Opinion
20 Civ. 9437 (JGLC) (GWG)
04-10-2024
REPORT & RECOMMENDATION
GABRIEL W. GORENSTEIN, United States Magistrate Judge.
Plaintiffs Alirio Zavala, Juan Carlos Diaz, Alexander Gonzalez, Jaume Villagrasa, Luis Torres, Jose Briceno, Luciano Emigdio, Nicolas Velasquez, Gustavo Rangel, Arodis Herrera, Jorge Guerrero, Segundo Morales Martinez, Sahagun Merejildo, Jaime Granada, John Jaime Rivera Alayon, Andres Torres, Ernesto Alejandro Sanchez, and Eduardo Cruz Gonzalez have brought this action against Top Shelf Electric Corp. (“Top Shelf”), PEI Electrical Services Group Inc. (“PEI Electrical”), CPI Electrical Services Inc. (“CPI Electrical”), and Pablo Ibepaulino alleging defendants violated the New York Labor Law §§ 190 et seq. (“NYLL”), the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (“FLSA”), and New York common law. See Complaint, filed Nov. 12, 2020 (Docket # 13) (“Compl.”). Defendant Pablo Ibepaulino has defaulted and plaintiffs now seek a default judgment against him. For the following reasons, plaintiffs should be awarded a judgment of $190,017.98 plus prejudgment interest.
See Notice of Motion for Entry of Default Judgment, filed Oct. 21, 2023 (Docket # 138) (“Mot.”); Memorandum of Law in Support, filed Oct. 21, 2023 (Docket # 139) (“Mem.”); Declaration of Jose Cristobal Gutierrez, filed Oct. 21, 2023 (Docket # 140) (“Gutierrez Decl.”); Declaration of Patricia Kakalec, filed Oct. 23, 2023 (Docket # 141) (“Kakalec Decl.”); Second Memorandum of Law in Support, filed Dec. 19, 2023 (Docket # 149) (“Second Mem.”); Proposed Findings of Fact, filed Dec. 19, 2023 (Docket # 150) (“Prop. Find.”); Supplemental Declaration of Jose Cristobal Gutierrez, filed Dec. 19, 2023 (Docket # 151) (“Supp. Gutierrez Decl.”); Supplemental Declaration of Patricia Kakalec, filed Dec. 19, 2023 (Docket # 152) (“Supp. Kakalec Decl.”); Second Supplemental Declaration of Patricia Kakalec, filed Dec. 20, 2023 (Docket # 153) (“Second Supp. Kakalec Decl.”); Letter, filed Mar. 1, 2024 (Docket # 156) (“Pl. Supp. Letter”); Damages Table, annexed as Ex. 1 to Pl. Supp. Letter (Docket # 156-1) (“Damages Table”); Amended Proposed Findings of Fact, annexed as Ex. 2 to Pl. Supp. Letter (Docket # 156-2) (“Am. Prop. Find.”); Declaration of Corinna Svarlien, annexed as Ex. 3 to Pl. Supp. Letter (Docket # 156-3) (“Svarlien Decl.”).
I. BACKGROUND
A. Procedural Background
Plaintiffs filed this action on November 10, 2020. See Docket # 1. In June 2021, plaintiffs served defendant Pablo Ibepaulino through the alternative methods of service permitted by the district court. See Affidavit of Service, filed June 21, 2021 (Docket # 56); Certificate of Service, filed June 21, 2021 (Docket # 57); see also Opinion and Order, filed June 14, 2021 (Docket # 55). Ibepaulino did not respond to the complaint and plaintiffs obtained a certificate of default as to him. See Clerk's Certificate of Default, filed Aug. 12, 2021 (Docket # 62).
Top Shelf and plaintiffs reached a settlement, which was approved on February 22, 2023. See Order, filed Feb. 22, 2023 (Docket # 129). Plaintiffs then filed a motion for a default judgement as to Ibepaulino. See Mot. The district judge referred the matter to the undersigned for an inquest. See Amended Order of Reference, filed Oct. 23, 2023 (Docket # 142). The undersigned issued an order directing plaintiffs to file proposed findings of fact and conclusions of law, see Scheduling Order for Damages Inquest, filed Oct. 25, 2023 (Docket # 144) (“Scheduling Order”), which plaintiffs filed on December 19, 2023. See Prop. Find. Ibepaulino has not responded to any filings in this case, including the motion for default judgment and the proposed findings.
B. Factual Background
Ibepaulino is the “owner, agent or principal” of PEI Electrical, a Tennessee corporation that transacted business in New York State. Compl. ¶¶ 16, 17, 21, 23, 32. In the spring of 2018, PEI Electrical and Ibepaulino “began working for and with Defendants Top Shelf Electric to provide electrical services at various construction worksites in New York City.” Id. ¶ 27. Top Shelf “engaged Defendant PEI Electrical . . . to assist in the recruiting and hiring of electrical workers in order to complete” certain contracting projects. Id. ¶ 31. The defendants - consisting of Top Shelf, PEI Electrical, CPI Electrical, and Pablo Ibepaulino - were employers of the 18 plaintiffs in this action. Id. ¶¶ 24-26. Ibepaulino and PEI Electrical “directly or indirectly” determined plaintiffs' method and rate of payment, had the power to hire and fire plaintiffs, and maintained employment records for each plaintiff.” Id. ¶¶ 68-70.
Ibepaulino and PEI Electrical “agreed to pay Plaintiffs either an hourly rate, a fixed weekly rate, or a piece rate per building unit completed.” Id. ¶ 34. Ibepaulino and PEI Electrical then “changed their practice and began agreeing to pay all Plaintiffs per an hourly rate, at rates which varied among the workers.” Id. Over the course of their employment, several of the plaintiffs received “one or two payments” when they began working but “did not receive any compensation for their work thereafter.” Id. ¶ 35. Other plaintiffs never received any payments. Id. ¶¶ 37, 41, 44, 46, 48, 49, 52, 53. In addition to their regular wages, plaintiffs never received full compensation at the overtime rate despite “consistently work[ing] more than forty hours each week,” id. ¶ 54, and did not receive any notice or wage statements, id. ¶¶ 58-60.
II. LEGAL STANDARD
In light of defendant's default, plaintiffs' properly pleaded allegations in the complaint, except those related to damages, are accepted as true. See City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (“It is an ancient common law axiom that a defendant who defaults thereby admits all well-pleaded factual allegations contained in the complaint.”) (citation and punctuation omitted); Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (“In light of [defendant's] default, a court is required to accept all . . . factual allegations as true and draw all reasonable inferences in [plaintiff's] favor.”).
As to damages, “[t]he district court must [ ] conduct an inquiry in order to ascertain the amount of damages with reasonable certainty.” Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). This inquiry requires the district court to: (1) “determin[e] the proper rule for calculating damages on . . . a claim” and (2) “assess[] plaintiff's evidence supporting the damages to be determined under this rule.” Id.
Plaintiffs bear the burden of establishing their entitlement to the amount sought. See Trs. of Local 813 Ins. Tr. Fund v. Rogan Bros. Sanitation Inc., 2018 WL 1587058, at *5 (S.D.N.Y. Mar. 28, 2018). In the case of a default where the defendant has never appeared, “a court may base its determination of damages solely on the plaintiff's submissions.” Id. (citing Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)). While a court must “take the necessary steps to establish damages with reasonable certainty,” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997), a court need not hold a hearing “as long as it ensure[s] that there [is] a basis for the damages specified in a default judgment,” Fustok, 873 F.2d at 40.
Here, the Court's Scheduling Order notified the parties that the Court might conduct the inquest into damages based upon the written submissions of the parties, but that a party may seek an evidentiary hearing. See Scheduling Order ¶ 3. No party has requested an evidentiary hearing. Moreover, because plaintiffs' submissions provide a basis for an award of damages, no hearing is required.
III. DISCUSSION
Plaintiffs brought suit under both the NYLL and the FLSA. It is settled that while
a plaintiff may be entitled to recover unpaid minimum wages and overtime pay under both the FLSA and the NYLL, he or she may not recover twice. Instead, where a plaintiff is entitled to damages under both federal and state wage law, a plaintiff may recover under the statute which provides the greatest amount of damages.Ergin v. 8th Hill Inc., 2022 WL 1037655, at *3 (S.D.N.Y. Apr. 6, 2022) (citation and quotation marks omitted), adopted by 2022 WL 1256996 (S.D.N.Y. Apr. 26, 2022). Because the NYLL provides for the greater recovery in plaintiffs' case, it is not necessary to address any provisions of the FLSA. See Caputi-Richards v. Chuck's Vintage, Inc., 2023 WL 2877622, at *2 (S.D.N.Y. Apr. 11, 2023), adopted by 2023 WL 3174316 (S.D.N.Y. May 1, 2023).
A. Unpaid Earned Wage
Plaintiffs seek unpaid earned wages at a rate higher than minimum wage based on their agreements with defendants. See Second Mem. at 6-7. Under the FLSA, plaintiffs would not be entitled to recover what they seek because “[w]ith respect to non-overtime wages . . . - commonly referred to as straight time - [t]he FLSA allows recovery for unpaid straight time only up to the minimum wage rate.” Contrera v. Langer, 314 F.Supp.3d 562, 572 (S.D.N.Y. 2018) (citations and punctuation omitted). The NYLL, however, provides that a worker must “be paid the wages earned in accordance with the agreed terms of employment.” N.Y. Lab. Law § 191(1)(d). Under this section, “a plaintiff can recover for unpaid ‘straight' time at the agreed-upon (or regular) rate where it exceeds the minimum wage.” Espinoza v. La Oficina Bar Corp., 2022 WL 987429, at *11 (E.D.N.Y. Mar. 1, 2022) (collecting cases), adopted as modified, 2022 WL 985836 (E.D.N.Y. Mar. 31, 2022); accord Soto v. Armstrong Realty Mgmt. Corp., 2016 WL 7396687, at *2 (S.D.N.Y. Dec. 21, 2016), adopted by 2017 WL 2191625 (S.D.N.Y. May 17, 2017).
Additionally, the NYLL requires an employer to pay “an employee for overtime at a wage rate of 11/2 times the employee's regular rate for hours worked in excess of 40 hours in one workweek.” N.Y. Comp. Codes R. & Regs. tit. 12, § 146-1.4. Where the plaintiff has been paid below the minimum wage, “the appropriate overtime rate [is] one-and-a-half times the minimum wage rate.” Nana v. Le Viking LLC, 2019 WL 3244181, at *3 (S.D.N.Y. July 19, 2019). However, where the plaintiff is paid at or above the minimum wage, the appropriate overtime rate is 1.5 times the plaintiff's regular rate. See, e.g., Ramos v. Guaba Deli Grocery Corp., 2021 WL 5563714, at *9 (S.D.N.Y. Nov. 29, 2021).
Based on the allegations in the complaint, see Compl. ¶¶ 36-53, plaintiffs are owed unpaid wages as alleged. Additionally, plaintiffs have alleged that “[a]lthough all of the Plaintiffs consistently worked more than forty hours each week, Defendants never paid any of the Plaintiffs overtime.” Id. ¶ 54. Thus, plaintiffs are entitled to unpaid amounts for the work they performed at the regular hourly rate and the work they performed at the overtime rate. As for the amounts owed, plaintiffs have proffered evidence in the form of sworn affidavits attesting to the wage they received per hour and the period they were employed by defendants. See Exhibits 1-18, annexed to Second Supp. Kakalec Decl. (Docket ## 153-1 to 153-18). Plaintiffs have provided a damages table summarizing this information, see Damages Table, which comports with the information provided in sworn affidavits and the proposed findings of fact. See Svarlien Decl. ¶ 3. Thus, we accept the accuracy of the information contained in the Damages Table for purposes of this motion, especially in light of “the absence of any rebuttal evidence proffered by Defendant[].” Rios v. Neighborhood Const. Corp., 2009 WL 3335354, at *1 (S.D.N.Y. Oct. 14, 2009) (citation omitted); accord Toramall v. Manhattan Constr. Grp. LLC, 2020 WL 2763737, at *4 (S.D.N.Y. May 28, 2020), adopted by 2020 WL 6482796 (S.D.N.Y. Nov. 4, 2020).
The initial damages table submitted by plaintiffs, see Damages Table, annexed as Ex. 9 to Kakalec Decl. (Docket # 141-9), was inaccurate and the Court ordered plaintiffs to provide a new damages table, see Order, filed Feb. 22, 2024 (Docket # 155). Plaintiffs provided this new table and amended proposed findings of fact. See Pl. Supp. Letter.
Accordingly, plaintiffs are owed the following amounts in unpaid earned wages:
Plaintiff | Wages Owed |
Alirio Zavala | $7,845.50 |
Juan Carlos Diaz | $8,954.75 |
Alexander Gonzalez | $9,339.74 |
Jaume Villagrasa | $3,375.00 |
Luis Torres | $15,642.00 |
Jose Briceno | $2,856.00 |
Luciano Emigdio | $5,476.25 |
Arodis Herrera | $4,960.00 |
Segundo Morales Martinez | $4,482.00 |
John Jaime Rivera Alayon | $5,590.25 |
Andres Torres | $4,950.00 |
Ernesto Alejandro Sanchez | $1,742.50 |
Eduardo Cruz Gonzalez | $9,593.75 |
Gustavo Rangel | $3,711.75 |
Jaime Granada | $3,690.00 |
Jorge Guerrero | $4,535.00 |
Nicolas Velasquez | $4,142.50 |
Sahagun Merejildo | $3,075.00 |
TOTAL | $103,961.99 |
B. Liquidated Damages
Plaintiffs seek liquidated damages for their unpaid wages. See Second Mem. at 5. N.Y. Lab. Law § 198(1-a) allows employees to recover “an additional amount as liquidated damages equal to one hundred percent of the total amount of the wages found to be due” unless the employer “proves a good faith basis for believing that its underpayment of wages was in compliance with the law.” Ibepaulino defaulted and therefore has not provided any evidence to suggest he had a good faith basis to believe his underpayment complied with the law. Accordingly, plaintiffs should be awarded 100% of their “unpaid earned wages.” Villanueva v. 179 Third Ave. Rest Inc., 500 F.Supp.3d 219, 239 (S.D.N.Y. 2020); accord Cavalotti v. Daddyo's BBQ, Inc., 2018 WL 5456654, at *19 (E.D.N.Y. Sept. 8, 2018) (awarding 100% liquidated damages for “unpaid straight-time wages” and “unpaid overtime compensation” under the NYLL). This amounts to $103,961.99 as described in the previous section.
C. Failure to Provide Notices and Wage Statements under the NYLL
N.Y. Lab. Law § 195(1) requires an employer at the time of hiring to “provide his or her employees, in writing in English and in the language identified by each employee as [their] primary language,” notice of
the rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; allowances, if any, claimed as part of the minimum wage, including tip, meal, or lodging allowances; . . . the regular pay day designated by the employer in accordance with section one hundred ninety-one of this article; the name of the employer; any “doing business as” names used by the employer; the physical address of the employer's main office or principal place of business, and a mailing address if different; the telephone number of the employer; plus such other information as the commissioner deems material and necessary.Id. § 195(1)(a); accord Maria v. Rouge Tomate Chelsea LLC, 2020 WL 6049893, at *5 (S.D.N.Y. Oct. 14, 2020), adopted, 2021 WL 734958 (S.D.N.Y. Feb. 25, 2021). The notice must also state an employee's regular hourly rate and overtime rate of pay. N.Y. Lab. Law § 195(1)(a). The statutory damages for violating the notice requirement are $50 per workday for a maximum of $5,000.00. N.Y. Lab. Law § 198(1-b). Plaintiffs alleged that defendants did not provide them with the notice required by N.Y. Lab. Law § 195(1). See Compl. ¶¶ 58-60.
A separate statute requires employers to “furnish each employee with a statement with every payment of wages,” which must include, inter alia, the rate of payment, the gross wages provided, and the applicable overtime rate. N.Y. Lab. Law § 195(3). Defendants did not provide plaintiffs with an accurate statement of wages and thus violated N.Y. Lab. Law § 195(3). See Compl. ¶ 60. The statute provides for a penalty of $250 for each workday that the violations occurred, not to exceed $5,000.00. See N.Y. Lab. Law § 198(1-d).
Plaintiffs cannot recover these sums, however, because their complaint contains no allegations as to any harm that these violations caused them. In TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), the Supreme Court held that “[o]nly those plaintiffs who have been concretely harmed by a defendant's statutory violation may sue that private defendant over that violation in federal court.” Id. at 427 (emphasis in original). With regard to the NYLL provisions, “plaintiffs lack standing under TransUnion to claim violations of the NYLL wage notice and wage statement provisions where the plaintiff cannot demonstrate a tangible injury as a result of the defendant's violation of these provisions.” Huerta v. 101 N. Laundromat Inc., 2023 WL 199699, at *2 (E.D.N.Y. Jan. 17, 2023); accord Estrada v. Lagos Lounge Inc., 2023 WL 2748846, at *4-5 (S.D.N.Y. Apr. 3, 2023); Sanchez v. Trescly, 2023 WL 2473070, at *1 (E.D.N.Y. Mar. 13, 2023). Because plaintiffs allege only that the statute was violated and “not a physical, monetary, or cognizable harm,” they “lack[] standing for [their] claims of violations of NYLL § 195(1)(a) and § 195(3) because [they] [were] not ‘concretely harmed by [defendant's] statutory violation[.]'” Hernandez v. 99 Thai Playground LLC, 2022 WL 18539303, at *7 (S.D.N.Y. Nov. 28, 2022) (quoting TransUnion LLC, 594 U.S. at 427), adopted by 2023 WL 1400626 (S.D.N.Y. Jan. 31, 2023).
D. Prejudgment Interest
Plaintiffs seek prejudgment interest. See Second Mem. at 7-8. A plaintiff who prevails on a NYLL-wage claim is entitled to prejudgment interest on any “underpayment” of wages. See N.Y. Lab. Law § 198(1-a); Santana v. Latino Express Rests., Inc., 198 F.Supp.3d 285, 29495 (S.D.N.Y. 2016); Castillo v. RV Transport, Inc., 2016 WL 1417848, at *3-4 (S.D.N.Y. Apr. 11, 2016). While “a plaintiff who receives FLSA liquidated damages may not also receive prejudgment interest[,] . . . liquidated damages under the NYLL are considered punitive in nature, thus enabling a plaintiff to recover both liquidated damages and pre-judgment interest.” Villanueva, 500 F.Supp.3d at 243. However, “the award of prejudgment interest applies only to the amount of underpayment of wages, not the liquidated damages.” Salustio v. 106 Columbia Deli Corp., 264 F.Supp.3d 540, 557 (S.D.N.Y. 2017).
Post-judgment interest will accrue automatically pursuant to 28 U.S.C. § 1961.
Prejudgment interest in New York runs at the rate of nine percent per annum. N.Y. C.P.L.R. § 5004(a). The starting date from which a court computes this interest is “the earliest ascertainable date the cause of action existed.” Conway v. Icahn & Co., Inc., 16 F.3d 504, 512 (2d Cir. 1994) (quoting N.Y. C.P.L.R. § 5001(b)). However, “[w]here such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date.” N.Y. C.P.L.R. § 5001(b); see also Marfia v. T.C. Ziraat Bankasi, 147 F.3d 83, 91 (2d Cir. 1998) (“New York law leaves to the discretion of the court the choice of whether to calculate prejudgment interest based upon the date when damages were incurred or ‘a single reasonable intermediate date.'”) (citing 155 Henry Owners Corp. v. Lovlyn Realty Co., 231 A.D.2d 559, 560-61 (2d Dep't 1996)).
Here, plaintiffs' claims for unpaid wages arose on various dates between July 30, 2018 to November 30, 2018. See Damages Table; see also Compl. ¶ 8 (“Each Plaintiff was employed by Defendants for part or all of the time between July 2018 and the beginning of December 2018.”). As is common in cases under the NYLL, see, e.g., Urena v. 0325 Tuta Corp., 2022 WL 4284879, at *8 (S.D.N.Y. Sept. 16, 2022), adopted by 2022 WL 17249362 (S.D.N.Y. Nov. 28, 2022), we will calculate prejudgment interest from the midpoint date of this employment period: here, September 29, 2018. Accordingly, plaintiffs are entitled to prejudgment interest on their unpaid wage damages of $103,961.99 from September 29, 2018, until the date judgment is entered. This amounts to $25.63 per day ([$103,961.99 * .09] / 365 days).
While plaintiffs acknowledge that using the midpoint date of the employment period is the proper way to calculate prejudgment interest, see Second Mem. at 8, plaintiffs inexplicably request the prejudgment interest rate “from 11/12/14 (six years prior to the filing of this case) until the date of entry of judgment.” Am. Prop. Find. at 33. Plaintiffs provide no explanation for this request and given the fact that none of the employees are alleged have been employed by defendant before 2018, the Court will use the September 29, 2018, mid-point date as the start date for calculating prejudgment interest.
* * *
After deducting payments received by plaintiffs - through either the satisfaction of a Mechanic's Lien or from the settlement with Top Shelf - the amounts owed to each plaintiff are as follows:
See Damages Table.
Plaintiff
Wages Owed
Liquidated Damages
Less Payments Already Received
Total Amount Due
Alirio Zavala
$7,845.50
$7,845.50
$2,362.15
$13,328.85
Juan Carlos Diaz
$8,954.75
$8,954.75
$3,129.80
$14,779.70
Alexander Gonzalez
$9,339.74
$9,339.74
$3,723.00
$14,956.48
Jaume Villagrasa
$3,375.00
$3,375.00
$1,184.90
$5,565.10
Luis Torres
$15,642.00
$15,642.00
$10,393.15
$20,890.85
Jose Briceno
$2,856.00
$2,856.00
$1,090.00
$4,622.00
Luciano Emigdio
$5,476.25
$5,476.25
$2,202.65
$8,749.85
Arodis Herrera
$4,960.00
$4,960.00
$1,732.40
$8,187.60
Segundo Morales Martinez
$4,482.00
$4,482.00
$1,472.60
$7,491.40
John Jaime Rivera Alayon
$5,590.25
$5,590.25
$1,961.65
$9,218.85
Andres Torres
$4,950.00
$4,950.00
$1,254.60
$8,645.40
Ernesto Alejandro Sanchez
$1,742.50
$1,742.50
$752.55
$2,732.45
Eduardo Cruz Gonzalez
$9,593.75
$9,593.75
$4,885.50
$14,302.00
Gustavo Rangel
$3,711.75
$3,711.75
$1,347.70
$6,075.80
Jaime Granada
$3,690.00
$3,690.00
$995.10
$6,384.90
Jorge Guerrero
$4,535.00
$4,535.00
$1,902.20
$7,167.80
Nicolas Velasquez
$4,142.50
$4,142.50
$899.30
$7,385.70
Sahagun Merejildo
$3,075.00
$3,075.00
$1,415.60
$4,734.40
TOTAL
$103,961.99
$103,961.99
$42,704.85
$165,219.13
E. Attorney's Fees and Costs
Plaintiffs have prevailed on their NYLL claims and are therefore entitled to seek an award of reasonable attorney's fees. See N.Y. Lab. Law § 663(4).
New York law provides that
[i]n determining reasonable compensation for an attorney, the court must consider such factors as the time, effort, and skill required; the difficulty of the questions presented; counsel's experience, ability, and reputation; the fee customarily charged in the locality; and the contingency or certainty of compensation. While a hearing is not required in all circumstances, the court must possess sufficient information upon which to make an informed assessment of the reasonable value of the legal services rendered. There must be a sufficient affidavit of services, detailing the hours reasonably expended and the prevailing hourly rate for similar legal work in the community.Citicorp Tr. Bank, FSB v. Vidaurre, 155 A.D.3d 934, 935 (2d Dep't 2017) (citations and internal alterations omitted).
New York courts thus use the “lodestar method” of calculating fees, “which is based on a reasonable hourly rate times a reasonable number of hours expended.” The New York Times Co. v. The City of New York Office of the Mayor, 2023 WL 5502516, at *2 (N.Y. Sup. Ct. Aug. 24, 2023). See also Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany, 522 F.3d 182, 186 (2d Cir. 2008) (In determining a statutory fee award, “[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.”) (punctuation omitted) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Because New York cases often cite to federal case law in addressing attorney fee applications, see, e.g., The New York Times Co., 2023 WL 5502516, at *2, we will as well.
Using the “lodestar method,” plaintiffs request $71,847.50 based on the work done by Kakalec Law PLLC ($47,785.00) and Make the Road New York (“MRNY”) ($24,062.50). See Am. Prop. Find. at 33; Supp. Kakalec Decl. ¶ 6; Exhibit 1, annexed to Supp. Gutierrez Decl. (Docket # 151-1) (“MRNY Time Records”); Exhibit 10, annexed as Ex. 10 to Kakalec Decl. (Docket # 141-12) (“Kakalec Time Records”).
1. Reasonable Hours
It is well-established that “any attorney . . . who applies for court-ordered compensation in this Circuit . . . must document the application with contemporaneous time records .... specify[ing], for each attorney, the date, the hours expended, and the nature of the work done.” N.Y. State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983); accord Ergin, 2022 WL 1037655, at *6. Here, Cristobal Gutierrez and Patricia Kakalec have provided time records for all attorneys and paralegals involved in this case, see MRNY Time Records; Kakalec Time Records, and they have sworn that the records were contemporaneously made, see Gutierrez Decl. ¶ 7; Supp. Kakalec Decl. ¶ 5. When reviewing such records, courts must make “a conscientious and detailed inquiry into the validity of the representations that a certain number of hours were usefully and reasonably expended.” Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir. 1994) (per curiam). “The critical inquiry is ‘whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.'” Angamarca v. Pita Grill 7 Inc., 2012 WL 3578781, at *12 (S.D.N.Y. Aug. 2, 2012) (quoting Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992)).
If a court finds that claimed hours are “excessive, redundant, or otherwise unnecessary,” it should exclude those hours from its calculation of the presumptively reasonable fee. Hensley, 461 U.S. at 434; accord Quaratino v. Tiffany & Co., 166 F.3d 422, 426 n.6 (2d Cir. 1999) (citations omitted); Farmer v. Hyde Your Eyes Optical, Inc., 2015 WL 2250592, at *15 (S.D.N.Y. May 13, 2015). However, as the Supreme Court noted in Hensley, “[t]here is no precise rule or formula for making these determinations.” 461 U.S. at 436. Because “it is unrealistic to expect a trial judge to evaluate and rule on every entry in an application,” Carey, 711 F.2d at 1146, “the court has discretion simply to deduct a reasonable percentage of the number of hours claimed ‘as a practical means of trimming fat from a fee application,'” Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (quoting Carey, 711 F.2d at 1146). Thus, a district court is not required to “set forth item-by-item findings concerning what may be countless objections to individual billing items.” Lunday, 42 F.3d at 134.
The instant case was litigated not only against Ibepaulino but also against Top Shelf. Plaintiffs, however, are not entitled to hours spent in pursuit of relief against Top Shelf that were not necessary to pursue their claims against Ibepaulino. Courts routinely exclude
attorneys' hours that were expended on matters related to non-defaulting defendants, finding that defaulting defendants are not responsible for attorneys' fees related to other, non-defaulting defendants in the case and that, where attorneys seek fees that were billed for services related to both non-defaulting and defaulting defendants, such mixed fees should be reduced by a percentage.Xochimitl v. Pita Grill of Hell's Kitchen, Inc., 2016 WL 4704917, at *21 (S.D.N.Y. Sept. 8, 2016) (collecting cases), adopted by, 2016 WL 6879258 (S.D.N.Y. Nov. 21, 2016); accord Griffen Sec., LLC v. Citadel Car Alarms, LLC, 2020 WL 3264173, at *6 (S.D.N.Y. June 17, 2020), adopted by 2020 WL 3791869 (S.D.N.Y. July 6, 2020) (reducing hours sought by 65% because they had “nothing to do with obtaining a judgment against” the defaulting defendant).
Here, Kakalec Law seeks 115.9 hours. See Kakalec Time Records; Supp. Kakalec Decl. Kakalec indicates that she has excluded time spent on matters which “primarily relate to Defendant Top Shelf's defense in this case.” Kakalec Decl. ¶ 14. The word “primarily” is unclear, however. Notably, many of the time entries that remain relate to discovery, which was not taken of Ibepaulino. Additionally, Kakalec concedes that she included time spent on Top Shelf's motion for summary judgment on the ground that Kakalec Law was “able to use that work” in connection with the default motion. Id. This explanation, however, is far too vague to justify inclusion of the summary judgment hours. Id. Kakalec also included “some” hours relating to settlement “because the amount received in that settlement reduces the amount of the settlement sought here.” Id. The Court rejects the inclusion of such hours as well. The amount obtained in settlement was the result of the pursuit of claims against an entirely different defendant. Under plaintiff's logic, all hours spent in pursuit of Top Shelf could have been deemed to be related to the default judgment application, even if the money had been paid after trial against Top Shelf rather than as part of a settlement. Plaintiffs' effort to be compensated for those hours runs afoul of the principle that “defaulting defendants are not responsible for attorneys' fees related to other, non-defaulting defendants in the case.” Xochimitl, 2016 WL 4704917, at *21.
While Kakalec Law's time records list 109.6 hours as a total, the sworn declaration of Patricia Kakalec identifies 109.7 hours. Compare Kakalec Time Records with Kakalec Decl. ¶¶ 15, 25-28. We thus use the hours in the declaration. We have added 6.2 hours identified in Kakalec's declaration, which were expended since the initial time records were compiled. See Supp. Kakalec Decl. ¶ 6.
MRNY seeks 101.4 hours. See MRNY Time Records. It states that it has “excluded from the time records time spent on matters which primarily relate to Defendant Top Shelf's defense in this case as well as other matters such as filing mechanic liens.” Supp. Gutierrez Decl. ¶ 5. Again, the word “primarily” is unclear. Additionally, MRNY's records contain numerous vague time entries (such as “emails with CC” or versions thereof). See MRNY Time Records at *1; see also Ramirez v. Marriott Int'l, 2023 WL 2447398, at *7 (S.D.N.Y. Mar. 10, 2023) (Where entries are vague, “courts routinely apply across-the-board reductions”) (citation and internal punctuation omitted). Finally, there is at least some time billed relating to Top Shelf given that a time entry refers to a call with “defense counsel.” MRNY Time Records at *1. MRNY's hours must therefore also be reduced.
We arrived at this figure through our own totaling of the appropriate time entries (which does not match the total in the MRNY Time Records). To arrive at this figure, we excluded the hours of two individuals (Nathalia Varela and Elizabeth Joynes Jordan) for whom no information as to their background has been provided.
Accordingly, the hours sought by MRNY and Kakalec Law will be reduced by 60%. The resulting number of hours, 86.92, while still substantial, is far closer to the reasonable number of hours that should have been needed to obtain a default judgment against Ibepaulino.
Thus, the following hours should be awarded:
Time Keeper | Firm | Position | Requested Hours | Awarded Hours |
Patricia Kakalec | Kakalec Law | Managing Attorney | 82.4 | 32.96 |
Hugh Baran | Kakalec Law | Attorney | 9.2 | 3.68 |
Jennifer Peterson | Kakalec Law | Paralegal | 2.6 | 1.04 |
Anthony Damelio | Kakalec Law | Intern | 6.9 | 2.76 |
Abigail Kohn | Kakalec Law | Intern | 14.8 | 5.92 |
Jose Cristobal Gutierrez | MRNY | Lead Attorney | 6 | 2.4 |
Estee Ward | MRNY | Attorney | 63.9 | 25.56 |
Amanda Bransford | MRNY | Attorney | 6.5 | 2.6 |
Corinna Svarlien | MRNY | Attorney | 11.1 | 4.44 |
Corinna Svarlien | MRNY | Non-Attorney | 1.6 | 0.64 |
Anacristina Fonseca | MRNY | Paralegal | 12.3 | 4.92 |
Subtotal - Kakalec Law | 115.9 | 46.36 | ||
Subtotal - MRNY | 101.4 | 40.56 | ||
TOTAL | 217.3 | 86.92 |
2. Reasonable Hourly Rate
In determining whether the hourly rate is reasonable, “the burden is on the fee applicant to produce satisfactory evidence . . . that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.” Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984); accord Savoie v. Merchants Bank, 166 F.3d 456, 463 (2d Cir. 1999).
To determine an appropriate hourly rate, Arbor Hill directs that a court engage in the following process:
[T]he district court, in exercising its considerable discretion, [is] to bear in mind all of the case-specific variables that we and other courts have identified as relevant to the reasonableness of attorney's fees in setting a reasonable hourly rate. The reasonable hourly rate is the rate a paying client would be willing to pay. In determining what rate a paying client would be willing to pay, the district court should consider, among others, the Johnson factors; it should also bear in mind that a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively. The district court should also consider that such an individual might be able to negotiate with his or her attorneys, using their desire to obtain the reputational benefits that might accrue from being associated with the case.522 F.3d at 190 (emphasis in original).
The “Johnson factors” are those laid out in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). These are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.Arbor Hill, 522 F.3d at 186 n.3 (citing Johnson, 488 F.2d at 717-19).
Arbor Hill specifically identified the following factors to be considered in determining what a reasonable, paying client would be willing to pay:
the complexity and difficulty of the case, the available expertise and capacity of the client's other counsel (if any), the resources required to prosecute the case effectively (taking account of the resources being marshaled on the other side but not endorsing scorched earth tactics), the timing demands of the case, whether an attorney might have an interest (independent of that of his client) in achieving the ends of the litigation or might initiate the representation himself, whether an attorney might have initially acted pro bono (such that a client might be aware that the attorney expected low or non-existent remuneration), and other returns (such as reputation, etc.) that an attorney might expect from the representation.Id. at 184.
Importantly, Arbor Hill held that a court must “step[ ] into the shoes of the reasonable, paying client, who wishes to pay the least amount necessary to litigate the case effectively.” Id. (emphasis added). “In other words, whether the attorneys on this case properly command the rates they seek in the marketplace is not dispositive of the rate that they are to be awarded. Rather, Arbor Hill demands that we determine the cheapest hourly rate an effective attorney would have charged.” Mei Chun Poon v. Apple NYC Corp., 2019 WL 75674, at *12 (S.D.N.Y. Jan. 2, 2019) (emphasis in original).
Here, work was performed by several different attorneys and non-attorney professionals. At Kakalec Law, two attorneys - Patricia Kakalec and Hugh Baran - and three non-attorney professionals - Jennifer Peterson (paralegal), Anthony Damelio (law intern), and Abigail Kohn (law intern) - performed work on the matter. See Kakalec Decl. ¶¶ 15, 24. As for MRNY, four attorneys - Jose Cristobal Gutierrez, Estee Ward, Amanda Bransford, and Corinna Svarlien - and one paralegal, Anacristina Fonseca, performed worked in connection with this matter. See Gutierrez Decl. ¶ 3. These professionals request the following hourly rates:
Gutierrez indicates that a “Sarah Leberstein” performed work in this matter. See Gutierrez Decl. ¶ 3. However, there are no time entries attributable to this individual. Thus, we exclude her from our analysis.
Time Keeper | Firm | Position | Requested Rate |
Patricia Kakalec | Kakalec Law | Managing Attorney | $500 |
Hugh Baran | Kakalec Law | Attorney | $350 |
Jennifer Peterson | Kakalec Law | Paralegal | $125 |
Anthony Damelio | Kakalec Law | Intern | $150 |
Abigail Kohn | Kakalec Law | Intern | $150 |
Jose Cristobal Gutierrez | MRNY | Lead Attorney | $300 |
Estee Ward | MRNY | Staff Attorney | $250 |
Amanda Bransford | MRNY | Staff Attorney | $250 |
Corinna Svarlien | MRNY | Staff Attorney | $250 |
Anacristina Fonseca | MRNY | Paralegal | $125 |
MRNY's time records indicate a “supervising attorney” billed at a rate of $300 and performed 7 hours of work. See MRNY Time Records at *4. Gutierrez's declaration suggests that “supervising” and “lead” attorney are synonymous from a billing perspective. See Gutierrez Decl. ¶ 21 (requesting a rate of $300 for “Lead and Supervising attorneys”). While Gutierrez - the only attorney identified as a “lead attorney” - only billed 6 hours, we find this discrepancy immaterial inasmuch as we use the actual billing records in our calculation.
Patricia Kakalec requests a rate of $500 per hour. She has nearly 25 years of experience and prior to working at Kakalec Law was the Bureau Chief, Deputy Bureau Chief, and Special Counsel of the New York State Attorney General's Labor Bureau. Kakalec Decl. ¶¶ 17-18. Kakalec points to several cases where fees of $500 or more were approved for senior attorneys, see, e.g., Brown v. City of New York, 2020 WL 6392779, *4 (S.D.N.Y. Nov. 1, 2020); Torres v. Gristede's Operating Corp., 2012 WL 3878144, *4 (S.D.N.Y. Aug. 6, 2012), aff'd, 519 Fed.Appx. 1 (2d Cir. 2013), and indicates that she has “sought a rate of at least $500” in several motions for fees, see Kakalec Decl. ¶ 23. “Courts in this District have determined that a ‘fee ranging from $250 to $450 is appropriate for experienced litigators in wage-and-hour cases.'” Chen v. Shanghai Cafe Deluxe, Inc., 2023 WL 2401376, at *15 (S.D.N.Y. Mar. 8, 2023); accord Reinoso v. Cipriani, 2019 WL 2324566, at *3 (S.D.N.Y. May 30, 2019) (“Courts in this District have determined that $250 to $450 per hour is the range of appropriate fees for attorneys with significant wage and hour litigation experience.”); Pinzon v. 467 Star Deli, Inc., 2023 WL 5337617, at *14 (S.D.N.Y. July 31, 2023) (finding $300 to $400 per hour reasonable), adopted by 2023 WL 5334757 (S.D.N.Y. Aug. 18, 2023); Hollis v. All Am. Bar on First, Inc., 2023 WL 4350613, at *3 n.6 (S.D.N.Y. July 5, 2023). While Kakalec's experience certainly warrants the upper end of that range, we do not see a reason to depart from the range. Thus, Kakalec should receive an hourly rate of $450 per hour.
Jose Cristobal Gutierrez is identified as a “Lead Attorney” at MRNY. Gutierrez Decl. ¶ 8. He received his Master's in Law from University of Valencia in 2010 and an L.L.M. from New York University School of Law in 2014. Id. He has worked at MRNY since November 2015 and has “continuously represented low-income immigrant workers in employment and labor cases.” Id. He requests a rate of $300 per hour, which is reasonable in light of his 8 years of practice at MRNY.
The other attorneys appear to have significantly less experience, which suggests they should be awarded associates rates. Generally, “rates in excess of $225.00 per hour are reserved for FLSA litigators with more than three years' experience, while associates with one to three years of experience have been awarded rates ranging from $150 to $200 per hour.” Singh v. Meadow Hill Mobile Inc., 2021 WL 4312673, at *16 (S.D.N.Y. Aug. 9, 2021), adopted by 2021 WL 3862665 (S.D.N.Y. Aug. 29, 2021); accord Garcia v. Francis Gen. Constr. Inc., 2022 WL 2698434, at *7 (S.D.N.Y. July 12, 2022).
Hugh Baran clerked for two federal judges and was a Skadden Fellow and Senior Staff Attorney at the National Employment Law Project before joining Kakalec Law in 2021. Kakalec Decl. ¶ 25. While the precise number of years Baran has practiced labor law is unclear, his senior position at the National Employment Law Project coupled with his 2 years at Kakalec Law suggests he should be awarded the upper range for associates; that is, $225 per hour.
As for the other attorneys from MRNY - Corinna Svarlien, Estee Ward, and Amanda Bransford - little information is provided related to their experience litigating wage and hour claims. See Gutierrez Decl. ¶¶ 3, 9-10. The only relevant information provided by plaintiffs is that Svarlien graduated from Columbia Law School in 2021, and that Ward graduated from University of Pennsylvania Law School. See id. ¶¶ 9-10. No information is provided about Bransford other than that she is an attorney. See id. ¶ 3. Given the lack of information, $200 per hour is a reasonable rate as it is a typical award for junior associates. See Singh, 2021 WL 4312673, at *16.
As to Jennifer Peterson and Anacristina Fonseca, courts in this district award rates between $75 to $200 to paralegals and legal assistants, depending on the individual's experience. See KCG Holdings, Inc. v. Khandekar, 2020 WL 7053229, at *6 (S.D.N.Y. Dec. 2, 2020) (finding $75 is a “a standard paralegal rate in this district”), adopted by 2021 WL 623927 (S.D.N.Y. Feb. 17, 2021); JTH Tax LLC v. Sanchez, 2023 WL 6813449, at *6 (S.D.N.Y. Oct. 16, 2023) (approving a rate of $125 per hour), adopted by 2023 WL 8936352 (S.D.N.Y. Dec. 27, 2023); Glob. Ref. Grp., Inc. v. PMD Analysis Inc., 2023 WL 8895869, at *4 (S.D.N.Y. Dec. 8, 2023) (“[C]ourts have concluded that $200 per hour is the upper limit for experienced paralegals and $75 per hour is standard.”), adopted by 2023 WL 8893989 (S.D.N.Y. Dec. 26, 2023). No information is provided regarding these individuals' experience that suggests an award above the “standard paralegal rate” is warranted. Accordingly, a rate of $75 is appropriate.
Corinna Svarlien seeks 1.6 hours for “Non-Attorney” work. Attorneys who perform tasks that could have been performed by paralegals must be awarded a paralegal rate. See SING for Serv., LLC v. DOWC Administration Services, LLC, 2023 WL 3294279, at *12 (S.D.N.Y. May 5, 2023) (“[W]here there is work done by an attorney that is typically done by a paralegal, courts reduce attorney's fees to a paralegal rate.”) (citation and punctuation omitted). Thus, Svarlien should be awarded $75 for those “Non-Attorney” hours.
As for the two legal interns - Anthony Damelio and Abigail Kohn -a rate of $100 is appropriate in light of the fact that both had completed some law school at the time they worked on the case and the time records suggest they were assisting in tasks that required some legal expertise. See M.C. ex rel. E.C. v. Dep't of Educ. of N.Y.C., 2013 WL 2403485, at *7 (S.D.N.Y. June 4, 2013) (“[L]aw student interns should be compensated at rates similar to those charged by paralegals in the prevailing market.”), adopted by 2013 WL 3744066 (S.D.N.Y. June 28, 2013); accord Guo v. Tommy's Sushi, Inc., 2016 WL 452319, at *5 (S.D.N.Y. Feb. 5, 2016); Gonzalez v. Fresh Start Painting Corp., 2022 WL 3701096, at *3 (S.D.N.Y. Aug. 26, 2022) (awarding “non-attorney support staff,” including interns, the same rate of $100 per hour).
Accordingly, plaintiffs should receive the following attorney's fees award:
Time Keeper
Firm
Position
Awarded Hours
Awarded Rate
Total Award
Patricia Kakalec
Kakalec
Managing Attorney
32.96
$450.00
$14,832.00
Hugh Baran
Kakalec
Attorney
3.68
$225.00
$828.00
Jennifer Peterson
Kakalec
Paralegal
1.04
$75.00
$78.00
Anthony Damelio
Kakalec
Intern
2.76
$100.00
$276.00
Abigail Kohn
Kakalec
Intern
5.92
$100.00
$592.00
Jose Cristobal Gutierrez
MRNY
Lead Attorney
2.4
$300.00
$720.00
Estee Ward
MRNY
Attorney
25.56
$200.00
$5,112.00
Amanda Bransford
MRNY
Attorney
2.6
$200.00
$520.00
Corinna Svarlien
MRNY
Attorney
4.44
$200.00
$888.00
Corinna Svarlien
MRNY
Non-Attorney Hours
0.64
$75.00
$48.00
Anacristina Fonseca
MRNY
Paralegal
4.92
$75.00
$369.00
Subtotal - Kakalec
46.36
$16,606.00
Subtotal - MRNY
40.56
$7,657.00
TOTAL
86.92
$24,263.00
3. Costs
A prevailing plaintiff under NYLL is entitled to costs, which “include those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients.” See LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998) (citation and quotation marks omitted); accord Febus v. Guardian First Funding Grp., LLC, 870 F.Supp.2d 337, 341 (S.D.N.Y. 2012). Here, plaintiffs seek $535.85 in costs consisting of a $400.00 filing fee, $112 for attempted service of Ibepaulino, and $23.85 in certified mail postage. See Kakalec Decl. ¶ 29. Plaintiff has submitted proof of the latter two costs, see Cost Receipts, annexed as Ex. 13 to Kakalec Decl. (Docket # 141-13), and the docket sheet reflects the filing fee. Such costs are recoverable. See, e.g., Caputi-Richards, 2023 WL 2877622, at *7 (awarding costs for a filing fee and process server fees); Kliger v. Liberty Saverite Supermarket Inc., 2018 WL 4782342, at *11 (E.D.N.Y. Sept. 17, 2018) (“Courts have also allowed recovery for PACER access, postage, and legal research.”), adopted as modified, 2018 WL 4783964 (E.D.N.Y. Oct. 3, 2018). Accordingly, plaintiffs should be awarded $535.85 in costs.
* * *
Thus, plaintiffs should receive an award of $165,219.13 in unpaid wages and liquidated damages (less amounts already received), plus $24,263.00 in attorney's fees, plus $535.85 in costs, for a total of $190,017.98.
Conclusion
For the foregoing reasons, the motion for a default judgment (Docket # 138) should be granted. Judgment should be entered against Ibepaulino in favor of plaintiffs in the amount of $190,017.98. Additionally, the judgment should include an award of prejudgment interest to be calculated by the Clerk of the Court at $25.63 per day starting from September 29, 2018, until the date judgment is entered.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file any objections. See also Fed.R.Civ.P. 6(a), (b), (d). A party may respond to any objections within 14 days after being served. Any objections and responses shall be filed with the Clerk of the Court. Any request for an extension of time to file objections or responses must be directed to Judge Clarke. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).