17, 2012.

II. Pertinent Facts

Plaintiff is a black female of Haitian national origin. Compl. at 6. Plaintiff was employed as a waitress at HDMJ Restaurant, operated by Defendant HDMJ, from at least March 2004 until January 23, 2006. Compl. at 3, 6, 10. HDMJ Restaurant is owned by former defendants George Athanasopoulos (" George" ), Gus Athanosopoulos (" Gus" ), and Peter Athanasopoulos (" Peter" ) (collectively, the " Owners" ). Compl. at 7. At all times relevant to the Complaint, George was Plaintiff's supervisor. Compl. at 1. Defendant employs more than 15 employees. Compl. at 1.

During Plaintiff's course of employment, the Owners insulted and abused Plaintiff on numerous occasions. Compl. at 3, 8-10. George constantly cursed at Plaintiff, calling her a " f****g bitch", " n****r" and " malvos." Compl. at 8.[1] Further, the Owners repeatedly asked Plaintiff to perform oral sex on them. Compl. at 8-9. Gus demanded oral sex from Plaintiff on numerous occasions. Compl. at 8. On one occasion, Gus called Plaintiff into the kitchen and told Plaintiff to " feel him" because he was not wearing any underwear and he wanted Plaintiff to give him a " blow job." Id . Peter spoke frequently about " what he did with his girlfriend" and how much he liked the " blow jobs." Id . One day Peter pulled a knife from his belt pocket and told Plaintiff, " look this is the knife I use to cut the throats of waitresses who refuse to give me a blow job." Compl. at 8-9. On numerous occasions, George grabbed his crotch and would tell Plaintiff " here, suck my dick." Compl. at 8. When Plaintiff complained about this behavior to Gus he said it was a " joke for n****rs." Id . Once, a busboy asked Plaintiff to perform oral sex on him. Compl. at 9 Plaintiff reported the behavior to Gus, but instead of reprimanding the busboy, Gus sent Plaintiff home and did not permit her to return to work for 12 days. Id .

In February 2005, Plaintiff suffered a knee injury in a car accident. Compl. at 9. The Owners were aware of Plaintiff's accident and that she had surgery on her knee. Id . On January 22, 2006, Plaintiff was not being assigned any tables to serve. Id . When Plaintiff asked Peter why she was not being assigned any tables, he said that white girls were supposed to make more money than foreign blacks. Id . He

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then became angry and pulled Plaintiff down a flight of stairs to curse and yell at her. Id . Plaintiff was limping and when Peter grabbed her she told him that she could not go down the stairs. Id . Peter responded, saying that he did not " give a f**k" and did not care that Plaintiff was hurt. Id . Peter stated that it was his " f*****g business and he could do whatever the f*** he wanted." Id . Plaintiff complained to Gus about this incident but no action was taken on Plaintiff's behalf. Id . However, the following day, on January 23, 2006, George fired Plaintiff. Compl. at 10. George told Plaintiff that Gus had informed him of her complaint against Peter and that George no longer wanted her there. Compl. at 10. Plaintiff alleges damages as a result of the foregoing incidents. Compl. at 7.

III. Procedural History

Plaintiff, proceeding pro se, filed her Complaint on January 20, 2009 against HDMJ and the Owners alleging race, color, national origin, sex and disability discrimination under the ADA and Title VII, as well as state law claims under the New York State Human Rights Law, N.Y. Exec. Law § 296, et seq . (" NYSHRL" ), and N.Y. Labor Law § 740. See Compl. at 1-5. In March 2009, HDMJ and the Owners moved to dismiss the action. DE 8, 9, 11, 12, 13. The motions to dismiss were granted in part and denied in part. See Joseph v. HDMJ Restaurant, Inc., 685 F.Supp.2d 312 (E.D.N.Y. 2009) (decision on motion to dismiss). Judge Seybert dismissed Plaintiff's state law claims in their entirety. Id . at 317. With respect to HDMJ, Plaintiff's Title VII and ADA claims were permitted to proceed. Id . at 315-317. However, finding that there is no individual liability under Title VII and the ADA, Judge Seybert dismissed those claims against the Owners, leaving HDMJ as the sole remaining defendant. Id . at 317-18. An interlocutory appeal was certified on behalf of HDMJ, but was later withdrawn at HDMJ's request due to a lack of resources. DE 19-26.

On July 3, 2012, Defendant's attorney moved to withdraw as counsel for HDMJ. See DE 31. On July 31, 2012, this Court held a hearing with the parties and, after providing counsel as well as the Athanasopoulos brothers a full opportunity to be heard, granted the motion of the Law Offices of David Feather to be relieved as counsel in this case. DE 34. The Court advised Gus Athanasopoulos, HDMJ's principal, that the corporation could not proceed pro se in this action by law. Id . The Court gave HDMJ 30 days to obtain new counsel. Id . Further, the Court mailed individual copies of the Civil Conference Minute Order of the July 31, 2012 conference to Defendant's four shareholders, George, Peter, Gus, and James Athanasopoulos. Id .

At a status conference held on September 18, 2012, Defendant's four shareholders represented to the Court that they would not hire new counsel to represent HDMJ and would not defend the corporation against this lawsuit. DE 38. The Court questioned each shareholder under oath to verify his understanding of the consequences of failing to defend HDMJ and further explained the ramifications should Plaintiff move for a default judgment as a result. Id . Notwithstanding the Court's cautionary instructions, the Athanasopoulos brothers declined to change their position. Id . The Court then advised Plaintiff that she could proceed to file a motion for default judgment against HDMJ if she chose. Id . On October 24, 2013, attorney Edward Sample filed a Notice of Appearance on behalf of Plaintiff. DE 41. The instant motion followed. DE 46.

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IV. Legal Standard

" When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Fed.R.Civ.P. 55(a). Once the clerk's certificate of default is issued, the moving party may then make an application for entry of a default judgment, pursuant to Fed.R.Civ.P. 55(b), as Plaintiff has done here. See Kiewit Constructors, Inc. v. Franbuilt, Inc., No. 07-CV-121A, 2007 WL 4405029, at *2 (W.D.N.Y. Dec. 14, 2007); FashionTV.com v. Hew, No. 06 CV 3200, 2007 WL 2363694, at *2 (S.D.N.Y. Aug. 17, 2007). A default constitutes an admission of all well-pleaded factual allegations in the complaint and the allegations as they pertain to liability are deemed true. Gurung v. Malhotra, 279 F.R.D. 215, 221 (S.D.N.Y. 2011); Joe Hand Promotions, Inc. v. El Norteno Rest. Corp., No. 06-CV-1878, 2007 WL 2891016, at *2 (E.D.N.Y. Sept. 28, 2007) (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992), cert. denied, 506 U.S. 1080, 113 S.Ct. 1049, 122 L.Ed.2d 357 (1993)). A default judgment entered on the well-pleaded allegations in the complaint establishes a defendant's liability. See Garden City Boxing Club, Inc. v. Morales, No. 05-CV-0064, 2005 WL 2476264, at *3 (E.D.N.Y. Oct. 7, 2005) (citing Bambu Sales, Inc. v. Ozak Trading, Inc., 58 F.3d 849, 854 (2d Cir. 1995)).

The determination of a motion for default judgment is left to the sound discretion of the district court. Shah v. N.Y. State Dep't of Civil Serv., 168 F.3d 610, 615 (2d Cir. 1999); Merrill Lynch Bus. Fin. Servs., Inc. v. Brook Island, No. 06 CV 5912, 2010 WL 2787553, at *3 (E.D.N.Y. July 14, 2010). As the Second Circuit notes, when determining whether to grant a default judgment, the Court is guided by the same factors that apply to a motion to set aside entry of a default. See Pecarsky v. Galaxiworld.com, Ltd., 249 F.3d 167, 170-171 (2d Cir. 2001); Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). These factors are: (1) " whether the defendant's default was willful; (2) whether defendant has a meritorious defense to plaintiff's claims; and (3) the level of prejudice the non-defaulting party would suffer as a result of the denial of the motion for default judgment." Mason Tenders Dist. Council v. Duce Constr. Corp., No. 02 Civ. 9044, 2003 WL 1960584, at *2 (S.D.N.Y. Apr. 25, 2003) (citation omitted). The court analyzes the three factors necessary for the entry of a default judgment below.

A. Willfulness

In general, a " willful and deliberate disregard for [court] orders . . . militates in favor of default judgment." Rodriguez v. Almighty Cleaning, Inc., 784 F.Supp.2d 114, 123-24 (E.D.N.Y. 2011); see also H. Daya Int'l Co., Ltd. v. Do Denim LLC, 11 CIV. 4028, 2012 WL 2524729, at *4 (S.D.N.Y. June 29, 2012) (" Continued noncompliance with a court order suggests willfulness." ). This includes where, as here, a corporation fails to comply with a court order to obtain counsel. See Eagle Assocs. v. Bank of Montreal, 926 F.2d, 1305, 1310 (2d Cir. 1991) (finding partnership's willful and " cavalier disregard" for court order to obtain counsel constituted failure under Rule 55(a) to " otherwise defend" ); Powerserve Int'l, Inc. v. Lavi, 239 F.3d 508, 514 (2d. Cir. 2001) (upholding default judgment where individual and corporate defendants did not obtain counsel in the time frame ordered by the court); Dow Chem. Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 336 (2d Cir. 1986) (finding that there was " no question" that default

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was properly entered where corporate defendant failed to comply with court's order to obtain new counsel); S & S Mach. Corp. v. Wuhan Heavy Duty Mach. Tool Group Co., Ltd., No. 07-CV-4909, 2012 WL 958527, at *3 (E.D.N.Y. Mar. 21, 2012) (noting that where a court has ordered a corporate entity to appear through counsel, it is appropriate to enter a default judgment when the entity willfully disregards the court order); Next Proteins, Inc. v. Distinct Beverages, Inc., No. 09 CV 4534, 2012 WL 314871, at *2 (E.D.N.Y. Feb. 1, 2012) (granting motion for default judgment where over seven months had passed since counsel for defendant withdrew and because defendant had since failed to appear by counsel despite numerous allowances by the court); H. Daya Int'l Co., 2012 WL 2524729, at *4 (finding default willful where limited liability corporations failed to retain new counsel despite " requirements of the law" and court order); Franco v. Ideal Mortg. Bankers, Ltd., No. 07 CV 3956, 2010 WL 3780972, at *3 (E.D.N.Y. Aug. 23, 2010) (" The presence of a disregarded Order is determinative in granting default judgment against a corporate entity that fails to retain counsel." ), report and recommendation adopted, No. 07 CV 3956, 2010 WL 3780984 (E.D.N.Y. Sept. 17, 2010).

Here, although the corporate defendant, HDMJ, initially retained counsel and filed a timely response to the Complaint, the corporation's counsel has since withdrawn from this action with the approval of the Court. See DE 34. At the September 18, 2012 Status Conference, the Court addressed this issue as follows:

On July 31, 2012, after vetting the motion by defendants' counsel, this Court issued an order granting the motion by Attorney David Feather to be relieved as counsel in this case. The defendant Corporation was given 30 days to obtain counsel and Gus Athanasopoulos was advised that under the law, the Corporation cannot proceed pro se. Therefore, the Corporation was directed to get new counsel and to have that new counsel appear before the Court at a September 6, 2012 conference. For unrelated reasons, the September 6 conference had to be rescheduled to today.
When the case was called today, no counsel appeared on behalf of the Corporation. The four individual shareholders of defendant HDMJ did appear, but made it clear that the shareholders will not be hiring counsel to represent the Corporation. Each of the four brother-shareholders was sworn in and asked various questions by the Court regarding their shareholder status, what officer position they held in the Corporation, the potential consequences of not defending [the Cor]peration, the right of the plaintiff to move for a default judgment if the Corporation declines to participate in the case and fulfill its discovery obligations, etc., and the consequences of a potential default judgment. After concluding the questioning, the brother-shareholders all confirmed again that they do not wish to have this litigation proceed vis-à-vis the Corporation. Each also expressed his understanding of the likelihood of plaintiff's filing a motion for a default judgment against the Corporation.
Once the questioning was concluded and the sworn responses of the shareholders were placed on the record, I advised plaintiff that she was free to proceed with a motion for default judgment against the Corporation in this action. If the plaintiff intends to make such a motion, that motion must be filed before Judge Seybert no later than ...

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