Barbecho et al v. M.A. Angeliades, Inc. et al

Filing 104

OPINION re: 83 MOTION to Amend/Correct 50 Amended Complaint, . filed by Augusto Venegas, Luis Rene Agudo, Victor H. Martinez, Julio Pelaez, Luis Pineda, Miguel Bonilla, Jose pineda, Romulo Quizhpi, Alberto Cando, Manuel Pineda, Edison Agudo, Daniel Almazo, Manuel Imanagua, Jose Barbecho, Juan Siavichay, Elias Juarez, Luis Morocho, Trinidad Ruiz, Fredy Gavilanes, Jaime Castro, Crecensiano V. Ruiz, Ortiz Julio, Luis Barbecho, Jose Villa, Luis Molina, Al fonso Yuquilima, Luis Tierra, Manuel Ortega, Efrain Fernandez, Luis Valdez, Miguel Yuquilima, Cornelio Sigua, Justo Mora, Mario Astudillo, Wilson Ortiz, Angel Zabala, 87 MOTION for Summary Judgment . filed by M.A. Angeliades , Inc., Federal Insurance Company, Dimitri Malakidis, Irena Angeliades, Merkourios Angeliades, Angeliades Group LLC.Defendants' motion for partial summary judgment is granted as to the NYLL overtime claims (Counts II and III), but denied as to the breach of contract claim (Count VI). Defendants' motion to quash is denied. Plaintiffs' motion to amend is granted and the amendment will relate back to the date this suit was initiated. (As further set forth in this Order.) (Signed by Judge Miriam Goldman Cedarbaum on 11/10/2015) (kgo)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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DANIEL ALMAZO, LUIS BARBECHO,
MANUEL IMANAGUA, ELIAS JUAREZ,
LUIS MOLINA, JUSTO SAUL MORA,
LUIS MOROCHO, and LUIS TIERRA
on behalf of themselves and others
similarly situated
Plaintiffs,

OPINION

-against-

11 CV 1717 (MGC)

M.A. ANGELIADES, INC.;
ANGELIADES GROUP LLC, MERKOURIOS
“MIKE” ANGELIADES, DIMITRI
MALAKIDIS, IRENA ANGELIADES,
FEDERAL INSURANCE COMPANY, a
subsidiary of Chubb Group of
Insurance Companies, and JOHN DOES
#1-100,
Defendants.
----------------------------------X
Cedarbaum, J.
Plaintiffs bring this putative collective and class
action for failure to pay overtime wages for work performed
on weekends against defendants M.A. Angeliades, Inc.,
Angeliades Group LLC, Merkourios “Mike” Angeliades, Dimitri
Malakidis, Irena Angeliades (collectively, “Angeliades
Defendants”), and Federal Insurance Company.

Plaintiffs,

individual workers, assert claims for failure to pay
overtime wages and retaliation under the Fair Labor

1

Standards Act (“FLSA”) and the New York Labor Law (“NYLL”),
and for breach of contract as a third party beneficiary.
Three motions are before the Court.

Defendants move

for partial summary judgment on the NYLL overtime claims
and the contract claim.

That motion is granted as to the

NYLL claims and denied as to the contract claim.
Defendants also move to quash certain third party
subpoenas.

That motion is denied.

Finally, Plaintiffs

move to amend the complaint to add Magnetic Construction
Corp. as a defendant and to add allegations of failure to
pay prevailing and overtime wages for weekday work.

That

motion is granted.
Defendants’ Motion For Partial Summary Judgment
Summary judgment is appropriate where “the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.”

Fed. R. Civ. P. 56(a).

In making this

determination, courts view all facts in the light most
favorable to the nonmovant.

Matthews v. City of New York,

779 F.3d 167, 171 (2d Cir. 2015).
The Angeliades Defendants operate a contracting
business in New York City.

The business performs public

works projects for city agencies.

The projects at issue

here were performed pursuant to contracts (the “Contracts”)
2

between some or all Angeliades Defendants and the relevant
city agency.
New York Labor Law § 220(2) requires that such
contracts for public work contain a stipulation that “no
laborer, worker or mechanic . . . shall be permitted or
required” to work more than eight hours in a day or five
days a week, except in cases of “extraordinary emergency
including fire, flood or danger to life or property.” 1
Extraordinary emergency is also defined to include
instances where the Commissioner of Labor determines that
the time restrictions prevent a project from being
completed “expeditiously”.

The provision goes on to state

that “any person interested” can apply to the Commissioner
for a dispensation to allow workers to work longer hours——
for which they would receive premium wages.
In the public works Contracts at issue here, that
required stipulation took the following form:
(a)

No laborer, worker or mechanic in the employ of the
Contractor, subcontractor, or other person doing or
contracting to do the whole or a part of the Work
contemplated by the Contract, shall be permitted or
required to work more than eight hours in any one

1

This provision implements the New York Constitution, Article 1,
Section 17: “[n]o laborer, worker or mechanic, in the employ of
a contractor or sub-contractor engaged in the performance of any
public work, shall be permitted to work more than eight hours in
any day or more than five days in any week, except in cases of
extraordinary emergency; nor shall he be paid less than the rate
of wages prevailing in the same trade . . . .”
3

calendar day or more than five days in any one week,
except in cases of extraordinary emergency . . . .
The term “extraordinary emergency” as contained
herein shall have the meaning set forth in Section
220 of the New York State Labor Law.
(b)

No contractor or subcontractor contracting for any
part of the Contract work may require or permit the
employment of laborers or mechanics to be employed on
such work in excess of either (8) hours in any
calendar day in excess of forty (40) hours in any
workweek unless such laborer or mechanic receives
compensation at a rate of not less than one and onehalf times (1 ½) the basic rate of pay for all hours
worked in excess of eight (8) hours in any such
calendar day, or in excess of forty (40) hours in any
such workweek, as the case may be. 2

The NYLL also provides that
[u]nless otherwise provided by law, the following number
of hours shall constitute a legal day’s work . . . . For
all other employees . . . eight hours. This subdivision
shall not prevent an agreement for overwork at an
increased compensation, except upon work by or for the
state or a municipal corporation, or by contractors or
subcontractors therewith, and except as otherwise
provided in this chapter.
N.Y. Lab. Law § 160.

Finally, the NYLL provides for

criminal penalties for contractors that require overtime on
public works projects: “[a]ny person contracting with the
state or a public benefit corporation, or a municipal
corporation . . . that shall require more than eight hours

2

Although Defendants provide only a one-page example of this
required provision in one contract between an unidentified city
agency and M.A. Angeliades, Inc., Plaintiffs “are willing to
presume” for the purposes of this motion that the sample
provisions provided were included in each relevant Contract.
Pls.’ Opp. Br. at 19, Dkt. #91.
4

work for a day’s labor, unless otherwise permitted by law,
is guilty of a misdemeanor.”

N.Y. Lab. Law § 220(2-a); see

also N.Y. Lab. Law § 220(3)(d)(i)-(iv) (criminal penalties
for failure to pay prevailing wage).
Plaintiffs worked as laborers and carpenters on public
works projects for the Angeliades Defendants.

Plaintiffs

allegedly worked Monday through Friday for forty hours, and
sometimes were required to work sixteen to twenty-four
additional hours on weekends.

For the weekend work,

Plaintiffs claim they were paid less than their weekly
hourly rate.
As to Plaintiffs’ statutory claims, NYLL § 220(7)-(9)
requires employees of public works projects to exhaust
administrative remedies before bringing a private right of
action.

Samborski v. Linear Abatement Corp., No. 96 CIV. 1405

(DC), 1998 WL 474069, at *2 (S.D.N.Y. Aug. 10, 1998); Ethelberth
v. Choice Sec. Co., No. 12-CV-4856 PKC, 2015 WL 861756, at *16
(E.D.N.Y. Feb. 27, 2015).

Plaintiffs have given no indication

that they have exhausted administrative remedies.

Summary

judgment on the NYLL overtime claims is therefore granted.
In New York, a public works project employee denied
proper wages is not limited, however, to statutory
remedies.

The employee may bring a common law breach of

contract claim as the intended third party beneficiary of a
5

public works contract.

Fata v. S.A. Healy Co., 289 N.Y.

401, 404–07 (1943).
The Angeliades Defendants argue that Plaintiffs cannot
recover under the Contracts because both the Contracts
themselves and the NYLL prohibit employees of public works
projects from working overtime.

Plaintiffs’ overtime work

was, according to Defendants, an “illegal bargain” and thus
unenforceable.

Defendants’ position is unsupported by the

Contracts, and even if the NYLL does bar Plaintiffs’
overtime work, the Contracts are nonetheless enforceable.
The Contracts at issue here are between various public
agencies and the defendant contractor.

The employees of

the contractor (Plaintiffs) are not parties to the
Contracts——they are beneficiaries.

Accordingly, the

Contracts do not regulate the conduct of the workers; the
Contracts regulate the conduct of the contractor.

That is

why the contract language promises that no worker “shall be
permitted or required to work more than . . .” instead of
no worker “shall work more than . . .”——the admonition is
directed at the contractor.
The Angeliades Defendants have allegedly failed to
adhere to that admonition.

Their breach does not, however,

render inapplicable the next section of the Contracts,
which states that no contractor “may require or permit”
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overtime work unless it pays a premium wage.

That language

is unambiguous——workers are owed a premium wage for
overtime hours worked.

That the contractor may have

breached his contract with the public agency has no bearing
on a worker’s ability to recover as a third party
beneficiary.
It may be true, as Defendants argue, that NYLL § 160
prohibits overtime work on public works projects. 3

However,

even if the overtime work Plaintiffs performed pursuant to
the Contracts was illegal, the Contracts are not
necessarily unenforceable.

A contract that violates a

regulatory statute is enforceable if 1) the statutory
violation is only unlawful by virtue of the statute (and
not evil in itself); 2) the statute does not “specifically
require that all contrary contracts be rendered null and
void”; and 3) the penalty imposed by voiding the contract
is “wholly out of proportion to the requirements of public
policy.”

Schlessinger v. Valspar Corp., 686 F.3d 81, 85

3

At the least, it is clear that, contrary to Defendants
suggestions, neither NYLL § 220(2) (“no laborer . . . shall be
permitted or required to work . . . .”), nor the New York
Constitution, Article 1, Section 17 (“no laborer . . . shall be
permitted to work . . . .”), prohibits public works project
employees from working overtime. Rather, these laws prohibit
the contractors from permitting or requiring public works
project employees to work overtime.
7

(2d Cir.) (citations omitted); see also Benjamin v.
Koeppel, 85 N.Y.2d 549, 553 (1995).
The Contracts meet this test.

There is nothing

inherently immoral about overtime work——indeed, the NYLL
provides for overtime outside the public works context.
Nothing in the NYLL specifically voids the Contracts.

And

the widely recited purpose of § 220 is to protect
“workingmen against being induced, or obliged, to accept
wages below the prevailing rate from a public employer.”
Bucci v. Village of Port Chester, 22 N.Y.2d 195, 201
(1968).

Indeed, the Court of Appeals of New York has

demanded that § 220 “be construed with the liberality
needed to carry out its beneficent purposes.”

Id.

Using a

statute so-designed to deny workers overtime pay would
achieve the opposite of the legislature’s intended end.
See Garcia v. Pasquareto, 812 N.Y.S.2d 216, 217 (App. Term
2004) (“To condone dismissal of actions for wages earned
but not paid, regardless of the legal theory employed, on
the ground that such labor contracts are ‘illegal’, would
thus directly contravene the public policy of the State of
New York.”).
In addition, “courts are especially skeptical of
efforts . . . to use public policy as a sword for personal
gain rather than a shield for good.”
8

Koeppel, 85 N.Y.2d at

553 (internal quotation marks omitted).

Illegal contracts

are thus often enforced where “there is the potential that
the defendant could receive a windfall” if the plaintiff is
not paid for services rendered.
86.

Schlessinger, 686 F.3d at

Here, Defendants have allegedly received overtime work

from Plaintiffs, without having to pay overtime wages.
Also supporting enforcement is the existence of
sanctions provisions in the statute.

“Allowing parties to

avoid their contractual obligation is especially
inappropriate where there are regulatory sanctions and
statutory penalties in place to redress violations of the
law.”

Lloyd Capital Corp. v. Henchar, Inc., 80 N.Y.2d 124,

128 (1992); see also Koeppel, 85 N.Y.2d at 555-56.

Under

the NYLL, contractors face criminal penalties for
unlawfully requiring workers on public works projects to
work overtime, or failing to pay them earned overtime
wages.

N.Y. Lab. Law § 220(2-a); N.Y. Lab. Law

§ 220(3)(d)(i)-(iv).
Defendants argue that this case is governed by New
York state court decisions that refuse to enforce contracts
illegally entered into by the State or a municipality.

In

Donovan v. City of New York, 33 N.Y. 291 (1865), for
example, workers brought suit against the city for wages
owed them for work on roads.

The court denied the workers’
9

claim because the city department that hired them had done
so without the statutorily required consent of the city
council.

Thus the workers “were employed in contravention

of the policy and terms of the statute, and they [could
not] invoke the aid of the courts to enforce an unlawful
agreement.”

Id. at 293.

However, the court noted that the

workers would have redress “against those who without
authority assumed to employ them.”

Id. at 292; see also

Burns v. City of New York, 105 N.Y.S. 605, 606 (App. Div.
1907) (“He knew that the city of New York had no authority
to make such a contract, and, not having the power, it
cannot be charged with the obligation.”).
Here, in contrast, Plaintiffs were hired by private
contractors who have refused to pay Plaintiffs for alleged
overtime work.

Donovan and Burns are inapplicable——those

decisions simply barred city officials from entering into
unauthorized contracts.

The Court of Appeals in Donovan

recognized that the unauthorized individuals could be
personally obligated to the workers.

Similarly, Defendants

here may be liable to Plaintiffs for their overtime work.
The situation before the Court is more akin to
instances where employers attempt to avoid paying
undocumented workers because their labor contracts are
illegal.

New York courts have rejected that argument.
10

See, e.g., Nizamuddowlah v. Bengal Cabaret, Inc., 415
N.Y.S.2d 685, 686 (App. Div. 1979) (“[T]he practice of
hiring [illegal] aliens, using their services and
disclaiming any obligation to pay wages because the
contracts are illegal is to be condemned.”); Pineda v. Kel–
Tech Constr., Inc., 832 N.Y.S.2d 386 (Sup. Ct. 2007)
(“Undocumented workers, no matter what type of documents
they proffered or did not proffer at the time of
employment, may still collect the prevailing wage under New
York Labor Law section 220 for work they have performed.”).
Accordingly, the NYLL overtime claims are dismissed,
but the contract claim will proceed.
Defendants’ Motion To Quash Third Party Subpoenas
Plaintiffs served subpoenas for documents on nine nonparty public agencies.

Defendants move to quash those

subpoenas due to lack of relevance.
“In the absence of a claim of privilege, a party
usually does not have standing to object to a subpoena
directed to a non-party witness.”

Langford v. Chrysler

Motors Corp., 513 F.2d 1121, 1126 (2d Cir. 1975).
Defendants assert that they have a “personal privacy right”
to information on the “income amounts [Defendants] received
for work performed for the” public agencies.

However,

given that the agencies made those payments, such
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information could not be private to Defendants.

See Nova

Products, Inc. v. Kisma Video, Inc., 220 F.R.D. 238, 241
(S.D.N.Y. 2004) (no standing to quash third party subpoenas
where moving party “included no evidence to show that [the
information] was meant to be private or confidential in any
manner”).

Defendants therefore lack standing to challenge

the subpoenas.

The motion to quash is denied.

Plaintiffs’ Motion To Amend
Plaintiffs move to amend their complaint to add Magnetic
Construction Corp. as a party and to add allegations of
failure to pay prevailing and overtime wages for weekday work.
Federal Rule 15(a)(2) states that courts “should
freely give leave [to amend] when justice so requires.”
“The rule in this Circuit has been to allow a party to
amend its pleadings in the absence of a showing by the
nonmovant of prejudice or bad faith.”

Block v. First Blood

Associates, 988 F.2d 344, 350 (2d Cir. 1993).

Courts have

“broad” discretion in choosing whether to allow amendments.
Local 802, Associated Musicians of Greater New York v.
Parker Meridien Hotel, 145 F.3d 85, 89 (2d Cir. 1998).
Where a proposed amendment seeks to add a new
defendant, Federal Rules 20 and 21 apply.

Under Rule 20,

defendants may be joined if the claims against them arise
“out of the same transaction, occurrence, or series of
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transactions or occurrences” and “any question of law or
fact common to all defendants will arise in the action.”
Fed. R. Civ. P. 20 (a)(2); see also Fed. R. Civ. P. 21
(“[T]he court may at any time, on just terms, add or drop a
party.”).

Joinder is decided under the “same standard of

liberality afforded to motions to amend.”

Sly Magazine,

LLC v. Weider Publ’ns LLC, 241 F.R.D. 527, 532 (S.D.N.Y.
2007) (internal quotation marks omitted).
Defendants have not made a showing of prejudice if the
amendment is allowed (or argued bad faith).

They claim

that Magnetic will be prejudiced because it no longer has
documents relating to Plaintiffs’ claims.

Nowhere,

however, does Magnetic assert that it disposed of these
documents after this lawsuit was initiated.
Defendants argue that, if the amendment is allowed,
the claims against Magnetic should not relate back to the
date of the original complaint.

That is incorrect.

An

amendment adding a new party relates back if the claim
asserted against that party arises out of the same
“conduct, transaction or occurrence” and if, within the
time limit for service, the new party “(i) received such
notice of the action that it will not be prejudiced in
defending on the merits; and (ii) knew or should have known
that the action would have been brought against it, but for
13

a mistake concerning the proper party’s identity.” Fed. R.
Civ. P. 15(c)(1)(C).
There is disagreement among the courts over whether
“mistake concerning the proper party’s identity” includes
instances where a plaintiff seeks to sue an additional
defendant (rather than simply a different defendant).
Compare Abdell v. City of New York, 759 F. Supp. 2d 450,
457 (S.D.N.Y. 2010) (“[I]t is clear that a mistake
‘concerning the proper party’s identity’ under Rule 15(c)
includes lack of knowledge regarding the conduct or
liability of that party.”), with In re Vitamin C Antitrust
Litig., 995 F. Supp. 2d 125, 129 (E.D.N.Y. 2014) (no
relation back where “[t]he plaintiff has sued the right
defendant, and simply neglected to sue another defendant
who might also be liable”).

As the Supreme Court has

stated in discussing Rule 15(c)(1)(C), no relation back
“would be a windfall for a prospective defendant who
understood, or who should have understood, that he escaped
suit during the limitations period only because the
plaintiff misunderstood a crucial fact about his identity.”
Krupski v. Costa Crociere S. p. A., 560 U.S. 538, 550
(2010).

With that reasoning in mind, “mistake concerning

the proper party’s identity” should be construed to include
the situation here where Plaintiffs were mistaken as to
14

which entities were responsible for their wages. Cf.
Michalow v. E. Coast Restoration & Consulting Corp., 2012
U.S. Dist. LEXIS 185362, *19-20 (E.D.N.Y. Oct. 22, 2012)
(amendment relates back where “mistake of plaintiffs . . .
consisted of not understanding the extent to which
prospective defendants were intertwined with, and had
authority in the operation of, the business of defendants
and the alleged conduct that violated the FLSA”).
Magnetic was on notice and knew or should have known
that Plaintiffs would have included Magnetic in this action
if not for Plaintiffs’ mistake (nor do Defendants challenge
these points).

Plaintiffs have alleged that defendant

Merkourios Angeliades owns Magnetic, that defendants
Dimitri Malakidis and Irena Angeliades are executives at
Magnetic, and that Magnetic is located at the same address
as the other corporate defendants.

The proposed amended

complaint alleges that certain plaintiffs here received
their (inadequate) wages from Magnetic.

The amended

complaint will relate back to the time of initial filing.

15

CONCLUSION
Defendants’ motion for partial summary judgment is
granted as to the NYLL overtime claims (Counts II and III),
but denied as to the breach of contract claim (Count VI).
Defendants’ motion to quash is denied.

Plaintiffs’ motion

to amend is granted and the amendment will relate back to
the date this suit was initiated.
SO ORDERED.
Date:

New York, New York
November 10, 2015

S/______________________________
MIRIAM GOLDMAN CEDARBAUM
United States District Judge

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