Gil v. Pizzarotti, LLC

Background

Andy Gil and Rafael Hernandez brought this action for themselves and other similarly situated workers, alleging that Pizzarotti, LLC, Ignazio Campoccia, Giacomo Di’Nola, Atlantic Contracting of Yonkers, Inc., and Joel Acevedo were joint employers that failed to keep required employment records and pay overtime wages under the Fair Labor Standards Act and New York Labor Law. The Pizzarotti Defendants asserted cross-claims—claims by one defendant against another party in the same case—against the Atlantic Defendants for indemnification and contribution. They argued that, as general contractors under a written agreement, they had no duties or responsibilities concerning the plaintiffs’ employment.

The Atlantic Defendants did not appear. The court entered a default against them on the Pizzarotti Defendants’ indemnification and contribution cross-claims. The court later approved a $460,000 settlement between the Pizzarotti Defendants and Gil, Hernandez, and 40 opt-in plaintiffs. It then referred the issue of damages to Magistrate Judge Sarah Netburn for an inquest. The Atlantic Defendants did not respond to the damages proceedings.

Report and Recommendation

On August 28, 2023, Magistrate Judge Netburn recommended that the Pizzarotti Defendants receive $460,000 from the Atlantic Defendants. No party objected. Judge Vyskocil therefore reviewed the recommendation for clear error rather than conducting a new review of the disputed issues.

Court’s Analysis

The court explained that obtaining a judgment against a party that fails to defend generally involves two steps: entering a default and then entering a default judgment. The default establishes the defaulting party’s liability, while the default judgment determines the relief owed. Even after a default, a claimant must prove damages with evidence. A separate hearing is not required when the court has the correct method for calculating damages and the evidence supports the amount with reasonable certainty.

The court agreed that Magistrate Judge Netburn applied the correct standard and properly declined to hold a damages hearing. It also agreed that the Atlantic Defendants were liable for indemnification. Although the Pizzarotti Defendants asserted both contribution and indemnification, the court viewed the substance of their allegations as claiming that the Atlantic Defendants were solely responsible for the alleged violations of the workers’ rights. Because of the Atlantic Defendants’ default, those allegations were accepted as true for purposes of the ruling.

The written agreement required the Atlantic Defendants to defend and indemnify the Pizzarotti Defendants against claims, liabilities, and damages arising from the Atlantic Defendants’ breach or negligent acts. The court found that the allegations that the Atlantic Defendants failed to pay the workers and maintain accurate records supported the requested damages with reasonable certainty. The court also found that the settlement amount could be recovered because the settlement had been reviewed and approved by the court and the Atlantic Defendants had sufficient notice and an opportunity to object.

Disposition

Judge Vyskocil found no clear error in the Report and Recommendation, adopted it in full, and directed the Clerk to enter default judgment against the Atlantic Defendants as cross-defendants. The judgment awards the Pizzarotti Defendants, as cross-claimants, $460,000 in damages.