Opinion
Index No. 500936/2016 Mot. Seq. No. 12 13
04-18-2024
JOSE CORNEJO and CARLOS CORNEJO on behalf of themselves and others similarly situated. Plaintiffs, v. EDEN PALACE INC.; PALACE OF EDEN INC.; EMMANUEL ROTH; JEFF ROSENBAUM; and any other related entities, including those doing business as EDEN PALACE, Defendants.
Unpublished Opinion
Motion Date: 2/16/2022
DECISION AND ORDER
HON. RICHARD J. MONTELIONE JUDGE.
After oral argument, the following papers were read on this motion pursuant to CPLR 2219(a):
| Papers | NYSCEF DOC.# |
| Plaintiffs' motion dated September 2, 2021 for an Order under CPLR § 2221(e) for leave to renew consideration of the Court's May 27, 2020 Order (Doc. No. 448, as filed via NYSCEF), based on a change in the law; attorney affirmation of Michael A. Tompkins, affirmed on September 2, 2021; exhibits; Memorandum of Law in Support | 453-457 |
| Defendants' cross-motion dated November 18, 2021; attorney affirmation of Austin Graff, affirmed on November 18,2021; exhibits; Memorandum of Law in Opposition and Support of Cross-Motion | 459-462 |
| Plaintiffs' Memorandum of Law in Opposition to Cross-Motion and in further Support of Motion | 464 |
| Defendants' attorney affirmation of Austin Graff, affirmed on December 28, 2021 | 465 |
This class action was commenced by filing the summons and complaint on October 1, 2015. Issue was joined by service of an answer on February 9,2016, by defendants Eden Palace Inc., Palace of Eden Inc,, Emmanuel Roth, and Jeff Rosenbaum. Plaintiffs move pursuant to CPLR 2103 and 2214(b) for leave to renew the Court's May 27, 2020 order (Doc. No. 448), per the Hon. Justice Edgar G. Walker, J.S.C., since retired, based on a change in the law reflected in Membrives v HHC TRS FP Portfolio, LLC, 196 A.D.3d 560, 151 N.Y.S.3d 423, 2021 NY Slip Op 04349, 2021 WL 2944277 [2d Dept 2021] arguing that it would change the prior determination of the court.
The prior decision of the court per the Hon, Edgar G. Walker found there was an issue of fact that needed to be determined at trial regarding whether the plaintiffs and defendants had an employer/employee relationship based on "...the degree of control exercised by the purported employer over the results produced or the means used to achieve the results" citing Bynog v. Cipriani Group, 1 N.Y.3d 193, 198 (2003) (NYSCEF Doc. # 456, p. 5). The movant plaintiffs now seek reargument based on Membrives v HHC TRS FP Portfolio, LLC, 196 A.D.3d 560, 562-63, 151 N.Y.S.3d 423, 2021 NY Slip Op 04349, 2, 2021 WL 2944277 [2d Dept 2021] which they assert changes the outcome because they are deemed employees for the purpose of liability under 12 NYCRR 146-2.18 (see 12 NYCRR 146-3.2 [a]) without the need for this issue to be determined at trial.
Plaintiffs' counsel argues that he "...is not aware of any other decisions that reflect this change in law as to (1) that the Hospitality Wage Order claims under 12 NYCRR § 146-2.18 and 2.19 are separate and distinct claims from those under Labor Law § 196-d, and (2) that the standard for protections for those Hospitality Wage Order claims are governed by the definition of an 'employee' under 12 NYCRR § 146-3.2." As to point one, assuming arguendo there was a change in law, the court in its prior decision and order specifically treated both 12 NYCRR §§ 146-2.18 and 2.19 and Labor Law § 196-d as separate alleged violations. In fact, the prior decision is in accord with Membrives where the Court found there was a question of fact regarding whether the plaintiffs are employees of certain of the defendants. However, regarding 12 NYCRR §§ 146-2.18 and 2.19, the Court in Membrives v HHC TRS FP Portfolio, LLC, 196 A.D.3d 560, 562-63, 151 N.Y.S.3d 423, 2021 NY Slip Op 04349, 2, 2021 WL 2944277 [2d Dept 2021] found that:
...the plaintiffs established, prima facie, that they were employees of the defendants for the purpose of liability under *563 12 NYCRR 146-2.18 (see 12 NYCRR 146-3.2 [a]), and submitted various contracts, proposals, estimates, checks, and receipts from the period of the alleged violations demonstrating, prima facie, that the defendants charged patrons what was referred to as an "administrative fee." These documents did not clearly disclose that this fee wras not a gratuity or tip. In opposition, the defendants failed to submit sufficient evidence to rebut the presumption set forth in 12 NYCRR 146-2.18, and, therefore, failed to raise a triable issue of fact.
The plaintiffs also established their prima facie entitlement to judgment as a matter of law on the cause of action alleging a violation of 12 NYCRR 146-2.19. 12 NYCRR 146-2.19 (c) requires "a statement in the contract or agreement with the customer, and on any menu and bill listing prices, that the administrative charge is . . . not purported to be a gratuity." The record demonstrates that the defendants' banquet checks, receipts, and other "bill listing prices" did not contain a statement that the administrative fee was not a gratuity. In opposition, the defendants failed to raise a triable issue of fact.
The allegations in the instant case are that defendants violated Labor Law § 196-d and 12 NYCRR §§ "by failing to distribute customer charges identified as gratuities in customer agreements relating to banquets and events held at defendants' banquet/cetering hall..." (decision of court. NYSCEF Doc. 448, p. 3). The facts in Membrives involved customer charges showing an "administrative fee" but containing no information that the administrative fee was not a gratuity. The issue before the court in the instant matter was whether "the putative class of waiters and other servers who worked at Eden Palace were employees of defendant or were independent contractors or employees of RB Waiter." Both the instant case and Membrives involve whether an employee/employer relationship exists, and both considered the degree of control exerted by the defendants in both matters. There is a rebuttable presumption in Membrives that any charges above food, beverage, lodging, etc., is for a "gratuity." However, there is no need to apply a rebuttable presumption when there is no issue that the instant case involves "failing to distribute customer charges identified as gratuities." Inasmuch as the Appellate Court in Membrives found that plaintiffs were employees for the purpose of liability under 12 NYCRR § 146-2.18(12 NYCRR § 146-3.2) because of the charges above food, . beverage, lodging, etc., implied a gratuity, this court is mandated to find that plaintiffs were employees for the purpose of liability under the foregoing sections when the gratuity is identified in customer agreements.
The defendants oppose the plaintiffs' motion and cross-move to reargue limited only to the issue of dismissal as to defendant Jeff Rosenbaum. Defendants argue that even if 12 NYCRR § 146-3.2 applies, it cannot be retroactively applied for any period of time before it became effective on January 1, 2011 (Sec. filed Dec. 14, 2010 eff. Jan. 1, 2011). Plaintiffs do not address defendants' arguments regarding the inapplicability of this section for claims made prior to its effective date. This court finds that based on the record before it, 12 NYCRR § 146-3.2 is prospectively applicable. (Cf. Majewski v Broadalbin-Perth Cent. School Disl., 91 N.Y.2d 577, 696NE2d 978, 673 N.Y.S.2d 966,1998 NY Slip Op 04556, 1998 WL 248915 [1998]). However, as to the employee/employer status prior to the effective date of the regulation, the issue may be resolved under traditional legal tests of determining employee/employer status.
Regarding defendants' motion to reargue and to dismiss against defendant Jeff Rosenbaum, plaintiffs oppose the motion because it is tantamount to an appeal. But CPLR 2221 (d)(2) allows reargument when the court has "overlooked or misapprehended" fact or law. Here, Rosenbaum described his duties and responsibilities of booking parties for Tasty Catering, answering phone calls, that he was an employee of and not an owner of the company. The only evidence indicating any control by this defendant over the plaintiffs involves a description of Rosenbaum as a "manger," but this court will not accept such a bare description without some greater showing of actual control over the plaintiffs. In short, the court, after reviewing the papers finds that in light of the defendant Rosenbaum's prima facie showing that he is not an employer of plaintiffs, plaintiffs have failed to raise an issue of fact by merely describing this defendant as a manger without specifying some of the controlling activities engaged by employers to create personal liability.
Based on the foregoing, it is
ORDERED, that plaintiffs' motion to renew based on the decision in Membrives v HHC TRSFP Portfolio, LLC, 196 A.D.3d 560, 562-63, 151 N.Y.S.3d 423, 2021 NY Slip Op 04349, 2, 2021 WL 2944277 [2d Dept 2021], is GRANTED and upon renewal the court modifies its Order dated May 27, 2020 (NYSCEF DOC. 448) by determining that plaintiffs are employees under 12 NYCRR § 146-2.18 (12 NYCRR § 146-3.2) from January' 1, 2011; and it is further
ORDERED, the defendant Jeff Rosenbaum's motion to reargue is GRANTED and upon reargument the complaint against defendant Jeff Rosenbaum is DISMISSED; and it is further
ORDERED, that any other requests for relief are DENIED and the Order dated May 27, 2020 (NYSCEF DOC. 448) is otherwise undisturbed.
This constitutes the decision and order of the Court.