Abouelmakarem v. MDNMA INC.
- Lewis Liman
- 1:21-cv-10625
- U.S. District Court · Southern District of New York
- 5
In Abouelmakarem v. MDNMA INC., Judge Liman granted Abouelmakarem’s motion to dismiss the defendants’ counterclaims, with different refiling consequences.
The ruling affected the defendants’ three counterclaims against Nader Abouelmakarem. The attorneys’-fee counterclaim was ended with prejudice; the vendor-payment and rent counterclaims were dismissed without prejudice, subject to a possible motion to amend within fourteen days.
What happened
Nader Abouelmakarem sued MDNMA Inc., MSSMINJA Inc., Mahmoud Mustafa, and Nazih K. Mustafa under federal and New York wage laws for work at two gift shops. The defendants responded with three claims against him.
The defendants’ first claim sought attorneys’ fees under several statutes. Their second claimed that Abouelmakarem violated a duty of loyalty by failing to provide account information and pay vendors. Their third claimed that he failed to pay or arrange payment of rent, causing losses and legal expenses.
The court granted Abouelmakarem’s motion to dismiss all three counterclaims. Judge Lewis J. Liman dismissed the attorneys’-fee claim with prejudice and dismissed the vendor and rent claims without prejudice, allowing the defendants fourteen days to seek permission to amend them.
The detailed version
- Abouelmakarem v. MDNMA INC. · No. 1:21-cv-10625
- Lewis Liman
- May 20, 2022
Background
Nader Abouelmakarem sued MDNMA Inc., doing business as 6th Avenue Gifts, MSSMINJA Inc., doing business as Gifts on Sixth, and individual defendants Mahmoud Mustafa and Nazih K. Mustafa. He alleged that the defendants violated the Fair Labor Standards Act and the New York Labor Law in connection with his employment as a store salesman, cashier, and clerk from approximately March 2018 through November 2021.
The defendants filed an answer containing three counterclaims. Abouelmakarem moved to dismiss those counterclaims under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a pleading does not state a legally sufficient claim.
The Counterclaims
The first counterclaim sought attorneys’ fees under 28 U.S.C. § 1927, 42 U.S.C. § 12205, and 42 U.S.C. § 2000a-3(b). The defendants abandoned that counterclaim. The court also ruled that it was meritless because the cited statutes concern different types of claims, and 28 U.S.C. § 1927 is not an independent cause of action.
The second counterclaim purported to assert breach of fiduciary duty, specifically breach of the duty of loyalty. It alleged that Abouelmakarem failed to provide a statement of accounts and failed to pay vendors on time, causing unpaid vendor balances and losses of $100,000. The court held that the counterclaim did not allege enough facts, including facts showing that Abouelmakarem had a duty to pay the accounts or vendors, that the employer had funds available to pay them, what duties he had beyond contractual duties, or how he violated those duties.
The third counterclaim alleged that Abouelmakarem failed to pay or arrange for payment of rent, resulting in legal fees, a risk of eviction, and at least $500,000 in damages. The court found that it likewise failed to allege that he had a duty or ability to pay rent, the source of any such duty, or what conduct breached it.
Ruling
The court granted the motion to dismiss the counterclaims. It dismissed the first counterclaim with prejudice. It dismissed the second and third counterclaims without prejudice to the defendants filing a motion to amend within fourteen days of the order. The court stated that if no such motion was filed, it would dismiss those counterclaims with prejudice. The conclusion states more generally that the motion to dismiss was “GRANTED without prejudice,” while the preceding ruling specifies the different treatment of the three counterclaims.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.