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Sanchez v. EL Rancho Sports Bar Corp.

United States District Court, S.D. New York

June 30, 2015

FRANCISCA SANCHEZ, MAYRA MORGADO, MARIA REYES, and LETICIA ZACA TZONTLE individually and on behalf of others similarly situated, Plaintiff,
v.
EL RANCHO SPORTS BAR CORP., RAUL ORTEGA, and ARACELI ORTEGA, Defendants.

OPINION AND ORDER

RONNIE ABRAMS, District Judge.

Plaintiffs Francisca Sanchez, Mayra Morgado, Maria Reyes, and Leticia Zactzontle bring this action on behalf of themselves and similarly situated employees against Defendants El Rancho Sports Bar Corp. ("El Rancho"), and Raul and Araceli Ortega ("the Ortega Defendants") pursuant to the Fair Labor Standards Act ("FLSA"), New York Labor Law ("NYLL"), and New York City Rules and Regulations ("NYCRR"). Before the Court is Plaintiffs' unopposed motion to sever their claims against the Ortega Defendants from those against El Rancho, and to amend the Second Amended Complaint ("SAC") to dismiss the Ortega Defendants, add Manuel Medina as a Defendant and new claims on behalf of Silviana Casarez. For the reasons that follow, the motion is GRANTED.

BACKGROUND

At all times relevant to the SAC, the Ortega Defendants served as managers for Los Dos Potrillos Sports Bar, a social "dollar-a-dance" club and restaurant (the "Restaurant"). SAC ¶¶ 7-10, 21-22. In 2011, El Rancho purchased the Restaurant from its previous owner, Los 2 Potrillos Sports Bar Corp. Id. ¶ 11. The Ortega Defendants managed the Restaurant both before and after the sale. Id. ¶ 15. Plaintiffs Morgado, Sanchez, Reyes, and Zacatzontle worked as waitresses at the Restaurant. Id. ¶¶ 23, 39, 51, 59, 66.

Plaintiffs Sanchez and Morgado originally filed this action on July 23, 2013, asserting various wage and overtime claims under the FLSA and NYLL against Defendants Los 2 Potrillos Restaurant Corp., Silvia Amador, and the Ortega Defendants. Dkt. 1. On February 6, 2014, Plaintiffs amended the Complaint to add Maria Reyes as a Plaintiff, dismiss Defendant Amador, and substitute El Rancho, the successor in interest for Los 2 Potrillos Restaurant Corp., as the corporate Defendant. Dkt. 13. On March 25, 2014, Plaintiffs filed a Second Amended Complaint ("SAC") to add Zacatzontle as a Plaintiff.

On May 13, 2014, the Court granted Plaintiffs' motion for conditional certification of a collective action. Dkt. 37. After the motion was granted, El Rancho was sold to a new owner who did not respond to communications from counsel for Defendants. See Yankwitt Decl. (Dkt. 51) at ¶¶ 5-6. On October 29, 2014, the Court granted counsel's motion to withdraw its representation of El Rancho. Dkt. 54.[1] On that same date, counsel informed the Court that the Ortega Defendants had filed for bankruptcy and, accordingly, were entitled to an automatic stay of all actions pending against them pursuant to 11 U.S.C. § 362(a). See Def. Ltr. (Dkt. 55) at 1; Pl. Ltr. (Dkt. 56) at 1.

On December 18, 2014, Plaintiffs moved to sever the Ortega Defendants from the action, and to amend the Complaint a third time to dismiss the Ortega Defendants, add Silviana Casarezanother former waitress - as a Plaintiff, and add El Rancho's purported principal owner Manuel Medina as a Defendant. Dkt. 63. Plaintiffs' motion is unopposed.

DISCUSSION

I. Motion to Sever and Dismiss Ortega Defendants

The Court begins with Plaintiffs' motion to sever and dismiss the Ortega Defendants from the case in order to proceed against El Rancho during the pendency of the bankruptcy stay. See Pl. Mem. (Dkt. 65) at 4-5.[2]

A. Severance

The Federal Rules of Civil Procedure permit a court to "sever any claim against a party." Fed.R.Civ.P. 21. "The decision whether to grant a severance motion is committed to the sound discretion of the trial court." Erausquin v. Notz, Stucki Mgmt. (Bermuda) Ltd., 806 F.Supp.2d 712, 720 (S.D.N.Y. 2011) (quoting State of N.Y. v. Hendrickson Bros., Inc., 840 F.2d 1065, 1082 (2d Cir. 1988)). Severance is warranted "when it will serve the ends of justice and further the prompt and efficient disposition of litigation." Id. (quoting T.S.I. 27, Inc. v. Berman Enters., Inc., 115 F.R.D. 252, 254 (S.D.N.Y. 1987)). In making such decision, courts in this district typically look to the following factors:

(1) whether the claims arise out of the same transaction or occurrence; (2) whether the claims present some common questions of law or fact; (3) whether settlement of the claims or judicial economy would be facilitated; (4) whether prejudice would be avoided if severance were granted; and (5) whether different witnesses and documentary proof are required for the separate claims.

Id. (quoting In re Merrill Lynch & Co., Inc. Research Reports Sec. Litig., 214 F.R.D. 152, 154-55 (S.D.N.Y. 2003)); see also Oram v. Soul Cycle, 979 ...


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