Amaya v. Garden City Irrigation, Inc.

• Decision Date: 13 July 2009
• Docket Number: Case No. 03-CV-2814 (FB) (RML).
• Citation: 645 F.Supp.2d 116
• Parties: Fredy AMAYA, Samuel Estrada, Jose Alvarado, Luis Campos, Juan Antonio Garcia, Paul Lopes, Thomas Baez, Leoladio Acosta, Jose Hernandez, Jose Garcia and Pedro Gil, individually and on behalf of others similarly situated, Plaintiffs, v. GARDEN CITY IRRIGATION, INC., Garden City Maintenance, Inc., Michael Moonan, Donna Milcetic, First National Insurance Company of America, RLI Insurance Company, Universal Bonding Insurance Company, and Adam Tedesco, Defendants. First National Insurance Company of America, Third-Party Plaintiff, v. Adam Tedesco, Third-Party Defendant. Adam Tedesco, Fourth-Party Plaintiff, v. Garden City Irrigation, Inc., and Donna Milcetic, Fourth-Party Defendants.
• Court: U.S. District Court — Eastern District of New York

645 F.Supp.2d 116

Fredy AMAYA, Samuel Estrada, Jose Alvarado, Luis Campos, Juan Antonio Garcia, Paul Lopes, Thomas Baez, Leoladio Acosta, Jose Hernandez, Jose Garcia and Pedro Gil, individually and on behalf of others similarly situated, Plaintiffs, v. GARDEN CITY IRRIGATION, INC., Garden City Maintenance, Inc., Michael Moonan, Donna Milcetic, First National Insurance Company of America, RLI Insurance Company, Universal Bonding Insurance Company, and Adam Tedesco, Defendants.

First National Insurance Company of America, Third-Party Plaintiff, v. Adam Tedesco, Third-Party Defendant.

Adam Tedesco, Fourth-Party Plaintiff, v. Garden City Irrigation, Inc., and Donna Milcetic, Fourth-Party Defendants.

Case No. 03-CV-2814 (FB) (RML).

United States District Court, E.D. New York.

July 13, 2009.

COPYRIGHT MATERIAL OMITTED

Robert Wisniewski, Esq., New York, NY, for Plaintiffs Campos, Juan Antonio Garcia, Lopes, Baez, Acosta, Hernandez, Jose Garcia and Gil.

Marina Trubitsky, Esq., New York, NY, for Plaintiffs Estrada and Alvarado.

Raymond Nardo, Esq., Mineola, NY, for Defendants Garden City Maintenance, Inc., and Moonan, and Defendants/Fourth-Party Defendants Garden City Irrigation, Inc., and Milcetic.

Jonathan Bondy, Esq., West Orange, NJ, for Defendant/Third-Party Plaintiff First National Insurance Company of America.

Todd Gardella, Esq., Melville, NY, for Defendant/Third-Party Defendant/Fourth-Party Plaintiff Tedesco.

MEMORANDUM AND ORDER

BLOCK, Senior District Judge:

Defendant/Third-Party Defendant/Fourth-Party Plaintiff Adam Tedesco ("Tedesco") appeals Magistrate Judge Levy's September 5, 2008 ruling that plaintiffs' claims against him, first raised in an amended complaint, would relate back to the filing of the original complaint on June 6, 2003. The Court held oral argument on July 8, 2009; for the following reasons, it overrules Magistrate Judge Levy's ruling and holds that plaintiffs' claims against Tedesco relate back only to December 31, 2007.

I

Plaintiffs are former employees of defendants Garden City Irrigation, Inc., and Garden City Maintenance, Inc. (collectively, "the Corporate Defendants"). They allege that they were not paid the wages required by federal and state labor laws and, further, that they were terminated in retaliation for their complaints about the underpayments.

On June 6, 2003, plaintiffs Fredy Amaya and Samuel Estrada sued the Corporate Defendants, as well as their owner, Donna Milcetic ("Milcetic"), and manager, Michael Moonan ("Moonan"); they also sued several bonding companies. On September 15, 2003, Jose Alvarado, Luis Campos, Juan Antonio Garcia, Paul Lopes, Thomas Baez and Leoladio Acosta joined as plaintiffs.¹

On May 12, 2005, one of the bonding companies, First National Insurance Company of America, filed a third-party complaint for indemnification against Tedesco, a former shareholder of the Corporate Defendants. Tedesco, in turn, filed a "fourth-party" complaint for indemnification against Garden City Irrigation and Milcetic on October 31, 2005.²

Some three years later, on April 11, 2008, the plaintiffs' sought leave to amend the complain to add Jose Hernandez, Jose Garcia and Pedro Gil as additional plaintiffs. In addition, they sought, on behalf of plaintiffs Estrada, Alvarado and Lopes, leave to assert state labor law claims against Tedesco. In their supporting memorandum of law, plaintiffs' counsel argued that the claims of Hernandez, Garcia and Gil against the defendants (other than Tedesco) should relate back to the filing of the June 2003 complaint; they made no similar argument with respect to the claims of Estrada, Alvarado and Lopes against Tedesco. When Tedesco opposed the motion to add him as a defendant on the ground that the claims against him would be time-barred, plaintiffs argued in reply that "the six-year [statute of limitations] should be counted from December 31, 2007 ... because Plaintiffs['] counsel informed the court on December 31, 2007 about his intention to amend the Complaint." Pls.' Reply Mem. of Law at 9. Thus, plaintiffs argued, "[o]nly the claims that arose prior to December 31, 2001 will be barred." Id.

In a memorandum and order dated July 28, 2008, 2008 WL 2940529 ("the July 28th M & O"), Magistrate Judge Levy granted leave to amend over Tedesco's objection. In so doing, he adopted plaintiffs' position that the claims against Tedesco would relate back to December 31, 2007.³ Tedesco did not appeal; at oral argument, he conceded that he does not object to deeming the claims against him filed as of that date.

Less than two weeks later, on August 8, 2008, Lopes, Alvarado and Estrada changed course and filed a letter motion for reconsideration asking the magistrate judge to instead hold that the claims against Tedesco would relate back to the filing of the June 2003 complaint. In a memorandum and order dated September 5, 2008, 2008 WL 4181555 ("the September 5th M & O"), Magistrate Judge Levy granted plaintiffs' request, over Tedesco's objection; applying New York law, he concluded (1) that the claims against Tedesco and the original defendants "derived from a common nucleus of operative fact," (2) that Tedesco was "united in interest" with the original defendants, and (3) that plaintiffs had not acted in bad faith in failing to name Tedesco in the original complaint. Sept. 5th M & O at 6-7. On his appeal, Tedesco argues that the claims against him should relate back only to December 31, 2007, as per the July 28th M & O.

II

Plaintiffs' state-law claims against Tedesco are subject to a six-year statute of limitations. See N.Y. Lab. L. § 198(3). Under Magistrate Judge Levy's initial order, plaintiffs' claims for wages for work performed prior to December 31, 2001, were time-barred. Under the September 5th order, however, plaintiffs will be allowed to reach back to June 6, 1997. The propriety of that four-and-a-half year extension is the subject of Tedesco's appeal.

A. Standard of Review

Magistrate Judge Levy made his relation-back ruling in the context of a motion to amend the complaint as part of his supervisory duties over pretrial matters; normally, the Court will overrule such a ruling only if it "is clearly erroneous or is contrary to law." Fed.R.Civ.P. 72(a). Tedesco argues, however, that the ruling should be treated as a dispositive matter and, accordingly, reviewed de novo. See Fed.R.Civ.P. 72(b)(3). While the grant of leave to amend is generally considered non-dispositive, see Tyree v. Zenk, 2009 WL 1456554, at *3 (E.D.N.Y. May 22, 2009) ("District courts in this circuit have suggested that a magistrate judge's denial of a motion to amend a complaint should be treated as dispositive, while a grant of the same motion should be treated as nondispositive."), the Court agrees with Tedesco that a ruling that a claim is or is not time-barred is dispositive, see Unilever (Raw Materials) Ltd. v. M/T Stolt Boel, 77 F.R.D. 384, 386 (S.D.N.Y.1977) (reviewing magistrate judge's rejection of relation back doctrine de novo); therefore, the Court will review Magistrate Judge Levy's ruling de novo. The Court notes, however, that it would reach the same result even if it were to treat the magistrate judge's ruling as nondispositive.

B. Applicable Law

Tedesco argues that Magistrate Judge Levy erred in applying the New York law of relation back instead of the requirements set forth in Federal Rule of Civil Procedure 15(c). Under that rule, a claim against an added defendant relates back only if the defendant "received such notice of the action that it will not be prejudiced in defending on the merits" and "knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity," Fed.R.Civ.P. 15(c)(1)(C); these requirements must be satisfied "within the period provided by Rule 4(m) for serving the summons and complaint," id.—namely, 120 days from the filing of the original complaint, plus "any additional time resulting from a court-ordered extension." 6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1498 (2008 supp.).

Tedesco is correct that Rule 15(c) would not allow plaintiffs' claims against him to relate back. There is no suggestion that he knew about the lawsuit until he was joined as a third-party defendant almost two years after the original complaint was filed; by that time, the 120-day period— which the Court never extended—had long since expired. Plaintiffs apparently recognize this, inasmuch as they have not sought to have their federal labor law claims against Tedesco relate back.

Since 1991, however, Rule 15(c) has further provided that claims raised in an amended complaint will relate back if "the law that provides the applicable statute of limitations allows relation back." Fed. R.Civ.P. 15(c)(1)(A). This provision "make[s] it clear that the rule does not apply to preclude any relation back that may be permitted under the applicable limitations law." Id. cmt. (1991 Amendment). When claims are subject to a state-law statute of limitations—as plaintiffs' state labor law claims are—"if i that law affords a more forgiving principle of relation back than the one provided in [Rule 15(c)], it should be available to save the claim." Id.

Tedesco argues that the 1991 amendment to Rule 15(c) does not apply to the addition of new parties. Nothing in the rule or its commentary, however, supports such a limited application. Indeed, the amendment's structure suggests otherwise because the use of state-law standards for relation back is listed an alternative to both the federal standard governing the addition of claims (set forth in subsection (1)(B)) and the federal standard governing the addition of parties (set forth in subsection (1)(C)). Had the drafters of the amendment intended that it not apply to the relation back of claims against new parties, they would have incorporated it into subsection (1)(B) only. Cornwell v. Robinson...