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Chen v. 2425 Broadway Chao Restaurant, LLC

United States District Court, S.D. New York

June 15, 2017



          GREGORY H. WOODS United States District Judge.

         The plaintiffs in this putative collective and class action lawsuit under the Fair Labor Standards Act and the New York Labor Law have sued two restaurants and seven individuals who are alleged to be owners, operators, and/or shareholders of one or both of the restaurants. In addition to their wage-and-hour claims, Plaintiffs bring claims for breach of implied contract and fraudulent filing of information returns. One of the defendants, Tsu Yue Wang, has moved to dismiss the operative complaint under Federal Rule of Civil Procedure 12(b)(6) on various grounds, including that Plaintiffs have not adequately pleaded that he was their “employer” under the FLSA or NYLL and that some of the claims have been discharged in bankruptcy. For the reasons stated below, Defendant Wang's motion to dismiss is GRANTED IN PART AND DENIED IN PART.

         I. BACKGROUND[1]

         Plaintiffs are thirteen former deliverymen who worked during various periods between 2010 and 2015 for Defendant 2425 Broadway Chao Restaurant, LLC d/b/a Ollie's To Go Restaurant (“Ollie's”), Defendant WMK 89th Street LLC d/b/a Trattoria Di Vino (“Trattoria Di Vino”) (collectively, the “Corporate Defendants”), or both. Am. Compl. (ECF No. 56) (“AC”) ¶¶ 8-20, 67-272. They allege that the corporate and individual defendants, as “joint employers, ” are liable to them for violations of the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”), including the provisions regarding minimum wages, overtime compensation, spread-of-hours pay, record-keeping requirements, time-of-hire wage notice requirements, and paystub requirements. AC ¶¶ (a)-(kkk). Plaintiffs also bring claims for breach of an implied contract for reimbursement of delivery-vehicle expenses and for fraudulent filing of information returns. AC ¶¶ (ll)-(ww).

         Plaintiffs initiated this case on July 20, 2016. On November 14, 2016, after an extension of the answer deadline, Defendant Tsu Yue Wang filed a motion to dismiss. ECF Nos. 51-53. In lieu of responding to that motion, Plaintiffs filed their Amended Complaint on December 3, 2016. AC. Wang filed a motion to dismiss the Amended Complaint on December 23, 2016, ECF Nos. 61-63, Plaintiffs filed their opposition on January 6, 2017, ECF No. 66, and Wang filed his reply on January 13, 2017, ECF No. 67.

         Although the Amended Complaint names nine defendants, Wang is the only one who has appeared in the case to date. Although not all claims in the Amended Complaint are asserted on behalf of all plaintiffs and against all defendants, Wang is the common denominator-he is named as a defendant with respect to all twelve claims. See AC ¶¶ (a)-(nnn). The Amended Complaint provides some, but not much, detail regarding Wang's relationship with the Corporate Defendants and his role vis-à-vis Plaintiffs' employment at Ollie's and/or Trattoria. Plaintiffs allege that Wang is an “owner/operator and/or majority shareholder of both of the Corporate Defendants.” AC ¶ 33. He “came to the restaurant two or three times a week on a regular basis, usually for a period exceeding an hour, communicated with kitchen chefs and cashiers, tasted dishes, and looked around the restaurant.” AC ¶ 35. Plaintiffs allege on information and belief that Wang hired Defendant “John” Wang to “oversee the operation of the restaurant in his absence.” AC ¶ 36. According to the Amended Complaint, “[a]fter inspecting the restaurant, ” Wang would “direct Defendant ‘John' Wang on how to manage the business, including the discipline of employees.” AC ¶ 37. Wang also hired Plaintiff Guangzhang Sun. AC ¶ 38. Finally, the Amended Complaint alleges that Wang dispatched eleven of the thirteen plaintiffs to deliver customer orders and scheduled them to distribute flyers for both restaurants. AC ¶ 31.


         Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Rule 8 “does not require detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. at 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). It is not enough for a plaintiff to allege facts that are consistent with liability; the complaint must “nudge” claims “across the line from conceivable to plausible.” Twombly, 550 U.S. at 570.

         In determining the adequacy of a claim under Rule 12(b)(6), a court is generally limited to “facts stated on the face of the complaint, ” “documents appended to the complaint or incorporated in the complaint by reference, ” and “matters of which judicial notice may be taken.” Goel v. Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016). The court must accept all facts alleged in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 124 (2d Cir. 2008) (per curiam). Legal conclusions, unlike facts, are not entitled to an assumption of truth. Iqbal, 556 U.S. at 679. A complaint that offers “labels and conclusions” or “naked assertion[s]” without “further factual enhancement” will not survive a motion to dismiss. Id. at 678 (citing Twombly, 550 U.S. at 555, 557).


         In his motion, Wang raises various grounds for dismissal of the claims asserted against him. The Court will address them in turn.

         A. Claims Allegedly Discharged in Bankruptcy

         Wang contends that all claims against him that arose prior to February 29, 2012 must be dismissed because they were discharged in bankruptcy. Def.'s Mem. of Law in Supp. of Mot. to Dismiss (ECF No. 62) (“Def.'s Mem.”) at 13-14. He attaches to his motion an Order Confirming Plan of Reorganization dated February 29, 2012 and signed by The Honorable Martin Glenn of the United States Bankruptcy Court for the Southern District of New York. Decl. of Matthew A. Brown in Supp. of Mot. to Dismiss (ECF No. 63), ¶ 3 & Ex. C (“Confirmation Order”). That order states:

Pursuant to Section 1141 and as set forth in the Plan, upon the completion of all payments required under the Plan, individual debtor Tsu Yue Wang shall be discharged and/or deemed released from any and all debts which arose before the date of confirmation of the Plan and any and all debts of a kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a proof of claim based on such debt is filed or deemed filed under Section 501 of the Bankrupcty Code; (b) such claim is allowed under Section 502 of the Bankruptcy Code; (c) such claim is listed on the Debtors' schedules and lists heretofore filed herein; (d) the holder of such claim has, or has been deemed to have accepted the Plan.

Confirmation Order ¶ 5(b).

         As an initial matter, Wang does not provide an adequate legal basis for the Court to consider the Confirmation Order in ruling on his motion to dismiss. He contends that “the Court may take judicial notice of [his] bankruptcy filing and confirmation plan in deciding this motion” and cites, for support, a passage from a Second Circuit decision stating that courts may consider public records when they are “integral to a . . . complaint”). Def.'s Mem. at 13. That is not a valid basis here, because the Confirmation Order is by no means integral to the Amended Complaint. “A document is integral to the complaint where the complaint relies heavily upon its terms and effect.” Goel, 820 F.3d at 559 (2d Cir. 2016) (internal quotation marks and citation omitted). Nothing in the Amended Complaint relies to any extent at all on the terms and effect of the Confirmation Order.

         Nevertheless, even assuming that the Court may properly consider the Confirmation Order, the Court denies Wang's motion to dismiss all pre-February 29, 2012 claims as discharged. 11 U.S.C. § 727(b) provides that, as a general matter, once a bankruptcy is concluded “all debts that arose before the date of the order for relief” are discharged. With respect to a debtor who is an individual, however, discharge is subject to the exceptions set forth in § 523. 11 U.S.C. § 1141(d)(2) (“A discharge under this chapter does not discharge a debtor who is an individual from any debt excepted from discharge under section 523 of this title.”); see also § 727(b)(2) (“Except as provided in section 523 of this title, a discharge under subsection (a) of this section discharges the debtor from all debts that arose before the date of the order for relief . . . .” (emphasis added)). Section 523(a)(3) provides, in turn, that a debt is not discharged if it “was not scheduled and the creditor lacked notice or actual knowledge of the case.” In re Massa, 187 F.3d 292, 296 (2d Cir. 1999) (citing § 523(a)(3)); see also Shu Lun Wu v. May Kwan Si, Inc., 508 B.R. 606, 611-12 (S.D.N.Y. 2014) (“[T]he claim of a creditor who is not listed on an individual chapter 11 debtor's schedules will not be discharged unless the creditor had notice of the bankruptcy case in time to file a timely proof of claim.”).

         Wang did not submit his schedules in connection with his motion, and thus the Court has no basis to conclude that Plaintiffs' claims were effectively discharged by operation of the Confirmation Order. Nor is there anything in the Amended Complaint or any other material that the Court may properly consider at this juncture that shows that Plaintiffs had notice or actual knowledge of the bankruptcy case. Wang's attempt to fill this gap by providing a declaration that “[i]t is [his] understanding that [his] bankruptcy attorney sent out a notice of [his] bankruptcy to all creditors, ” Decl. of Tsu Yue Wang in Further Supp. of Mot. to Dismiss (ECF No. 68), is unavailing. The Court may not consider that statement at the pleading stage. Given Wang's arguments here that he was not the “employer” of these plaintiffs, the Court declines to assume that he notified them as creditors of his bankruptcy estate.[2] As a result, Wang's motion to dismiss all claims against him that arose prior to February 29, 2012 is denied.

         B. FLSA and NYLL Claims

         1. ...

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