Hosking v. New World Mortg., Inc.

• Decision Date: 09 March 2009
• Docket Number: No. 07-CV-2200 (ADS)(ARL).,07-CV-2200 (ADS)(ARL).
• Parties: Gary HOSKING, Individually, and on Behalf of All Others Similarly Situated, Plaintiff, v. NEW WORLD MORTGAGE, INC., and New World Capital Holdings, Inc., Defendants.
• Court: U.S. District Court — Eastern District of New York

602 F.Supp.2d 441

Gary HOSKING, Individually, and on Behalf of All Others Similarly Situated, Plaintiff, v. NEW WORLD MORTGAGE, INC., and New World Capital Holdings, Inc., Defendants.

No. 07-CV-2200 (ADS)(ARL).

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

March 9, 2009.

COPYRIGHT MATERIAL OMITTED

Erik H. Langeland, Esq., New York, NY, for Plaintiff.

Dandeneau & Lott, by Gerald V. Dandeneau, Esq., of Counsel, Melville, NY, for Defendant New World Capital Holdings, Inc.

Presently Unrepresented: Westerman Ball Ederer Miller & Shapiro, LLP, by Richard F. Harrison, Esq. and William Edward Vita, Esq., of Counsel, Mineola, NY, for Defendant New World Mortgage Inc.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

I. BACKGROUND

This case has a complex procedural history. The plaintiff commenced this action by filing a complaint on May 31, 2007, claiming failure to pay overtime wages to the plaintiff and similarly situated loan officers employed by the defendants in accordance with the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. On July 30, 2007, the Court entered a default against the defendants, New World Mortgage, Inc. ("New World Mortgage") and New World Capital Holdings, Inc. ("New World Capital") for failure to appear in the action and referred the matter to United States Magistrate Judge Arlene R. Lindsay for a determination of damages.

Thereafter, on August 14, 2007, before a damages determination was made, New World Capital moved to set aside the default. On September 10, 2007, the Court entered an order vacating the default as to New World Capital. Two days later, New World Mortgage also moved to vacate the judgment of default as against it. On February 5, 2008, the Court vacated the default of New World Mortgage. In its February 5, 2008 Order the Court gave New World Mortgage twenty days to answer or otherwise move with respect to the complaint. New World Mortgage filed an answer to the complaint on February 21, 2008.

On February 22, 2008, counsel for New World Mortgage, Westerman Ball Ederer Miller & Sharfstein, LLP, moved to withdraw as attorneys for that entity. On March 26, 2008, the Court entered an Order providing that "[t]he firm of Westerman Ball Ederer Miller & Sharfstein, LLP is relieved as attorneys of record ... provided New World Mortgage Inc. obtains substitute counsel within 30 days of the entry of this Order." In addition, the Court ordered that "[i]n the event New World Mortgage Inc. cannot secure substitute counsel, the Court shall entertain a motion to enter a judgment by default against New World Mortgage Inc." The plaintiff's renewed motion for a default judgment was granted on July 21, 2008 and the matter was again referred to Judge Lindsay for a determination of damages.

In the meantime, on March 27, 2008, the plaintiff moved to amend the complaint to: (1) add officers of New World Mortgage and New World Capital as individual defendants; (2) add a New York state-law cause of action for failure to pay overtime and minimum wages; and (3) add a claim for failure to pay minimum wages under the FLSA. In addition, on June 26, 2008, the plaintiff filed a motion to equitably toll the statute of limitation with regard to potential "opt-in" plaintiffs who have not yet joined in the action. Both motions stand unopposed.

Finally, on January 6, 2009, Judge Lindsay issued a Report recommending that the calculation of damages with respect to New World Mortgage be postponed until the matter is resolved as to the non-defaulting defendant New World Capital. The Court agrees that a determination of damages as to New World Mortgage is premature at this time. Accordingly, the calculation of damages and entry of final judgment against New World Mortgage is stayed until after resolution of the action as to all defendants.

II. DISCUSSION

A. As to the plaintiff's motion to amend the complaint

Federal Rule of Civil Procedure ("Fed. R. Civ.P.") 15(a) provides that "[a] party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served...." However, where as here, a responsive pleading has been served, "a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." A court should deny leave to amend only if there is delay, bad faith, futility, or prejudice to the non-moving party. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); Aetna Cas. & Sur. Co. v. Aniero Concrete Co., Inc., 404 F.3d 566, 604-05 (2d Cir.2005) (stating that leave to amend "should be denied only for such reasons as undue delay, bad faith, futility of the amendment, and perhaps most important, the resulting prejudice to the opposing party") (quoting Richardson Greenshields Sec., Inc. v. Lau, 825 F.2d 647, 653 n. 6 (2d Cir.1987)).

As an initial matter, by order dated August 22, 2008, Judge Lindsay established January 2, 2009 as the final date to move to amend the pleadings or for joinder of additional parties. The plaintiff filed his motion on March 27, 2008, well before the court-established deadline. Accordingly, the Court finds that the plaintiff's motion was timely filed and not the result of any undue delay.

A determination that a proposed claim is futile is dictated by the same standards that govern a motion to dismiss under Fed.R.Civ.P. 12(b)(6). See A.V. by Versace, Inc. v. Gianni Versace, S.p.A., 160 F.Supp.2d 657, 666 (S.D.N.Y.2001); Rotblut v. 333 E. 66th St. Corp., No. 96CV5228, 1996 WL 586353, at *1 (S.D.N.Y. Oct. 11, 1996) ("In addressing the proposed futility of an amendment, the proper inquiry is comparable to that required upon a motion to dismiss pursuant to FED.R.CIV.P. 12(b)(6)."). Thus, an amendment is futile "if the proposed amended complaint would be subject to `immediate dismissal' for failure to state a claim or on some other ground." Randolph-Rand Corp. of New York v. Tidy Handbags, Inc., No. 96CV1829, 2001 WL 1286989, at *5 (S.D.N.Y. Oct. 24, 2001) (quoting Jones v. New York Div. of Military & Naval Affairs, 166 F.3d 45, 55 (2d Cir.1999)).

In considering a 12(b)(6) motion to dismiss, "`[t]he issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.'" Aniero Concrete Co., Inc. v. New York City Construction Auth., No. 94CV3506, 2000 WL 863208, at *28 (S.D.N.Y. June 27, 2000) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)). Further, the Court must "accept all of the plaintiff's factual allegations in the complaint as true and draw inferences from those allegations in the light most favorable to the plaintiff." Starr v. Georgeson S'holder, Inc., 412 F.3d 103, 109 (2d Cir. 2005); Desiderio v. Nat'l Ass'n of Sec. Dealers, Inc., 191 F.3d 198, 202 (2d Cir. 1999).

A complaint should be dismissed only if it does not contain enough allegations of fact to state a claim for relief that is "plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). In fact, "[t]he plaintiff's factual allegations must be enough to give the defendant fair notice of what the claim is and the grounds upon which it rests." Port Dock & Stone Corp. v. Oldcastle Northeast, Inc., 507 F.3d 117, 121 (2d Cir.2007). According to the Second Circuit, "[i]n last term's Twombly decision ... the Supreme Court held that a complaint must allege facts that are not merely consistent with the conclusion that the defendant violated the law, but which actively and plausibly suggest that conclusion." Id. Indeed, the Twombly Court noted that "[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 127 S.Ct. at 1965 (internal citations omitted).

A proposed amendment to add defendants may be considered futile if "(1) the claim it seeks to assert is barred by the applicable statute of limitations, and (2) the claim does not relate back to the date of an earlier timely pleading." Pastorello v. City of New York, No. 95CV470, 2001 WL 1543808, at *4 (S.D.N.Y. Nov. 30, 2001) (citing Mackensworth v. S.S. American Merchant, 28 F.3d 246, 251-52 (2d Cir.1994)). An employee may recover for unpaid compensation pursuant to the FLSA within two years after the claim accrues, or in the case of a willful FLSA violation, within three years following accrual. 29 U.S.C. § 255(a). "Courts have held that for the purposes of establishing the statute of limitations under the FLSA, a new cause of action accrues with each payday following an allegedly unlawful pay period." Lee v. ABC Carpet & Home, 236 F.R.D. 193, 199 (S.D.N.Y.2006); see also 29 C.F.R. § 790.21(b) ("[A] cause of action under the Fair Labor Standards Act for unpaid minimum wages or unpaid overtime compensation and for liquidated damages `accrues' when the employer fails to pay the required compensation for any workweek at the regular pay day for the period in which the workweek ends.").

In addition to plaintiff Hosking, ten other parties have purported to opt-in as plaintiffs to this action, having various final dates of employment, including as late as September of 2007. Assuming that these parties claim that the defendants failed to properly pay overtime and minimum wages throughout their entire period of employment, including the date on which their final paycheck was issued, the statute of limitations is not an obstacle to claims against the proposed individual defendants or FLSA claims for failure to pay minimum wage. Further, the statute of limitations under the New York State Labor Law is six years, posing no hurdle to amendment here. See Park v. Seoul Broadcasting System Co., No. 05CV8956, 2008 WL 619034, at *7 n. 12 (S.D.N.Y. March 06, 2008).

The plaintiff seeks to add as defendants Francis Leonard, the Chief...