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Leon v. Chen

United States District Court, E.D. New York

March 29, 2017

JOSE ROLANDO LEON, Individually and on behalf of others similarly situated, Plaintiff,
v.
ZITA CHEN, Individually and DNC DOORS & CABINETS INC. Defendants.

          MEMORANDUM AND ORDER

          HON. KIYO A. MATSUMOTO UNITED STATES DISTRICT JUDGE.

         Plaintiff Jose Rolando Leon brought this action pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C § 201 et seq. and the New York State Labor Law (“NYLL”) § 190 et seq. Plaintiff seeks unpaid wage and overtime pay, FLSA liquidated damages, NYLL liquidated damages, damages for failure to provide written notice of rate of pay, attorneys' fees and costs, and post-judgment interest. Defendants failed to appear or otherwise defend this action. After the Clerk of the Court entered default against defendants pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, plaintiff filed the instant motion for entry of default judgment. For the reasons stated herein, plaintiff's motion for entry of a default judgment is granted pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. Plaintiff is awarded $33, 320.00 in damages and $4, 728.50 in attorneys' fees and $504.00 in costs, plus post judgment interest as prescribed in 28 U.S.C. § 1961.[1]

         BACKGROUND

         Plaintiff Jose Rolando Leon (“plaintiff”) brought this action against Zita Chen (“Chen”) and against DNC Doors & Cabinets Inc. (“DNC”) under the Fair Labor Standards Act (“FLSA”), 29 U.S.C § 201 et seq., and the New York State Labor Law (“NYLL”) § 190 et seq., by filing a complaint on January 29, 2016. (Complaint (“Compl.”), ECF No. 1.)

         Plaintiff alleges that he worked for defendant DNC from approximately December 2013 to December 16, 2015, as a factory worker. (Compl., ECF No. 1 at ¶ 3; Declaration of Jose Rolando Leon (“Leon Decl.”), ECF No. 14-3 at ¶ 3.) DNC is a New York Corporation located in Flushing, New York with annual gross sales in excess of $500, 000.00. (Compl., ECF No. 1 at ¶¶ 6-7.) At all relevant times, DNC was an employer engaged in commerce and/or in the production of goods. (Id. at ¶ 8.) Plaintiff also alleges that Chen is an owner and operator of DNC, and therefore, an employer. (Id. at ¶ 10.) Chen is responsible for the day-to-day operations of DNC, including hiring, terminating, supervising, setting schedules, and pay rates for employees. (Id.)

         Plaintiff alleges that Chen hired him to work for DNC, and fired him from DNC. (Leon Decl., ECF 14-3 at ¶¶ 7-8.) During 2013 and 2014, plaintiff's primary job responsibilities were delivering and installing DNC's products to its customers in New York, New Jersey and Connecticut. (Compl., ECF No. 1 at ¶¶ 21-22.) During 2015, plaintiff primarily worked in the factory, where he sanded marble, and prepared marble for installation. (Id. at ¶ 23.) Plaintiff frequently worked six days per week for defendants, between the hours of 8 a.m. to 6 p.m. (Leon Decl., ECF No. 14-3 at ¶¶ 10-11.) Plaintiff alleges that he was not required to sign in or out, when he arrived or left work. Nor was he otherwise required to record the time he spent at work. (Compl., ECF No. 1 at ¶ 26.) Plaintiff was paid $120.00 per day in cash, regardless of the hours he worked. (Id. at ¶ 29.) Plaintiff alleges that Chen terminated his employment with DNC, and that the last day he was employed by defendants was December 16, 2015. (Leon Decl., ECF No. 14-3 at ¶¶ 3, 7.) Plaintiff further alleges that defendants did not pay him for his last two weeks of work, from December 2, 2015 to December 16, 2015. (Compl., ECF No. 1 at ¶ 30.)

         Plaintiff filed the Complaint on January 29, 2016. (Compl., ECF No. 1.) Plaintiff alleges that: 1) Defendants failed to pay him minimum wage pursuant to FLSA and NYLL; 2) Defendants failed to pay him overtime pay pursuant to FLSA and NYLL; 3) Defendants failed to pay him spread-of-hours pay pursuant to New York State labor regulations, N.Y. Comp. Codes R. & Regs. (“NYCRR”) tit. 12, § 142-2.4; and 4) Defendants failed to provide him with a written notice of rate of pay pursuant to NYLL. (Compl., ECF No. 1 at ¶¶ 36-62.)

         On February 8, 2016, the summons and complaint were served on Suki Zhang, who self-identified as the co-worker of Chen, and as the general agent of DNC. (Ex. C, ECF No. 14-2 at 22-23.) Neither Chen nor DNC appeared or has otherwise defended this action. (Ex. D, ECF No. 14-2 at 26.) On April 15, 2016, the Clerk of the Court filed the Clerk's Certificate of Default against Chen and DNC pursuant to Fed.R.Civ.P. 55(a). (Id.; ECF No. 13.)

         On May 10, 2016, plaintiff filed this motion for entry of a default judgment against Chen and DNC pursuant to Fed.R.Civ.P. 55(b)(2). (ECF No. 14.) Plaintiff seeks the following relief: 1) unpaid wage and overtime pay in the amount of $17, 670; 2) FLSA liquidated damages in the amount of $17, 670; 3) NYLL liquidated damages in the amount of $17, 670; and 4) damages in the amount of $5, 000 for failure to provide written notice of rate of pay. (Ex. A, ECF No. 14-3 at 6.) Additionally, plaintiff seeks $5, 063.05 in attorneys' fees at an hourly rate of $400.00 (Ex. E, ECF No. 14-2 at 29), $400.00 in filing fees (Ex. D, ECF No. 14-2 at 25), and $104 in costs. (Ex. E, ECF No. 14-2 at 30.) Plaintiff also seeks post-judgment interest as provided by law. (Memo. of Law, ECF No. 14-1 at 6.)

         DISCUSSION

         I. Legal Standard

         To obtain a default judgment under Rule 55 of the Federal Rules of Civil Procedure, a movant must complete a two-step process. Rodriguez v. Almighty Cleaning, Inc., 784 F.Supp.2d 114, 123 (E.D.N.Y. 2011); La Barbera v. Fed. Metal & Glass Corp., 666 F.Supp.2d 341, 346-47 (E.D.N.Y. 2009). First, the Clerk of the Court must enter default “[w]hen 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.” Fed.R.Civ.P. 55(a); Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). Second, after the Clerk of the Court has entered default pursuant to Rule 55(a), the movant “may then make an application for entry of default judgment pursuant to Fed.R.Civ.P. 55(b).” Rodriguez, 784 F.Supp.2d at 123. If the defendant fails to appear, or move to set aside the default under Rule 55(c), the court may enter a default judgment. Fed.R.Civ.P. 55(b)(2).

         On a motion for entry of a default judgment, the court “deems all the well-pleaded allegations in the pleadings to be admitted.” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997); see also Finkel v. Universal Elec. Corp., 970 F.Supp.2d 108, 119 (E.D.N.Y. 2013). The Second Circuit has an “oft-stated preference for resolving disputes on the merits, ” making default judgments “generally disfavored.” Enron, 10 F.3d at 95-96. “Accordingly, just because a party is in default, the plaintiff is not entitled to a default judgment as a matter of right.” Mktg. Devs., Ltd. v. Genesis Imp. & Exp., Inc., No. 08-CV-3168 (CBA)(CLP), 2009 WL 4929419, at *2 (E.D.N.Y. Dec. 21, 2009) (citing Erwin DeMarino Trucking Co. v. Jackson, 838 F.Supp. 160, 162 (S.D.N.Y. 1993)). Regardless of the assumption of truth of the complaint when a party is in default, the court has a “responsibility to ensure that the factual allegations, accepted as true, provide a proper basis for liability and relief.” Rolls-Royce PLC v. Rolls-Royce USA, Inc., 688 F.Supp.2d 150, 153 (E.D.N.Y. 2010)(citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)).

         An employee seeking to recover unpaid wages “has the burden of proving that he performed work for which he was not properly compensated.” Jiao v. Chen, No. 03-CV-165 (DF), 2007 WL 4944767, at *2 (S.D.N.Y. Mar. 30, 2007) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)). An employer is required by federal and state law to maintain “records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him.” 29 U.S.C. § 211(c); see also 12 NYCRR § 142-2.6(a) (“[e]very employer shall establish, maintain and preserve for not less than six years, weekly payroll records”). In the case of a default judgment, the “defaulting defendant deprive[s] the plaintiff of the necessary employee records required by the FLSA, thus hampering [the] plaintiff's ability to prove his damages” and, consequently, “a plaintiff may meet his burden of proof by relying on recollection alone to establish that he performed work for which he was improperly compensated.” Kernes v. Global Structures, LLC, No. 15-CV-659 (CM) (DF), 2016 WL 880199, at *6 (S.D.N.Y. Mar. 1, 2016) (internal citations and quotation marks omitted) (alteration in original); Maldonado v. La Nueva Rampa, Inc., No. 10-CV-8195 (LLS) (JLC), 2012 WL 1669341, at *3 (S.D.N.Y. May 14, 2012), R&R adopted by, Order dated Aug. 9, 2012 (Dkt. No. 20).

         “[A] district court retains discretion [on a motion for entry of a default] . . . to require proof of necessary facts [, ] and need not agree that the alleged facts constitute a valid cause of action.” Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). If the unchallenged facts establish defendant's liability, the court then determines the amount of damages due. See Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (citing Transatlantic, 109 F.3d at 111) (citation omitted). An inquest on damages by affidavit, without an in-person hearing, may be conducted as long as the court can ensure “a basis for the damages specified in the default judgment.” Transatlantic, 109 F.3d at 111; Xochimitl v. Pita Grill of Hell's Kitchen, Inc., No. 14-CV-10234(JGK)(JLC), 2016 WL 4704917, at *5 (S.D.N.Y. Sept. 8, 2016), R&R adopted sub nom., 2016 WL 6879258 (S.D.N.Y. Nov. 21, 2016) (“An affidavit that sets forth the number of hours worked and pay received is sufficient” to carry the employee's burden of proving that he was not compensated for the work performed.) (citation omitted).

         II. Service of Process

         Defendants were properly served. Fed.R.Civ.P. 4(e)(1) provides that service may be effected in accordance with the service rules of the state where the district is located or service is made. “An affidavit of service is prima facie proof of effective service.” Gore v. RBA Group, Inc., No. 03-CV-9442, 2009 WL 884565, at *4 (S.D.N.Y. March 27, 2009); Fifth Third Bank v. Mytelka, No. 05-MC-52, 2008 WL 3852170, at *2 (E.D.N.Y. Aug. 16, 2008). New York Civil Practice and Law Rules (“CPLR”) § 311(a)(1) state that “personal service upon ‘any domestic [] corporation' may be made upon ‘an officer, director, managing or general agent . . . or to any other agent authorized by appointment or by law to receive service.'” CIT Bank v. Dambra, No. 14-CV-3951 (SLT) (VMS), 2015 WL 7422348, at *3 (E.D.N.Y. Sept. 25, 2015), R&R adopted by CIT Bank, N.A. v. Dambra, No. 14-CV-3951 (SLT) (VMS), 2015 WL 7430006 (E.D.N.Y. Nov. 20, 2015) (citing CPLR § 311(a)(1)). Here, plaintiff submitted an affidavit of service stating that a copy of the summons and complaint was served on Suki Zhang personally, who is the general agent of DNC. (Affidavit of Service, Ex. C, ECF No. 14-2 at 23.) Accordingly, service on the corporate defendant DNC was in accordance with CPLR § 311(a)(1).

         Defendant Chen was also properly served. CPLR § 308(2) allows for service of process on an individual “by delivering the summons within the state to a person of suitable age and discretion at the actual place of business, dwelling place or usual place of abode of the person to be served, ” and “by either mailing the summons to the person to be served at his or her last known residence or by mailing the summons by first class mail to the person to be served at his or her actual place of business, ” where the delivery and mailing is effected “within twenty days of each other.” Id. Here, plaintiff submitted an affidavit of service stating that a copy of the summons and complaint was served on Suki Zhang, who self-identified as Ms. Chen's co-worker, at Chen's place of business. (Ex. C, ECF No. 14-2 at 22.) Suki Zhang was described as being “of suitable age and discretion.” Id. A copy of the summons and complaint was sent by regular first class mail to Ms. Chen at her place of business on February 11, 2016. Id. Accordingly, service on Ms. Chen was in accordance with CPLR § 308(2).

         III. Statute of Limitations

         Plaintiff brings six claims pursuant to both state and federal wage laws. “The statute of limitations for an FLSA claim is two years, unless the violation is ‘willful, ' in which case it is three years.” Kuebel v. Black & Decker Inc., 643 F.3d 352, 366 (2d Cir. 2011) (citing 29 U.S.C. § 255(a)). When a defendant defaults, courts consider the violation “willful” and apply the three-year statute of limitations. Blue v. Finest Guard Servs., Inc., No. 09 CV 133, 2010 WL 2927398, at *11 (E.D.N.Y. June 24, 2010). The statute of limitations starts to run when the employee begins to work for the employer. See Wicaksono v. XYZ 48 Corp., No. 10 CIV. 3635 LAK JCF, 2011 WL 2022644, at *3 (S.D.N.Y. May 2, 2011), R&R adopted by 2011 WL 2038973 (S.D.N.Y. May 24, 2011). The statute of limitations under NYLL is six years. Id. (citing NYLL § 663(3) and Lanzetta v. Florio's Enters., Inc., 763 F.Supp.2d 615, 622 (S.D.N.Y. 2011)).

         Here, defendants defaulted and, therefore, the three-year FLSA statute of limitations applies. Plaintiff began working with defendants in December 2013 and filed his complaint on January 29, 2016. As such, both plaintiff's FLSA and NYLL claims are timely.

         IV. Defendants are Covered by the FLSA and the NYLL

         To qualify for FLSA protection, a plaintiff must establish either enterprise or individual coverage under the statute. See Gomez v. El Rancho de Andres Carne de Tres Inc., No. 12-CV-1264 (CBA) (MDG), 2014 WL 1310296, at *3 (E.D.N.Y. Mar. 11, 2014). The FLSA specifically applies only to employees: (1) who are personally engaged in interstate commerce or in the production of goods for interstate commerce or (2) who are employed by an enterprise engaged in interstate commerce or in the production of goods for interstate commerce. See 29 U.S.C. § 206(a), (b). An employee engages in commerce by “performing work involving or related to the movement of persons or things.” 29 C.F.R. § 779.103.

         Plaintiff alleges that he worked in defendants' factory and also installed and delivered products to defendants' customers in New York, New Jersey and Connecticut. (Compl., ECF 1 at ¶21.) Accordingly, plaintiff has established that he was engaged in commerce. See Herrera v. Tri-State Kitchen & Bath, Inc., No.14-CV-1695 (ARR) (MDG), 2015 WL 1529653, at *3 (E.D.N.Y. Mar. 31, 2015) (concluding that plaintiffs who regularly worked in New York and New Jersey established individual coverage under the FLSA); Bowrin v. Catholic Guardian Soc'y, 417 F.Supp.2d 449, 468-71 (S.D.N.Y. 2006) (concluding that plaintiffs who regularly traveled across state lines in connection with their employment could establish individual coverage).

         Plaintiff also establishes enterprise coverage under the FLSA. An “enterprise” is an entity engaged in interstate commerce that has no less than $500, 000 in annual gross volume of sales. See 29 U.S.C. § 203(s). An enterprise is “engaged in commerce” where it “has employees engaged in [interstate] commerce or in the production of goods for [interstate commerce], or that has employees handling, selling or otherwise working on goods or materials that have been moved in or produced for [interstate commerce].” 29 U.S.C. § 203(s)(1)(A). DNC, the corporate defendant, is a cabinet manufacturing company offering its goods and services, at least to customers in New York, New Jersey and Connecticut. It has gross annual sales exceeding $500, 000.000. Accordingly, it is an enterprise engaged in interstate commerce and is covered under the FLSA. See Boutros v. ...


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