Reyes Nepomuceno v. Columbia Deli & Grill Inc.

Background

Eduardo Reyes Nepomuceno brought wage-and-hour claims under the Fair Labor Standards Act and the New York Labor Law. The original defendants were Columbia Deli & Grill Inc. and Shawqi Algaad. Reyes Nepomuceno later added Amsterdam Deli and Convenience Corp., Ammar Y. Al Kutainy, Nassar A. Al Kutainy, and Fouad Thabet Saleh.

The court had previously granted Reyes Nepomuceno summary judgment—judgment based on the record without a trial—on Algaad’s liability for failing to pay overtime and for failing to provide wage notices and wage statements. The court had not decided the amount of overtime damages, and it had not granted judgment on several other claims. The court had dismissed the minimum-wage claims as facially deficient.

The added individual defendants never appeared. Reyes Nepomuceno obtained certificates of default but then took no action against those defendants for more than two and a half years. During the case, he also failed to obtain wage-and-hour records, file required pretrial materials, appear at a pretrial conference, and comply with repeated warnings and orders. After the court gave him a final chance to prosecute the case by moving for default judgment, he filed the motion but failed to appear at the hearing. The court also found that he had not properly served the non-appearing individual defendants and apparently had not served the operative Third Amended Complaint on any defendant.

Default judgment and dismissal

The court denied Reyes Nepomuceno’s motion for default judgment as to all defendants. Although courts may enter default judgment when a defendant withdraws from litigation, default judgments are disfavored and courts generally prefer decisions on the merits. The court declined to enter default judgment against Columbia Deli & Grill Inc. and Algaad because of Reyes Nepomuceno’s repeated failures to prosecute and concerns about adequate notice of the operative pleading.

The court also found that the individual non-appearing defendants had not been properly served. The service papers identified an accepting person only as a co-worker named “JORGE (DOE)” and did not establish that this person had authority to accept service. The court also found insufficient allegations that the individual defendants were regularly present at the deli, as required for service at an actual place of business. The court further noted that mailing the default-judgment papers alone did not properly serve the defendants in the first instance.

The court concluded that Reyes Nepomuceno’s own allegations did not establish a prima facie case against the non-appearing defendants because they allegedly purchased or owned the deli only after his employment ended. The court dismissed all claims against Columbia Deli & Grill Inc., Amsterdam Deli and Convenience Corp., Ammar Y. Al Kutainy, Nassar A. Al Kutainy, and Fouad Thabet Saleh. It also dismissed Algaad’s claims that had not previously received summary judgment on liability, specifically the spread-of-hours claim, the liquidated-damages claim based on alleged willfulness, and the retaliation claims.

Overtime damages

The court allowed recovery on the overtime claim for which it had previously granted summary judgment on Algaad’s liability. The record showed no dispute that Reyes Nepomuceno worked at least 48 hours per week for 14 weeks, from March 25, 2018, through July 1, 2018. Based on a regular hourly rate of $13.50, the overtime rate was $20.25. Eight overtime hours per week for 14 weeks totaled 112 hours. The court therefore awarded $2,268 in unpaid overtime under the Fair Labor Standards Act and the New York Labor Law, plus post-judgment interest, against Algaad.

Wage notices and wage statements

Although the court had previously granted summary judgment on Algaad’s liability for failing to provide wage notices and wage statements under New York law, it dismissed those claims in this opinion. The court held that Reyes Nepomuceno had not alleged a concrete, downstream injury from the recordkeeping violations and therefore lacked standing to seek damages. Because standing is required for federal subject-matter jurisdiction, the court dismissed those claims rather than award damages on them.

Disposition

The request to adjourn the default-judgment hearing after the fact was denied. The Clerk was directed to enter judgment for $2,268 plus post-judgment interest, terminate the open motions, and close the case.