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In Aidape, the Court stressed that the plaintiff therein did not work at three of the four restaurants comprising the single integrated enterprise and, therefore, had no personal knowledge of their policies and practices.
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Index No. 151381/2022
07-21-2023
Rafael Aldape, Plaintiff, v. Ocinomled, Ltd., BALARINI RESTAURANT CORP., FIVE M CORP., 50/50 RESTAURANT CORP., MILAN LICUL, BRANKO TURCINOVIC, OMER GRGUREV, FERDO GRGUREV, Defendant.
Unpublished Opinion
Dakota D. Ramseur, J.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55 were read on this motion to/for ORDER MAINTAIN CLASS ACTION.
In February 2022, plaintiff Rafael Aldape commenced this class action against corporate defendants Ocinomled, LTD (d/b/a Delmonico Restaurant), Balarini Restaurant Corp. (d/b/a Arno Ristorante), Five "M" Corp. (d/b/a DK Restaurant), and 50/50 Restaurant Corp. (d/b/a Scaletta Restaurant), and individual defendants Milan Licul, Branko Turcinovic, Omer Grgurev, and Ferdo Grgurev. Plaintiff, a former employee at Delmonico Restaurant from 2018 to 2019, alleges that the individual defendants own and operate the four restaurants as part of a common enterprise and that tip and wage policies at these restaurants violate several provisions of the New York Labor Law. In this motion sequence, plaintiff moves pursuant to CPLR 901 and 902 for pre-discovery class certification. The proposed class consists of "all non-exempt employees employed by Defendants at Defendants' Restaurants on or after March 2, 2015, to the present." (See NYSCEF doc. no. 14 at 2, plaintiff's proposed notice to class.) Defendants oppose class certification. For the following reasons, plaintiff's motion for class certification is denied.
Balarini, Licul, and Turcinovic oppose the motion separately from Ocinomled, Grgurev, and Grgurev and from Five "M." (See NYSCEF doc. no. 28, Balarini, Licul, and Turcinovic's memo in opp.; NYSCEF doc. no. 47, Ocinomled, Grgurev, and Grgurev's memo in opp.; NYSCEF doc no. 48, Five "M"'s memo in opp.)
BACKGROUND
From January 2018 through April 2019, plaintiff was employed as a busser at Delmonico Restaurant at 56 Beaver Street, New York, New York in Lower Manhattan. Throughout his employment, plaintiff was paid hourly based on New York's minimum wage for service employees. (NYSCEF doc. no. 24 at ¶ 8, plaintiff's affidavit in support.) Plaintiff alleges Delmonico distributed his and his coworkers' compensation using policies that violate provisions of Title 12 of the New York Code, Rules and Regulations Law, governing compensation for service work, and Article 6 of the New York Labor Law. Under §146-1.3 of the code, an employer may pay service employees at a rate that is lower the basic minimum hourly rate (a practice known as taking a "tip credit") so long as the employees receive a tip-inclusive wage that is equal to or greater than the minimum hourly rate and only after the employer gives notice of the amount of credit taken prior to the start of employment. (See 12 NYCRR §146.1.3 [a], §146-2.2 [a].) Meanwhile, where an employee does both tipped and non-tipped work on a given shift, §146-2.9 prohibits an employer from claiming a tip credit where the non-tipped work is either (a) for two or more hours or (b) for more than twenty percent of his or her shift (whichever is less). (12 NYCRR § 146-2.9.) Here, plaintiff avers that Delmonico failed to give him notice of its claimed tip-credit prior to starting his employment in January 2018 (NYSCEF doc. no. 24 at ¶ 7), and that Delmonico sometimes required him to clean, sweep, and mop the restaurant and perform other non-tipped work for more than twenty percent of his shift, such that it was not entitled to take tip credits for his work on those days. (Id. at ¶ 8; NYSCEF doc. no. 15 at 12, plaintiff's memo in supp.)
As to alleged New York Labor Law violations, § 196-d proscribes employers and their agents from accepting or demanding any part of the gratuities received by their employees. (Labor Law § 196-d; see also 12 NYCRR § 146-2.14 [e] ["[To be eligible to receive shared tips] employees must perform, or assist in performing, personal service to patrons at a level that is a principal and regular part of their duties and is not merely occasional."]) According to plaintiff, several Delmonico managers participated in the tipping pool despite (1) being agents of Delmonico and (2) not performing duties that make them eligible for tip sharing. (NYSCEF doc. no. 24 at ¶10.) Further, plaintiff alleges that Delmonico developed an unlawful time-shaving policy in which he was forced to deduct two hours for meal breaks on days he worked from 4:00 p.m. to 11:00 p.m. even though Delmonico required him to be on-call during such breaks and often required him to work through them. (NYSCEF doc. no. 2 at ¶ 36, complaint). Accordingly, plaintiff alleges that he was not paid approximately four to six hours per week for which he was not compensated in violation of Labor Law § 652. (NYSCEF doc. no. 24 at ¶10.)
Plaintiff brought this action on behalf of all non-exempt employees (including hosts, servers, bussers, cooks, line cooks, food preparers, bartenders, barbacks, dishwashers, porters, and delivery persons) employed at defendants' restaurants, alleging that the individual defendants own and operate the four restaurants as a single entity (NYSCEF doc. no. 2 at ¶ 16) and that they violated the above-described statutes at each restaurant through similar compensation policies. Plaintiff relies exclusively on alleged conversations he had with six other busboys at Delmonico, each of whom, he asserts, had previously worked at one of the other three defendant-owned restaurants and had described to him similar policies. (NYSCEF doc. no. 24 at ¶ ¶ 3 ["Based on my work experience and my personal observations and conversations with co-workers, I know that all employees employed by Defendants were subject to the same wage and hour policies."].) Plaintiff does not include affidavits from these other busboys, nor does he detail any of the conversations that he had with them. Other than stating that the compensation policies at the three other restaurants were the same as the ones at Delmonico, plaintiff provides no factual details relating to a tip scheme involving managers, notice of a tip credit, tip credits for non-tipped work, or time-shaving. (See id. at ¶3-11.)
On the instant motion, plaintiff moves to certify the class with him as its class representative.
DISCUSSION
CPLR 902 provides that a class action may only be maintained if the five prerequisites promulgated by CPLR 901 (a) are met. (Pludeman v Northern Leasing Sys., Inc., 74 A.D.3d 420, 421 [1st Dept 2010]; CPLR 902.) These prerequisites are: (a) (1) the class is so numerous that joinder of all members is impracticable (numerosity); (2) questions of law or fact common to the class predominate over questions of law or fact affecting individual class members (commonality); (3) the claims or defenses of the class representatives are typical of those in the class (typicality); (4) the class representatives will fairly and accurately protect the interest of the class; and (5) a class action represents the superior method of adjudicating the controversy (superiority). (Id.; CPLR 901 [a].)
The party seeking class certification bears the burden of establishing the prerequisites provided by CPLR 901 (a) by tendering evidence in admissible form. (Weinstein v Jenny Craig Operations, Inc., 138 A.D.3d 546, 547 [1st Dept 2016]; Kudinov v Kel-Tech Constr. Inc., 65 A.D.3d 481, 481 [1st Dept 2009].) Conclusory allegations are insufficient to satisfy the moving party's burden. (Feder v Staten Island Hosp., 304 A.D.2d 470, 471 [1st Dept 3003]; Pludeman, 74 A.D.3d at 422.) Whether these prerequisites have been met and thus, whether a lawsuit qualifies as a class action, rests within the sound discretion of the trial court. However, the court must be mindful that class certification should be liberally construed. (Kudinov, 65 A.D.3d at 481.) Here, while the Court recognizes that "claims for uniform systemwide wage violations are particularly appropriate for class certification" since the cost of litigating individually often outweighs the value of the individual's claim (Andryeyeva v New York Health Care, Inc., 33 N.Y.3d 152), it nonetheless finds class certification inappropriate.
Whether categorized as a numerosity, commonality, or typicality problem, plaintiff's affidavit in support of class certification relies entirely on conclusory allegations and inadmissible hearsay evidence to support the proposition that potential class members at Arno Ristorante, DK Restaurant, and Scaletta Restaurant exist and were harmed by the same policies that existed at Delmonico. In paragraph three of his affidavit, plaintiff asserts that he spoke to his six co-workers who previously worked at these other restaurants. "Based on [these] conversations," plaintiff alleges that "other employees (including, but not limited to individuals listed in ¶ 3)" were (1) "required to work through their meal breaks and were similarly time-shaved (paragraph 5), (2) "[did not] receive such legally required notice [of tip credits]" (paragraph 7), (3) "similarly engaged non-tipped activities for twenty percent or more of their workdays (paragraph 8) and (4) "similarly subject to an illegal tip pool, which they did not consent to, that included managers (paragraph 9)." (NYSCEF doc. no. 24.)
Since plaintiff has not supplied the Court with supporting affidavits from said co-workers corroborating (1) that they worked at defendants' other restaurants and (2) the accuracy of plaintiff's assertions that these wage policies were in effect in the three other restaurants, the only evidence left is plaintiff's description of violations at the three other restaurants based on vague, non-specific conversations he had at some point in time rather than personal knowledge. Such a dearth of evidence means that the existence of potential class members at Arno, DK, and Scaletta Restaurants remains entirely speculative at this point and does not meet even the liberal standard for granting class certification. (See Feder 304 A.D.2d at 471 [holding that plaintiff's conclusory statement that they, as well as thousands of others, suffered injury caused by the defendant was patently insufficient to demonstrate the predominance of common questions of law and fact to the class or that plaintiff's claims are typical of the class]; Weinstein v Jenny Craig Operations, Inc., 138 A.D.3d 546, 547 [1st Dept 2016] [finding plaintiffs minimum threshold for establishing their claim was not a sham by submitting sworn testimony from four employees and a center director attesting to time-shaving allegations] Placinta v Grazina Pilka, Inc., 2018 U.S. Dist Lexis 179222 [EDNY 2018] [determining that deposition testimony and affidavits, including one from a co-worker corroborating plaintiffs' claims, sufficient for certification purposes of a class of servers, bussers, bartenders and "all other employees who regularly and customarily receive tips" asserting various wage-theft claims under the Fair Labor Standards Act and New York Labor Law]; Lewis v Hallen Constr. Co. Inc., 193 A.D.3d 511, 512 [1st Dept] ["Affidavits by both the named plaintiffs and three other former employees of defendant attesting that at least 30-50 workers performed the work at issue establish the numerosity, and commonality and typicality are established by the fact that all claims arise from defendant's alleged failure to pay prevailing wages"]; Sanches v JMP Ventures, LLC, 2014 U.S. Dist. LEXIS 14980 at *5 [SDNY 2014] [holding that plaintiff's affidavit-the sole affidavit submitted in support of certification motion-insufficient to grant class certification, where said affidavit did not provide any details as to a single such observation or conversation as to the "common" unlawful employment practices at the defendant's third restaurant (emphasis in original).]) These cases demonstrate that while the threshold for class certification is low, courts will not rubber stamp certification and that a plaintiff must proffer some evidence as to the existence of a potential class of people harmed by an allegedly unlawful business practice.
Plaintiff contends that it has met the minimum evidentiary threshold for establishing class certification given that, in determining whether each prerequisite has a factual basis, courts may rely on hearsay in their calculus. (NYSCEF doc. no. 53 at 7, plaintiff's reply memo of law; citing Maor v Hornblower NY, LLC, 2016 NY Slip Op 50891 [U] [Sup. Ct. NY County 2016] and Molina v Two Bros. Scrap Metal Inc., 2018 NY Slip Op 32537 [U] [Sup. Ct. Nassau County 2018].) Plaintiff notes that, in Maor, the court rejected the defendant's position that plaintiff failed to demonstrate the commonality prerequisite because portions of his affidavit contained hearsay. (Maor, 2016 NY Slip Op. 50891 at *7) Similarly, in Molina, which cites Maor, the court explained that "while plaintiffs 'bear the burden to tent admissible evidence' in support of their motion there is no rule barring a court from considering other [i.e. hearsay] evidence on a motion for class certification. (Molina, NY Slip Op. 32537 at *4.) Contrary to plaintiff's position, however, the holding from these two cases is that the plaintiffs demonstrated the prerequisites based on admissible evidence alone. (See Maor, 2016 NY Slip Op. 50891 at *7 ["Defendants rely on inapposite federal cases to support its argument which held that plaintiff failed to create a factual basis to defeat summary judgment as he proffered only 'inadmissible hearsay evidence (emphasis added, citation omitted)'";] Molina, 2018 NY Slip Op 32537 at * 4 [finding plaintiff bears the burden to tender admissible evidence in support of their motion, "which they have done."]) As such, these cases are not instructive where the only evidence of a potential class is inadmissible hearsay evidence.
Given that plaintiff has failed to provide evidentiary support for its class action claims, the Court need not address the parties' respective arguments as to whether the individual defendants operated the four restaurants as part of a single entity or common enterprise. It should also be noted that despite finding class certification to be inappropriate as submitted herein, the Court does not preclude plaintiff from seeking class certification in the future.
Accordingly, for the foregoing reasons, it is hereby, ORDERED that plaintiff Rafael Aldape's motion for class certification pursuant to CPLR 901 and 902 is denied; and it is further
ORDERED that the parties shall appear at 60 Centre Street, Courtroom 341 at 10 a.m. on August 22, 2023, for a preliminary conference with the Court; and it is further
ORDERED that counsel for defendants Balarini Restaurant Corp, Milan Licul, and Branko Turcinovic, shall serve a copy of this order, along with notice of entry, on all parties within ten (10) days of entry.
This constitutes the Decision and Order of the Court.