Napoli v. 243 Glen Cove Avenue Grimaldi Inc.

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK _____________________

No 13-CV-5828 (JFB) (ETB) _____________________

MICHAEL NAPOLI,

Plaintiff,

VERSUS

243 GLEN COVE AVENUE GRIMALDI, INC., D/B/A GRIMALDI’S PIZZERIA, AND FRANK CIOLLI,

Defendants. ___________________

MEMORANDUM AND ORDER September 6, 2019 __________________

JOSEPH F. BIANCO, Circuit Judge (sitting by expenses; and (3) for retaliation against designation): plaintiff for the filing of the initial, first, and second amended complaints. Plaintiff further Plaintiff Michael Napoli (“plaintiff”), asserts unjust enrichment and quantum brings this action against 243 Glen Cove meruit claims.1 In connection with these Avenue Grimaldi, Inc., and Frank Ciolli claims, plaintiff seeks a declaratory judgment (“Ciolli”) (collectively, “defendants”), that defendants’ practices are unlawful under asserting claims under the Fair Labor the FLSA and the NYLL, and an order Standards Act (“FLSA”), 29 U.S.C. §§ 201, finding defendants liable for unpaid overtime et seq., and the New York Labor Law compensation and an equal amount of (“NYLL”). Specifically, plaintiff alleges that liquidated damages. Plaintiff also requests defendants violated the following provisions compensatory and punitive damages for of the FLSA: (1) by failing to pay plaintiff violations of the anti-retaliation provisions of minimum wage and overtime compensation; the FLSA. Finally, plaintiff requests an and (2) by retaliating against plaintiff for award, jointly and severally against filing the initial, first, and second amended defendants, for loss of compensation, complaints. Plaintiff also asserts claims financial harm, and other economic loss. under NYLL for: (1) failure to pay plaintiff minimum wage and overtime compensation; A bench trial was held on November 13, (2) failure to reimburse employment-related 15, and 19, of 2018, as well as on February 1,

1 At the summary judgment stage, plaintiff consented Inc., as well as the fiduciary duty claim against to dismissal of all claims against 1 Front Grimaldi, defendants. (ECF No. 68, at 25.) 2019. Having held a bench trial, the Court agreed upon by plaintiff and Ciolli, plaintiff now issues its findings of fact and has failed to prove his quasi-contract claims conclusions of law, as required by Rule 52(a) and judgment in favor of defendants is of the Federal Rules of Civil Procedure, and warranted on such claims. concludes, after carefully considering the evidence introduced at trial (including I. BACKGROUND assessing the credibility of the witnesses based upon their demeanor and their answers On October 22, 2013, plaintiff filed his to questions in light of all the evidence in the complaint alleging violations of the FLSA case), the arguments of counsel, and the and NYLL. (ECF No. 1.) On December 18, controlling law on the issues presented, that 2013, plaintiff filed his first amended plaintiff has not met his burden of proof on complaint. (ECF No. 5.) On March 7, 2014, any of his claims. As such, plaintiff is not plaintiff filed his second amended complaint. entitled to any relief. In particular, the Court (ECF No. 25.) On April 1, 2014, defendants finds Ciolli’s testimony to be credible on moved to dismiss the complaint. (ECF No. each and every one of the key elements in the 28.) The Court denied this motion in its case and was often corroborated by other entirety on May 7, 2014. Plaintiff then filed evidence in the case, including plaintiff’s his third amended complaint on May 14, own testimony in many instances. Based 2014. (ECF No. 37.) Defendants answered upon all of the evidence, plaintiff has failed on May 28, 2014. (ECF No. 40.) On October to prove by a preponderance of the evidence 30, 2015, the parties filed cross-motions for that Ciolli acted as an employer under either summary judgment. (ECF Nos. 56, 62.) On the FLSA or NYLL. As discussed in detail May 23, 2016, the Court denied both parties’ below, the credible evidence demonstrates summary judgment motions. (ECF No. 88.) that plaintiff had the power to hire and fire The Court held a bench trial on employees, supervised and controlled November 13, 15, 19, 2018, and February 1, employee work schedules and conditions of 2019. 2 Plaintiff, John Napoli, plaintiff’s employment, determined the rate and method brother, and Roger DeBonis, a former of payment, and maintained Grimaldi’s assistant to Ciolli, testified for plaintiff.3 pizzeria’s (the “Restaurant”) employment Ciolli and Michael Feldman, Ciolli’s records. Ciolli’s investment and involvement accountant, testified for defendants. During in the Restaurant was part of an oral joint the trial, both sides also submitted exhibits to venture agreement that he had reached with be considered by the Court. Finally, the the plaintiff regarding the opening and parties submitted proposed findings of fact operation of the Restaurant where, as a result and conclusions of law, as well as other of the time and money both were expending, memoranda, to the Court. they would share equally (50/50) in the profits of the Restaurant. Under the The Court has fully considered all of the circumstances of this case, it is clear that no evidence presented by the parties, as well as employer/employee relationship existed their written submissions. Below are the between Ciolli and plaintiff. Accordingly, Court's Findings of Fact and Conclusions of judgment is warranted in defendants’ favor Law. on all of the FLSA and NYLL claims. Similarly, given the financial arrangement

2 Both sides consented to a bench trial. (See Joint 3 Ciolli was called for plaintiff as well. Stipulation and Order, ECF No. 116.) II. FINDINGS OF FACT end of the business and borrow money.” (Tr. 29:01-03.) Since signing the Agreement, The following section constitutes the Ciolli has opened two additional locations. Court’s Findings of Fact4 pursuant to Federal For each new location, he created a Rule of Civil Procedure 52(a)(1). These corporation, of which he owns 100%, and had Findings of Fact are drawn from witness an operating partner to assist with running the testimony at trial and the parties’ trial store, who was compensated through a share exhibits. of the profits. (Tr. 98:07-99:13.) A. The Formation of Grimaldi’s B. Agreement Between the Parties In 1996, Ciolli acquired the corporation In or around 2011, plaintiff and Ciolli Pattabe, which owns the Grimaldi’s Pizzeria discussed opening a Grimaldi’s pizzeria (the in Brooklyn, New York, as well as the “Restaurant”) in Sea Cliff, New York. (Tr. Grimaldi’s trademark. (Tr.5 14:13-16:20.) 135:14-138:04.) On March 29, 2012, Ciolli created the defendant corporation 243 Glen Around 2000, the Grimaldi trademark Cove Avenue Grimaldi, Inc. (the was transferred to JMC Restaurant Holdings, “Corporation”), to facilitate ownership of the a corporation with Ciolli owning 49% and his pizzeria. (Tr. 36:16-36:22.) Ciolli was the son, Joseph Ciolli, owning 51%. (Tr. 17:07- sole shareholder of the Corporation, never 18:18.) On March 9, 2011, Ciolli and Joseph issuing any shares. (Tr. 37:09-23.) signed the Intellectual Property License Agreement (“the Agreement”).6 (Tr. 21:17- Ciolli and plaintiff agreed that plaintiff 24:13; Pl. Ex. 3.) The Agreement provided would be an operating partner of the that any use of the intellectual property at Restaurant, splitting 50% of any potential additional locations was at the sole discretion profits, while Ciolli would maintain of JMC and required that defendant Frank ownership of the Grimaldi name and Ciolli wholly own the restaurant business property.7 (Tr. 35:17-19.) Plaintiff testified operating at the additional location. (Pl. Ex. that he understood the profit-sharing 3 at 1.) The Agreement also mandated that arrangement, and it was an incentive for him Ciolli had to maintain all services associated to enter the business arrangement with Ciolli. with the trademark, at a high-quality standard (Tr. 208:16-22.)8 After this oral agreement “reasonably acceptable to JMC.” (Id. at 2.) was reached, plaintiff expended over Ciolli testified that he entered into this $155,000 of his own money in building the Agreement in order to help his son “grow his

4 To the extent that any Finding of Fact reflects a legal 7 Ciolli testified that he had this same arrangement – conclusion, it shall to that extent be deemed a whereby he was the sole owner and there was an Conclusion of Law, and vice-versa. operating partner – at two of his other Grimaldi locations. (Tr. 98:07-99:13.) 5 This citation references the Trial Transcript (“Tr.”) referring to the page of the transcription followed by 8 Specifically, plaintiff was asked, “At the time that the line on the page. For example, 14:13 refers to you had discussed with Mr. Ciolli your salary, you also line 13 on page 14. understand that you were supposed to be getting 50/50 with regards to profits, correct?” Plaintiff responded, 6 The Agreement lists four pizzerias in: (1) Brooklyn, “Correct.” Plaintiff was then asked, “And that was New York; (2) Douglaston, New York; (3) New York, your incentive to get into this business, correct?” New York; and (4) New York, New York. Plaintiff responded, “Hopefully that it would lead to ownership, yes.” Restaurant.9 (Tr. 173:20-175:17; Pl. Ex. 5.) agreement involved only the above- Plaintiff also testified that Ciolli had referenced profit-sharing arrangement. introduced him as a partner and had told plaintiff that they had both “built a hell of a C. Preparation for Opening place.” (Tr. 187:02-07.) 1. Ciolli’s Role Plaintiff testified that, in addition to the profit-sharing arrangement, Ciolli stated that On June 21, 2011, Ciolli signed a lease – he would give plaintiff a small salary for a for July 1, 2011 to June 30, 2021 – for 243 short period of time before the Restaurant Glen Cove Avenue, Sea Cliff, New York opened. 10 Ciolli denied that such a with Samiano Realty Corporation with Sal conversation took place. The Court finds Imbriano (“Imbriano), the property’s Ciolli’s testimony to be credible, and there is landlord. (Tr. 38:18-39:11, Pl. Ex. 6.) no credible evidence in the record to support Plaintiff was not at the meeting when the plaintiff’s contention. In fact, plaintiff lease was signed, nor was he involved in acknowledged that he did not request a salary lease negotiations. (Tr. 139:11-140:04.) In check from Ciolli after both his first and order to assist with the renovations, an second week of work on the Restaurant. (Tr. architect was hired. (Tr. 141:22-25.) Plaintiff 212:10-16.) Plaintiff further acknowledged recommended that one particular architect, that he did not make any request for his salary out of three options, would be “best to serve” after a year and a half of work prior to the the parties. (Tr. 142:06-12.) Ciolli made the Restaurant opening. (Tr. 214:06-13.) In final decision to enter into a written contract other words, despite the fact that plaintiff with plaintiff’s suggested architect. (Tr. claimed that he worked seven days a week 42:08-24.) Ciolli also hired a plumber and from 9:00 a.m. to 4:00 p.m. between July 1, an electrician for the renovations, both of 2011 (when the lease began) to the opening whom were friends of plaintiff. (Tr. 43:13- of the Restaurant in January 2013 (Tr. 19, 102:18-22.) Ciolli retained parking 149:05-25), plaintiff never requested or spaces across the street from the Restaurant. inquired as to the circumstances surrounding (Tr. 44:01-19.) Ciolli also submitted his purported salary. In short, based upon all disability insurance forms to the Health the testimony and evidence in this case, the Department (Tr. 45:7-16.) The Restaurant Court finds that Ciolli did not offer plaintiff a received equipment from the other pizzerias salary for any period of time, but rather their owned by Ciolli prior to opening. (Tr. 160:05-24.)

9 Plaintiff asserts that Ciolli should be considered the spent a substantial sum in building the Restaurant (and “only investor in the Restaurant.” (Pl. Find. of Fact, making it operational) because he hoped that such ECF No. 135 ¶ 17.) Plaintiff cites to Ciolli’s testimony expenditures would lead to a substantial profit for this argument where when asked if he invested any pursuant to his joint venture with Ciolli by which of his own money in the Restaurant, Ciolli replied, “As plaintiff would receive 50% of the profits. far as I know, I’m the only investor.” (Tr. 76:25- 77:01.) (emphasis added). That appears to be a 10 Plaintiff testified that he was not able to recall the reference to the fact that Ciolli never required any specific amount, but approximates that it was between investment from plaintiff with respect to the profit- $800 and $1,000 for an undefined period of time. (Tr. sharing arrangement and, thus, any money plaintiff 172:07-12, 173:6-11, 207:16-20.) Plaintiff also spent on the Restaurant was voluntary. Regardless of testified that any salary would be “for a short period of whether plaintiff is labelled an “investor,” it is clear time.” (Tr. 173:08-09.)

from the evidence in the record that he voluntarily Additionally, Ciolli suggested that There is a dispute as to the justification plaintiff meet with individuals at other for plaintiff’s firing of Mr. Feldman. Plaintiff Grimaldi’s locations to learn what purveyors testified that he fired Mr. Feldman because to use (Tr. 46:11-47:11, 49:01-16), and Mr. Feldman, without authorization, paid offered to train the any of the Restaurant’s himself from Restaurant funds, forging employees selected by plaintiff at one of the plaintiff’s signature. (Tr. 164:04-09.) other Grimaldi locations. 11 (101:14-16.) However, plaintiff also testified that he was However, Ciolli testified that very few not in the Restaurant at the time of this individuals were actually trained and only on supposed theft and provides no other one or two occasions. (Tr. 50:20-51:06.) evidence regarding this alleged Ciolli approved additional menu items misappropriation. Conversely, Ciolli favored by plaintiff.12 (Tr. 50.02-14, 107:18- testified that plaintiff justified Mr. Feldman’s 108:05.) firing because he felt that he charged too much, and plaintiff could find a better a. Mr. Feldman’s Discovery and accountant. (Tr. 113:09-13.) The Court Firing concludes that the reason for Mr. Feldman’s termination is immaterial to the issues in this Prior to opening, Ciolli sent his case; rather, the material fact (which the accountant, Mr. Feldman, to oversee the Court finds) is that plaintiff made the Restaurant’s financial statements and assist independent decision to terminate Mr. plaintiff with payroll. (221:18-223:07.) Feldman without any approval from Ciolli. Plaintiff testified that he viewed Mr. Feldman as Ciolli’s “right-hand man.” (Tr. 161:13- 2. Plaintiff’s Role 19). Mr. Feldman worked from around December 2012/January 2013 until around After terminating Mr. Feldman, plaintiff March/April 2013. (Tr. 224:10-16.) Mr. hired his own accounting firm, Kempisty and Feldman credibly testified that, during his Company, whose services were used until the review of the Restaurant’s finances, he Restaurant closed. (Tr. 259:20-23, 267:24- discovered improper uses of Restaurant funds 25.) Plaintiff testified that the new by plaintiff. (Tr. 225:02-20.)13 Mr. Feldman accountant did not report to Ciolli (Tr. confronted plaintiff, telling him that these 260:06-09), and Ciolli never met this expenses would have to be recouped from accountant (Tr. 114:04-07). This accounting plaintiff’s monetary investment. (Tr. 225:07- firm calculated all the payments made by 13.) Plaintiff denies improper spending and plaintiff, Ciolli, and the Restaurant, itself, up testified that he thought his wife might have until December 31, 2012. Plaintiff spent used the Restaurant’s card and once Mr. $155,664.71 of his own money on the Feldman informed him, he “yelled and construction and operation of the Restaurant. screamed at her.” (Tr. 246:08-247:06.) (Tr. 173:20-175:17, Pl. Ex. 5.) Those expenses included $27,976.98 in food

11 Plaintiff testified that at least four employees were 13 For example, Restaurant funds were spent on trained at the Grimaldi’s Douglaston location. (Tr. restaurant visits, nail salons, jewelry, and eyeglasses. 158:19-159:15.) (Tr. 225:07-19, 245.)

12 Ciolli testified that plaintiff “felt he could attract more people if he had a little more stuff on the menu.” (Tr. 107:23-24.) purchases and $29,678.85 in repairs and Although Ciolli recommended certain maintenance. (Pl. Ex. 5.) purveyors, plaintiff had discretion in where to purchase supplies for the Restaurant. (Tr. In preparation for the Restaurant’s 217:03-05.) For instance, plaintiff chose a opening, plaintiff signed permits to the different coal purveyor due to its reduced Village of Sea Cliff – listing himself as the cost. (Tr. 217:03-05.) Ciolli also testified owner or president. (Tr. 251:15-23; Exs. B, that plaintiff chose “his own people” based D.) Plaintiff also appeared before the on cheaper ingredients and this was Village of Sea Cliff town council review negatively impacting the Restaurant’s boards three times, when applying for these product but he did not interfere. (Tr. 48:07- permits, without discussing any of these 48:12.) Plaintiff also solely possessed the appearances with Ciolli or disclosing that he keys to the Restaurant. (Tr. 104:02-04.) was not, in fact, the owner but was merely Ciolli’s representative. (Tr. 165:15-166:02, Plaintiff, in an attempt to obtain a liquor 272:05-273:01.) In conjunction with this license, also executed a fraudulent second process, plaintiff submitted a special use lease with Imbriano in his own name. (Tr. permit with his signature as owner, but 170:02-171:10, 256:21-257:01; Pl. Ex. 7.) claimed that the architect filled out the forms Plaintiff testified that he spoke to Ciolli prior prior to his signature. (Tr. 271:22-272:23.) to signing the fraudulent lease. (Tr. 170:02- 171:10.) Ciolli testified that he only found Plaintiff also filled out and signed the out about this second lease through his Restaurant’s worker compensation forms, attorney and was angered, but could not fire signing as “president” and listing himself and plaintiff due to the fact that plaintiff was an Ciolli as the Restaurant’s officers. (Tr. associate and not employee. (Tr. 108:12- 251:07-14; Def. Ex. D.) Other forms were 110:25.) The Court found Ciolli’s testimony submitted and plaintiff testified that they on this issue to be credible, but it is were filled out and submitted by the architect immaterial to the Court’s determination. or the plumber.14 (Tr. 166:06-169:17.) Ciolli testified that he had no idea who submitted 3. Opening and Control Over the these forms. (Tr. 73:09-76:01.) The Court Restaurant notes that, even assuming that plaintiff did not see each of these forms, it is clear from Plaintiff credibly testified that he—– the credible evidence in the record that he without any input from Ciolli—interviewed knowingly signed multiple municipal forms various people for job openings, set their in which he represented himself as the owner work schedules, and bought a time clock to or president of the Restaurant. Plaintiff also allow these employees to check in and out. opened Grimaldi’s corporate checking (Tr. 215:01-10.) Plaintiff bought the clock to account as the sole signatory (Tr. 214:18-25), ensure that the Restaurant’s payroll would and plaintiff acknowledges that he had “free avoid any labor law violations. (Tr. 215:11- reign” on this account “so long as it was for 16.) Plaintiff never put himself on payroll or the business” (Tr. 248:14-16). drew any salary, nor did Ciolli tell him to draw a salary. (Tr. 215:17-24.) Ciolli also

14 This included a “short environmental assessment 17, 18). Plaintiff testified that he only discussed the form” (Pl. Ex. 10), a “notice of disapproval / review Ex. 18 form with the plumber prior to signing it. (Tr. required” which was signed by plaintiff (Pl. Ex. 11), 169:08-17.) and two “change of contractor/plumber or other professional” forms also signed by plaintiff (Pl. Exs. credibly testified that plaintiff interviewed all not at the opening of the Restaurant. (Tr. the Restaurant’s employees, while setting 65:17-18.) Ciolli testified that he learned of their schedules and rates of pay. (Tr. 104:05- the opening date from Mr. DeBonis who 14.) Ciolli never set plaintiff’s work called Ciolli to inform him that Mr. DeBonis schedule. (Tr. 104:07-09.) Plaintiff also had would be attending the opening. (Tr. 66:02- discretion to fire employees. As explained 03.) Ciolli testified that he told plaintiff that earlier, he fired Mr. Feldman, Ciolli’s he thought the Restaurant was not ready and accountant, without any consultation or that it should not be opened in January or approval from Ciolli. (Tr. 111:21-113:13.) February as these are “dead months” for Moreover, Ciolli did not demand Mr. business and should, instead, be opened in the Feldman’s reinstatement. (Tr. 113:14-21.) spring. (Tr. 66:07-10, 114:18-115:10.) Plaintiff opened it anyway, without Ciolli’s In January 2013, three online articles approval. (Tr. 65:21-66:03.) Plaintiff discussed the opening of the Restaurant. (Pl. testified that he told Ciolli about his decision Exs. 13-15.) In each article, plaintiff is to open the Restaurant in January 2013. (Tr. quoted and referred to as the Restaurant’s 242:15-20.) Plaintiff did not testify as to owner. (Pl. Exs. 13-15.) Plaintiff testified whether Ciolli opposed his decision to open that he never told a reporter that he was the in January as Ciolli claims. In any event, owner, nor made any of the quoted based upon the credible testimony, the Court statements in the articles, only meeting one concludes that plaintiff informed Ciolli that reporter from a Sea Cliff Village paper. (Tr. he intended to open in January. Ciolli, in 184:24-186:12, 273:06-274:23.) Plaintiff turn, expressed his concerns. Despite these also testified that he never saw any of these concerns, plaintiff went ahead with his initial articles and, therefore, did not request any plan and then Mr. DeBonis informed Ciolli of corrections regarding the references to him as the specific date of the Restaurant’s opening. the owner. (Tr. 275:18-276:03.) The Court does not find plaintiff’s testimony on this Mr. DeBonis also credibly testified, in issue to be credible based upon his demeanor addition to Ciolli, that it was plaintiff who and the other credible evidence in the record was making personnel decisions. For (including government forms), where he example, plaintiff decided who was hired for represented himself to be an owner or opening night and task allocation (i.e., who president of the Restaurant. In any event, the operated the takeout section of the fact that he represented himself at times to be Restaurant). (Tr. 62:01-08.) Mr. DeBonis the owner and/or president of the Restaurant explained that he knew that plaintiff would be is not a critical part of the Court’s legal making these sorts of decisions because it analysis discussed infra. “was made clear that as with all of these other stores, [Ciolli] is the owner, that was made The Restaurant was open from January clear from day one, and this was a partnership 2013 until March 2014 (Tr. 87:02-07, in which [plaintiff], in this case, would be the 259:10-13), and served lunch and dinner operator, and he would run day-to-day from 12:00 p.m. to roughly 10:00 p.m., operations. And they had some financial, you excluding certain holidays and other periodic know, deal that I was never privy to[.]” (Tr. closings (Tr. 155:19-156:09). Plaintiff 62:14-19.) copied these operation hours off the menu from the Grimaldi’s in Douglaston. Plaintiff Plaintiff later failed to pay the does not recall any discussion with Ciolli Restaurant’s rent, resulting in both plaintiff about the hours. (Tr. 156:10-16.) Ciolli was and Ciolli being locked out of the property. clear” to which Ciolli responds, “Well, I’ll (Tr. 179:06-08, 115:17-19.) accept your resignation.” (Ct. Ex. 15:04-06.) D. Meeting at Diner Ciolli then offered to “take over the place” himself and to “make money and pay In February 2014, months after this [plaintiff] back from the business,” asking litigation had commenced, plaintiff, Ciolli, that plaintiff first surrender him the keys. (Ct. plaintiff’s wife, and Imbriano (the property’s Ex. 18:05-10.) Ciolli further stated to landlord) met at a diner. (Tr. 80:12-22, plaintiff that he “know[s] how much extra it 187:14-189:20, 235:05-236:02, 189:20-23.) cost [him] because of [plaintiff’s] The purpose of the meeting was to resolve the involvement on a voluntary basis to get the issue of the Restaurant’s unpaid rent. (Tr. place built,” and further explained, “I didn’t 80:14-81:03, Tr. 116:15-20.) Ciolli also argue with you, I didn’t fight with you, you testified that during this meeting he didn’t listen to me, you did what you wanted expressed his concerns with the way plaintiff and you cost me a lot of extra money, and I was operating the Restaurant and offered to paid” but also noted that he was “willing to take over the operation and, in exchange, pay work with [plaintiff].” (Ct. Ex. 18:18-24.) plaintiff what he thought was owed to him. Ciolli then told Imbriano that he would pay (Tr. 235:08-236:01.) Plaintiff had this the back rent, but it would come from him meeting recorded on his phone unbeknownst personally and not the Restaurant. (Ct. Ex. to the other participants besides his wife and 20:14-17.) Ciolli said, “I no longer want to Imbriano. (Tr. 188:2-189:05, Tr. 199:17- be in a position where I have to keep paying 200:03.) things and everything’s gone the way I don’t like it.” (Ct. Ex. 20:21-23.) During this conversation, Ciolli said to Imbriano that “[plaintiff] asked you to call Plaintiff expressed that he had money me because you didn’t get paid January’s invested as well, with Ciolli responding, “Not rent.” (Pl. Ex. 19.)15 Ciolli and plaintiff then by my request. Listen, if you wanna take argued about who paid for certain items in the money and throw it in the street or give it Restaurant. (Ct. Ex. 7:02-12:19.)16 Ciolli away to somebody don’t bother me. You’re referred to plaintiff as “an associate” when not a partner. I have no responsibility for conversing with Imbriano. (Ct. Ex. 12:08.) what you do. The only place I get responsible As a possible remedy to the Restaurant’s is what you do in the store, because I own it. problems, Ciolli told plaintiff that he Other than what you’re doing in the store, I (plaintiff) could “buy [Ciolli] out” and “take have no responsibility for you. You’re not my over the business” but Ciolli would have to partner and have never been my partner. If “remove the name Grimaldi.” (Ct. Ex. 13:03- you think you’re a partner or an owner, 05.) The two then discussed whether plaintiff you’re mistaken.” (Ct. Ex. 22:23-23:06.) was asking Ciolli to pay the unpaid rent and, Plaintiff responded, “I was mistaken. I told during that discussion, plaintiff stated, “It’s you that in the office….” (Ct. Ex. 23:07.) up to you. It’s your store. As you made it very Ciolli added, “We were never partners. And the fact of employ, you’re not my employee either …. I didn’t hire you. We had an

15 The Court has reviewed the entire recording, but 16 The Court has filed plaintiff’s transcription (which only refers to the relevant portions here. was accurate) as an attachment to this Order. agreement, you were gonna run the store for Finally, plaintiff must prove the amount of 50% of the profits. That was the deal.” (Ct. damages by a preponderance of the evidence. Ex. 23:11-17.) IV. CONCLUSIONS OF LAW The parties then discussed meeting in the near future about possible resolutions. Within A. Admissibility of Diner Recording two weeks of this meeting, plaintiff listened to the entire recording, confirming that the Plaintiff has offered a recording of the conversation was captured accurately. (Tr. February 2014 diner meeting. A transcript of 190:18-191:03.) Then plaintiff, without this recording was also provided to the Court. altering the recording, gave it to his brother, (See Ct. Ex.) Excerpts of this recording were John Napoli, who, in turn, gave it to his played at Mr. Ciolli’s deposition, at which he assistant. The assistant then used a court confirmed his voice and the voices of other reporter service to have it transcribed. (Tr. individuals on the recording (Ciolli Dep. at 123:25-124:17.) 135-45.) Defendants argue that the statements made at this meeting were made After the diner meeting, Ciolli paid during a settlement discussion, and thus, are Imbriano $30,000 in order to re-open the privileged under Rule 408 of the Federal Restaurant. After about three months of Rules of Evidence (“FRE 408”). Plaintiff operation, Ciolli then closed it permanently. argues that the relevant portions of the (Tr. 237:16-21.) conversation fall outside FRE 408 because they do not involve settlement discussions III. BURDEN OF PROOF about the present dispute, but as to the issue of the Restaurant’s unpaid rent. Plaintiff has the burden of proof in this Alternatively, plaintiff argues that the case on each and every claim, as well as on recording is admissible to impeach Ciolli’s the issue of damages. He must prove by a credibility regarding the employer-employee preponderance of the evidence that relationship. defendants did not adequately compensate employees as required by the FLSA and Rule 408 of the Federal Rules states: NYLL. See Reich v. S. New England Telecomm. Corp., 121 F.3d 58, 67 (2d Cir. Evidence of (1) furnishing or 1997) (“[Plaintiff] must produce sufficient offering or promising to furnish, or evidence to establish that the employees have (2) accepting or offering or in fact performed work for which they were promising to accept, a valuable improperly compensated and produce consideration in compromising or sufficient evidence to show the amount and attempting to compromise a extent of that work ‘as a matter of just and claim which was disputed as to reasonable inference.’” (quoting Anderson v. either validity or amount, is not Mt. Clemens Pottery Co., 328 U.S. 680, 687 admissible to prove liability for or (1946))). Plaintiff also must also prove by a invalidity of the claim or its preponderance of the evidence that amount. Evidence of conduct or defendants violated the anti-retaliation statements made in compromise provisions of the FLSA and NYLL; failed to negotiations is likewise not reimburse employment-related expenses admissible. This rule does not under NYLL; and that defendants were require the exclusion of any unjustly enriched by plaintiff’s services. evidence otherwise discoverable merely because it is presented in the to compromise the claim.” Pierce, 955 F.2d course of compromise negotiations. at 827. “As a general matter, courts focus on This rule also does not require whether the pertinent statement was made in exclusion when the evidence is attempting to persuade the plaintiff into offered for another purpose, such as ‘abandon[ing] or modify[ing]’ her proving bias or prejudice of a suit.” Eviner, 2015 WL 4600541, at *7 witness, negativing a contention of (citing Lightfoot v. Union Carbide Corp., 110 undue delay, or proving an effort to F.3d 898, 909 (2d Cir. 1997)). obstruct a criminal investigation or prosecution. Here, the conversation clearly took place after litigation was commenced in October Fed. R. Evid. 408. As the Second Circuit has 2013. Although no attorneys were present, stated “[i]t is often difficult to determine defendants claim the statements were made whether an offer is made in compromising or in the context of settlement discussions. The attempting to compromise a claim. Both the Court has reviewed the entire conversation timing of the offer and the existence of a and finds that the recording is admissible disputed claim are relevant to the primarily because the purpose of the meeting determination.” Pierce v. F.R. Tripler & Co., was to discuss the Restaurant’s unpaid rent 955 F.2d 820, 827 (2d Cir. 1992); see also and not the ongoing litigation.17 Ciolli’s Eviner v. Eng, No. 13-CV-6940-ERK, 2015 testimony indicates that the initial objective WL 4600541, at *7 (E.D.N.Y. July 29, 2015). of the meeting was to resolve the In Pierce, the Second Circuit clearly stated Restaurant’s unpaid rent issue with Imbriano that “where a party is represented by counsel, (Tr. 80:18-81:3, 116:07-16.) Although some threatens litigation and has initiated the first portions of the conversation focus on the administrative steps in that litigation, any present dispute, there are no specific offers to offer made between attorneys will be end the litigation. Moreover, Ciolli never presumed to be an offer within the scope of demanded that, in exchange for taking over Rule 408.” 955 F.2d at 827. However, courts the business, plaintiff must “abandon or have also found that “communications modify his suit” and, examining the between the parties themselves may also conversation in its totality, the Court come within the scope of the Rule” when they concludes that it “cannot be considered an are made in an effort to settle litigation. offer of settlement or compromise.” Eviner, 2015 WL 4600541, at *7 (finding Lightfoot, 110 F.3d at 909. Under the voicemails left between parties soon after particular circumstances here, the value of receiving demand letter from plaintiff’s the evidence outweighs “any potential for attorney and on the recommendation of discouraging future negotiations between counsel to settle directly with plaintiff fell these or other parties which might frustrate within the protection of Rule 408). Further, the policies underlying Rule 408.” Starter the “party seeking admission of an offer Corp. v. Converse, Inc., 170 F.3d 286, 294 under those circumstances must demonstrate (2d Cir. 1999) (citing Trebor Sportswear Co. convincingly that the offer was not an attempt v. The Ltd. Stores, Inc., 865 F.2d 506, 510-11

17 In an earlier portion, Ciolli stated to plaintiff, “So then says, “I don’t understand it. You asked him now, you would like me to fund the rent. Is that what [Imbriano] to call me for the rent. Is that what you had you want? For me to pay Sal? Is that what you’re in mind?” (Ct. Ex. 14:16-21.) looking to do?” Plaintiff responded, “I’m not saying to do anything. It’s your choice, it’s your store.” Ciolli (2d Cir. 1989)). Accordingly, the Court agent of such labor organization.” 29 U.S.C. overrules defendants’ objection and has § 203(d). considered the recording (Ex. 19) in reaching its decision. The NYLL defines “employer” to include “any person . . . employing any individual in B. FLSA and NYLL Claims any occupation, industry, trade, business or service” or “any individual . . . acting as Plaintiff asserts that he has not been fully employer.” N.Y. Lab. Law. §§ 190(3), compensated for his services under the FLSA 651(6). and NYLL in accordance with unpaid overtime and minimum wages. In addition, The Second Circuit has noted that the plaintiff asserts that defendants retaliated question of whether the tests for employer against him for bringing this litigation. For status are the same under the FLSA and the the reasons set forth below, the Court finds NYLL has not been answered by the New that plaintiff has not proven, by a York Court of Appeals. Irizarry v. preponderance of the evidence, that Catsimatidis, 722 F.3d 99, 117 (2d Cir. defendants have violated the overtime, 2013). However, courts in this district “have minimum wage, or anti-retaliation provisions interpreted the definition of ‘employer’ under of the FLSA and NYLL.18 the New York Labor law coextensively with the definition by the FLSA.” Sethi v. Narod, 1. Ciolli’s Status as an Employer 974 F. Supp. 2d 162, 188-89 (E.D.N.Y. 2013) (quoting Spicer v. Pier Sixty LLC, 269 F.R.D. Defendants argue that plaintiff’s claims 321, 335 n.13 (S.D.N.Y. 2010)); see fail, under both the FLSA and NYLL, also Hart v. Rick’s Cabaret Int’l, Inc., 967 F. because Ciolli cannot be defined as an Supp. 2d 901, 940 (S.D.N.Y. 2013) (noting “employer.” After a careful examination of that “[c]ourts in this District have regularly the evidence, the Court concludes that applied the same tests to determine, under the plaintiff has not shown by a preponderance of FLSA and the NYLL, whether entities were the evidence that Ciolli acted as an joint employers” because “[t]he statutory “employer” under either the FLSA or the standard for employer status under the NYLL NYLL. is nearly identical to that of the FLSA” and that while “the New York Court of Appeals Under the FLSA, an employer “includes has not yet resolved whether the NYLL’s any person acting directly or indirectly in the standard for employer status is coextensive interest of an employer in relation to an with the FLSA’s,” “there is no case law to the employee and includes a public agency, but contrary” (citations omitted)); Cruz v. Rose does not include any labor organization Assocs., LLC, No. 13–CV–0112, 2013 WL (other than when acting as an employer) or 1387018, at *2 (S.D.N.Y. Apr. 5, 2013) anyone acting in the capacity of officer or (noting that the definitions of “employer” under the NYLL and the FLSA are coextensive (citing Spicer, 269 F.R.D. at 335 n.13)); Chen v. St. Beat Sportswear, Inc., 364

18 The parties dispute whether defendants are subject FLSA. As such, the statute of limitations issue is to the FLSA and whether the FLSA statute of moot. limitations should be extended to three years due to willful violations. As discussed infra, the Court concludes that Ciolli was not an “employer” under the F. Supp. 2d 269, 278 (E.D.N.Y. 2005) Cmty. Coll., 735 F.2d 8, 12 (2d Cir. 1984)). (“Courts hold that the New York Labor Law The factors are not exclusive, embodies the same standards for joint however. See Irizarry, 722 F.3d at 105 employment as the FLSA.” (citation (“None of the factors used in any of these omitted)); Topo v. Dhir, No. 01–CV–10881, cases, however, comprise a rigid rule for the 2004 WL 527051, at *3 (S.D.N.Y. Mar. 16, identification of an FLSA employer.” 2004) (noting that there is “general support (citation omitted)); see also Herman v. RSR for giving FLSA and the New York Labor Sec. Servs. Ltd., 172 F.3d, 132, 139 (2d Cir. Law consistent interpretations”); Ansoumana 1999), holding modified by Zheng v. Liberty v. Gristede’s Operating Corp., 255 F. Supp. Apparel Co. Inc., 355 F.3d 61 (2d Cir. 2003) 2d 184, 189 (S.D.N.Y. 2003) (“[B]ecause (holding that when determining whether one New York Labor Law and the FLSA embody is an employer, “the overarching concern is similar standards . . . I will consider the whether the alleged employer possessed the federal law in deciding whether defendants power to control the workers in question . . . were joint employers.”); Lopez v. with an eye to the ‘economic reality’ Silverman, 14 F. Supp. 2d 405, 411 n.4 presented by the facts of each case.” (internal (S.D.N.Y.1998) (considering federal law citation and quotation omitted)). only as to question of joint employment under federal and New York law)). After considering the Carter factors, in Therefore, the Court will analyze the FLSA light of all of the evidence in the record, the and NYLL claims under the same standard. Court concludes that plaintiff has not shown by a preponderance of the evidence that The Second Circuit has made clear that Ciolli acted as an employer under either the “‘[t]he determination of whether FLSA or NYLL. an employer-employee relationship exists for purposes of the FLSA should be grounded in First, plaintiff had the power to hire and economic reality rather than technical fire the Restaurant’s employees. See concepts,’ and depends ‘upon the Irizarry, 722 F.3d at 114 (“In RSR, we circumstances of the whole activity.’” Sethi, emphasized that the hiring and firing of 974 F. Supp. 2d at 188 (quoting Irizarry, 722 ‘individuals who were in charge of [the at 104). The Second Circuit has set forth plaintiff employees] is a strong indication of “four factors that better determine the control.’”) (citing RSR, 172 F.3d at 140)). ‘economic reality’ of a putative employment Plaintiff directs the Court to the fact Ciolli relationship, specifically, ‘whether the hired the architect, plumber, and electrician alleged employer (1) had the power to hire for renovations. (Pl. Prop. Find. of Law ¶ 4.) and fire the employees, (2) supervised and However, Ciolli credibly testified that these controlled employee work schedules or individuals were recommended to him by conditions of employment, (3) determined plaintiff. 19 (Tr. 42:08-24, 43:13-19, 102:18- the rate and method of payment, and (4) 22.) The evidence in the record demonstrates maintained employment records’” (the “Carter factors”). Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 142 (2d Cir. 2008) (quoting Carter v. Dutchess

19 Ciolli made the final decision to enter into a written electrician for the renovations, both of whom were contract with plaintiff’s suggested architect. (Tr. friends of plaintiff. (Tr. 43:13-19, 102:18-22.) 42:08-24.) Ciolli also hired a plumber and an joint coordination in the hiring of these there is no evidence that his work schedule or individuals. that of the employees (hired by plaintiff) were dictated by Ciolli. Ciolli, in fact, Moreover, plaintiff interviewed and hired testified that he never set plaintiff’s schedule the Restaurant’s employees without Ciolli’s or mandated an amount of hours either prior involvement. (Tr. 215:01-04.) Plaintiff also to or after the Restaurant opened. (Tr. terminated Mr. Feldman without consulting 104:07-09, 76:02-14.) Plaintiff controlled Ciolli. (Tr. 113:10-114:07.) Plaintiff faced payroll for all the Restaurant’s employees. no consequences or demands from Ciolli as a (Tr. 215:06-16.) result of this termination.20 (Tr. 113:14-21.) Plaintiff then hired his own accounting firm, Although plaintiff copied the schedule of which did not report to Ciolli. (Tr. 259:20- the Grimaldi’s in Douglaston, he unilaterally 23, 267:24-25, 260:06-09.) made this decision without any direction from Ciolli. (Tr. 156:10-157:01.) Plaintiff Mr. DeBonis, plaintiff’s own witness, also had discretion in where the Restaurant credibly testified that plaintiff made the got its supplies. For example, Ciolli testified hiring decisions (Tr. 62:01-08), which was in that plaintiff would “use his own people” keeping with Ciolli’s arrangements at other instead of Ciolli’s recommended purveyors locations where it was clear that plaintiff (Tr. 48:05-12), and plaintiff, himself, would be the “operator” and “run day-to-day testified that he chose a different coal operations.” (Tr. 62:14-19.) Additionally, provider due to the cost (Tr. 217:03-05). Ciolli, in the recorded conversation, told Finally, plaintiff selected the Restaurant’s plaintiff that he would not fire any of opening date, without Ciolli in attendance plaintiff’s employees if plaintiff accepted his and over Ciolli’s strategic concerns. (Tr. offer to take over the Restaurant. (Ct. Ex. 65:17-18, 66:02-10.) 19:02-04.) While Ciolli, in the recorded conversation, stated that he considered firing In sum, plaintiff has failed to demonstrate plaintiff,21 Ciolli also stated that he has “no that Ciolli supervised and controlled responsibility for what [plaintiff] do[es,]” employee work schedules or conditions of that plaintiff was not an “employee either,” employment. Carter, 735 F.2d at 12. and the parties had an agreement where Instead, the credible evidence shows that plaintiff would run the store “for 50% of the plaintiff had day-to-day control over these profits.” (Ct. Ex. 23:17.) aspects of the operation of the Restaurant. With respect to the second Carter factor, Under the third Carter factor, the record the evidence demonstrates that plaintiff lacks any evidence that Ciolli determined the predominately controlled the work rate and method of payment. While both conditions at the Restaurant. Plaintiff set the parties do not dispute that there was a profit- employees’ work schedules (Tr. 215:01-10), sharing arrangement, plaintiff testified that and installed a time clock to ensure Ciolli also promised him a small salary for a compliance with relevant labor law (Tr. brief period of time, yet provided no 215:11-16), Plaintiff set his own hours and substantive support for this contention. (Tr.

20 Plaintiff testified that he viewed Mr. Feldman as end the oral joint venture with plaintiff at any time and Ciolli’s “right-hand man.” (Tr. 161:15-19.) that Ciolli was the sole shareholder of the corporation that owned the Restaurant itself. 21 In the Court’s view, this appears to be a reference to the fact that Ciolli believed that he had the ability to 172:07-12, 173:6-11, 207:16-20.) The Court accounting books in determining profit and finds plaintiff’s testimony on this issue not to loss). be credible. Mr. Feldman also credibly testified that plaintiff “was not on the books” Analysis of the final Carter factor also and there “was no salary that [he] knew of.” does not support a finding of an employer- (Tr. 224:05-09.) Tellingly, plaintiff, even employee relationship. Plaintiff, not Ciolli, while he controlled the Restaurant’s payroll, maintained the Restaurant’s employment never drew himself any type of salary. 22 (Tr. records. Plaintiff testified that he completed 172:07-12, 173:6-11, 207:16-20, 215:17-24.) all the workers’ compensation documents As discussed supra, plaintiff controlled the that were sent to him. (Tr. 249:05-250:12, method of payment for the Restaurant’s Def. Ex. 5). There is no evidence that Ciolli employees, filling out and submitting the maintained or had any involvement with the workers’ compensation forms and setting employment records. their schedules. (Tr. 250:09-251:06, 215:06- 16; Def. Ex. D.) Ciolli credibly testified that The Court also finds that additional plaintiff interviewed all the Restaurant’s evidence supports its finding that Ciolli was employees, while setting their schedules and not an “employer” under the economic reality rates of pay. (Tr. 104:05-14.) Moreover, due test. See RSR, 172 F.3d at 139 (“Since to the fact that plaintiff controlled payroll and economic reality is determined based applied for permits, there is no indication that upon all the circumstances, any relevant Ciolli even had the authority to sign these evidence may be examined so as to avoid paychecks.23 See RSR, 172 F.3d at 140. having the test confined to a narrow legalistic (“The key question is whether [the definition.” (citing Rutherford Food Corp. v. defendant] had the authority to sign McComb, 331 U.S. 722, 730 (1947))). paychecks throughout the relevant period, Specifically, plaintiff had the sole set of keys and he did.”) Finally, in the recorded to the Restaurant (Tr. 104:02-04); he conversation, Ciolli told plaintiff that submitted the Restaurant’s required forms, plaintiff’s “involvement on a voluntary listing himself as “president” or “owner” on basis” led to extra costs for Ciolli and that several (Def. Exs. B, D, Pl. Exs. 11, 17, 18); plaintiff “did what [he] wanted.” (Ct. Ex. appeared before town boards, without 18:18-24) (emphasis added.) The recording disclosing that Ciolli was, in fact, the owner further indicates Ciolli’s ignorance as to of the Restaurant (Tr. 165:15-166:02, payroll and finances, with Ciolli declaring 272:05-273:01); was quoted and listed as that he did not know “what we made or didn’t “owner” in articles about the Restaurant (Pl. make” in the Restaurant. (Ct. Ex. 17:22-23); Exs. 13-15);24 he filled out a second lease— see Irizarry, 722 at 115 (finding it critical that listing himself as the owner—in an attempt to defendant kept track of payroll on his get a liquor license (Tr. 256:21-257:01, Pl. Ex. 7); and he opened and controlled the Restaurant’s checking account with “free reign” (Tr. 248:14-16). Plaintiff also fired

22 The Court also notes that plaintiff testified that he (Def. Ex. D.) Additionally, Ciolli testified that he never requested or had his lawyer request a salary after never did sign any paychecks. (Tr. 103:16-17.) a year-and-a-half of labor (Tr. 214:10-13) prior to the Restaurant’s opening. 24 As the Court noted supra, even assuming that plaintiff did not hold himself out as the owner and/or 23 Although Ciolli is listed as an officer on the president of the Restaurant to certain third parties, the workers’ compensation forms, he did not sign them. Court’s decision would be the same. Mr. Feldman, Ciolli’s “right-hand man.”25 not hire his purveyors but “used his own (Tr. 113:18-114:07.) people” in order to bring down costs. (Tr. 48:05-12.) In short, the Court finds that In sum, the Court finds Ciolli was not Ciolli made recommendations regarding plaintiff’s employer because the economic purveyors, but not mandates. In other words, realities demonstrate that plaintiff had control just as plaintiff suggested local contractors to of the day-to-day operations of the assist with the renovations (Tr. 142:06-12), Restaurant. In reaching this decision, the Ciolli suggested certain purveyors. Court recognizes that Ciolli was involved in Moreover, the evidence demonstrates that certain major decisions and had some control, plaintiff, not just Ciolli, invested or expended especially due to his contractual right to use substantial sums of money in the opening and the Grimaldi name, as well as his status as the operation of the Restaurant (e.g., $27,976.98 sole shareholder of the corporation that in food purchases and $29,678.85 in repairs owned the Restaurant. However, the Court and maintenance). (Pl. Ex. 5.) Thus, finds that Ciolli’s ownership and although plaintiff points to Ciolli’s support of involvement in certain aspects of the opening the renovations as evidence that he was an and operation of the restaurant was pursuant “employer,” the accounting report notes that to the joint venture (as discussed further plaintiff put in $29,678.85 for what the infra) that he established with plaintiff, and accounting firm categorized as “repairs and did not transform this joint venture into an maintenance.” employer/employee relationship. It is clear from the record that, in the context of this Plaintiff also highlights the fact that joint venture, Ciolli provided input, but day- Ciolli trained several Restaurant employees. to-day decision-making and control was in (Pl. Prop. Find. of Law, ECF No. 136 ¶ 4.) the hands of plaintiff. For example, although However, Ciolli credibly testified that he told Ciolli approved the menu items that plaintiff plaintiff that this opportunity was “available” wanted to add, coordinated employee and that the Restaurant’s employees went training, and assisted with purveyor “hardly at all” and “they certainly didn’t arrangements, there is no indication that utilize what [Ciolli] thought they should Ciolli demanded compliance. Instead, the have.” (Tr. 50:20-51:06.) evidence shows that plaintiff sought out and utilized Ciolli’s restaurant experience and Finally, the recording that plaintiff financial support and Ciolli, in turn, was submitted (Pl. Ex. 19) also demonstrates that hoping to help the Restaurant be profitable Ciolli did not have unilateral control of the pursuant to their profit-sharing arrangement. Restaurant. In fact, he made an offer to “take over” the Restaurant from plaintiff. Ciolli Plaintiff argues that control is shown also stated that he did not want to maintain through the Ciolli’s interactions with the the current arrangement whereby he is Restaurant’s purveyors. (Pl. Find. of Fact ¶¶ financially supporting the Restaurant without 26-27.) However, plaintiff testified that he, things being done “the way [he] likes it,” (Ct. without Ciolli’s approval or input, used a Ex. 30:23), again indicating his lack of cheaper coal purveyor. (Tr. 217:03-05.) Ciolli also credibly testified that plaintiff did

25 As noted supra, the Court recognizes that there was of the reason for the firing) had the unchecked ability a dispute as to the reason for Mr. Feldman’s firing. to fire Ciolli’s “right-hand man.” However, the material fact is that plaintiff (regardless control over the day-to-day operations of the As discussed supra, the Court does not venture. find that Ciolli acted as plaintiff’s “employer,” but rather that the parties entered After a careful review of the evidence, the into an oral joint venture to build and operate Court finds that plaintiff did not comply with the Restaurant and share 50/50 in the profits. several of Ciolli’s suggestions; controlled the Although plaintiff argues that such a joint Restaurant’s work schedules and conditions; venture is not permitted under New York law held himself out as “owner” and “president” because of Ciolli’s use of a corporation in to the local community; and fired Ciolli’s connection with the ownership of the right-hand man, Mr. Feldman26 without any Restaurant, the Court disagrees. substantial opposition from Ciolli. Therefore, the evidence does not show Ciolli “Under New York law, a joint venture is had “operational control” of the Restaurant or formed when (a) two or more persons enter that Ciolli’s role or decisions “directly into an agreement to carry on a venture for affect[ed] the nature or conditions of profit; (b) the agreement evinces their intent [plaintiff]’s employment.” Irizarry, 722 F.3d to be joint venturers; (c) each contributes at 110. property, financing, skill, knowledge, or effort; (d) each has some degree As discussed above, because “[c]ourts of joint control over the venture; and have interpreted the definition of ‘employer’ (e) provision is made for the sharing of both under the [NYLL] coextensively with the profits and losses.” SCS Commc’ns, Inc. v. definition used by the FLSA,” Copantitla v. Herrick Co., 360 F.3d 329, 341 (2d Cir. Fiskardo Estiatorio, Inc., 788 F. Supp. 2d 2004) (citing Itel Containers Int’l Corp. v. 253, 308 n.21 (S.D.N.Y. 2011), the Court’s Atlanttrafik Express Serv., Ltd., 909 F.2d analysis under the FLSA applies equally to 698, 701 (2d Cir. 1990)). the claims under the NYLL and is not addressed separately, see Cavalotti v. When determining whether a joint Daddyo’s BBQ, Inc., No. 15 Civ. 6469 (PKC) venture has been formed, the Second Circuit (VMS), 2018 WL 5456654, at *11 (E.D.N.Y. has observed, under New York law: Sept. 8, 2018) (finding that defendant was an employer for NYLL liability after finding The indicia of the existence of a defendant to be plaintiff’s employer under joint venture are: acts manifesting the FLSA). the intent of the parties to be associated as joint venturers, mutual Accordingly, plaintiff has not contribution to the joint undertaking demonstrated by a preponderance of the through a combination of property, evidence that Ciolli was his employer under financial resources, effort, skill or the FLSA or NYLL.27 knowledge, a measure of joint proprietorship and control over the 2. Joint Venture

26 Plaintiff testified that Mr. Feldman was “Ciolli’s the FLSA and NYLL do not apply here, there is no eyes and ears, and basically would have reported credible evidence that Ciolli retaliated against plaintiff everything back to” him. (Tr. 163:16-17.) for his attempt to invoke his rights under the FLSA or NYLL. 27 The Court also concludes with respect to the retaliation claim that, in addition to the conclusion that enterprise, and a provision for the Inc., No. 04 Civ. 7395, 2008 WL 2557422 at sharing of profits and losses. *32 (S.D.N.Y. June 24, 2008); DIRECTV Group, Inc. v. Darlene Inv., LLC, No. 05 Civ. Brown v. Cara, 420 F.3d 148, 159-60 (2d Cir. 5819(WHP), 2006 WL 2773024, at *6 2005) (quoting Richbell Info. Servs., Inc. v. (S.D.N.Y. Sept.27, 2006). As in the instant Jupiter Partners, L.P., 765 N.Y.S.2d 575, matter, where the alleged agreement is oral, 584 (1st Dep’t 2003)); see also SCS parties may demonstrate their intent by Commc’ns, Inc., 360 F.3d at 341. “The combining their property and efforts in a absence of any one element ‘is fatal to the manner such that they are necessarily subject establishment of a joint venture.’” Kidz Cloz, to their joint venturers’ corresponding efforts Inc. v. Officially for Kids, Inc., 320 F. Supp. and potential failures. See Kid Cloz, Inc., 320 2d 164, 171 (S.D.N.Y. 2004) (citation F. Supp. 2d at 171 (citing Zeising, 152 F. omitted). Supp. 2d at 348). After a careful examination of the Here, the credible testimony regarding evidence, the Court concludes that the parties the profit-sharing arrangement, the division formed a joint venture. First, plaintiff and of responsibilities, and the conduct of the Ciolli entered into an oral agreement to open parties (e.g., Ciolli entering into the and run a Grimaldi’s pizzeria. (Tr. 38:02-09, Restaurant’s lease and plaintiff managing the 135:24-138:25.) There is substantial employment and operations) demonstrates an evidence in the record (discussed supra) to intent to enter a joint venture. Specifically, support the existence of this oral agreement. Ciolli credibly testified that the arrangement Although the joint venture was not required him to “build out the entire memorialized in writing, “[p]arties can business” (Tr. 101:12-14), while plaintiff evince their intent to be bound in testified that he was in charge of “getting the a joint venture through a written or oral place open” and “staffing the place” (Tr. agreement.” See Milton Abeles, Inc. v. 212:22-24). Moreover, as explained below, Creekstone Farms Premium Beef, LLC, No. the “totality of the conduct” through the 06-CV-3893 (JFB)(AKT), 2009 WL 875553, parties’ contributions confirms a mutual at *5 (E.D.N.Y. Mar. 30, 2009); see also intent to be joint venturers. Zeising v. Kelly, 152 F. Supp. 2d 335, 347 (S.D.N.Y. 2001) (“If the oral agreement Second, both plaintiff and Ciolli entered into by the parties was a joint venture, contributed to the joint venture. Both it is not subject to the Statute of Frauds and individuals contributed financial resources.28 therefore, may be enforceable.” (citations Ciolli also contributed his knowledge and omitted)). Intent need not be express but skill in the restaurant business. (Tr. 101:14- “may be implied from the totality of the 16.) As discussed supra, Ciolli suggested conduct alleged . . . .” Richbell Info. particular purveyors, provided equipment Servs., 765 N.Y.S.2d at 584 and opportunities for employee training, (citing Mendelson v. Feinman, 531 N.Y.S.2d among other things. Plaintiff’s efforts were 326, 328 (2nd Dep’t 1988)); see SCS focused on daily operations (e.g., hiring staff Commc’ns, 360 F.3d at 342; see also Sea Carriers Corp. v. Empire Programs,

28 Ciolli contributed over $200,000 (Tr. 77:02-03), and plaintiff states that he “has money invested as well.” plaintiff invested $155,664.71 of his own (Tr. 173:20- (Ct. Ex. 22:23.) 175:17, Pl. Ex. 5). In the recorded conversation, and maintaining the schedules). (Tr. 62:14- common law and statutory law, is a mutual 19, 215:01-16.) promise or undertaking of the parties to share in the profits of the business and submit to the Third, the evidence shows that both burden of making good the losses.’” (quoting parties had “some degree of joint control over Dinaco, Inc. v. Time Warner, Inc., 346 F.3d the venture.” SCS Commc’ns, Inc., 360 F.3d 64, 68 (2d Cir. 2003)). There is no evidence at 341. For instance, Ciolli executed the lease that either party would disproportionality for the Restaurant’s property and allowed for share in the profit or the losses of the the use of the Grimaldi’s trademark. (Tr. Restaurant. 38:18-39:11, Pl. Ex. 6.) Plaintiff, in turn, controlled the internal functioning of the In sum, the evidence demonstrates that Restaurant, having sole authority over hiring the parties formed a joint venture in and firing. 29 As explained, the parties connection with the opening and operation of collaborated on renovations, selection of the Restaurant. Plaintiff argues that the mere purveyors, menu items, and the payment of existence of a corporation, as a matter of law, rent. abolishes any underlying joint venture. However, under the circumstances of this Finally, it is clear from the record that the case, it does not.30 parties agreed to equally share in the profits (i.e., 50/50). (Tr. 35:13-25, 172:04-06.) Plaintiff is correct that courts have Although there was no explicit agreement on previously held that a “joint venture may not losses, the conduct of plaintiff and Ciolli be carried on by individuals through a demonstrated an understanding that they corporate form” because the “two forms of would share in the losses as well, including in business are mutually exclusive[.]” Weisman terms of whatever money they each put into v. Awnair Corp. of Am., 3 N.Y.2d 444, 449 the business. Ciolli invested over $200,000 in (1957) (citations omitted). However, later the Restaurant prior to opening and during its precedent has narrowed the scope of operation. (Tr. 77:02-03.) Plaintiff, like Weisman. See Macklem v. Marine Park Ciolli, invested a substantial amount of Homes, Inc., 191 N.Y.S.2d 374, 376 (Sup. Ct. money (over $150,000) in the opening and 1955), aff’d sub nom. Macklem v. Marine operation of the Restaurant that was lost with Park Homes, 191 N.Y.S.2d 545 (2d Dep’t the Restaurant’s closure. (Tr. 114:15-17, 1959), aff’d sub nom. Macklem v. Marine 173:20-174:07, Pl. Ex. 5); see Abeles, Inc. v. Park Homes, Inc., 8 N.Y.2d 1076, (1960) (the Creekstone Farms Premium Beef, LLC, No. joint venture remained intact where “the 06-CV-3893 JFB AKT, 2010 WL 446042, at corporation was formed subsequent to the *8 (E.D.N.Y. Feb. 1, 2010) (“‘An commencement of the joint venture merely as indispensable essential of a contract of a conduit of title and there was never any partnership or joint venture, both under intention on the part of [the parties] to carry

29 The Court also notes that, in plaintiff’s third of the FLSA and NYLL. In any event, the Court has amended complaint (“TAC”), plaintiff alleges that analyzed the issue and concludes that a joint venture plaintiff and defendants “have joint control over the can exist in this situation. However, even if there was restaurant.” (ECF No. 39 at 18.) a legal impediment to the formation of a joint venture that would frustrate their clear intent, the Court would 30 The Court notes that this issue generally arises in the still conclude that no employer/employee relationship context of a party attempting to enforce the terms of a existed because the economic realities of the joint venture, which is not the situation in this case, relationship still warrant such a conclusion (for the where the Court is trying to determine whether an reasons discussed herein). employer/employee relationship existed for purposes on their venture as stockholders in a by a corporation”). As Ciolli had done on corporation”). two prior occasions, when opening up a new Grimaldi’s location, Ciolli created the The Second Circuit has further clarified Corporation (243 Glen Cove Avenue this New York law framework, holding that Grimaldi Inc.) in order to protect the “[w]hen the parties intend to merge their “Grimaldi” name as per the licensing entire joint venture agreement, including agreement. (Tr. 29:01-03; Pl. Ex. 3.) Ciolli their rights inter sese and the conduct of the unilaterally created the Corporation and was business enterprise planned or conducted its sole shareholder. (Tr. 37:09-23.) There is under the agreement, into the form of a no evidence that plaintiff was promised or corporation, they are bound by the result and demanded shares in the Corporation. are relegated to their rights as corporate Therefore, this is not an instance where both stockholders.” Sagamore Corp. v. Diamond parties held an interest in the Corporation, W. Energy Corp., 806 F.2d 373, 378 (2d Cir. indicating an intent to carry out the 1986) (emphasis added) (collecting cases). underlying joint venture while still seeking the protections of the corporate form. See “However, when the parties to a joint Nasso v. Seagal, 263 F. Supp. 2d 596, 618 venture agreement, in forming a corporation (E.D.N.Y. 2003) (holding that the joint to carry out one or more of its objectives, venture was no longer in existence because intend to reserve certain rights inter the parties adopted the corporate form and sese under their agreement, which do not both held shares); Bevilacque v. Ford Motor interfere with or restrict the management of Co., 509 N.Y.S.2d 595 (2d Dep’t 1986) the affairs of the corporation, its exercise of (holding that the partners were not fiduciaries corporate powers, or the rights of third because both were shareholders of the parties doing business with it, defendant corporation.); Berke v. Hamby, these rights being extrinsic to the corporate 719 N.Y.S.2d 280, 281 (2d Dep't 2001) entity and its operations, such joint venture (“Parties may not be partners between agreement may be enforced.” Id. at 378-79. themselves while using the corporate shield (citing Arditi v. Dubitzky, 354 F.2d 483 (2d to protect themselves against personal Cir. 1965) (corporation formation pursuant to liability.”) (citation omitted); Notar– joint venture to construct high-rise Francesco v. Furci, 539 N.Y.S.2d 800, 801 apartments did not bar party from seeking (2d Dep’t 1989) (holding that when partners accounting based on fraud in inducing him to jointly formed a corporation, “the partnership enter agreement)); Triggs v. Triggs, 46 agreement was a nullity” and the partners had N.Y.2d 305, 306 (1978) (stock purchase “only the rights, duties and obligations of agreement between organizers of a stockholders”). corporation, which made “no intrusion on the unfettered management of corporate affairs,” Furthermore, there is no evidence that the enforced) (citation omitted)). joint venture interfered with the rights of the Corporation or third parties. See Paretti v. Here, there is no evidence of the parties’ Cavalier Label Co., 702 F. Supp. 81, 83–84 intent to merge their entire Restaurant (S.D.N.Y. 1988) (“In New York, venture into the corporate form. See Arditi, entrepreneurs may consider themselves to be 354 F.2d at 487 (finding it notable that there partners even though their business is was no “allegation tending to show that the organized as a corporation, so long as the parties intended their personal joint venture partnership agreement does not interfere with agreement to be merged into and carried on the rights of third parties such as creditors.” (citing Sagamore Corp., 806 F.2d at as alter ego for [Ciolli].” Brady, 149 N.Y.S. 379)); Arditi, 354 F.2d at 486. Specifically, at 931. there is no evidence of any “intrusion on the unfettered management of [the In sum, after a careful review of all the Corporation’s] affairs” as Ciolli exclusively evidence, plaintiff has not met his burden in owned and managed the Corporation. showing that Ciolli was his employer under Triggs, 46 N.Y.2d at 306. Moreover, the the FLSA and NYLL. The evidence Corporation’s sole function was to provide demonstrates that the parties entered into a the trademark for the Restaurant, thus it was joint venture to operate the Restaurant for but a “mere adjunct of [the] joint venture.”31 profit. The mere existence of Ciolli’s Sagamore Corp., 806 F.2d at 379 (quoting corporation to facilitate this venture does not Fromkin v. Merrall Realty, Inc., 225 prevent the Court from so finding. N.Y.S.2d 632, 635 (2d Dep’t 1962)). Accordingly, plaintiff has failed to prove his Accordingly, because there was no evidence claims under the FLSA and NYLL.32 of conflict with Ciolli’s management or with any of the Corporation’s creditors (e.g., C. Quantum Meruit and Unjust Imbriano as landlord), the joint venture Enrichment Claims “‘runs along side of the path of the As a threshold matter, plaintiff’s claims corporation’ without being merged into it.” for unjust enrichment and quantum meruit Id. (quoting Manacher v. Central Coal Co., were not included in the pre-trial order or the 131 N.Y.S.2d 671, 676 (1954), aff’d, 125 trial briefing and, thus, appear to have been N.E.2d 431 (1955)). abandoned.33 In any event, plaintiff has Therefore, because Ciolli was the sole failed to carry his burden of proof on these shareholder (Tr. 37:09-12, 38:13-18, 80:10- claims for the reasons set forth below. 12), and there is no evidence of the parties’ Claims for unjust enrichment and intent to “carry on their business enterprise quantum meruit may be analyzed as a single through the corporate form,” Weisman, 3 quasi-contract claim. See, e.g., Mid-Hudson N.Y.2d at 448-49, the underlying joint Catskill Rural Migrant Ministry, Inc. v. Fine venture was not extinguished merely by the Host Corp., 418 F.3d 168, 175 (2d Cir. 2005) Corporation’s formation. Brady v. Erlanger, (“Applying New York law, we may analyze 149 N.Y.S. 929 (1st Dep’t 1914) (holding quantum meruit and unjust enrichment that the underlying joint venture remained in together as a single quasi contract claim.” existence after defendant organized a (citing Newman & Schwartz v. Asplundh corporation to purchase a theater, where Tree Expert Co., Inc., 102 F.3d 660, 663 (2d plaintiff held no stock and received no Cir. 1996)); Atla-Medine v. Crompton dividends). In other words, while Ciolli Corp., No. 00 CIV 5901 HB, 2001 WL owned the corporation, it is “quite clear that 170666, at *8 (S.D.N.Y. Feb. 21, 2001); see plaintiff and [Ciolli] remained co-joint also Seiden Assocs., Inc. v. ANC Holdings, adventurers to the end; the corporation acting

31 The Corporation, itself, did not carry out the 33 The Court notes that plaintiff makes no mention of objectives of the underlying joint venture (i.e., sell his quantum meruit / unjust enrichment claim in his pizza). proposed findings of law (ECF No. 136), or his post- trial submission (ECF No. 139). 32 Because the Court concludes that the FLSA and NYLL do not apply, it does not address the arguments regarding the executive business owner exemption. Inc., 768 F. Supp. 89, 96 (S.D.N.Y. 1991) evidence introduced at trial, the arguments of (explaining that “quantum meruit and unjust counsel, and the controlling law on the issues enrichment are not separate causes of action . presented, that plaintiff has not shown by a and that “unjust enrichment is a required preponderance of the evidence that element for an implied-in-law, or quasi defendants violated the minimum wage, contract, and quantum meruit, meaning ‘as overtime, and anti-retaliation provisions of much as he deserves,’ is one measure of the FLSA and NYLL. Nor has plaintiff liability for the breach of such a shown by a preponderance of the evidence contract”), rev'd on other grounds, 959 F.2d that he is entitled to relief in quasi-contract 425 (2d Cir. 1992) (internal citation omitted). (i.e., quantum meruit and unjust enrichment) “Tn order to recover in quantum meruit under between the parties. The Clerk of the Court New York law, a claimant must establish ‘(1) shall enter judgment in favor of the the performance of services in good faith, (2) defendants on all claims. the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the SO ORDERED. . reasonable value of the services.”” Mid- Hudson, 418 F.3d at 175 (quoting Revson v. Cinque & Cinque, P. C., 221 F.3d 59, 69 (2d Cir. 2000); see also Beth Israel Med. Ctr. v. EPH F. BIANCO Horizon Blue Cross & Blue Shield of N.J, ited States Circuit Judge Inc., 448 F.3d 573, 586 (2d Cir. 2006). (sitting by designation) Here, Ciolli never received any payment Dated: September 6, 2019 from the Restaurant, never withdrew any Central Islip, NY money from the Restaurant’s bank account, and never received any return on his investment from the build-out of the * □□ Restaurant. (Tr. 114:8-17; 237:16-21.) Thus, Ciolli was not unjustly enriched in any Plaintiff is represented by Douglas Brian manner in connection with the operation of Lipsky, Lipsky Lowe LLP, 630 Third the Restaurant. Similarly, to the extent that Avenue, Fifth Floor, New York, NY 10017. plaintiff seeks to recover for the time and Defendants are represented by Vito A. money that he invested in the Restaurant, the Palmieri, Palmieri, Castiglione & Associates, Court concludes that there was no PC, 250 Mineola Boulevard, Second Floor, expectation of compensation for such time Mineola, NY 11501. and money, but rather was a result of the joint venture that Ciolli and plaintiff had formed. Accordingly, plaintiff has failed to show by a preponderance of the evidence that Ciolli breached any quasi-contract with plaintiff related to the Restaurant. V. CONCLUSION For the foregoing reasons, the Court concludes, after carefully considering the