Shah v. Wilco Sys., Inc.

• Decision Date: 29 December 2005
• Docket Number: 6970.,6970A.
• Citation: 2005 NY Slip Op 10232,27 A.D.3d 169,806 N.Y.S.2d 553
• Parties: SONA SHAH et al., Respondents, v. WILCO SYSTEMS, INC., Appellant.
• Court: New York Supreme Court — Appellate Division

27 A.D.3d 169

806 N.Y.S.2d 553

2005 NY Slip Op 10232

SONA SHAH et al., Respondents, v. WILCO SYSTEMS, INC., Appellant.

6970.

6970A.

Appellate Division of the Supreme Court of the State of New York, First Department.

December 29, 2005.

APPEAL from two orders of the Supreme Court, New York County (Marilyn Shafer, J.), entered January 6, 2004 and January 12, 2005, respectively. The first order, insofar as appealed from, denied plaintiffs' motion for class certification without prejudice to renewal and denied defendant's motion for partial summary judgment dismissing part of the first cause of action for discriminatory discharge and the second cause of action based on disparate pay discrimination, and for dismissal of the third cause of action for breach of an implied contract. The second order, insofar as appealable, granted defendant's motion for renewal and adhered to the prior determination.

Grotta, Glassman & Hoffman, P.C., Roseland, New Jersey (Jonathan Meyers of counsel), for appellant.

McCallion & Associates, LLP, New York City (Kenneth F. McCallion of counsel), for Sona Shah, respondent.

Morelli Ratner PC, New York City (David S. Ratner of counsel), for Kai Barrett, respondent.

OPINION OF THE COURT

SULLIVAN, J.P.

In this putative class action against their former employer, plaintiffs—one an American citizen suing on behalf of other American citizen workers and the other a noncitizen suing on behalf of other foreign workers—claim, under the New York City Human Rights Law, that they were discriminated against on the basis of their respective citizenship status.

Defendant appeals from the denial of its motion for partial summary judgment, which sought dismissal of part of the first cause of action (a discriminatory discharge claim), the second cause of action based on disparate pay discrimination, and the third cause of action for breach of an implied contract, and the denial, without prejudice to renewal, of plaintiffs' motion for class certification.

Defendant Wilco Systems provides brokerage processing and related services, including software development, to the financial brokerage industry. Most of Wilco's employees are computer programmers who develop and customize GLOSS, Wilco's core product, a proprietary software program, for use by its clients. Plaintiff Sona Shah, a citizen of the United States who resides in New Jersey, worked for Wilco as a programmer from September 16, 1996 until she was terminated on April 1, 1998. The primary work of programmers is performed at client locations both in and out of New York City, and the programmers, while assigned to a project, would report to work at the client site, not at Wilco's New York office. These assignments can last months or even years. From approximately January 20, 1998 until the date of her termination, Ms. Shah was assigned to work on a project at the client's offices in Jersey City, New Jersey. Plaintiff Kai Barrett, a citizen of the United Kingdom who worked for Wilco on a visa obtained by Wilco, was employed as a junior systems administrator from January 1, 1998 until he resigned on May 5, 1998.

In December 1999, prior to commencing this action, plaintiff Shah commenced an action in the United States District Court for the Southern District of New York, seeking damages arising out of the alleged exploitation of domestic and foreign workers in violation of title VII of the Civil Rights Act of 1964 (42 USC § 2000e-5 et seq.), the New York State Human Rights Law (Executive Law § 290 et seq.) and the New York City Human Rights Law ([NYCHRL] Administrative Code of City of NY § 8-107). The federal complaint, amended on several occasions, inter alia, to add Barrett as a plaintiff and to replead various claims, was ultimately dismissed. Insofar as relevant, the federal court declined to retain supplemental jurisdiction over plaintiffs' state and city law claims remaining after all the federal claims had been dismissed (see Shah v Wilco Sys., Inc., 76 Fed Appx 383 [2d Cir 2003], affg 2002 WL 959557, 2002 US Dist LEXIS 8276 [SD NY] and 2001 WL 1006722, 2001 US Dist LEXIS 13393 [SD NY]; 126 F Supp 2d 641 [SD NY 2000], mot to amend denied 2000 WL 1876913, 2000 US Dist LEXIS 18426 [SD NY]), and dismissed the fifth amended complaint on June 18, 2002 for lack of subject matter jurisdiction.

Plaintiffs commenced this action in June 2002 as class representatives for similarly situated American and foreign workers, alleging Wilco's discrimination toward both workers of United States citizenship and foreign workers, and breach of contract with American workers by refusing to train them and assign them to work due to their status as citizens. Specifically, the first cause of action alleges that, in violation of the NYCHRL, Wilco denied Shah and other American workers training and work assignments, and then discharged them and replaced them with foreign workers who were no more qualified. As to Barrett and other foreign workers, the complaint alleges in the second cause of action that while their credentials and background in computer software were equal or superior to all other Wilco employees, they were paid at below market rates because they were noncitizens, in violation of the NYCHRL. The breach-of-contract claim—the third cause of action—alleges that training to maintain skill levels is an understood term in all employment contracts in the computer software industry, and that Wilco breached its contract with Shah and the similarly situated American workers by refusing to train them and to assign them work due to their status as United States citizens.

By notice dated April 16, 2003, Wilco moved for summary judgment pursuant to CPLR 3212 on Barrett's claim for disparate pay discrimination—the second cause of action—and Shah's claim for discriminatory discharge—part of the first cause of action—and for dismissal of Shah's claim pursuant to CPLR 3211 (a) (7) for breach of an implied contractual term to train programmers—the third cause of action. After previously withdrawing another motion for the same relief, plaintiffs moved on May 13, 2003 for, inter alia, class certification.

After consolidating the motions for disposition, the court denied them both. The court found a question of fact as to whether Barrett was paid less than someone similarly situated, noting questions as to his title and actual role, the nature of his responsibilities and assignments, and the amount of his compensation. As to Shah's claim for wrongful termination under the NYCHRL, the court rejected Wilco's argument that since her employment was terminated in New Jersey the law did not apply, finding that she was terminated for behavior that was not limited to the New Jersey project, and that the termination was from her New York employment as well as from the New Jersey assignment. Finally, as to Shah's breach of an implied contract claim, the court found that the claim was sufficiently pleaded, rejecting defendant's contention that the pleading was too vague to support a cause of action. The court denied without prejudice plaintiffs' motion for class certification.

Plaintiffs' motion for class certification should have been denied with prejudice since the motion was untimely. Pursuant to CPLR 902, "[w]ithin sixty days after the time to serve a responsive pleading has expired for all persons named as defendants in an action brought as a class action, the plaintiff shall move for an order to determine whether it is to be so maintained." This filing deadline is mandatory (see O'Hara v Del Bello, 47 NY2d 363, 368-369 [1979]; see also Meraner v Albany Med. Ctr., 211 AD2d 867 [1995], lv dismissed 85 NY2d 968 [1995]). On June 25, 2002, pursuant to Business Corporation Law § 306 (b), service was effected upon Wilco by delivery of the summons and complaint to the New York State Department of State. Service was complete on that date and Wilco's answer was due 30 days later (see CPLR 3012 [c]), i.e., July 25, 2002. Wilco's answer was served by mail on July 24, 2002, and plaintiffs belatedly served their motion for class certification on September 27, 2002.

Supreme Court, in finding the motion timely, gave plaintiffs the benefit of the five days that are added for service by mail (see CPLR 2103 [b] [2]). This was error. "[W]here a period of time prescribed by law is measured from the service of a paper and service is by mail, five days shall be added to the prescribed period" (id.). Plaintiffs assert that since the answer was served by mail, the five days afforded by CPLR 2103 (b) (2) must be added. As CPLR 902 makes clear, however, the time period for making a motion for class certification is not measured from service of the answer but rather from the date on which the defendant's time to answer expires. In any event, the five-day extension "has no application . . . to the time limits for responding to service of process" (Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C2103:3, at 738). Accordingly, CPLR 2103 (b) (2) is inapplicable. Since the motion, which was made after September 23, 2002, the date on which the 60-day period expired, was untimely, we reject plaintiff Shah's suggestion that we uphold Supreme Court's exercise of discretion in allowing the class certification motion (cf. Caesar v Chemical Bank, 118 Misc 2d 118, 121 [1983], affd 106 AD2d 353 [1984], mod on other grounds 66 NY2d 698 [1985] [motion for class certification deemed timely where delay resulted from inability to define class sufficiently until Appellate Division decided appeal from related order]). In any event, no facts are alleged to support an exercise of discretion in this regard.

As to Shah's claim for breach of implied contract, she asserts that Wilco breached an understood and necessary term in all employment contracts in the computer software industry that employees will be trained to maintain their skill level to keep pace with changing technology. To prevail on...