Jean v. Auto & Tire Spot Corp.
| Decision Date | 24 May 2013 |
| Docket Number | 09-CV-5394 (ARR)(RLM) |
| Parties | ALTESSE JEAN, Plaintiff, v. AUTO AND TIRE SPOT CORP., et al., Defendants. |
| Court | U.S. District Court — Eastern District of New York |
NOT FOR ELECTRONIC
OR PRINT PUBLICATION
The court has received the Report and Recommendation on the instant case dated March 7, 2013, from the Honorable Roanne L. Mann, United States Magistrate Judge. No objections have been filed. Accordingly, the court has reviewed the Report and Recommendation for clear error on the face of the record. See Advisory Comm. Notes to Fed. R. Civ. P. 72(b); accord Brissett v. Manhattan & Bronx Surface Transit Operating Auth., No. 09-CV-1930682 (CBA) (LB), 2011 WL 1930682, at *1 . Having reviewed the record, I find no clear error in Judge Mann's recommendation that plaintiff's motion to reopen the case for purposes of adding new defendants be denied. See Scela v. City Univ, of N.Y., 76 F.3d 37, 40 (2d Cir. 1996). I also find no clear error in Judge Mann's recommendation that I enter a default judgment against the defendants in the amount of $141,914.77, representing $126,820.00 in unpaid principal, $14,812.50 in attorney's fees, and $282.25 in costs, as well as nine percent annual statutory interest on the unpaid principal, calculated as of February 1, 2012. I hereby adopt the Report and Recommendation, in its entirety, as the opinion of the court pursuant to 28U.S.C. § 636(b)(1). The Clerk of Court is directed to enter judgment accordingly.
SO ORDERED.
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-against-
In May 2011, plaintiff Altesse Jean ("plaintiff") settled this Fair Labor Standards Act case against defendants Auto and Tire Spot Corp. ("Auto & Tire") and Richard Francois ("Francois") (collectively, "defendants"), and the case was subsequently closed. More than a year later, plaintiff filed a motion requesting that the case be reopened, so that (1) a default judgment could be entered against defendants for breach of the settlement agreement; and (2) plaintiff could amend his complaint to bring in two new defendants -- Tire Spot & Brakes, Inc. ("Tire Spot") and Emma Louis ("Louis") (collectively, the "proposed defendants") -- in order to enforce the same settlement agreement against the proposed defendants. See Plaintiff's Memorandum of Law in Support of His Motion to Reopen Case (July 16, 2012) ("Pl. Mem."), Electronic Case Filing ("ECF") Docket Entry ("DE") #57. Thereafter, the Honorable Allyne R. Ross referred plaintiff's motion to the undersigned magistrate judge for a report and recommendation. See Order of Referral (docketed July 24, 2012), DE #61,
For the reasons set forth below, this Court recommends that the District Court (1) deny plaintiff's motion to amend for lack of subject matter jurisdiction; and (2) enter defaultjudgments against defendants, jointly and severally, in the amount of $141,914.75, representing $126,820.00 in unpaid principal, $14,812.50 in attorney's fees and $282.25 in costs.
On December 9, 2009, plaintiff filed this action, alleging that defendants failed to pay him proper wages, in violation of the Fair Labor Standards Act ("FLSA") and New York Labor Law. See Complaint (Dec. 9, 2009), DE #1. Although defendant Francois initially appeared pro se, see Minute Order (May 28, 2010), DE #27, he later retained counsel to represent him and Auto & Tire. See Notice of Appearance (Oct. 13, 2010), DE #41. Thereafter, the parties engaged in discovery, participated in two mediation sessions and, eventually, agreed in principle to settle the case. See Status Report (May 2, 2011), DE #48.
On May 16, 2011, in connection with the settlement, the parties wrote to Judge Ross, requesting that she so-order their stipulation of dismissal, pursuant to which she would "retain jurisdiction over the interpretation and enforcement of the settlement agreement." See Letter (May 16, 2011) at 1, DE #51. In accordance with this request, the parties submitted a proposed stipulation for Judge Ross's signature, see Proposed Order, DE #51-2, and a copy of the executed settlement agreement (hereinafter, the "Settlement Agreement"). See Settlement Agreement, DE #52. On July 26, 2011, Judge Ross signed the proposed stipulation and order, which explicitly stated that the matter would be "dismissed with prejudice and without costs or fees to any party as against any other party, except that the Court shall have continuing subject matter jurisdiction to interpret and enforce the terms of the parties' Settlement Agreement andRelease entered into on May 16, 2011." See Stipulation and Order (July 26, 2011) ("Stipulation and Order"), DE #53.
Pursuant to the Settlement Agreement, defendants were obligated to make monthly installment payments, in varying amounts, beginning with the execution of the Settlement Agreement and continuing through November 2014. See Settlement Agreement % 1, Schedule A. In the event defendants defaulted on any payments owed, plaintiff would provide defendants with written notice of the default. See Settlement Agreement f 1(e). If defendants failed to cure the default within twenty business days of said notice, plaintiff was entitled to apply for a default judgment "against any and all Defendants without further notice," in the amount of $130,000 (minus any payments made), which represented the damages and costs plaintiff believed he could have proven at trial. See id. In the event of a default, plaintiff would also be entitled to recover "damages, including costs, expenses and reasonable attorney['s] fees ... as a consequence of the [b]reach." See id. ¶ 4(a). The two defendants would be "jointly and severally liable ... for any breach" of the Agreement. See id. ¶ 1(b).
Upon execution of the Settlement Agreement, Francois made the first installment payment from a bank account in the name of Tire Spot, rather than that of defendant Auto & Tire. See Check (May 17, 2011), DE #59-10 at 1.; Tire Spot was formed in May 2010 and was allegedly run by Louis, Francois's girlfriend. See Declaration of Robert Wisniewski in Support of Motion to Reopen ("Wisniewski Decl") ¶ 19, DE #59; N.Y.S. Dep't of State Entity Information (Tire Spot), DE #59-9. Subsequent payments for July 2011 and August 2011 were likewise made from Tire Spot's checking account. See Check (Aug. 1, 2011)(replacing July 2011 check), DE #59-10 at 2; Check (Aug. 2, 2011), DE #59-10 at 3. Around the same time, plaintiff, who lives within walking distance of Auto & Tire's two locations, noticed that the signs for the locations had changed from "Auto & Tire Spot" to "Tire Spot 'n' Brakes." See Declaration of Altesse Jean ¶¶ 8-10, DE #58.
Following the August 2011 payment, defendants made no further payments under the Settlement Agreement. See Notice of Breach (Jan. 12, 2012) ("Notice"), DE #59-4; Wisniewski Decl. ¶ 23.1 Accordingly, on January 12, 2012, plaintiff's counsel served defendants and their counsel with a formal Notice of Breach, pursuant to section 1(e) of the Settlement Agreement. See Notice. Despite this notice, defendants did not timely cure their breach. See Wisniewski Decl. ¶ 24.
On February 23, 2012, plaintiff wrote to Judge Ross, requesting permission to file a "motion to enforce the settlement agreement between the parties[.]" See First Motion for Premotion Conference, DE# 54. Nowhere in this letter-request did plaintiff indicate that healso wished to amend the complaint to add new claims and bring in Tire Spot and Louis as additional parties. See generally id. Two weeks later, Judge Ross granted plaintiff permission to file his motion to enforce the Settlement Agreement. See Order (Mar. 6, 2012).
After a few months' delay due to staffing issues, see Wisniewski Decl. ¶¶ 5-11, plaintiff's counsel filed the pending motion. See generally Pl. Mem. In addition to seeking a default judgment against defendants, plaintiff, for the first time, requested leave to amend the complaint to add Louis and Tire Spot as defendants, so that he could also enforce the Settlement Agreement against them. See id. at 13. Plaintiff did not, however, submit his proposed new pleading for the Court's approval.
In essence, plaintiff contends that Francois created the new entity Tire Spot, with Louis as its officer, as a means of avoiding his and Auto & Tire's obligations under the Settlement Agreement, thus entitling plaintiff to an order piercing the corporate veil of Tire Spot. See id. Plaintiff further argues that Tire Spot is liable as a successor entity to Auto & Tire. See id. Finally, plaintiff posits that Tire Spot and Louis are "beneficiaries of an implied contract which has resulted in an unjust enrichment at the expense of Plaintiff." Id.
Although Francois and the proposed defendants filed letters to the Court requesting, and were granted, additional time to respond to plaintiff's motion in order to retain (new) counsel, neither Francois nor the proposed defendants filed any substantive response to the motion. See Order (Aug. 27, 2012), DE #65; Endorsed Order (Aug. 29, 2012), DE #66; Letter dated 8/24/2012 from Nicole Senat to Judge Mann (re Emma Louis), DE #67; see also Order (Feb. 28, 2013) (given defendants' and proposed defendants' six-month silence,Court would presume that they did not retain counsel).
Before turning to the underlying merits of plaintiff's motion, the Court must first determine whether these motions were properly brought in federal court. See Ageitos v. N. Shore Country Club, No. 06 Civ. 2001(HBP), 2009 WL 2958390, at *4 n.2 (S.D.N.Y. Sept. 15, 2009) () (collecting cases).
As the Supreme Court has made clear, enforcement of a settlement agreement...
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