Velez v. Vassallo
| Decision Date | 26 March 2002 |
| Docket Number | No. 99 CIV. 11330(LAK).,99 CIV. 11330(LAK). |
| Citation | 203 F.Supp.2d 312 |
| Parties | Walter VELEZ, et al., Plaintiffs, v. Joseph VASSALLO, et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Leon Greenberg, New York City, for Walter Velez.
Leon Marc Greenberg, New York City, for John Panafiel, Jhofre Penafiel, Romeo Siguenza.
In September 2000, this Court entered a default judgment against defendants in this Fair Labor Standards Act ("FLSA") case. Almost a year later, defendants moved to vacate the judgment, and the Court referred the motion to Magistrate Judge Katz for an inquest. Judge Katz rendered a report and recommendation, dated March 6, 2002, in which he recommended denial of the motion. Plaintiffs object to the limited extent that it did not act on their application for legal fees in defending the judgment. Defendants have not objected and have not responded to plaintiffs' objections.
It is perfectly clear that Judge Katz was right in recommending denial of the motion to vacate the judgment. Defendants' actions with respect to this matter, from beginning to end, can be characterized only as a wilful disregard of the legal system and of their obligations to it. The motion to vacate the default judgment was utterly lacking in merit and seems to have been intended solely for purposes of delay.
So far as plaintiffs' limited objection is concerned, prevailing plaintiffs in FLSA cases are entitled to attorneys' fees for prosecuting or defending appeals. E.g., Caserta v. Home Lines Agency, Inc., 273 F.2d 943, 948 (2d Cir.1959); Aaron v. Bay Ridge Operating Co., 162 F.2d 665, 670 (2d Cir.1947), mod. and aff'd, 334 U.S. 446, 68 S.Ct. 1186, 92 L.Ed. 1502 (1948). Plaintiffs' successful defense of a postjudgment motion is indistinguishable in principle. Accordingly, plaintiffs are entitled to a reasonable attorneys' fee and expenses.
The time expended, billing rate, and expenses incurred by plaintiffs' counsel were reasonable. In addition, the proposed changes to the fee previously awarded are appropriate. Accordingly, defendants' motion to vacate the default judgment is denied. The default judgment is modified to increase the award for attorneys' fees and expenses to $19,989.80.
SO ORDERED.
REPORT AND RECOMMENDATION
On October 2, 2000, pursuant to an Order of the Honorable Lewis A. Kaplan, U.S.D.J., dated September 28, 2000, the Clerk of the Court entered a Default Judgment totaling $141,403.66 against Defendants on behalf of Plaintiffs and their attorney, Leon Greenberg. Defendants have now moved the Court under Fed. R.Civ.P. 60(b)(4), for an order vacating the Default Judgment, on the grounds that the Judgment is void for lack of personal and subject matter jurisdiction, and under Fed. R.Civ.P. 60(b)(6), on the grounds that allowing the Judgment to stand would offend equity.
The facts underlying this case were set forth in my Report and Recommendation of August 23, 2000, which was adopted by the Court by Order dated September 14, 2000. Accordingly, I will provide only those facts that bear on the resolution of the instant motion.
Plaintiffs, Walter Velez, John Penafiel, Romeo Siguenza, and Jhofre Penafiel (collectively, "Plaintiffs"), filed an Amended Complaint against Defendants, Joseph Vassallo, Beacon 76th Garage, Cross Garage Corp., Double Garage Corp., Wall Street Garage, 331 50th St. Parking, 60th Storage Corp., 76th Garage Corp., and JK Improvements, Inc. (collectively, "Defendants"), on December 6, 1999, alleging violations of the Fair Labor Standards Act ("FLSA") and New York labor laws. Essentially, Plaintiffs claimed that they were employed as garage attendants by Defendants, and that Defendants failed to compensate them for a substantial number of hours worked in overtime. The Amended Complaint alleges that Defendant Vassallo is sole or part owner, officer, shareholder, and director of the other Defendants (the "corporate Defendants"). (Am.Compl. ¶¶ 6-8.) For his part, Defendant Vassallo now acknowledges that he is an officer and shareholder of Defendant JK Improvements, and that JK Improvements "manages indoor parking garages and open parking lots." (Order to Show Cause, Affidavit of Joseph Vassallo ("Vassallo Aff.") ¶ 4.) Neither Mr. Vassallo nor the other Defendants ever answered or otherwise appeared in the litigation until the instant motion, and on March 15, 2000, upon motion of Plaintiffs, the Court entered a Default Judgment against all of the named Defendants, establishing their joint and several liability as to the relief sought in the Amended Complaint.1 The case was then referred to me for an inquest on damages.
Pursuant to this Court's directives, Plaintiffs submitted materials in support of their request for damages, including attorney's fees, which were served on Defendants. Defendants' counsel, Maurice Blum, subsequently wrote this Court asking for a stay of its proceedings in order to give him time to make a motion to vacate the entry of the Default Judgment. (Letter of Maurice H. Blum, Esq., Apr. 21, 2000, attached as Exhibit ("Ex.") Q to Affirmation of Leon Greenberg, Esq., in Opposition ("Greenberg Aff.") at 1.) Mr. Blum stated that he and his clients "intend[ed] to appear" in the action. By Memorandum Endorsed Order dated April 24, 2000, I indicated that the matter was before this Court only for an inquest on damages, and that any motion to vacate the Default Judgment should be made to Judge Kaplan. (Id. at 2.) No such motion was filed; nor did Defendants submit any opposition to Plaintiffs' request for damages, or otherwise appear in the action.2
On August 23, 2000, this Court issued a Report and Recommendation, which was sent to Plaintiffs and the defaulting Defendants, recommending that the Default Judgment entered against Defendants, jointly and severally, include the following damage awards with respect to the Plaintiffs:
1. Walter Velez: $12,562.50
2. John Penafiel: $23,385.00
3. Romeo Siguenza: $58,042.18
4. Jhofre Penafiel: $36,076.84
5. Attorney's Fees and Costs: $11,337.14
No objections to the Report and Recommendation were filed, and, as noted, it was adopted on September 14, 2000. A Judgment in the above amounts was entered.
Over ten months passed. On August 16, 2001, Defendants, by Order to Show Cause, brought the instant motion under Rule 60(b)(4) to vacate the Judgment as void, on the grounds that the Court lacked personal and subject matter jurisdiction. Defendants also seek relief on equitable grounds, under Rule 60(b)(6). Additionally, Defendants have requested the imposition of Rule 11 sanctions against Plaintiffs and their counsel, apparently on the grounds that Plaintiffs' allegations in the Amended Complaint and in support of their request for damages were false. (Defendants' Memorandum of Law ("Defs.Mem.") at 10.) Finally, Defendants have requested an evidentiary hearing on these issues. Plaintiffs oppose each of Defendants' claims on the merits, argue that there is no need for an evidentiary hearing, and, in the alternative, request an opportunity to conduct discovery in the event the Court deems an evidentiary hearing necessary.
Defendants' motion was referred to me for a Report and Recommendation. Upon reviewing the submissions, and upon hearing argument from counsel, the Court concludes that an evidentiary hearing is not necessary to reach a disposition on this matter. Defendants have been on notice of this action since its inception, and chose to remain silent as this Court adjudicated their default and liability for damages. They have been extremely dilatory in bringing the instant motion, which this Court finds meritless. Therefore, I recommend that Defendants' motion be denied in its entirety.
A party may move for relief from a final judgement under Rule 60(b) of the Federal Rules of Civil Procedure. The rule lists six bases for such relief, one of which is that the judgment is void. See Fed.R.Civ.P. 60(b)(4). A judgment is void if entered by a court against a party over whom it lacks personal jurisdiction, or on claims over which it lacks subject matter jurisdiction. See Triad Energy Corp. v. McNell, 110 F.R.D. 382, 385 (S.D.N.Y. 1986). Unlike other motions under Rule 60(b), which are committed to the district court's sound discretion, a motion under Rule 60(b)(4) must be granted if the court initially lacked jurisdiction. See SEC v. Softpoint, Inc., No. 95 Civ. 2951(GEL), 2001 WL 43611, at *2 (S.D.N.Y. Jan.18, 2001); China Mariners' Assurance Corp. v. M.T. W.M. Vacy Ash, No. 96 Civ. 9533(PKL), 1999 WL 126921, at *3 (S.D.N.Y. Mar.9, 1999). Furthermore, although a Rule 60(b)(4) motion must be made "within a reasonable time," courts have been "exceedingly lenient in defining the term `reasonable time,'" Beller & Keller v. Tyler, 120 F.3d 21, 24 (2d Cir.1997), and have refused to apply the doctrine of laches as a bar to relief under the rule, id. at 23; see also United States v. One Toshiba Color Television, 213 F.3d 147, 157 (3d Cir.2000)(en banc) ().
Accordingly, although Defendants had full notice of this lawsuit well before any judgment was entered, and before the inquest on damages, and although they offer no reason whatsoever for their delay in appearing in this case,3 the Court is nevertheless constrained to consider their belated challenges to its jurisdiction.
Although they do not deny having notice of this action, the corporate Defendants argue that the...
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