Opinion
Index No. 151307/2020
09-29-2021
Leandro GUERRERO, Biljana Vulicevic, Paola Julca, Jenny Baez Rosa, Carlos Risco, Juleissy Maria Vargas, Slavica Terzeu, Jose Aria Arroyo, Diosy Alexander Bido, Augusto Pilier, Adisa Ahasanagic, Larissa Polanco, Sladjana Popa, Lauren Jouvert, Bianca Felciciano, Edilma McNamee, Mayra Vargas Pineda, Jose Virella, Anthony Dume, Marijana Tomic, Sanela Harbas, Nadka Evtimova Zaimovaa, Gisella Cornejo, Cesar Mejia, Steffon Houser, Lydia Diana, Tenzin Rabgyal, Jennifer Perez, Julissa Jimenez Detorres, Fidelina Espinal, Carolina Molina, Marjorie Conforme, Me Me New, Marleni Garcia De Toribio, Anila Velo, Sandra Reynoso, Marina M. Matias, Dwayne Campbell, Carmen Haro, Christina Fonseca, Maribel Perez, Keisha Oquendo, Katica Sajin, Jefferson A. Rodas Ramirez, Florika Popa, Ardens G. Eugene, Jr., and Maida Mendez Torres, Plaintiffs v. CLUB QUARTERS MANAGEMENT COMPANY, LLC, 52 William Street Company, LLC, Masterworks Development Co., LLC, McSam Hotel Group, LLC, SCCQ Downtown, LLC f/d/b/a Club Quarters Wall Street, d/b/a Radisson Hotel New York Wall Street, any other entities affiliated with or controlled by Club Quarters Wall Street, Wall Management Company, LLC, and Sam Chang, Defendants.
For Plaintiffs, Rachel Feingold Esq. and James E. Murphy Esq., Virginia & Ambinder, LLP, 40 Broad Street, New York, NY 10004 For Defendants, Jennifer M. Horowitz Esq., Epstein Becker & Green P.C., 875 3rd Avenue, New York, NY 10022
For Plaintiffs, Rachel Feingold Esq. and James E. Murphy Esq., Virginia & Ambinder, LLP, 40 Broad Street, New York, NY 10004
For Defendants, Jennifer M. Horowitz Esq., Epstein Becker & Green P.C., 875 3rd Avenue, New York, NY 10022
Lucy Billings, J. I. BACKGROUND
Plaintiffs move to amend their complaint. C.P.L.R. § 3025(b). All remaining defendants collectively cross-move to dismiss the complaint, whether in its original form or in its proposed amended form, and for sanctions. C.P.L.R. § 3211(a)(1) and (7) ; 22 N.Y.C.R.R. § 130-1.1. Since defendants do not otherwise oppose plaintiffs’ motion, the court focuses on the facts alleged in the complaint and presumes them to be true. Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v. Matthew Bender & Co., Inc. , 37 N.Y.3d 169, 175, 150 N.Y.S.3d 79, 171 N.E.3d 1192 (2021) ; Connaughton v. Chipotle Mexican Grill, Inc. , 29 N.Y.3d 137, 141, 53 N.Y.S.3d 598, 75 N.E.3d 1159 (2017) ; Seaman v. Schulte Roth & Zabel LLP , 176 A.D.3d 538, 538, 111 N.Y.S.3d 266 (1st Dep't 2019).
Plaintiffs are workers who were employed at a building at 52 William Street, New York, New York, which operated as the Wall Street Hotel. They allege that defendants McSam Hotel Group, LLC, a hotel developer, SCCQ Downtown, LLC, a subsidiary of McSam Hotel, and Sam Chang, founder, sole member, and manager of McSam Hotel, purchased the building from its prior owner in January 2017. Aff. of James E. Murphy Ex. A (Compl.) ¶ 66, NYSCEF No. 45. On August 2, 2019, defendants McSam Hotel, SCCQ Downtown, and Chang entered a Termination Agreement with the entity that had been managing the hotel. Id. ¶ 61. Those defendants also terminated all plaintiffs’ employment on August 2, 2019, and then engaged defendant Wall Management Company, LLC, to manage and operate the Wall Street Hotel. Id. ¶¶ 63, 71.
Plaintiffs commenced this action February 5, 2020, claiming under the New York City Displaced Building Service Workers Protection Act. N.Y.C. Admin. Code § 22-505. The current proposed amended complaint's sole cause of action is defendants’ discharge of plaintiffs without a transition employment period of 90 days and defendants’ failure to continue employing plaintiffs whose work was evaluated as satisfactory, as the Act requires. The proposed amended complaint also removes several plaintiffs and defendant entities alleged to have been involved with the hotel's operation before the August 2019 Termination Agreement.
II. MOTION TO AMEND THE COMPLAINT
Leave to amend a pleading is freely granted unless the amendment would surprise or otherwise prejudice the opposing parties, Davis v. South Nassau Communities Hosp. , 26 N.Y.3d 563, 580, 26 N.Y.S.3d 231, 46 N.E.3d 614 (2015) ; Kimso Apts., LLC v. Gandhi , 24 N.Y.3d 403, 411, 998 N.Y.S.2d 740, 23 N.E.3d 1008 (2014) ; Mashinsky v. Drescher , 188 A.D.3d 465, 466, 131 N.Y.S.3d 891 (1st Dep't 2020) ; Global Liberty Ins. Co. v. Tyrell , 172 A.D.3d 499, 500, 101 N.Y.S.3d 45 (1st Dep't 2019), or the amendment lacks merit. C.P.L.R. § 3025(b) ; Avail 1 LLC v. Acquafredda Enters. LLC , 184 A.D.3d 476, 477, 124 N.Y.S.3d 196 (1st Dep't 2020) ; Brook v. Peconic Bay Med. Ctr. , 172 A.D.3d 468, 469, 102 N.Y.S.3d 1 (1st Dep't 2019) ; Jean-Baptiste v. 153 Manhattan Ave. Hous. Dev. Fund Corp. , 124 A.D.3d 476, 477, 2 N.Y.S.3d 441 (1st Dep't 2015) ; Onetti v. Gatsby Condominium , 111 A.D.3d 496, 497, 975 N.Y.S.2d 27 (1st Dep't 2013). Plaintiffs move to amend their complaint to remove plaintiffs who were ineligible for protection under the Displaced Building Service Workers Protection Act, to correct plaintiffs’ dates of employment, to remove defendants that the court dismissed upon their prior motion to dismiss the action against them, and to add allegations against the owner defendants and manager defendant.
Defendants oppose on the ground that the amendment is futile, as it attempts to claim under the 2002 Displaced Building Service Workers Protection Act (DBSWPA), which defendants maintain does not apply to plaintiffs. Defendants insist that, because plaintiffs worked in a hotel, they would be protected only by the Displaced Hotel Service Workers Protection Act (DHSWPA), enacted September 28, 2020, after plaintiffs’ employment was terminated and thus too late to protect plaintiffs here. N.Y.C. Admin. Code § 22-510. Defendants point out that the DBSWPA and the later DHSWPA are nearly identical, differing only as to what type of employee they protect. Plaintiffs reply that the DHSWPA does not preclude plaintiffs from claiming under the DBSWPA, as long as plaintiffs provide the types of services listed in the earlier statute applicable to building service workers.
The DBSWPA requires a covered employer with a terminating building service contract to request the departing building service provider to give the employer or the incoming building service provider a list of covered employees and post the list with a notice of the employees’ rights under the DBSWPA. The employer or the incoming building service provider is required to retain those employees for a transition period of 90 days and, if the employees are performing satisfactorily, to continue to employ them under the same terms and conditions. The DBSWPA provides these protections for "building service employees," defined as employees who work at a building in connection with the care or maintenance of an existing building and includes, but is not limited to, work performed by a watchman, guard, security officer, fire safety director, doorman, building cleaner, porter, handyman, janitor, gardener, groundskeeper, stationary fireman, elevator operator and starter, window cleaner, and superintendent.
N.Y.C. Admin. Code § 22-505(a). The DHSWPA provides similar protections for "hotel service employees," workers who engage in "work performed in connection with the operation of a hotel." Id. § 22-510(a). The DBSWPA is not, on its face, restricted to any particular type of building or business. Plaintiffs’ proposed amended complaint alleges that plaintiffs were engaged in care and maintenance work at the hotel, including the work performed by the types of employees listed in New York City Administrative Code § 22-505(a). Murphy Aff. Ex. E ¶¶ 7-8, NYSCEF No. 49. As the DBSWPA protects any workers who perform a particular type of work, and plaintiffs allege they performed that type of work, their claim of protection under that statute states a viable cause of action. Mashinsky v. Drescher , 188 A.D.3d at 466, 131 N.Y.S.3d 891. Their claim does not conflict with the later DHSWPA, which extended the same protections to workers with different functions, based on their employment in a specific kind of business, a hotel. Therefore the court grants plaintiffs’ motion to amend their complaint. C.P.L.R. § 3025(b).
III. CROSS-MOTION TO DISMISS THE COMPLAINT AND FOR SANCTIONS
Defendants move to dismiss the amended complaint pursuant to C.P.L.R. § 3211(a)(1) and (a)(7), based on documentary evidence and failure to state a viable cause of action. Defendants also move for sanctions against plaintiffs for their failure to discontinue this action after defendants informed plaintiffs that the enactment of the DHSWPA shows the DBSWPA does not apply to plaintiffs. 22 N.Y.C.R.R. § 130-1.1.
As discussed above, defendants contend that the DHSWPA, not the DBSWPA, would protect plaintiffs, but the DHSWPA had not been enacted when their employment was terminated. Based on the amended complaint's allegations, for the reasons explained above, the DBSWPA protects plaintiffs, even though the later enactment also might protect them in the future.
Defendants also contend, pursuant to C.P.L.R. § 3211(a)(1), that documentary evidence establishes defendants McSam Hotel and Chang are not liable to plaintiffs because neither McSam Hotel nor Chang ever owned or managed the hotel or employed plaintiffs and thus are not covered employers within the meaning of the DBSWPA or DHSWPA. To support dismissal of the amended complaint pursuant to C.P.L.R. § 3211(a)(1), the documentary evidence on which the defense is based must utterly refute or completely negate plaintiffs’ factual allegations, eliminating all material disputes regarding those facts, and "conclusively establishing a defense as a matter of law." Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v. Matthew Bender & Co., Inc. , 37 N.Y.3d at 175, 150 N.Y.S.3d 79, 171 N.E.3d 1192 ; Seaman v. Schulte Roth & Zabel LLP , 176 A.D.3d at 539, 111 N.Y.S.3d 266 (quoting Goshen v. Mutual Life Ins. Co. of NY , 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 (2002) ). See Beal Sav. Bank v. Sommer , 8 N.Y.3d 318, 324, 834 N.Y.S.2d 44, 865 N.E.2d 1210 (2007). The court accepts the amended complaint's factual allegations as true and affords plaintiffs the benefit of every favorable inference, Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v. Matthew Bender & Co., Inc. , 37 N.Y.3d at 175, 150 N.Y.S.3d 79, 171 N.E.3d 1192 ; Connaughton v. Chipotle Mexican Grill, Inc. , 29 N.Y.3d at 141, 53 N.Y.S.3d 598, 75 N.E.3d 1159 ; Seaman v. Schulte Roth & Zabel LLP , 176 A.D.3d at 538, 111 N.Y.S.3d 266, but does not afford such consideration to allegations consisting of bare legal conclusions or to factual claims flatly contradicted by the documentary evidence. Myers v. Schneiderman , 30 N.Y.3d 1, 11, 62 N.Y.S.3d 838, 85 N.E.3d 57 (2017) ; Array BioPharma, Inc. v. AstraZeneca AB , 184 A.D.3d 463, 464, 126 N.Y.S.3d 91 (1st Dep't 2020).
C.P.L.R. § 3211(a)(1) does not define "documentary evidence." A document qualifies as documentary evidence only if "(1) it is ‘unambiguous’; (2) it is of ‘undisputed authenticity’; and (3) its contents are ‘essentially undeniable.’ " VXI Lux Holdco S.A.R.L. v. SIC Holdings, LLC , 171 A.D.3d 189, 193, 98 N.Y.S.3d 1 (1st Dep't 2019) (quoting Fontanetta v. John Doe 1 , 73 A.D.3d 78, 86, 87, 898 N.Y.S.2d 569 (2d Dep't 2010) ). See Seaman v. Schulte Roth & Zabel LLP , 176 A.D.3d at 539, 111 N.Y.S.3d 266. Upon defendants’ motion to dismiss the complaint pursuant to C.P.L.R. § 3211(a)(1) or (7), the court may not consider the facts alleged by defendants’ affidavits, Serao v. Bench-Serao , 149 A.D.3d 645, 646, 53 N.Y.S.3d 628 (1st Dep't 2017) ; Calpo-Rivera v. Siroka , 144 A.D.3d 568, 568, 42 N.Y.S.3d 19 (1st Dep't 2016) ; Asmar v. 20th & Seventh Assoc., LLC , 125 A.D.3d 563, 564, 4 N.Y.S.3d 198 (1st Dep't 2015) ; City of New York v. VJHC Dev. Corp. , 125 A.D.3d 425, 426, 2 N.Y.S.3d 453 (1st Dep't 2015), but under § 3211(a)(1) the court may consider any admissible documents that these affidavits authenticate. Nomura Home Equity Loan, Inc., Series 2006-FM2 v. Nomura Credit & Capital, Inc. , 30 N.Y.3d 572, 601, 69 N.Y.S.3d 520, 92 N.E.3d 743 (2017) ; Goshen v. Mutual Life Ins. Co. of NY , 98 N.Y.2d at 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 ; Calpo-Rivera v. Siroka , 144 A.D.3d at 568, 42 N.Y.S.3d 19.
Defendants point to a Management Agreement, a Deed, and the Termination Agreement as documentary evidence that McSam Hotel and Chang were not covered employers under Administrative Code § 22-505(a). Aff. of Samar Gandhi Exs. A-C, NYSCEF Nos. 56-58. The DBSWPA defines a covered employer as:
any person who hires or retains building service employees or a building service contractor, including, but not limited to, a lessee of commercial space, housing cooperative, condominium association, building managing agent, or any other person who owns, leases or manages real property.
N.Y.C. Admin. Code § 22-505(a).
The affidavit by Samar Gandhi, a member of SCCQ Downtown, does not qualify as documentary evidence. Nor does Gandhi authenticate the Management Agreement, which is heavily redacted. Gandhi Aff. Ex. A. See Clarke v. American Truck & Trailer, Inc. , 171 A.D.3d 405, 406, 97 N.Y.S.3d 105 (1st Dep't 2019) ; B & H Florida Notes LLC v. Ashkenazi , 149 A.D.3d 401, 403 n.2, 51 N.Y.S.3d 59 (1st Dep't 2017). He merely attests, "Upon information and belief," reciting the contents of an inadmissible document, that in 2006 RCQ Hotel FD, LLC, titled as an owner, and a manager, Club Quarters Management Company, LLC, entered an agreement for the management of the hotel at 52 William Street, New York, New York. Gandhi Aff. ¶ 4, NYSCEF No. 55. See Kenneth J. v. Lesley B. , 165 A.D.3d 439, 441, 85 N.Y.S.3d 42 (1st Dep't 2018) ; AQ Asset Mgt. LLC v. Levine , 128 A.D.3d 620, 621, 13 N.Y.S.3d 1 (1st Dep't 2015) ; Shanmugam v. SCI Eng'g, P.C. , 122 A.D.3d 437, 438, 996 N.Y.S.2d 252 (1st Dep't 2014).
Plaintiffs stipulate that the court may consider the Deed, Gandhi Aff. Ex. B, authenticated and admissible. It reflects a transfer dated January 9, 2017, of the property at 52 William Street from RCQ Hotel FD, LLC, to SCCQ Downtown, LLC. Chang signed the Deed for SCCQ Downtown as its manager, but the Deed is to be returned to McSam Hotel Group, LLC, raising the inference that McSam Hotel is the new owner or affiliated with it.
Gandhi does not authenticate the Termination Agreement either, which also is heavily redacted. Id. Ex. C. He simply presents a copy of the Termination Agreement that he obtained from Club Quarters Management. Nevertheless, the Termination Agreement, dated May 6, 2019, is signed by Chang, this time as the manager of multiple entities, one of which is SCCQ Downtown, and by the same authorized signatory for Club Quarters Management and several other entities and appears to terminate the Management Agreement. Thus, even were the court to consider the Termination Agreement, it shows Chang's control of multiple affiliated entities and implicates him in the hotel's retention of a building service contractor and in the management or ownership of the hotel at 52 William Street.
Even were the court to consider all these documents, none on its face completely refutes that McSam Hotel and Chang qualified as covered employers when plaintiffs’ employment was terminated in August 2019. Nor do defendants suggest how any of these documents supports defendants’ position. The documents may show that other entities earlier retained a building service contractor or owned the hotel at 52 William Street. None, however, conclusively establishes that McSam Hotel or Chang, as part of SCCQ Downtown or an affiliated entity, did not retain a building service contractor or building service employees or own or manage the hotel at 52 William Street in August 2019. Finally, nothing indicates that the redacted parts of the documents do not implicate McSam Hotel or Chang in the retention of a building service contractor or building service employees or in the ownership or management the hotel.
Consequently, the court denies defendants’ cross-motion to dismiss the complaint and amended complaint against McSam Hotel and Chang. C.P.L.R. § 3211(a)(1) and (7) ; Goshen v. Mutual Life Ins. Co. of NY , 98 N.Y.2d at 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 ; Array BioPharma, Inc. v. AstraZeneca AB , 184 A.D.3d at 464, 126 N.Y.S.3d 91 ; Cassidy v. Greater NY Auto. Dealers Assn., Inc. , 173 A.D.3d 536, 537, 100 N.Y.S.3d 520 (1st Dep't 2019) ; Silvergrove Advisors, LLC v. Crosswing Holdings LLC , 173 A.D.3d 455, 456, 104 N.Y.S.3d 52 (1st Dep't 2019). Since the court has denied defendants’ cross-motion seeking dismissal and sustains the amended complaint, the court also denies defendants’ cross-motion seeking sanctions against plaintiffs for failing to discontinue their action.
IV. DISPOSITION
In sum, for the reasons explained above, the court grants plaintiffs’ motion to amend their complaint. C.P.L.R. § 3025(b). Plaintiffs shall file their proposed amended complaint as an amended complaint in this action. The court amends the caption of this action to reflect the discontinuance of claims by several former plaintiffs and the dismissal of several former defendants in the above captioned action. Until further order, all future documents filed in this action shall bear the amended caption:
x
LEANDRO GUERRERO, BILJANA VULICEVIC, PAOLA JULCA, JENNY BAEZ ROSA, CARLOS RISCO, JULEISSY MARIA VARGAS, SLAVICA TERZEU, JOSE ARIA ARROYO, AUGUSTO PILIER, ADISA AHASANAGIC, LARISSA POLANCO, SLADJANA POPA, LAUREN JOUVERT, EDILMA MCNAMEE, MAYRA VARGAS PINEDA, JOSE VIRELLA, ANTHONY DUME, MARIJANA TOMIC, SANELA HARBAS, NADKA EVTIMOVA ZAIMOVAA, GISELLA CORNEJO, CESAR MEJIA, STEFFON HOUSER, LYDIA DIANA, TENZIN RABGYAL, JENNIFER PEREZ, JULISSA JIMENEZ DETORRES, FIDELINA ESPINAL, CAROLINA MOLINA, MARJORIE CONFORME, ME ME NEW, MARLENI GARCIA DE TORIBIO, ANILA VELO, SANDRA REYNOSO, MARINA M. MATIAS, DWAYNE CAMPBELL, CARMEN HARO, CHRISTINA FONSECA, MARIBEL PEREZ, KEISHA OQUENDO, KATICA SAJIN, JEFFERSON A. RODAS RAMIREZ, FLORIKA POPA, and MAIDA MENDEZ TORRES, Plaintiffs
against
McSAM HOTEL GROUP, LLC, SCCQ DOWNTOWN, LLC f/d/b/a CLUB QUARTERS WALL STREET, d/b/a RADISSON HOTEL NEW YORK WALL STREET, any other entities affiliated with or controlled by CLUB QUARTERS WALL STREET, WALL MANAGEMENT COMPANY, LLC, and SAM CHANG, Defendants
Index No. 151307/2020
x
Plaintiffs’ attorney shall serve this order with notice of entry on the Clerk of the Court (60 Centre Street, Room 141B) and the Clerk of the General Clerk's Office (60 Centre Street, Room 119) who shall mark the court's records to reflect the change in the caption. Plaintiffs shall serve the Clerk of Court and the Clerk of the General Clerk's Office according to the procedures in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the "E-filing" page on the court's website at www.nycourts.gov/supctmanh).
The court denies defendants’ cross-motion to dismiss the complaint and amended complaint and for sanctions. C.P.L.R. § 3211(a)(1) and (7) ; 22 N.Y.C.R.R. § 130-1.1.