Moreno Estrada v. Therapy PLLC

Background

Policarpo Moreno Estrada, who was employed as a porter at the bar Therapy, sued Therapy PLLC, Tom Johnson, and Kash Amin under the Fair Labor Standards Act and New York Labor Law. He alleged unpaid minimum and overtime wages, as well as violations of New York’s wage-notice and wage-statement requirements. Although the action initially was brought as a class or collective action, Estrada sought a default judgment only for himself.

Johnson and Amin were served on September 30, 2020, but neither responded to the complaint. Estrada moved for default judgment against those two defendants. He did not seek default judgment against Therapy PLLC because, according to his counsel, the company was believed to be no longer operational. The court deemed Estrada’s claim against Therapy PLLC abandoned.

Default-judgment standard

Federal Rule of Civil Procedure 55 uses a two-step process: first, the clerk or court enters a default when a defendant fails to defend; second, the court decides whether to enter a default judgment. A default admits well-pleaded factual allegations, but it does not automatically establish legal liability or the amount of damages. The court must determine whether the allegations establish liability as a matter of law and whether the plaintiff has supported the requested damages with evidence.

Liability

The court found that the complaint’s well-pleaded allegations satisfied the jurisdictional requirements of the Fair Labor Standards Act and New York Labor Law. It also found that the allegations substantiated violations of the federal and state minimum-wage and overtime provisions, along with New York’s wage-notice and wage-statement provisions.

Because Johnson and Amin did not appear or provide pay records, Estrada submitted a sworn statement estimating the days and hours he worked. The court accepted those estimates as the best available evidence. It concluded that Estrada was entitled to back wages under New York law, which the court used as the focus of its damages analysis because it provides the higher minimum wage and avoids duplicative recovery under both statutes.

Damages and interest

The court awarded $90,378.00 in back wages. It also awarded liquidated damages equal to 100% of the back wages—another $90,378.00—because the defaulting defendants did not appear or present a good-faith defense to the underpayment claims.

For the alleged wage-statement violations, the court awarded the statutory maximum of $5,000. It awarded another $5,000 for the alleged wage-notice violations. The court also awarded 9% prejudgment interest on the back wages, beginning August 6, 2017, and post-judgment interest under federal law. The judgment would automatically increase by 15% if amounts remained unpaid after the period specified in the order and no appeal was pending.

Attorneys’ fees and costs

The court reviewed the time and expense submissions from Estrada’s counsel. It reduced the claimed 20.80 hours to 19 hours because some entries were excessive, redundant, unnecessary, or improperly combined. It also adjusted the requested hourly rates, awarding rates of $400 for Michael Faillace, $300 for William K. Oates, and $100 for paralegal work.

The opinion’s discussion states that these calculations produced $5,360.00 in attorneys’ fees. However, the conclusion and damages list award $4,640.00 in attorneys’ fees and $551.00 in costs. The judgment was directed to reflect the $4,640.00 fee amount stated in the conclusion.

Disposition

Judge Lewis J. Liman granted default judgment against Tom Johnson and Kash Amin, directed the Clerk to prepare a judgment reflecting the listed damages, attorneys’ fees, and costs, directed Estrada to transmit the order to the defendants, and directed the Clerk to close the case.