Khurana v. JMP United States, Inc., 14-CV-4448 (SIL)

CourtU.S. District Court — Eastern District of New York
Writing for the CourtLOCKE, Magistrate Judge
PartiesNITIN KHURANA, Plaintiff, v. JMP USA, INC. and RAVINDER SINGH, Defendants.
Decision Date05 April 2017
Docket Number14-CV-4448 (SIL)

NITIN KHURANA, Plaintiff,
v.
JMP USA, INC. and RAVINDER SINGH, Defendants.

14-CV-4448 (SIL)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

April 5, 2017


FINDINGS OF FACT AND CONCLUSIONS OF LAW

LOCKE, Magistrate Judge:

Plaintiff Nitin Khurana ("Plaintiff" or "Khurana) commenced this action against Defendants Ravinder Singh ("Singh" or "Individual Defendant") and JMP USA, Inc., a New York corporation ("JMP USA" or "Corporate Defendant") (collectively, "Defendants"), alleging violations of the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 201 et seq., and New York Labor Law ("NYLL"), N.Y. Lab. Law § 190 et seq that occurred during his employment as an attendant at USA Gas Station, which Defendants owned and operated. See Docket Entry ("DE") [1]. This action was assigned to this Court for all purposes pursuant to 28 U.S.C. § 636(c). See DE [27]. As detailed herein, the Clerk of the Court entered a Certificate of Default against the Corporate Defendant on June 30, 2016. With respect to the Individual Defendant, the Court held a bench trial on June 29, 2016. See DE [39], [40]. Included with his Proposed Findings of Fact and Conclusions of law submitted after trial, Khurana also moved for a default judgment against JMP USA. See DE [42].

Accordingly, the Court herein decides Plaintiff's motion and issues its findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52(a). Having reviewed

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the Complaint and considered the evidence adduced at trial, the arguments of counsel, the parties' post-trial submissions, and the controlling law on the issues presented, the Court concludes that Plaintiff has met his burden of proof on all of his overtime and spread of hours claims arising under the FLSA and NYLL, and that he is entitled to $39,427.44 in damages and prejudgment interest from both JMP USA and Singh, who are jointly and severally liable.

I. PROCEDURAL HISTORY

By way of Complaint filed July 24, 2014, Plaintiff commenced this action, seeking to recover, among other things: (i) unpaid overtime pursuant to the FLSA and NYLL and (ii) unpaid spread of hours compensation pursuant to the NYLL. See Compl. ¶¶ 51-64.

In their answer to the Complaint, Defendants asserted a counterclaim alleging a discrepancy in the gas pump receipts and records that suggested Plaintiff misappropriated funds from JMP USA during his employment. See Answer, DE [7]. Defendants provide no specificity in the Answer as to the dates on which the thefts are alleged to have occurred or the actual amount that was stolen. See id.

On October 19, 2015, the Court adopted the Proposed Joint Pre-Trial Order and certified the completion of discovery. See DE [21], [22]. In anticipation of trial, on December 14, 2015, both parties consented to the jurisdiction of this Court for all purposes. See DE [27]. However, on December 30, 2015, Defendants filed a signed consent to relieve their counsel and proceed pro se. DE [28]. After hearing from Defendants and their attorney on January 6, 2016, the Court allowed defense counsel

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to withdraw. DE [29]. Though the Court warned Singh that day and at each subsequent appearance that JMP USA, as a corporation, could not proceed pro se, he as its sole officer and shareholder nevertheless failed to retain counsel for the Corporate Defendant. DE [29], [31], [32]. Consequently, on June 10, 2016, Plaintiff filed a Request for and, on June 30, 2016, the Clerk of the Court entered a Certificate of Default against JMP USA. DE [36], [38].

After the Corporate Defendant defaulted, Singh continued as a pro se defendant with respect to his personal liability for the FLSA and NYLL violations alleged in the Complaint. See DE [36], [32]. On June 29, 2016, the Court conducted a bench trial on this question and to determine what if any damages were warranted. See DE [39]. At trial, Plaintiff offered: (i) testimony from himself, (ii) excerpts from Singh's deposition, and (iii) Plaintiff's shift reports that indicated his total weekly pay for 81 out of the 102 weeks of employment at issue. See id. Defendant Singh offered only his own testimony. See id. Following the trial, at the Court's direction, the parties submitted their proposed findings of fact and conclusions of law. See DE [42], [42-3]. Plaintiff also sought in its submission a default judgment against the Corporate Defendant. See Plaintiff's Proposed Findings of Fact and Conclusions of Law ("Pl. Findings") at 10, DE [42].

II. DEFAULT JUDGMENT AGAINST JMP USA

The Court first turns to Plaintiff's application for a Default Judgment against the Corporate Defendant that was included with Khurana's Proposed Findings of Fact and Conclusions of Law. See id.

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"It is settled law that a corporation may not appear in a lawsuit against it except through an attorney, and that, where a corporation repeatedly fails to appear by counsel, a default judgment may be entered against it pursuant to Rule 55, Fed. R. Civ. P." Grace v. Bank Leumi Trust Co. of NY, 443 F.3d 180, 192 (2d Cir. 2006) (citing SEC v. Research Automation Corp., 521 F.2d 585 (2d Cir. 1975)) (internal quotations omitted). This rule is fully applicable even where the sole shareholder of the defaulting corporation elects to proceed pro se regarding his personal liability because he is, as a matter of law, situated differently from the corporation, whose interests may at times "overlap but are not identical in all respects." Grace, 443 F.3d at 192 (internal citations and quotation marks omitted).

As noted above, JMP USA consented to its attorney's withdrawal prior to trial. See supra at 2-3. Defendant Singh affirmatively acknowledged the consequences of attempting to litigate his personal liability pro se. See the Consent to Change Attorney, DE [28]. Despite the Court's repeated warnings that a failure to retain counsel for the corporation would result in a default, Singh did not retain new counsel for JMP USA. See supra at 3. Accordingly, for the reasons detailed below, the Court grant's Khurana's motion for a default judgment against JMP USA in its entirety.

A. Legal Standard

Motions for default judgments are governed by Rule 55 of the Federal Rules of Civil Procedure, which provides for a two-step process. See Fed. R. Civ. P. 55; Priestley v. Headminder, Inc., 647 F.3d 497, 504-05 (2d Cir. 2011). Initially, the moving party must obtain a certificate of default from the Clerk of the Court. See

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Fed. R. Civ. P. 55(a). Once the certificate of default is issued, the moving party must then apply for entry of a default judgment. Id. Where a default occurs, the well-pleaded factual allegations set forth in a complaint concerning liability are deemed true. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); see also Fed. R. Civ. P. 8(b)(6) ("An allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not denied."). However, "just because a party is in default, the plaintiff is not entitled to a default judgment as a matter of right." Profi-Parikiet Sp. Zoo v. Seneca Hardwoods LLC, 13-CV-4358, 2014 U.S. Dist. LEXIS 71289, at *11 (E.D.N.Y. May 23, 2014) (Report and Recommendation), adopted by, 2014 U.S. Dist. LEXIS 83128 (E.D.N.Y. June 18, 2014) (internal quotation omitted). Rather, the district court must determine whether the plaintiff's allegations establish liability as a matter of law. See City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011); see also Gunawan v. Sake Sushi Rest., 897 F. Supp. 2d 76, 83 (E.D.N.Y. 2012) (holding that a plaintiff seeking a default judgment must establish that its "uncontroverted allegations, without more, establish the defendant's liability on each asserted cause of action"). The decision whether to enter a default judgment "is entrusted to the sound judicial discretion of the court." Allstate Ins. Co. v. Howell, 09-CV-4660, 2013 WL 5447152, at *1 (E.D.N.Y. Sept. 30, 2013); see also Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993) ("The dispositions of motions for entries of defaults and default judgments . . . are left to the sound discretion of a

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district court because it is in the best position to assess the individual circumstances of a given case and to evaluate the credibility and good faith of the parties.").

In response to Defendants' repeated failure to retain counsel, Plaintiff appropriately requested a Certificate of Default against JMP USA from the Clerk of this Court on June 10, 2016, which was properly served upon the Corporate Defendant. DE [37]. Moreover, the Court repeatedly cautioned JMP USA's principal, the present pro se defendant, that his failure to retain counsel would result in JMP USA defaulting. See DE [29], [31], [32]. The Clerk then issued and entered a Certificate of Default on June 30, 2016. See Entry of Default, DE [38]. Accordingly, as a default judgment would be procedurally appropriate, the Court now examines whether Plaintiff has established the Corporate Defendant's liability.

B. Discussion

1. Overtime FLSA Claim

In the Complaint, Khurana first alleges that JMP USA owes him unpaid overtime compensation pursuant to the FLSA for a period that includes July 2, 2012 through July 6, 2014. See Pl. Findings at 2; Compl. ¶¶ 51-64, Estimated Calculation of Damages ("Est. Calc. of Dams"). For the reasons set forth below, the Court finds that the Corporate Defendant is liable with respect to this claim.

i. Employer Status

To prove FLSA overtime liability Plaintiff must first establish that JMP USA was an employer under the FLSA and was engaged in interstate commerce. See 29 U.S.C. § 207; D'Arpa v. Runway Towing Corp., 12-CV-1120, 2013 WL 3010810, at *13 (E.D.N.Y. June 18, 2013). The FLSA defines "employer" as "any person acting

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directly or indirectly in the interest of an employer in relation to an employee . . . ." 29 U.S.C. § 203(d). To determine whether an individual is...

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