Maor v One Fifty Fifty Seven Corp.

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Maor v One Fifty Fifty Seven Corp. 2018 NY Slip Op 30655(U) April 11, 2018 Supreme Court, New York County Docket Number: 158840/2014 Judge: Jennifer G. Schecter Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 1] NYSCEF DOC. NO. 195 INDEX NO. 158840/2014 RECEIVED NYSCEF: 04/13/2018 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 57 ----------------------------------------x MARSHALL MAOR, on behalf of himself and others similarly situated, DECISION AND ORDER Index No. 158840/2014 Plaintiffs, -againstONE FIFTY FIFTY SEVEN CORP d/b/a RUSSIAN TEA ROOM; RTR FUNDING GROUP, INC., GERALD LIEBLICH and any other related entities, Defendants, ----------------------------------------x JENNIFER G. SCHECTER, J.: Motion sequence numbers 004 and 005 are consolidated for disposition. In motion sequence number 004, pursuant to CPLR 3212, defendants One Fifty Fifty Seven Corp. d/b/a The Russian Tea Room (The Russian Tea Room), RTR Funding Group, Inc., (RTR) and Gerald Lieblich (collectively Defendants) , move for summary judgment dismissing the action. In motion sequence number 005, plaintiff moves for an order' certifying this case as a class action and granting leave to amend the complaint to include Gina Garcia as a named plaintiff. Background Defendants operate a restaurant and event venue known as The Russian Tea Room. Permanent wait staff are employed for the main dining room, which serves primarily as a restaurant 2 of 13 [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 2] NYSCEF DOC. NO. 195 RECEIVED NYSCEF: 04/13/2018 Index No. 158840/14 Page 2 Maor v One Fifty Fifty Seven Corp. (Memorandum in Support 004 [Sup] at 3). catered events, Staffing INDEX NO. 158840/2014 Defendants (Ambitious) (Sup catered event, hire at For all banquets and workers 3). Before through Ambitious each banquet or Defendants inform Ambitious of the date and time of the event and the number of wait staff needed. The wait staff hired for each event arrive at the Russian Tea Room in their own uniforms. in a They sign in and participate pre-event meeting conducted by The managers to discuss the event, tasks, Russian Tea Room assignments and menu (Sup at 4-6, 10-11; Memorandum in Opposition 004 [Opp] at 5~ 6) . After the event, Defendants pay Ambitious a flat rate per waiter or waitress and Ambitious then pays the wait staff (Sup at 4-5, 9). Banquet wait staff are paid three to four times the tipped minimum wage amount (Sup at 4). Named plaintiff Marshall Maor and proposed named plaintiff Gina Garcia are professional banquet waiters (Sup at 5). Maor worked at approximately three events at The Russian Tea room over a two month period in 2009 (Sup at l; Opp at 7). Garcia also worked as a banquet server at Defendants' catered events on numerous occasions from 2008 through 2010 1 7) . 3 of 13 (Opp at [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 3] INDEX NO. 158840/2014 NYSCEF DOC. NO. 195 RECEIVED NYSCEF: 04/13/2018 Maor v One Fifty Fifty Seven Corp. Index No. 158840/14 Page 3 Maor commenced this action, others similarly situated, on behalf of himself and seeking recovery gratuities pursuant to New York Labor Law Opp at 7) . of unpaid 196-d (Sup at 1; § Plaintiff alleges that customers seeking a banquet or catered event are provided a contract that includes a "service charge," typically 22%, without disclosing that the collected fees are not paid to the wait staff (Opp at 10, 1213) . Plaintiff maintains that without a disclaimer on Defendants' banquet "service charge," a reasonable customer would presume that such a charge was, in fact, a gratuity, and that, because he and other wait staff were not paid these gratuities, Defendants violated the Labor Law. Defendants move for summary judgment urging that the action should be dismissed because Maor was an independent contractor, not an employee; therefore, the statute does not apply to him. maintained Plaintiff contends that because Defendants sufficient control over banquet wait staff, a question of fact precludes summary judgment particularly at this early stage before discovery has been completed. Plaintiff moves for class certification and for leave to amend the complaint to add Gina Garcia as. a named plaintiff. 4 of 13 [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 4] NYSCEF DOC. NO. 195 INDEX NO. 158840/2014 RECEIVED NYSCEF: 04/13/2018 Index No. 158840/14 Page 4 Maor v One Fifty Fifty Seven Corp. Analysis Summary Judgment Summary Judgment is a drastic remedy that should not be granted if there is any doubt as to the ~~istence of material triable issues(see Glick & Dolleck v Tri-Pac Export Corp, 22 NY2d 439, 441 [1968] [denial of summary judgment appropriate where an issue is "arguable"] ; Sosa v 46th Street Develop. LLC, 101 AD3d 490, 493 [1st Dept 2012]). The burden, which is a "heavy one," is on the movant to make a prima facie showing of entitlement to judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of any disputed material facts (see William J. Jenack Estate Appraisers and Auctioneers, Inc. v Rabizadeh, 22 NY3d 470, 475 [2013]) . Once the movant has made this showing, then shifts to the opponent to establish, the burden through competent evidence, that there is a material issue of fact that warrants a trial (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Plaintiff seeks recovery pursuant to New York Labor Law (NYLL) § 196-d. The statute provides: "No employer or his agent or an officer or agent of any corporation, or any other person shall demand, accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee. 5 of 13 [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 5] NYSCEF DOC. NO. 195 RECEIVED NYSCEF: 04/13/2018 Index No. 158840/14 Page 5 Maor v One Fifty Fifty Seven Corp. (NYLL § INDEX NO. 158840/2014 Nothing in this subdivision shall be construed . as affecting practices in connection with banquets and other special functions where a fixed percentage of the patron's bill is added for gratuities which are distributed to employees . " 196-d) . 1 Defendants urge that this action must be dismissed as Maor was not an employee of Defendants, but rather, an independent contractor not covered under the statute (Sup at 13-14). "In determining whether an employment relationship exists for section 196-d purposes, a court looks to the 'degree of control exercised by the purported employer over the results As to produced or the means used to achieve the results.' assessing relevant control in this non-exhaustive factors: worked at his own convenience, employment, (3) received context, Bynog 'whether outlined the five worker (1) (2) was free to engage in other fringe benefits, (4) was on the employer's payroll and (5) was on a fixed schedule'" (Maor v Hornblower New York, LLC, 51 Misc 3d 1231[A] [Sup Ct, New York County 2016]; Bynog v Cipriani Group, 1 NY3d 193, 198 [2003]). 1 Mandatory charges can be considered Labor Law § 196-d "when it is shown that represented or allowed their customers to charges were in fact gratuities for their (Samiento v World Yacht Inc., 10 NY3d 70, 6 of 13 gratuities under employers believe that employees" 81 [2008]). [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 6] INDEX NO. 158840/2014 NYSCEF DOC. NO. 195 RECEIVED NYSCEF: 04/13/2018 Maor v One Fifty Fifty Seven Corp. In Bynog, the Court Index No. 158840/14 Page 6 found that the workers were independent contractors rather than employees for section 196d purposes. plaintiffs defendants' Critical worked to at the their competitors and Court's own reasoning was discretion, were under worked the that for "exclusive direction and control" of the temporary service that hired and paid them (Bynog, 1 NY3d 193). Defendants contend that similar to those in Bynog. the facts in this case are Maor was not hired by Defendants, provided services at other catering halls, provided his own uniform, did not have a fixed schedule with Defendants, did not receive any fringe benefits and was not on Defendants' payroll (Sup at 5- 10, 15-16). Although a number of factors reflect lack of control, plaintiff urges that exercised direction, Defendants directly and supervision and control staff and that Ambitious served invoicing [The Russian Tea Room] nothing else" (Opp at 18). "merely as exclusively over banquet a paymaster for workers' services - and Unlike in Bynog, plaintiff claims that Ambitious had no role in controlling or supervising the wait staff's work at the Russian Tea Room. Maor and Garcia testified that Defendants were present at events monitoring and checking that "everybody was doing everything they were 7 of 13 [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 7] NYSCEF DOC. NO. 195 INDEX NO. 158840/2014 RECEIVED NYSCEF: 04/13/2018 Maor v One Fifty Fifty Seven Corp. supposed to do" and would instruct the wait staff 15-20 times "throughout the whole night" Defendants Index No. 158840/14 Page 7 have not (Opp at 18-19) met their "heavy burden" of establishing that plaintiff was not an employee covered by the Labor Law as a matter of law because there is a question of fact as to the control Defendants exercised "over the results produced or the means used to achieve the results" (contrast Bynog, 1 NY3d at 199 [staffing agency controlled and directed the work, was present at events and provided staff training and handbooks on how to conduct themselves] ; with see Connor v Pier Sixty, LLC, 29 Misc 3d 1220 [A] [Sup Ct, New York County 2010] [determination of whether a worker is an employee within the meaning of Labor Law § 196-d requires a factual assessment of the degree of control exercised by defendants] ) . In addition and based on the limited discovery conducted, Defendants have not established that the action should be dismissed as against Gerald Lieblich and RTR and that as a matter of law they are not "employers" under Labor Law Article 6 (see Bonito v Avalon Partners, Inc., 106 AD3d 625 [1st Dept 2013] ; Picard v Bigsbee Enters., Inc., 55 Misc 3d 1221 [A] [Sup Ct, Albany County 2017] [summary judgment denied because record did not establish whether there 8 of 13 was actual exercise and [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 8] NYSCEF DOC. NO. 195 RECEIVED NYSCEF: 04/13/2018 Index No. 158840/14 Page 8 Maor v One Fifty Fifty Seven Corp. control INDEX NO. 158840/2014 over the operations of defendant businesses and plaintiff employees]) Defendants have, however, demonstrated that the unjust enrichment claim must be dismissed. Significantly, the cause of action is based on the exact same allegations that form the basis of the Labor-Law claim. viable claim pursuant If ultimately there is no to Labor Law 196-d, § it would be because the Legislature did not intend for workers such as Maor to receive a portion of the service charge as a gratuity and there would be no injustice or inequity to be redressed. 2 Class Action Plaintiff commenced this action on behalf of himself and a putative class of individuals (Plaintiffs) who worked in food-service capacities for Defendants since September 2008 (Memorandum in Support 005 [Supp] at 6) order (1) certifying this action as Plaintiff seeks an a class action, (2) designating Virginia & Ambinder, LLP and Leeds Brown Law, PC as class counsel, (3) approving for publication the proposed Notice of Class Action Lawsuit and Publication Order and (4) leave to amend the complaint to add Gina Garcia as a named plaintiff. 2 Plaintiff has withdrawn the breach of contract cause of action (Opp at 24 n 9). 9 of 13 [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 9] NYSCEF DOC. NO. 195 INDEX NO. 158840/2014 RECEIVED NYSCEF: 04/13/2018 Maor v One Fifty Fifty Seven Corp. Index No. 158840/14 Page 9 Plaintiff's motion for class certification is governed by CPLR 901 and 902 requiring common questions of fact or law to predominate over issues that are specific to individual class members (City of New York v Maul, 14 NY3d 499, 508 [2010]). CPLR 901(a) sets forth prerequisites for class certification: " ( 1) the class is so numerous that j cinder of all members, whether otherwise required or permitted, is impracticable; (2) there are questions of law or fact common to the class which predominate members; over ( 3) any questions affecting only individual the claims or defenses of ' the representative parties are typical of the claims or defenses of the class; ( 4) the representative parti~s will fairly and adequately protect the interests of the class; and (5) a class action is superior to other available methods for the fair and efficient adjudication of the controversy." These factors are of ten "referred to as the requirements of numer'osi ty, commonality, typicality, adequacy of representation and superiority" (City of New York, 14 NY3d at 508) . The criteria for certification are broadly and liberally construed 509) . class (id. at Significantly, courts have held that "'the merits of the claim are not at issue' on a motion to certify a class, but that, instead plaintiffs must 'satisfy the minimal threshold of establishing that their cl~im is not a sham'" 10 of 13 [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 10] NYSCEF DOC. NO. 195 INDEX NO. 158840/2014 RECEIVED NYSCEF: 04/13/2018 Index No. 158840/14 Page 10 Maor v One Fifty Fifty Seven Corp. (Maor v Hornblower New York, 51 Misc 3d 1231[A] LLC, at *2 [Sup Ct, New York County 2016] citing Weinstein v Jenny Craig Operations, Inc., 138 AD3d 546, 547 [1st Dept 2016]). A class action is an appropriate method of adjudication given that the damages suffered by individual class members may be insignificant and the costs of prosecuting individual actions would result in the class members not having their day in court (id. at *3) Plaintiffs have satisfied the prerequisites of CPLR 901. Plaintiffs allege that "as many as 40 servers could work at a single event" undesirable common and and that (Supp at 18) predominate individual class members. j oinder both impracticable and Questions of law and fact are over is questions affecting only Specifically, Plaintiffs claim that whether Defendants imposed charges upon banquet customers that were gratuities, whether Defendants had an obligation to pay the funds to Plaintiffs and whether the class members should receive compensation are all common questions to the class and are at the core of the action (Supp at 20) . 3 Additionally, in 3 Defendants urge that there is no commonality because each class member must first demonstrate employment status. However, the record indicates that at a minimum all banquet wait staff were hired through Ambitious and the critical determination will be whether these workers are to be considered "employees" under the Labor Law. Certification of this class will ultimately generate common answers for its members (Memorandum in Opposition 11 of 13 [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 11] NYSCEF DOC. NO. 195 INDEX NO. 158840/2014 RECEIVED NYSCEF: 04/13/2018 Maor v One Fifty Fifty Seven Corp. Index No. 158840/14 Page 11 this action plaintiff and proposed plaintiffs' typical of the members of the class as claims are they worked for Defendants in food service roles at various times from 2008 through the present. Maor and Garcia allege that Defendants imposed a service charge at banquets and catered events that the Plaintiffs would be entitled to. seek to recover unpaid gratuities Because Maor and Garcia for .themselves and the members of the proposed class and would be represented by competent counsel, they may adequately and fairly represent the interests of the class (see Supp at 24-26). A class action is the most efficient method for the fair adjudication of this controversy. 4 Finally, leave to amend the complaint to add Gina Garcia is granted pursuant to CPLR 3025 (b) as she has sufficient knowledge of the claims, is similarly situated to the class members and her addition as a named representative in no way prejudices Defendants (CPLR 3025[b]). Accordingly, it is 005 at 19-20; compare Corsello v Verizon New York, Inc., 18 NY3d 777 [2012] ) . 4 Plaintiffs' counsel has represented that "no other individual instituted an action against Defendants in New York State court for underpayment of wages" (Supp at 28-29; CPLR 902) . 12 of 13 [*FILED: NEW YORK COUNTY CLERK 04/13/2018 09:51 AM 12] NYSCEF DOC. NO. 195 RECEIVED NYSCEF: 04/13/2018 Maor v One Fifty Fifty Seven Corp. ORDERED that (motion sequence Defendants' of contract Index No. 158840/14 Page 12 motion for summary judgment is granted to the limited extent that 004) the unjust enrichment breach INDEX NO. 158840/2014 cause of action is dismissed. cause of action, moreover, has withdrawn and is therefore no longer part of the action·. The been It is further ORDERED that plaintiff's motion for leave to amend the complaint to add Gina Garcia as a named plaintiff sequence 005) accordingly. (motion is granted and the caption shall be amended Plaintiffs are to serve a copy of this order on the Clerk of the Court and the Clerk of the Trial Support Office who are directed to amend the court's records; it is further ORDERED that plaintiff's motion for class certification under CPLR 901 and 902 (motion sequence 005) is granted. This is the decision and order of the court. Dated: April 11, 2018 HON. JE 13 of 13 SCHECTER

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