Amalgamated Service & Allied Industries Joint Board v. Supreme Hand Laundry, Inc.

182 F.R.D. 65, 14 I.E.R. Cas. (BNA) 541, 42 Fed. R. Serv. 3d 374, 1998 U.S. Dist. LEXIS 12587, 1998 WL 481522
CourtDistrict Court, S.D. New York
DecidedAugust 14, 1998
DocketNo. 94 Civ. 2904(MGC)
StatusPublished
Cited by2 cases

This text of 182 F.R.D. 65 (Amalgamated Service & Allied Industries Joint Board v. Supreme Hand Laundry, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amalgamated Service & Allied Industries Joint Board v. Supreme Hand Laundry, Inc., 182 F.R.D. 65, 14 I.E.R. Cas. (BNA) 541, 42 Fed. R. Serv. 3d 374, 1998 U.S. Dist. LEXIS 12587, 1998 WL 481522 (S.D.N.Y. 1998).

Opinion

OPINION

CEDARBAUM, District Judge.

Plaintiffs sue defendants for violation of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101-2109 (the “WARN Act”). Plaintiffs move for entry of a default judgment against defendants Supreme Hand Laundry, Inc., Budge-Wood Laundry Service, Inc., Trousseau Laundry Corp., Sylvia Gray Cleaners, Inc., Grandview Cleaners Corp., and 2350 Laundry and Dry Cleaning (the “Karten defendants”). In addition, defendant 2350 Fifth Avenue Corp. moves to amend its answer to plead a good faith violation of the WARN Act pursuant to 29 U.S.C. § 2104(a)(4). For the reasons that follow, plaintiffs’ motion for entry of a partial judgment is granted and defendant 2350 Fifth Avenue’s motion to amend its answer is denied.

Background

Plaintiffs served the summons and complaint on all defendants on July 8,1994. The complaint alleges that defendant Supreme Hand Laundry “dominated and controlled” the numerous named defendants, that all the defendants were one “employer” under the WARN Act, and that all defendants were jointly and severally liable. (Compl. HH12-14; at 8, “Prayer for Relief.”)

The Karten defendants and defendant 2350 Fifth Avenue Corp. answered on August 25, 1994. (Cary Aff., Exs. B, C.) In their answer, the Karten defendants asserted that proper notice had been given under the WARN Act. (Karten Def. Answer H 8.) In its answer, 2350 Fifth Avenue denied that it was dominated and controlled by Supreme Hand Laundry and that it was an employer under the WARN Act. (2350 Fifth Avenue Answer HH 3, 13-16.) 2350 Fifth Avenue did not assert that proper notice had been given under the WARN Act. No defendant disputed that its liability under the WARN Act could be joint and several, and no answer alleged that any violation of the WARN Act had been committed in good faith.

By Order dated October 9, 1996, Joseph Karten, Esq., the sole shareholder of four of his clients, was disqualified from representing the Karten defendants. See Amalgamated Services and Allied Industries Joint Board v. Supreme Hand Laundry, Inc., 1996 WL 583351 (S.D.N.Y. Oct. 9, 1996). Karten was disqualified under the advocate-witness rule. The record showed that Karten’s testimony was necessary to establish the corporate relationships among the defendants and his clients’ affirmative defense. Further, the record established that it was likely that Karten’s testimony would be prejudicial to the Karten defendants. Accordingly, Karten [67]*67was disqualified. Amalgamated Services, 1996 WL 583351, at *3-6.

By an Order dated October 28, 1996, the Karten defendants were instructed that a corporation cannot appear without counsel and that “unless new counsel files a notice of appearance by December 1, 1996, these corporate defendants will be in default.” To date, no new counsel has filed a notice of appearance for the Karten defendants.

Plaintiffs have moved for a default judgment against the Karten defendants by notice of motion. 2350 Fifth Avenue opposes the motion on the ground that entry of a default judgment against the Karten defendants is inappropriate under the standards of Fed.R.Civ.P. 54(b). In its first set of opposition papers, 2350 Fifth Avenue also moved to amend its answer to assert that proper notice had been given under the WARN Act. (2350 Fifth Avenue “Notice of Cross-Motion,” Ex. A, “Proposed Amended Answer,” tH 17-21.)

After oral argument of the motions, I denied the belated motion to amend on the ground that such an amendment would have unfairly prejudiced plaintiffs and was, in any event, futile. (Transcript of Oral Argument of Nov. 3,1997, at 22-25.)

2350 Fifth Avenue then raised the possibility of a different amendment, namely amending its answer to assert good faith under 29 U.S.C. § 2104(a)(4). Section 2104(a)(4) provides: “If an employer which has violated this chapter proves to the satisfaction of the court that the act or omission that violated this chapter was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of this chapter the court may, in its discretion, reduce the amount of the liability or penalty provided for in this section.” 29 U.S.C. § 2104(a)(4). Both parties were directed to brief this very belated proposed amendment.

Discussion

The Motion for Default Judgment

It is undisputed that the Karten defendants are in default. See Eagle Associates v. Bank of Montreal, 926 F.2d 1305, 1310 (2d Cir.1991) (failure to obtain counsel may constitute a failure to “otherwise defend” within the meaning of Fed.R.Civ.P. 55(a)).

A district court may direct entry of a final judgment as to fewer than all of the parties upon an express determination that there is no just reason for delay. Fed.R.Civ.P. 54(b).

Prior to determining whether there is no just reason for delay, the..trial court must ensure that the judgment is “final” within the meaning of Rule 54(b). See Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 7, 100 S.Ct. 1460, 64 L.Ed.2d 1 (1980). Moreover, the court must ensure that the claim upon which final judgmentls’Mmg'éñtered is separable and extrieable from any; remaining claim. Hogan v. Consolidated Rail Corp., 961 F.2d 1021, 1026 (2d Cir.1992); Ginett v. Computer Task Group, Inc., 962 F.2d 1085, 1096 (2d Cir.1992).

1. Final judgment

The decision of a court is final if it ends litigation of a claim' ahWTeaves'nothing for the court to do with that claim other than to execute the judgment. Ginett, 962 F.2d at 1092.

Damages under the WARN Act are the amount of back pay and benefits minus wages or other remuneration actually paid during the period of violation, up to a maximum of sixty days. 29 U.S.C. § 2104(a)(1), (2). Plaintiffs have submitted documents that establish statutory damages for back pay in the amount of $501,565.23. (Toran Ail UU13,15; Razo Aff. UU1-5.)

Because damages are for a sum certain set by statute and liability is established by default, nothing remains to be done on the claim against the Karten defendants other than entry and execution of judgment. The decision against the Karten defendants is final.

2. Separable and extricable

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182 F.R.D. 65, 14 I.E.R. Cas. (BNA) 541, 42 Fed. R. Serv. 3d 374, 1998 U.S. Dist. LEXIS 12587, 1998 WL 481522, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amalgamated-service-allied-industries-joint-board-v-supreme-hand-nysd-1998.