Ghosh v. Neurological Services of Queens, P.C. et al, No. 1:2013cv01113 - Document 16 (E.D.N.Y. 2015)
Court Description: MEMORANDUM & ORDER denying 15 Motion for Default Judgment and dismissing 1 Complaint. For the reasons set forth herein, plaintiff's federal cause of action is patently meritless, and the amount in controversy in this case never reached $ ;75,000.00, which divests this Court of jurisdiction over his remaining state and common law claims. His motion is therefore DENIED and his Complaint DISMISSED without prejudice to the refiling of the claims over which this Court lacks jurisdiction in state court. The Clerk of Court is directed to close this case. Ordered by Judge I. Leo Glasser on 2/3/2015. (Carey, Charles)
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Ghosh v. Neurological Services of Queens, P.C. et al Doc. 16 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------x SIDDHARTH N. GHOSH, Plaintiff, MEMORAN D U M & ORD ER - against 13-CV-1113 (ILG) (CLP) NEUROLOGICAL SERVICES OF QUEENS, P.C. and DR. J ATINDER S. BAKSHI, M.D., Defendants. ------------------------------------------------------x GLASSER, Senior United States District J udge: On March 4, 20 13, plaintiff Siddharth N. Ghosh com m enced this action against Neurological Services of Queens, P.C. (“Neurological Services”) and Dr. J atinder S. Bakshi, M.D. (“Dr. Bakshi”; together, “defendants”), alleging violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 20 1, et seq.; m ultiple sections of the New York Labor Law (“NYLL”), Art. 6 § 190 , et seq. and Art. 19 § 650 , et seq.; and com m on law. Defendants have not responded to the Com plaint, and plaintiff now m oves for a default judgm ent, pursuant to Rule 55(b) of the Federal Rules of Civil Procedure, seeking com pensatory, liquidated, and punitive damages, along with interest, costs, and attorney’s fees. For the following reasons, that m otion is DENIED and this case is DISMISSED. BACKGROU N D Except where otherwise noted, the following facts are taken from the Com plaint (Dkt. No. 1) and plaintiff’s affidavit in support of this m otion (Dkt. No. 15-1), as well as their accom panying exhibits. Plaintiff is a citizen of India and a resident of New J ersey who holds a Master of Science degree from Long Island University and is certified to practice as a physical therapist in New York. On J anuary 18, 20 10 , Neurological 1 Dockets.Justia.com Services hired plaintiff as a physical therapist, offering him a one-year contract with a yearly salary of $ 70 ,0 0 0 .0 0 , eight hours of paid vacation for every four hundred hours worked in a six-m onth period, and a stipend of up to $ 1,0 0 0 .0 0 per year (plus expenses) for continuing education classes or sem inars (contingent on Neurological Service’s approval of the course content). Neurological Services also assisted plaintiff in applying for and obtaining an H-1B work visa. Plaintiff’s em ploym ent agreem ent with Neurological Services was counter-signed by Dr. Bakshi, who was the sole shareholder and operator of the com pany. Although that agreem ent expired in J anuary of 20 11, Neurological Services continued to em ploy plaintiff and pay him the sam e salary. In May of 20 11, Neurological Services began to delay paying plaintiff regularly. The last paycheck he received was dated Decem ber 30 , 20 11, but issued for the pay period between J uly 16, 20 11 and J uly 30 , 20 11. Plaintiff nevertheless continued to work for the com pany until m id-March of 20 12, when he arrived for work only to find the office doors locked and the space com pletely em pty. Plaintiff called Dr. Bakshi, who acknowledged that he had closed down Neurological Services without notifying plaintiff. Had plaintiff received checks during the period between August 1, 20 11 and March 15, 20 12 for the usual am ount that Neurological Services had paid him , he would have earned $ 47,788.0 5 before taxes and withholdings. Additionally, plaintiff never received vacation pay or a stipend for any continuing professional education classes at any tim e during the two years he worked for the defendants. Although plaintiff m ade repeated requests of Dr. Bakshi for the am ount he believed he was owed after Neurological Services unexpectedly closed down, his requests were ignored and this litigation ensued. The Clerk of Court noted defendants’ default on J anuary 22, 20 14 (Dkt. No. 11) and plaintiff filed this m otion on Novem ber 6, 20 14 (Dkt. No. 15). 2 LEGAL STAN D ARD Rule 55 of the Federal Rules of Civil Procedure sets forth a two-step process for obtaining a default judgm ent: first, the clerk of court enters the party’s default pursuant to Rule 55(a), and second, if the defaulting party fails to set aside the entry of default pursuant to Rule 55(c), the plaintiff m ust apply for a default judgm ent pursuant to Rule 55(b). See Finkel v. Universal Elec. Corp., 970 F. Supp. 2d 10 8, 118 (E.D.N.Y. 20 13) (citing Enron Oil Corp. v. Diakuhara, 10 F.3d 90 , 95-96 (2d Cir. 1993)). The plaintiff has the burden of establishing entitlem ent to a default judgm ent, which is not obtained as a m atter of right. See id. at 119 (citing, inter alia, Erwin DeMarino Trucking Co. v. J ackson, 838 F. Supp. 160 , 162 (S.D.N.Y. 1993)). Courts m ust “supervise default judgm ents with extrem e care to avoid m iscarriages of justice.” DeMarino Trucking, 838 F. Supp. at 162. Thus, while the defaulting defendant is deem ed to have adm itted all well-pleaded allegations in the com plaint pertaining to liability, “a district court has discretion . . . to require proof of necessary facts and need not agree that the alleged facts constitute a valid cause of action.” Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). Additionally, allegations in the com plaint pertaining to dam ages are not deem ed adm itted and require an independent evidentiary determ ination. E.g., id.; Greyhound ExhibitGroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). D ISCU SSION Plaintiff dem ands $ 47,775.0 0 in unpaid salary, $ 1,918.0 0 in unpaid vacation pay, $ 2,0 0 0 .0 0 in unpaid continuing professional education stipends, and any other statutory liquidated dam ages or interest available to him . See Pl.’s Ex. H at 1-3. He believes he is entitled to that m oney pursuant to four separate theories of recovery, and 3 asks the Court for relief under “only one” of them , be it the FLSA’s m inim um -wage provisions, or the NYLL’s unpaid-wage provisions, or breach of contract, or quantum m eruit. Pl.’s Mem . at 21-22. While plaintiff is “not entitled to recover twice for the sam e injury, . . . to the extent [his] allegations allow recovery under both state and federal law, the law providing for the greatest recovery will govern the calculation of dam ages.” Wicaksono v. XYZ 48 Corp., No. 10 Civ. 3635, 20 11 WL 20 22644, at *3 (S.D.N.Y. May 2, 20 11) (internal quotation m arks and citations om itted), rep’t & rec. adopted, 20 11 WL 20 38973 (S.D.N.Y. May 24, 20 11). The Court m ust therefore determ ine whether the theories plaintiff relies upon actually support his claim s, and, if m ore than one does, which am ong them provides for the greatest recovery. I. Fe d e ral Claim s & Ju ris d ictio n al Co n ce rn s This Court has subject-m atter jurisdiction over claim s that arise under the “Constitution, laws or treaties of the United States” pursuant to 28 U.S.C. § 1331’s “federal question” authority. The sole federal question this case presents is whether plaintiff is entitled to recover under the FLSA. If he is, the Court m ay exercise supplem ental jurisdiction over his rem aining state and com m on law claim s pursuant to 28 U.S.C. § 1367(a). A. Th e FLSA The FLSA requires employers to pay certain em ployees who engage in com m erce or are “employed in an enterprise engaged in com m erce or in the production of goods for com m erce” a m inim um wage ($ 7.25 an hour at all tim es relevant to this litigation). 29 U.S.C. § 20 6(a). Em ployees covered by the FLSA m ay sue em ployers who fail to provide that m inim um wage, recovering “the am ount of their unpaid m inim um wages” along with liquidated dam ages, costs and fees as the circum stances dictate. Id. § 216(b). 4 The FLSA’s m inim um -wage provisions do not apply, however, to bona fide “professional” em ployees, a group that includes em ployees com pensated on a salary basis at a rate of not less than $ 455.0 0 per week and whose prim ary duties require advanced knowledge in a field of science or learning. See 29 U.S.C. § 213(a)(1); 29 C.F.R. §§ 541.30 0 (a), 541.30 1. The question of what an em ployee’s prim ary duties are is factual, while the issue of whether such duties render the em ployee exem pt from the FLSA’s m inim um -wage provisions is a question of law. See McBeth v. Gabrielli Truck Sales, Ltd., 768 F. Supp. 2d 383, 387 (E.D.N.Y. 20 10 ) (citing Icicle Seafoods, Inc. v. Worthington, 475 U.S. 70 9, 714 (1986)). Plaintiff’s own subm issions describe him as a licensed physical therapist with a m aster’s degree in science and a $ 70 ,0 0 0 .0 0 yearly salary that was to be paid bi-weekly. He is clearly a bona fide professional as the FLSA defines the term , and not covered by the statute’s m inim um -wage protections. See 29 C.F.R. §§ 541.30 1(e)(1), (2), (4), & (8) (expressly but not exclusively exem pting sim ilar professionals such as m edical technologists, registered nurses, physician assistants, and athletic trainers). His federal m inim um -wage claim s are denied accordingly. B. Ju ris d ictio n Afte r D is m is s al o f Plain tiff’s FLSA Claim Where, as here, the sole federal cause of action in a case is “patently m eritless,” its dism issal deprives a district court of supplem ental jurisdiction over any rem aining state law claim s it m ay have otherwise had pursuant to 28 U.S.C. § 1367(a). See Dunton v. Cnty. of Suffolk, 729 F.2d 90 3, 910 -11 (2d Cir. 1984), am ended on other grounds, 748 F.2d 69 (2d Cir. 1984). Plaintiff, however, has also invoked this Court’s diversity jurisdiction pursuant to 28 U.S.C. § 1332(a). See Com pl. ¶ 4. That statute provides federal courts with jurisdiction over cases between citizens of a state and citizens of a 5 foreign state where the “m atter in controversy” is $ 75,0 0 0 .0 0 or more, exclusive of interest and costs. See 28 U.S.C. § 1332(a)(2). Diversity of citizenship exists here, but the Court m ust determ ine whether the dam ages sought satisfy the jurisdictional requirem ent. The Second Circuit disfavors dism issal of actions m aintained pursuant to diversity jurisdiction m erely because “a plaintiff’s ultim ate recovery is less than [the statutory m inim um ] am ount.” See Zacharia v. Harbor Island Spa, Inc., 684 F.2d 199, 20 2 (2d Cir. 1982). The jurisdictional determ ination is to be m ade on the basis of the plaintiff’s allegations, not on a decision on the m erits. Moreover, even where those allegations leave grave doubt about the likelihood of a recovery of the requisite am ount, dism issal is not warranted. . . . Rather, it m ust appear to a legal certainty from the com plaint that the plaintiff cannot recover sufficient damages to invoke federal jurisdiction. Id. (citing, inter alia, St. Paul Mercury Indem . Co. v. Red Cab Co., 30 3 U.S. 283, 289 (1938); Deutsch v. Hewes Street Realty Corp., 359 F.2d 96, 98-99 (2d Cir. 1966)). Additional evidence subm itted by the parties m ay be used to clarify or “am plify the m eaning of” the allegations in a com plaint in determ ining whether diversity jurisdiction exists. See id. (citing Givens v. W.T. Grant Co., 457 F.2d 612, 613 (2d Cir. 1972), vacated on other grounds, 40 9 U.S. 56 (1972)). Yet even a com plete defense that is plain from the face of the pleadings does not deprive a federal court of jurisdiction, “for who can say in advance that that defen[s]e will be presented by the defendant, or, if presented[,] sustained by the court?” Schunk v. Moline, Milburn & Stoddart Co., 147 U.S. 50 0 , 50 5 (1893); see also Scherer v. Equitable Life Assur. Soc’y of U.S., 347 F.3d 394, 398 (2d Cir. 20 0 3) (applying this “affirm ative defense rule” in a case where res judicata applied to the am ount in controversy, but noting it seem ed “paradoxical” to do so when it appeared “to a legal certainty” that the defense would be successful). 6 Ultim ately, therefore, while a court m ust accept plaintiffs’ assurances that their “uncertain m oney dam ages” will exceed the statutory m inim um without applying any affirm ative defenses to their claim s, it cannot ignore subsequently-discovered facts which reveal that, “from the outset,” it was or should have been certain that plaintiffs could not recover $ 75,0 0 0 .0 0 or m ore. See Tongbrook Am . v. Shipton Sportswear Co., 14 F.3d 781, 785 (2d Cir. 1994). For the reasons set forth below, it is certain that plaintiff here fails to m eet the statutory m inim um am ount in controversy required for this Court to exercise diversity jurisdiction over his claim s. II. State an d Co m m o n Law Plaintiff’s own allegations m ake it clear that none of his state or com m on law causes of action entitles him to recover $ 75,0 0 0 .0 0 or m ore. See Zacharia, 684 F.2d at 20 2. This Court therefore lacks jurisdiction over those claim s, and this case m ust be dism issed. A. Th e N YLL It is well settled that a plaintiff cannot assert a statutory claim for unpaid wages under the NYLL “if he has no enforceable contractual right to those wages.” E.g., Tierney v. Capricorn Investors, L.P., 592 N.Y.S.2d 70 0 , 70 3 (App. Div. 1993). Plaintiff’s original contract expired in J anuary of 20 11, but he continued to work for, and be paid at the sam e rate by, Neurological Services. See Pl.’s Ex. D. “The general rule is that where one enters the em ploym ent of another for a fixed period at a stated annual salary, and the em ploym ent continues beyond that period, the presum ption is continuance of the relationship for another year at the sam e salary.” Shenn v. Fair-Tex Mills, Inc., 273 N.Y.S.2d 876, 877 (App. Div. 1966) (per curiam ) (citing, inter alia, Adam s v. Fitzpatrick, 125 N.Y. 124, 129-30 (1891)). This com m on-law rule, however, “cannot be used to im ply 7 that there was m utual and silent assent to autom atic contract renewal when an agreem ent im poses an express obligation on the parties . . . to extend the term of em ploym ent.” Goldm an v. White Plains Ctr., 11 N.Y.3d 173, 178 (20 0 8). The term s of plaintiff’s em ploym ent contract state that “both parties will have the option to renew this agreem ent annually.” Pl.’s Ex. D at 1 (em phasis added). This language clearly “im pose[d] an express obligation on the parties” to “extend the term of em ploym ent” if they wished to do so. See Goldm an, 11 N.Y.3d at 178. They did not, and plaintiff becam e an at-will em ployee when his contract expired on J anuary 18, 20 11. See id. at 175. He can therefore only invoke the NYLL to recover unpaid wages which he was contractually entitled to receive between J anuary 18, 20 10 and J anuary 17, 20 11. Plaintiff adm its that he was paid his full regular salary during the year his contract was in force. While he was not com pensated for his unused vacation tim e that was to be paid “at year end of contract” (Pl.’s Ex. D at 3), he cannot prevail on his claim for that m oney under the NYLL because it expressly prohibits “professional” em ployees who m ake m ore than $ 90 0 .0 0 a week (such as plaintiff) from recovering vacation pay. N.Y. Lab. Law § 198-c; N.Y. Com p. Codes R. & Regs. tit. 12, § 142-2.14(c)(4)(iii); see also Galasso v. Eism an, Zucker, Klein & Ruttenberg, 310 F. Supp. 2d 569, 575 (S.D.N.Y. 20 0 4). Finally, plaintiff’s $ 10 0 0 .0 0 stipend for continuing education was “entirely discretionary and subject to the non-reviewable determ ination of his em ployer,” and thus did not constitute “wages” as the NYLL defines them . See Truelove v. Ne. Capital & Advisory, Inc., 95 N.Y.2d 220 , 224 (20 0 0 ). Given the foregoing, plaintiff cannot (and could never) recover any wages by invoking the NYLL, and his claim s pursuant to that statute are denied. 8 B. Bre ach o f Co n tract Since plaintiff was paid all of his regular salary for the year his em ploym ent contract was in force, the m ost he could potentially recover under a breach-of-contract cause of action would be his unpaid vacation tim e and continuing education stipend for that year. He can recover far m ore in quantum m eruit for the reasons discussed below, and so his decision to pursue only whichever cause of action allows him to recover the largest am ount of unpaid wages waives his breach-of-contract claim . C. Qu an tu m Me ru it Quantum m eruit, which m eans “as m uch as he deserved,” is an equitable “m easure of liability” awarded when a defendant is unjustly enriched by services provided by a plaintiff who perform ed them without a contract to do so. See Seiden Assocs., Inc. v. ANC Holdings, Inc., 768 F. Supp. 89, 96 (S.D.N.Y. 1991), rev’d on other grounds, 959 F.2d 425 (2d Cir. 1992). In order to recover in quantum m eruit under New York law, a plaintiff m ust establish “(1) the perform ance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of com pensation therefor, and (4) the reasonable value of the services.” Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 69 (2d Cir. 20 0 0 ) (internal quotation m arks and citation omitted). Plaintiff has satisfied all four of the above elem ents here. Since he seeks to recover only $ 47,775.0 0 in dam ages under that theory of liability, however, he still falls short of the $ 75,0 0 0 .0 0 m atter-in-controversy jurisdictional bar.1 1 Plaintiff does not seek to recover his unpaid vacation tim e and continuing education stipend as part of his quantum m eruit claim , but even if he did, he still would not reach $ 75,0 0 0 .0 0 in dam ages. See Pl.’s Mem . at 30 . 9 D . Co m p e n s ato ry & Pu n itive D am age s fo r W ro n gfu l Te rm in atio n Plaintiff devotes considerable space in his m em orandum of law to the final two causes of action in his com plaint, which seek com pensatory and punitive damages under an unspecified theory of liability for the “m ental agony, torture and stress” defendants caused him when Neurological Services shut down, thereby effectively term inating his em ploym ent. See Com pl. ¶¶ 58-67; Pl.’s Mem . at 36-42. New York “does not recognize a cause of action for the tort of abusive or wrongful discharge of an at-will em ployee” such as plaintiff, however, which m akes it legally certain that he never could have prevailed on those claim s. E.g., Barcellos v. Robbins, 858 N.Y.S.2d 658, 660 (App. Div. 20 0 8) (collecting cases).2 Plaintiff’s request for dam ages under the fifth and six causes of action in his Com plaint is therefore denied. E. In te re s t, Co s ts , & Fe e s As previously noted, 28 U.S.C. § 1332(a) specifically excludes interest and costs from the m atter in controversy. While an exception to that rule exists for interest that “is owed as part of an underlying contractual obligation,” no such obligation exists here, as plaintiff’s sole claim with any hope of success sounds in quantum m eruit. See Grunblatt v. Unum Provident Corp., 270 F. Supp. 2d 347, 350 (E.D.N.Y. 20 0 3) (quoting Transaero, Inc. v. La Fuerza Area Boliviana, 24 F.3d 457, 461 (2d Cir. 1994)). As for attorney’s fees, the Second Circuit has held that they m ay be treated as part of the m atter in controversy “only where they are recoverable as of right pursuant to statute or contract.” In re Ciprofloxacin Hydrochloride Antitrust Litig., 166 F. Supp. 2d 740 , 755 (E.D.N.Y. 20 0 1) (citing Givens, 457 F.2d at 614). Plaintiff points no statute or 2 Plaintiff also claim s that the FLSA entitles him to com pensatory and punitive dam ages, but the section he cites, 29 U.S.C. § 216(b), provides for such dam ages only for violations of 29 U.S.C. § 215(a)(3), which concerns retaliation, not failure to pay wages. See Solis v. SCA Rest. Corp., 938 F. Supp. 2d 380 , 40 3 (E.D.N.Y. 20 13). 10 contract that would perm it him to recover fees here, and the Court is aware of none. His attorney’s fees, therefore, cannot be used to satisfy the m atter-in-controversy requirem ent. CON CLU SION For the foregoing reasons, plaintiff’s federal cause of action is patently m eritless, and it is clear that the am ount in controversy in this case never reached $ 75,0 0 0 .0 0 , which divests the Court of jurisdiction over plaintiff’s rem aining state and com m on law claim s. His m otion for a default judgm ent is therefore DENIED, and his Com plaint is DISMISSED without prejudice to the refiling of the claim s over which this Court lacks jurisdiction in state court. The Clerk of Court is directed to close this case. SO ORDERED. Dated: Brooklyn, New York February 3, 20 15 / s/ I. Leo Glasser Senior United States District J udge 11
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