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Demirovic v. Ortega

United States District Court, E.D. New York

November 3, 2017

KUJTIM DEMIROVIC et al., Plaintiffs,
FRANKLIN ORTEGA et al., Defendants.



         This action was commenced on January 21, 2015, by plaintiffs Kujtim Demirovic, Richard Reinoso, Murto Avdalovic, and Senad Perovic (collectively, “plaintiffs”) against Franklin Ortega, Rocio Uchofen, and P.O. Italianissimo Ristorante Inc. (the “Restaurant” or “Italianissimo”) (collectively, “defendants”), pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and New York Labor Law (“NYLL”) § 650 et seq. They sought to recover unpaid overtime and minimum wages, along with applicable liquidated damages, under both the FLSA and NYLL, as well as damages for defendants' unlawful withholding of gratuities, failure to provide wage notices, and retaliation.[1] On September 21, 2015, the parties consented to have the case re-assigned to the undersigned for all purposes.

         The Court bifurcated the trial of this matter so that wage and hour claims under the FLSA and NYLL were presented in the first trial, while retaliation claims under those same statutes were presented in a second trial. The first trial began on October 23, 2017 and continued until October 25, 2017. On October 26, 2017, the jury returned a verdict against the Restaurant and Ortega, but did not find Uchofen liable as an employer for the unpaid wages. In the second trial, held on the same day, the jury returned a verdict in favor of the plaintiffs against all defendants, including Uchofen.

         Now before the Court is plaintiffs' motion for a restraining order under CPLR § 5229. For the reasons discussed below, the Court grants plaintiffs' motion.


         A. The Parties' Positions

         Immediately after the jury rendered its verdict in the second trial, the plaintiffs filed a motion for a restraining order under New York Civil Practice Law and Rules (“CPLR”) 5229, as incorporated by Rule 64 of the Federal Rules of Civil Procedure. (Pls.' Mot., [2] Oct. 26, 2017). In their motion, plaintiffs seek an order enjoining the defendants from “making or suffering any sale, assignment, transfer, or interference with any property in which [defendants have] an interest” until a judgment in this action is entered. (Id. at 1). Plaintiffs also seek an order requiring the defendants to answer post-verdict discovery requests regarding their assets and net worth, and requiring the defendants to appear for depositions once they have responded to that discovery. (See id. at 1-2). Plaintiffs observe that although they “need not make a particular showing of the danger of dissipation of assets, ” they nonetheless have made such a showing here. (Id. at 4-5 (quoting Coley v. Vannguard Urban Improvement Ass'n, Inc., No. 12 CV 5565, 2016 WL 7217641, at *6 (E.D.N.Y. Dec. 13, 2016). Finally, the plaintiffs specifically contend that “granting the [restraining order] will not impact [d]efendants' ability to meet ordinary payroll expenses or to cover food, mortgage or utility payments and other ordinary living expenses.” (Id. at 5 (citing Gallegos v. Elite Model Management Corp., 1 Misc.3d 200, 202, 768 N.Y.S.2d 134, 135 (Sup. Ct. 2003)).

         The defendants filed their opposition papers on the evening of October 31, 2017. (Defs.' Opp'n, [3] Oct. 31, 2017). The next morning, they filed a supplemental opposition (Defs.' Supp., [4]Nov. 1, 2017), even though the deadline to file had passed and despite the explicit prohibition against such supplemental briefing in the Court's Individual Rules of Practice. See Cheryl L. Pollak, Individual Rules of Practice at 3 (providing that “[s]upplemental briefs will not be accepted unless requested by the Court”). In their first set of papers, the defendants argue that there is no basis for a restraining order because the jury did not find that the defendants engaged in criminal or reckless, wanton, or malicious conduct. (See Defs.' Opp'n at 2). The defendants further argue that plaintiffs' references to “falsified W-2 journals” are improper given that the jury never found, by a preponderance of the evidence, that the W-2s were falsified.[5] (Id.) Finally the defendants argue that if the Court should issue a TRO, it should provide that “the payment of ordinary and usual expenses should be liberal” given that there are two businesses, one of which is owned jointly with Rocio Uchofen, whom the jury did not find liable for unpaid wages, but did find liable for retaliation. (Id. at 3).

         In their second set of opposition papers, the defendants argue that one of the cases relied on by plaintiffs, Coley v. Vannguard Urban Improvement Ass'n, Inc., is inapplicable for two reasons. (Defs.' Supp. at 1). First, the defendants argue that the court in Coley considered a motion for preliminary injunction only after six co-defendants had defaulted, and thus “the likelihood of success on the merits, irreparable harm to the moving party, balance of the hardships and public interest were significantly different [in Coley] than [in] the case at bar.” (Id.) Second, the defendants contend that the Coley decision misquotes CPLR § 5229 by replacing the word “notice” in the statute with the word “order.” (Id. at 1-2)[6]. They therefore argue, without citation to any authority, that a “restraining notice, which is issued by a court clerk or attorney . . . is not nearly as powerful in its effect as a restraining order from the court.” (Id. at 2). The defendants do not explain how that distinction is relevant to the motion currently pending before the Court.

         B. The Proper Standard

         Rule 64 of the Federal Rules of Civil Procedure provides that “[a]t the commencement of and throughout an action, every remedy is available that, under the law of the state where the court is located, provides for seizing a person or property to secure satisfaction of the potential judgment. But a federal statute governs to the extent it applies.” Fed.R.Civ.P. 64(a). CPLR § 5229 “is designed to secure satisfaction of the judgment ultimately to be entered in the action . . . . [and] has substantially the same effect as an attachment and seizure of property.” Sequa Capital Corp. v. Nave, 921 F.Supp. 1072, 1076 (S.D.N.Y. 1996) (citation and alteration omitted). Thus, CPLR § 5229 is a remedy within the meaning of Rule 64. Id.; accord Coley v. Vannguard Urban Improvement Ass'n, Inc., 2016 WL 7217641, at *6.

         CPLR § 5229 provides that

In any court, before a judgment is entered, upon motion of the party in whose favor a verdict or decision has been rendered, the trial judge may order examination of the adverse party and order him restrained with the same effect as if a restraining notice had been served upon him after judgment.

Id. It thus provides both for discovery relating to the party against whom a decision or verdict has been rendered and for an order of restraint against the adverse party. See id.; Richard C. Reilly, Practice Commentaries: N.Y. CPLR C5229:1 (McKinney's 2017) (explaining that, unlike provisions that apply after judgment, CPLR § 5229 is “available only against ‘the adverse ...

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