Opinion
818-98.
Decided November 26, 2004.
Law Office of E. David Duncan, Attorney for Plaintiff, Albany, New York.
Davidoff Malito Hutcher LLP, Attorney for Defendant, New York, New York.
The plaintiff has requested an order of this Court pursuant to CPLR § 3124 compelling the defendant to produce its two chief executives for depositions. Defendant opposed the motion and cross-moved requesting this Court strike the plaintiff's complaint pursuant to CPLR § 3126 and grant summary judgment pursuant to CPLR § 3212 dismissing the plaintiff's complaint. Plaintiff has opposed the motion.
This case will celebrate its seventh anniversary in January 2005. The case has had a contentious history that has included new defense counsel, several motions, two appeals to the Appellate Division Third Department, repeated extensive discovery conferences and extensive correspondence directed to this Court. Remarkably the case is not particularly complex. It arises out of a claim by the plaintiff that he is owed payment for an alleged one hundred and sixty hours of "overtime" pay that he allegedly accrued during the course of his "employment" by the defendant. The plaintiff claims that due to his status as an employee of the defendant he is entitled to the protections afforded employees under the New York Labor Law § 190, et seq. including attorneys fees pursuant to Labor Law § 198(1-a). Contrary to the plaintiffs interpretation, the defendant claims that the parties did not have an employer/employee relationship. Rather defendant contends the plaintiff was an independent contractor. The defendant claims the plaintiff is not entitled to the relief he requests under the Labor Law or by virtue of any contract between the parties. It is undisputed that the parties never executed a written contract to govern their business relationship. The plaintiff alleges in sum and substance that the parties had an oral agreement setting forth the obligations of each party. There has never been any admissible proof submitted to establish the terms of this alleged oral contract.
The defendant previously requested the Court grant summary judgment in its favor based upon the lack of an employee/employer relationship. The plaintiff at the same time sought a default judgment. This Court denied both motions. The plaintiff appealed the default and the Appellate Division Third Department affirmed this Court's denial of the default and its decision to grant restitution. Gagen v. Kipany Productions, Inc., 6 AD3d 963 (3rd Dept. 2004).
On the issue of summary judgment this Court determined that "questions of fact regarding whether the plaintiff was an independent contractor or an employee and whether an oral contract existed that set forth the terms of the parties business relationship precludes the granting of summary judgment." Gallegos v. Brandeis School, 189 F.R.D 256 (E.D.NY 1999); Hornstein v. Negev Airbase Constructors, 110 AD2d 884 (2nd Dept. 1985); Tiernay v. Capricorn Investors, L.P. 189 AD2d 629 (1st Dept. 1993). The defendant requested the opportunity to pursue further discovery if its motion was denied. The cardinal principles applicable to this case are that New York does not have a mandatory overtime law and that a plaintiff must have an enforceable contractual right for overtime wages to prevail on a claim for wages under the Labor Law. Hornstein v. Negev Airbase Constructors, 110 AD2d 884, 885 (2nd Dep't 1985); Tierney v. Capricorn Investors, L.P., 189 AD2d 629, 632, (1st Dep't 1993) leave denied, 81 NY2d 710. The other pivotal issue is whether plaintiff is classified as an employee under the Labor Law or an independent contractor.
In order to succeed in obtaining summary judgment the defendant must establish its defense through the presentation of sufficient admissible proof "to warrant the court as a matter law in directing judgment" in its favor. (CPLR 3212 [b]), Friends of Animals, Inc. v. Associated Fur Manufactures, 46 NY2d 1065 (1979). To defeat the motion the plaintiff must demonstrate upon admissible evidence the existence of a triable issue of fact. Zuckerman v. City of New York, 49 NY2d 557 (1980). Summary judgment should be granted only in the absence of any material or triable issue of fact. Glick Dolleck v. Tri-Pac Export Corp., 22 NY2d 439, 441 (1968). The Court should not employ this drastic remedy and deny a party their day in court if there is any doubt as to whether such issues exist or if the issue is "arguable". Id. citing Barrett v. Jacobs, 255 NY 520, 522 (1931). The Court is obligated to construe the facts in a light most favorable to the party opposing the motion, in this case the plaintiff. Rifenburgh v. Wilczek, 294 AD2d 653 (3rd Dept. 2002) citing Silvestro v. Wartella, 224 AD2d 799 (3rd Dept. 1996). The Court may not "weigh the credibility of the affiants on a motion for summary judgment unless it appears the issues are not genuine but feigned." Rifenburgh v. Wilczek, 294 AD2d 653 (3rd Dept. 2002) citing Glick Dolleck v. Tri-Pac Export Corp., 22 NY2d 439, 441 (1968). However, "mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" to create a material question of fact. Zuckerman v. City of New York, 49 NY2d 557 (1980).
The question of the plaintiff's status is once again before this Court. It is beyond dispute that there is no entitlement to overtime pay in New York. Defining the relationship between plaintiff and defendant is the pivotal issue required to determine whether plaintiff is entitled to the relief he requests in this lawsuit. See, Gagen v. Kipany Productions, Inc., 6 AD3d 963 (3rd Dept. 2004). The plaintiff's tax returns for the years in question establish his status as an independent contractor and not as he alleges an employee of the plaintiff. See, e.g., Matter of O'Flaherty [Hartnett], 173 AD2d 901 (3rd Dept. 1991); see also, Felter v. Mercy Community Hosp. of Port Jervis, 244 AD2d 385 2nd Dept. 1997). The plaintiff's tax returns include the typical indicia of deductions for business expenses associated with an independent contractor such as travel, entertainment, lodging, supplies, and telephone. The plaintiff did not declare any W-2 wages, only self-employment income. Furthermore he declared depreciation associated with his business assets. Finally his tax filing includes a City of New York Nonresident Earnings Tax Return wherein he declares that he carried on his business in Albany, New York and at an address in New York City that is not the address of the defendant. That return also indicates that he allocated only 50% of his earnings to New York City. This does not support plaintiff's assertion that he was employed on a full-time basis by the defendant, a New York City business. The plaintiff has not produced any admissible evidence to rebut the proof or create a question of fact regarding the plaintiff's status as an independent contractor as supported by his 1995, 1996 and 1997 tax filings. The plaintiff is bound by the representations set forth in his tax returns. See, Naghi v. New York Life Insurance Co., 260 A.D. 252 (1st Dept. 1999); Meyer v. Insurance Co. Of America, 1998 WL 709854 (S.D.NY 1998). Additionally in her affidavit, Tiffany Hendry, an officer, director and shareholder of the defendant avers the plaintiff was never on the company payroll, paid his own social security tax, income tax and any other statutory withholding amounts for FICA, medical insurance and other expenses. The plaintiff may not seek to take advantage of those protections of the Labor Law he seeks to invoke and at the same time seek advantages afforded to him by the tax code by virtue of his filing as a self-employed independent contractor.
Nor has plaintiff presented any proof to support a finding regarding the issue of control to defeat the overwhelming evidence that the plaintiff's business relationship with the defendant was that of an independent contractor. The facts as set forth in the Appellate Division's earlier decision remain unchanged. That Court found
"the only written document in the record which addresses a working relationship between the parties is plaintiff's March 25, 1995 letter which suggests "an alternative" to an undisclosed offer from defendant and proposes a "contractual retainer agreement" with a "set monthly fee for all [plaintiff's] services". The record reflects no agreement that plaintiff was to be paid an hourly wage nor does it explain when "overtime" compensation would be paid or how it would be computed. Gagen v. Kipany Productions Ltd., 289 AD2d 844, (3rd Dept 2001).
The plaintiff may not rely on "mere conclusions, expressions of hope or unsubstantiated allegations or assertions" to create a material question fact. Zuckerman v. City of New York, 49 NY2d 557 (1980). The defendant has provided sufficient proof in admissible form to establish the plaintiff was an independent contractor and not and employee of the defendant.
Furthermore based upon the foregoing, the plaintiff as a nonemployee is not entitled to the liquidated damages or attorneys fees provided for in Labor Law § 198(1-a). Gagen v. Kipany Productions Ltd., 289 AD2d 844, (3rd Dept 2001); citing, Di Lorenzo v. Sbarra, 124 AD2d 446, 449 (3rd Dept. 1976). The defendant's motion for summary judgment is granted.
While academic in light of the foregoing, the plaintiff's motion to compel is denied based on it's flagrant disregard for the clear directives of this Court set forth in its scheduling order. Plaintiff did not request an extension of the dates in the order and proceeded at his peril in choosing to ignore the order. The plaintiff's request for sanctions is denied.
Any relief not specifically granted is denied. No costs are awarded to any party. This decision shall constitute the order of the Court. The original papers shall be forwarded to the attorney for the defendant for filing and entry.
Papers Received and Considered:
Notice of Motion to Compel Disclosure dated August 9, 2004
Affidavit of Sara A. Duncan, Esq., sworn to August 9, 2004
Affidavit of Good Faith Effort of Sara A. Duncan, Esq., sworn to August 9, 2004
Notice of Cross-Motion dated August 23, 2004
Affidavit of Rachel L. Warren, Esq., sworn to August 23, 2004 with attached Exhibits A-U
Exhibits to Kipany's Cross-Motion Plaintiff's Tax Returns 1995, 1996, 1997
Memorandum of Law in Support of Defendant's Cross-Motion and in Opposition to Plaintiff's Motion to Compel dated August 23, 2004
Affidavit of Sara A. Duncan, Esq., sworn to September 13, 2004 with attached Exhibits 1-3
Memorandum of Law dated September 13, 2004
Defendant's Reply Memorandum of Law dated October 4, 2004