Bermejo Sanango v. Ruby Nails Tarrytown, Inc.

Background

Maria Concepcion Bermejo Sanango sued Ruby Nails Tarrytown, Inc., doing business as Ruby Nail, Mi Young Kal, and Edwin Keh under the Fair Labor Standards Act and New York Labor Law. She alleged that the defendants failed to pay minimum wages, overtime, and spread-of-hours pay, and failed to provide required wage notices and wage statements.

The defendants initially answered through counsel. Their counsel later withdrew after Kal’s anticipated bankruptcy filing. The court warned that Ruby Nail, as a corporation, could appear in federal court only through a licensed attorney. The clerk later entered defaults against Ruby Nail, Kal, and Keh. Bermejo Sanango eventually sought a default judgment only against Ruby Nail. She voluntarily dismissed Keh, and the court granted that dismissal.

Default judgment against Ruby Nail

The court granted Bermejo Sanango’s motion for default judgment against Ruby Nail. A default established Ruby Nail’s liability on the well-pleaded claims, but Bermejo Sanango still had to provide evidence supporting the amount of damages. Because Ruby Nail did not produce time records, the court accepted Bermejo Sanango’s detailed estimates of her hours and pay.

The court awarded $65,265.64 in unpaid wages under New York law, consisting of:

- $4,013.84 for the difference between wages paid and the New York minimum wage; - $41,170.22 in unpaid overtime wages; and - $20,081.58 in spread-of-hours pay.

The court awarded an additional $65,265.64 in liquidated damages, equal to 100% of the unpaid wages. It also awarded $10,000 in statutory damages for alleged violations involving wage notices and wage statements: $5,000 for each type of violation.

The principal award was therefore $140,531.28. The court also awarded pre-judgment interest at 9% per year on the $65,265.64 in unpaid wages, beginning October 4, 2014, through entry of final judgment. Post-judgment interest was also authorized at the statutory rate.

Attorneys’ fees and costs

Bermejo Sanango requested $45,719 in attorneys’ fees and $800.02 in costs. The court found the requested hourly rates excessive, citing the law firm’s handling of the case, including failures related to the first default-judgment motion, delays in prosecuting the case, and failures concerning Kal. The court reduced the hourly rates and awarded $21,130 in attorneys’ fees and $800.82 in costs.

Dismissal of claims against Kal

The court dismissed the action against Kal under Federal Rule of Civil Procedure 41(b), which permits dismissal for failure to prosecute or failure to comply with court orders. After the stay related to Kal’s bankruptcy was lifted, Bermejo Sanango did not seek a default judgment against Kal or voluntarily dismiss her, despite a court order giving her those alternatives and setting a deadline. The court directed the clerk to terminate Kal as a defendant and close the case.

Disposition

Judge Philip M. Halpern directed the clerk to enter a default judgment against Ruby Nail in favor of Bermejo Sanango for $162,462.10 in principal damages, attorneys’ fees, and costs, plus the specified pre- and post-judgment interest. The action against Kal was dismissed under Rule 41(b), and the case was closed.