Djurdjevich v. Flat Rate Movers, Ltd. et al

Filing 29

MEMORANDUM OPINION & ORDER: re: 19 MOTION to Dismiss Plaintiff's Amended Complain,t filed by Israel Carmel, Sam Gholam, Flat Rate Movers, Ltd. The Court grants in part and denies in part Defendants' motion to dismiss. Spe cifically, the Court grants the motion to dismiss Counts IX (breach of contract), XI (breach of the covenant of good faith and fair dealing), and XII (defamation). The Court denies the motion to dismiss the other claims. This resolves Docket Number 19. An initial pretrial conference is hereby scheduled for April 27, 2018, at 4:00 pm. The materials described at Docket Number 8 are due seven days before the conference, and as further set forth in this order. (Initial Conference set for 4/27/2018 at 4:00 PM before Judge Alison J. Nathan.) (Signed by Judge Alison J. Nathan on 3/22/2018) (ap)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Mirko Djurdjevich,
Plaintiff,
17-cv-261 (AJN)

-v-

MEMORANDUM
OPINION & ORDER

Flat Rater Movers, Ltd. et al,
Defendants
ALISON J. NATHAN, District Judge:

This action centers around alleged violations of the Fair Labor Standards Act ("FLSA")
and the New York Labor Law ("NYLL") by Defendants Flat Rate Movers, Ltd. ("Flat Rate"),
Sam Gholam, Israel Carmel, and John Does #1-10. Defendants move to dismiss PlaintiffMirko
Djurdjevich's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state
a claim. For the reasons that follow, the motion is granted in part and denied in part.
I.

BACKGROUND
In the summer of 2010, Defendants encouraged Plaintiff to form a corporation to provide

moving services to Flat Rate. Dkt. No. 16 (FAC)

~

2. Flat Rate and Plaintiff's corporation then

entered into a General Moving Subcontractor and Truck Lease Agreement. FAC

~

2; Dkt. No.

21, Ex. A. Although Defendants thus viewed Plaintiff as an independent contractor, the nature
of the relationship between Plaintiff and Defendants did not change with the formation of
Plaintiff's corporation. FAC

~

3. "Defendants continued to maintain complete control over

Plaintiff's services-dictating his schedule, requiring Plaintiff to purchase and wear the Flat Rate
uniform at all times, prohibiting Plaintiff from working for any other moving company, requiring
Plaintiff to rent Flat Rate's trucks, and dictating how much Plaintiff's crew of truck workers

1

were paid from the fee Plaintiff received." FAC ~ 3. Around October 2011, Defendants
terminated Plaintiffs services. F AC

~

3.

As part of his work for Defendants, Plaintiff "provide[d] moving services" to
Defendants' clients: He and his truck crew would arrive at one residence, pack a client's
furniture and other property, transport them to the client's new residence, and unload them there.
FAC

~

37. Defendants required Plaintiff to arrive at the Flat Rate headquarters in the Bronx by

6:30 am and return the trucks at the end of day, usually around 11 :30 pm. F AC~~ 39-40. From
July 2010 to October 2011, Plaintiff and his truck crew worked at least 17 hours per day, 6 days
per week, for a total of 102 hours per week. F AC

~~

41-43.

Each client would pay Flat Rate a ce1iain fee for the moving job. From that fee, Flat Rate
deducted surcharges before calculating the commissionable amount. F AC

~

44. Defendants then

gave Plaintiff 36% of the commissionable amount, but required that Plaintiff pay his truck crew
and other work-related expenses from that percentage. FAC ~ 44. For example, Defendants
required Plaintiff to pay his crew 27% of the commissionable amount and to pay Defendants at
least $75 per day per moving truck, to pay for gasoline for all trucks, to pay for any tolls and
parking tickets incurred while providing moving services, and to pay for packing materials. FAC
~~

46-51, 54. As a result, in one week, from October 2, 2011 to October 8, 2011, Plaintiff

worked 102 hours and received $643.02 after deducting truck rental charges and the payment to
his truck crew. FAC

~

56. Once Plaintiff paid for other expenses, like gasoline and packaging

materials-expenses that cost $1,332.03-he actually lost $698.01 that week. FAC

~

56.

Around September 2012, the New York State Department of Labor determined that
Plaintiff had been an independent contractor to Flat Rate and that Plaintiffs corporation was
therefore liable for unemployment insurance contributions for the truck crew. FAC~ 4. Plaintiff

2

then pursued an appeal to the Unemployment Insurance Appeal Board, which decided that Flat
Rate had been Plaintiffs employer from July 2010 to October 2011 and that, as a result,
Plaintiffs corporation was not in fact liable for the unemployment contributions. FAC ii 5.
On January 12, 2017, Plaintiff filed suit against Defendants. Dkt. No. 1. In response to a
motion to dismiss, See Dkt. No. 12, Plaintiff filed his First Amended Complaint on April 21,
2017. Dkt. No. 16. Plaintiff contends that Flat Rate, Gholam (the CEO of Flat Rate), and
Carmel (a Flat Rate supervisor), along with ten John Doe officers, directors, members, and/or
managing agents of Flat Rate, violated the FLSA and the NYLL by failing to pay Plaintiff and
the Collective Action Members the required minimum wage or sufficient overtime
compensation; and violated the NYLL by failing to pay the spread of hours premium, to
reimburse Plaintiff for necessary expenses, to provide him with wage notices, and to pay him on
a weekly basis. In addition, Plaintiff brings claims for breach of contract, breach of the covenant
of good faith and fair dealing, quantum meruit, and defamation. Defendants now move to
dismiss Plaintiffs complaint for failure to state a claim. Dkt. No. 19.

II.

ST AND ARD OF REVIEW
To survive a Rule 12(b)(6) motion for failure to state a claim upon which relief can be

granted, the claimant must provide "a short and plain statement of the claim showing that the
pleader is entitled to relief," that "give[s] the defendant fair notice of what the ... claim is and
the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting

Conley v. Gibson, 355 U.S. 41, 47 (1957)). The allegations must "state aclaim to relief that is
plausible on its face." Id. at 570. In deciding a motion to dismiss pursuant to Rule 12(b)(6), the
Court accepts the allegations in the complaint as true and draws all reasonable inferences in
favor of the non-moving party. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d

3

Cir. 2007). "In considering a motion to dismiss for failure to state a claim pursuant to Rule
l 2(b )( 6), a district court may consider the facts alleged in the complaint, documents attached to
the complaint as exhibits, and documents incorporated by reference in the complaint." DiFolco

v. MSNBC Cable L.L.C, 622 F.3d 104, 111 (2d Cir. 2010). Here, the Court considers the
complaint, Dkt. No. 16, and the Subcontractor Agreement, Dkt. No. 21, Ex. A.

III.

STATUTE OF LIMITATIONS
The statute of limitations for a claim under the FLSA is two years, or three years if the

violation was willful. 29 U.S.C. § 255(a). The statute of limitations may, however, be tolled in
certain circumstances. "[E]quitable tolling may be used to suspend the statute oflimitations
against a plaintiff who is unaware of his cause of action .... " Yu G. Kev. Saigon Grill, Inc.,
595 F. Supp. 2d 240, 259 (S.D.N.Y. 2008) (quoting Cerbone v. lnt'l Ladies' Garment Workers

Union, 768 F.2d 45, 48 (2d Cir. 1985)). "The relevant question when considering a request to
toll is whether a reasonable plaintiff in the circumstances would have been aware of the
existence of a cause of action, and despite all due diligence he [wa]s unable to obtain vital
information bearing on the existence of his claim." Lanzetta v. Florio 's Enters., Inc., 763 F.
Supp. 2d 615, 622 (S.D.N.Y. 2011) (Chin, J.) (internal citations and quotation marks omitted).
"[T]he failure to provide an employee with the notice required by the FLSA may be a sufficient
basis for tolling ... ifthat failure contributed to the employee's unawareness of his rights." Id.
at 622-23 (internal quotation marks omitted). However, failure to disclose that an employee is
entitled to overtime pay is generally not sufficient, on its own, to justify equitable tolling.

Upadhyay v. Sethi, 848 F. Supp. 2d 439, 445 (S.D.N.Y. 2012). A plaintiff must also demonstrate
that the failure to provide him with such notice contributed to his unawareness of his rights. Id.
at 446. In Parada v. Banco Industrial De Venezuela, CA., 753 F.3d 62 (2d Cir. 2014), the

4

Second Circuit held that a plaintiff did not merit equitable tolling when, within the statute of
limitations period, she had asked the Department of Labor to review her claim that she was owed
compensation for her ove1iime work. Id. at 71. The court explained that by seeking review from
the Department of Labor, the plaintiff had shown "that she was capable of taking legal action
much earlier" than she had. Id. Because the decision to equitably toll a claim is a highly factual
one, comis may decline to decide at an early stage whether equitable tolling is warranted. See,
e.g., Zhongwei Zhou v. Wu, No. 14-cv-1775 (RJS), 2015 WL 925962, at *4 (S.D.N.Y. Mar. 3,

2015).
The statute oflimitations for NYLL claims is six years. N.Y. Lab. Law§§ 198(3),
663(3). Under New York law, equitable tolling "may be invoked to defeat a statute of
limitations defense when the plaintiff was induced by fraud, misrepresentations or deception to
refrain from filing a timely action." 1 Abbas v. Dixon, 480 F.3d 636, 642 (2d Cir. 2007) (quoting
Doe v. Holy See, 793 N.Y.S.2d 565, 568 (App. Div. 2005)). As with the federal equitable tolling

standard, due diligence by the plaintiff "is an essential element of equitable relief." Id.
The Court concludes that it is too early to determine whether Plaintiff merits equitable
tolling. On the one hand, in September 2012 the New York State Department of Labor
determined that Plaintiff had been an independent contractor to Flat Rate, and Plaintiff then
pursued an appeal to the Unemployment Insurance Appeal Board in which he apparently argued
that he was in fact an employee of Flat Rate. FAC ifif 4-5. That suggests Plaintiff may have

1

The Court notes that several cases apply the same standard in deciding whether to toll the
statute of limitations for NYLL claims as they apply in deciding whether to toll the statute of
limitations for FLSA claims. See, e.g., Kim v. Kum Gang, Inc., No. 12-CV-6344 (MHD), 2015
WL 2222438, at *38-39 (S.D.N.Y. Mar. 19, 2015); Ramirez v. Rifkin, 568 F. Supp. 2d 262, 273
(E.D.N.Y. 2008). At this stage, the difference, if any, between the federal and state tolling
standards does not affect the Court's conclusion that it is too early to decide whether equitable
tolling applies in this action.
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been aware of the rights he seeks in this case at least at the time he pursued the appeal. On the
other hand, unlike in Parada, there is no indication that Plaintiff was pursuing the same wage
and hour violations in the Department of Labor proceeding that he alleges in this action. That
Plaintiff argued before the Unemployment Insurance Appeal Board that he was an employee of
Flat Rate, and that he makes the same argument here, says nothing about whether Plaintiff was
aware of his cause of action under the FLSA or the NYLL. Moreover, Plaintiff alleges that
Defendants did not provide him with any notice of his rights under the FLSA or the NYLL. 2
FAC

~

80; see also FAC

~

7 ("Defendants have sought to deceive Plaintiff and other similar

workers, to lead them to believe they had no rights under foderal and state wage and hour
laws."). At this stage, it is not clear whether Defendants' alleged failure to provide the required
notice led to Plaintiff's ignorance of his rights or whether he learned about his rights from
another source. Accordingly, the Court declines to decide whether Plaintiff's claims under the
FLSA and the NYLL may be equitably tolled. Defendants' motion to dismiss Plaintiff's FLSA
and NYLL claims on the ground that the statute of limitations has passed is thus denied.
Defendants may raise the argument again, if appropriate, at the summary judgment stage.
IV.

WAGE AND HOUR VIOLATIONS
The FLSA requires employers to pay "employees a specified minimum wage, and

overtime of time and one-half for hours worked in excess of forty hours per week." Glatt v. Fox
Searchlight Pictures, Inc., 811F.3d528, 533 (2d Cir. 2015). The NYLL requires the same. See
id. At all times relevant to this action, the minimum wage was $7.25. See 29 U.S.C. § 206(a).
2

Defendants have submitted a declaration contesting this assertion. See Dkt. No. 28. However,
as this is the motion to dismiss stage, the Court considers only the complaint, "documents
attached to the complaint as exhibits, and documents incorporated by reference in the
complaint." DiFolco, 622 F.3d at 111. The declaration does not qualify as any of those
materials. The Court thus excludes it and instead accepts the allegations in Plaintiff's complaint
as true and draws all reasonable inferences in his favor.
6

The interpretation of "employee" under the FLSA is broad, and district courts have "found that
complaints sufficiently allege employment when they state where the plaintiffs worked, outline
their positions, and provide their dates of employment." Dejesus v. HF Mgmt. Servs., LLC, 726
F.3d 85, 91 (2d Cir. 2013). In determining whether an entity constitutes the employer of the
individual under the FLSA, courts consider whether, "as a matter of 'economic reality,' the
entity functions as the individual's employer." Zheng v. Liberty Apparel Co. Inc., 355 F.3d 61,
66 (2d Cir. 2003) (quoting Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33 (1961)); see

also Barfield v. New York City Health and Hasps. Corp., 537 F.3d 132, 141 (2d Cir. 2008)
("[W)hether an employer-employee relationship exists for purposes of the FLSA should be
grounded in economic reality rather than technical concepts .... ").
"The FLSA prohibits employers from requiring employees to purchase the tools of their
trade or give any money back to their employers, when the cost of such tools purchased by the
employee cuts into the minimum or overtime wages required to be paid him under the Act."

Yahui Zhang v. Akami Inc., 15-CV-4946 (VSB), 2017 WL 4329723, at *8 (S.D.N.Y. Sept. 26,
2017) (quoting Jin M Cao v. Wu Liang Ye Lexington Rest., Inc., No. 08 Civ. 3725 (DC), 2010
WL 4159391, at *4 (S.D.N.Y. Sept. 30, 2010)).
Here, Defendants suggest that Plaintiff was not in fact an employee of Defendants. They
emphasize that the New York State Department of Labor initially determined that Plaintiff was
an independent contractor of Flat Rate, rather than an employee, and that Plaintiffs corporation
had entered into the· Subcontractor Agreement with Flat Rate. See Dkt. No. 20 (Def. Memo) at
2-3; Dkt. No. 26 (Def. Reply) at 5. But the complaint contains details describing the employeetype relationship that Plaintiff had with Defendants. Beyond the statements in the complaint that
Plaintiff was "employed by Defendants" within the meaning of the FLSA and the NYLL, see

7

FAC ii~ 94, 99, 105, the complaint also includes allegations describing Plaintiffs relationship
with Defendants, like assertions that Defendants "maintain[ed] complete control over Plaintiffs
services-dictating his schedule, requiring Plaintiff to purchase and wear the Flat Rate uniform
at all times, prohibiting Plaintiff from working for any other moving company, requiring Plaintiff
to rent Flat Rate's trucks, and dictating how much Plaintiffs crew of truck workers were paid
from the fee Plaintiff received," FAC ~ 3; see also FAC ~ 3("[T]he nature of the working
relationship between Plaintiff and Defendants did not change under this new 'independent
contractor' scheme."); FAC

~

37 ("Defendants required Plaintiff and his truck crew to provide

moving services to Defendants' moving clients."); FAC ~~ 34, 38, 39 (describing where Plaintiff
worked); FAC ~ 41 (stating that Plaintiff worked for Defendants from July 2010 to October
2011 ). Those detailed allegations are sufficient to survive a motion to dismiss. Though evidence
produced during discovery may prove otherwise, Plaintiff has sufficiently alleged that he was an
employee entitled to overtime and minimum wage under the FLSA and the NYLL.
As explained more fully below, Plaintiff has also sufficiently alleged wage and hour
violations. 3

a. Overtime Compensation Violation
"[T]o survive a motion to dismiss [a FLSA overtime claim], Plaintiffs must allege
sufficient factual matter to state a plausible claim that they worked compensable overtime in a
workweek longer than 40 hours. " 4 Lundy v. Catholic Health Sys. of Long Island, Inc., 711 F .3d

3

Although Defendants state, "Plaintiff fails to adequately plead any of his causes of action," Def.
Memo at 2, their memorandum in support of the motion to dismiss focuses, in the context of the
FLSA and the NYLL causes of action, on Plaintiffs overtime, minimum wage, and spread of
hours claims, see Def. Memo at 7-10. Accordingly, the Court does not analyze whether Plaintiff
has sufficiently alleged claims for unlawful deductions, Wage Theft Prevention Act violations, or
failure to make payments on a weekly basis.
4

"The same pleading requirements for [a FLSA overtime claim] apply to [an overtime claim]
8

106, 114 (2d Cir. 2013). Accordingly, "to state a plausible FLSA overtime claim, a plaintiff
must sufficiently allege 40 hours of work in a given workweek as well as some uncompensated
time in excess of 40 hours." Id. When the hours alleged to have been worked by a plaintiff do
not add up to more than 40 hours in any given week, the plaintiff has failed to state a plausible
claim for overtime. Id. at 114-15. Similarly, a plaintiff must do more than simply repeat the
language of the FLSA. Dejesus, 726 F.3d at 89.
Plaintiff alleges that he worked more than 40 hours per week without overtime
compensation, and he provides detailed factual allegations to support that argument. He states
that he and his truck crew worked at least 6 days per week, 17 hours per day during the time
period at issue. FAC~~ 41-42; see also FAC~ 39-40 (explaining that Plaintiff usually worked
from 6:30 am to 11:30 pm). Accordingly, Plaintiff worked at least 102 hours per week. FAC
~

43. Given a federal minimum wage of $7.25, Plaintiff should have received $290 for the first

40 hours of work and $674.25 5 for the 62 hours of overtime. However, Plaintiff states that, at the
end of a typical week, he was left with $643.02 (an average hourly rate of $6.30), even before
Defendants imposed additional expenses for gasoline, parking tickets, and moving materials. 6

under [the] NYLL." Amponin v. OlayanAmerica Corp., No. 14 Civ. 2008 (TPG), 2015 WL
1190080, at *4 (S.D.N.Y. Mar. 16, 2015) (citing Lundy, 711 F.3d at 118; Dejesus, 726 F.3d at
89). Here, the Court refers to the FLSA, but the analysis applies with equal force to Plaintiffs
NYLL claim.
Plaintiff calculates this amount as $673.32, FAC ~ 57, but a minimum wage of $7.25 leads to
an overtime rate of $10.875 (one and a halftimes the minimum wage), and 62 hours at a rate of
$10.875 per hour should result in a total of $674.25. It appears that Plaintiff may have
miscalculated the overtime rate by using a minimum wage of $7.24 rather than $7.25.
5

6

Plaintiff states that Defendants required him to pay his truck crew "27% of the commissionable
amount." FAC~ 54. Defendants read that statement to mean that Plaintiff paid his crew 27% of
the amount that he received, see Def. Memo at 9, whereas Plaintiff insists that he meant that
Plaintiff paid his crew 27% of the total commissionable amount, of which Plaintiff was to be
paid 36%, see Dkt. No. 22 (Pl. Memo) at 11-12. Plaintiffs reading is supported by the text of
the complaint, see FAC ~~ 44, 54, so the Court uses that interpretation. In addition, for purposes
of the motion to dismiss, the Court accepts as true Plaintiffs allegations regarding the expenses

9

FAC~ 56. Given that Plaintiff should have received $674.25 in overtime but-even excluding
additional expenses-received only $643.02 for the entire week, it is impossible, based on
Plaintiffs allegations, that Defendants provided Plaintiff with the required overtime
compensation. Accordingly, Plaintiff sufficiently alleges that Defendants failed to pay him the
overtime compensation to which he was entitled.
That Plaintiff has provided details about only one week in which he worked overtime but
was not paid overtime does not change this conclusion. See Boutros v. JTC Painting &
Decorating Corp., 989 F. Supp. 2d 281, 283 (S.D.N.Y. 2013) (explaining that the Second Circuit

in Lundy "held that plaintiffs bringing a FLSA overtime claim must allege not merely that they
typically worked unpaid overtime, but must specify at least one week in which they worked

ove1iime hours but were not paid overtime"). Moreover, read in the light most favorable to
Plaintiff, the allegations about that week serve as an example of a typical week. Defendants'
motion to dismiss Plaintiffs overtime compensation claim is thus denied.
b. Minimum Wage Violation
A FLSA minimum wage claim arises when a plaintiffs "average hourly wage falls below
the federal minimum wage." Lundy, 711 F.3d at 115. "To state a FLSA minimum wage claim,
it is sufficient for a plaintiff to allege facts about her salary and working hours, such that a simple
arithmetical calculation can be used to determine the amount owed per pay period." Tackie v.
Keff Enters. LLC, No. 14-CV-2074 (JPO), 2014 WL 4626229, at *3 (S.D.N.Y. Sept. 16, 2014).

Plaintiff has sufficiently alleged that Defendants failed to pay him the minimum wage.
As explained above, at the end of a typical week, Plaintiff was left with $643.02. FAC ~ 56. But

imposed on Plaintiff by Defendants, see FAC ~ 55, and that they had the effect ofreducing
Plaintiffs compensation.
10

Defendants then imposed expenses for gasoline, parking tickets, and packaging materials. F AC
~

56. After those expenses, Plaintiff was out of pocket $698.01. F AC~ 56. Given that Plaintiff

should have received at least $290 but instead ended up losing money for the week, Plaintiffs
complaint sufficiently alleges that Defendants failed to pay him the federal minimum wage. 7
Likewise, the complaint alleges that Defendants failed to pay Plaintiff the minimum wage
required by the NYLL. Accordingly, Defendants' motion to dismiss Plaintiff's minimum wage
claims is denied.

c. Spread of Hours Violation
Under New York law, when the spread of hours, i.e. the period oftime worked in a given
day, exceeds 10 hours, an employee must be paid "one hour's pay at the basic minimum hourly
wage rate," in addition to his otherwise-required wages. N.Y. Comp. Codes R & Regs. tit. 12,
§ 142-2.4.
Plaintiff alleges that he "was not paid a 'spread of hours' premium" despite the fact that
he worked shifts that exceeded 10 hours. F AC ~ 70. At this stage of the litigation, and given
that Plaintiff has alleged that Defendants paid him so little that he ended up losing money, the
Court concludes that Plaintiff has sufficiently alleged a spread of hours violation. Defendants'

7

The Court recognizes that Plaintiff has not separated out the 40 hours for which Plaintiff should
have received minimum wage and the 62 hours for which Plaintiff should have received
overtime compensation. Indeed, Plaintiffs allegations regarding how much he made from one
four-hour job, see F AC ~ 54, does not demonstrate whether Plaintiff received proper payment
because it is unclear if those four hours were part of the base 40 hours or the additional 62 hours
he worked. Similarly, if Plaintiff had only alleged that he had received $643.02 per week,
resulting in an average hourly rate of $6.30, Plaintiff's minimum wage claim would likely have
failed because that rate would have included the 40 hours for which Plaintiff deserved minimum
wage and the 62 hours for which he deserved overtime compensation, making it possible that
Plaintiff had received the minimum wage for 40 hours and then received less for the overtime
hours. But because Plaintiff contends that, when the additional expenses imposed by Defendants
are considered, he lost money for the week, it is impossible that Plaintiff received the appropriate
minimum wage or overtime compensation.
11

motion to dismiss Plaintiffs spread of hours claim is accordingly denied.

V.

CONTRACT AND QUASI-CONTRACT CLAIMS
Defendants contend that Plaintiff lacks standing to pursue claims for breach of contract,

quantum meruit, and breach of the covenant of good faith and fair dealing. Def. Memo at 11.
"Where the claim asserted is contractual and the plaintiff is not a party the contract or a
third paiiy beneficiary of the contract the claim must be dismissed." Faggionato v. Lerner, 500
F. Supp. 2d 237, 248 (S.D.N.Y. 2007) (citing Hylle Bruks Aktiebolag v. Babcock & Wilcox Co.,
399 F.2d 289, 292 (2d Cir. 1968)).
Here, Plaintiffs contract claims must be dismissed. Plaintiff alleges breach of contract
and breach of the covenant of good faith and fair dealing by Flat Rate in connection with its
performance under the Subcontractor Agreement. FAC iii! 133-136, 144-150. Yet Plaintiff is
not a party to or a third party beneficiary of that Agreement. See Dkt. No. 21, Ex. A. Plaintiff
contends that the Agreement "was a ruse to induce Plaintiff to go along with Defendants' scheme
to mischaracterize him as an independent contractor," Dkt. No. 22 (Pl. Memo) at 12, but that
does not change the fact that the only parties to the Subcontractor Agreement are Flat Rate and
another company. Defendants' motion to dismiss Counts IX (breach of contract) and XI (breach
of the covenant of good faith and fair dealing) is thus granted.
However, the Court rejects Defendants' argument that Plaintiff has no standing to pursue
a quantum meruit claim against Defendants. A quantum meruit claim does not rely on the
existence of an underlying contract. See Mid-Hudson Catskill Rural Migrant Ministry, Inc. v.
Fine Host Corp., 418 F.3d 168, 174 (2d Cir. 2005) (setting forth the requirements of a quantum

meruit claim). Thus the fact that Plaintiff was not a party to the Subcontractor Agreement does
not bar Plaintiffs quantum meruit claim.

12

Accordingly, the breach of contract and breach of the covenant of good faith and fair
dealing claims-but not the quantum meruit claim-are dismissed.

VI.

DEFAMATION CLAIM
Flat Rate has also moved to dismiss Plaintiffs defamation claim. Def. Memo at 11-12. 8
"To state a claim for defamation under New York Law, the plaintiff must allege: (1) a

false statement about the plaintiff; (2) published to a third paiiy without authorization or
privilege; (3) through fault amounting to at least negligence on [the] part of the publisher; (4)
that either constitutes defamation per se or caused special damages." Gargiulo v. Forster &

Garbus Esqs., 651 F. Supp. 2d 188, 192 (S.D.N.Y. 2009) (citing Dillon v. City of New York, 704
N.Y.S.2s 1, 5 (App. Div. 1999)). An allegation of defamation "'is only sufficient ifit adequately
identifies the purported communication, and an indication of who made the communication,
when it was made, and to whom it was communicated.' .... Mere conclusory statements that the
claimant was disparaged by false statements are insufficient to state a defamation claim." Camp

Summit of'Summitville, Inc. v. Visinski, No. 06-CV-4994 (CM) (GAY), 2007 WL 1152894, at
*10 (S.D.N.Y. Apr. 16, 2007) (quoting Scholastic, Inc. v. Stouffer, 124 F. Supp. 2d 836, 849
(S.D.N.Y. 2000)). Thus, "[w]hile plaintiffs are not required to plead defamation in haec verba,''
when a plaintiff makes an "unsupported claim that [his superior] said 'something bad' about him
to a client," the plaintiff has "failed to afford [the defendant employer] 'sufficient notice of the
communications complained of to enable [it] to defend [itself],"' and the claim is properly
dismissed. Reilly v. Natwest Mkts. Grp. Inc., 181F.3d253, 271 (2d Cir. 1999) (last two
alterations in original) (quoting Kelly v. Schmidberger, 806 F.2d 44, 46 (2d Cir. 1986)).
Here, Plaintiff has failed to sufficiently allege a false statement. Plaintiff alleges that

8

Plaintiff did not respond to Defendants' arguments in support of dismissing this claim.
13

"Flat Rate has made false statements to prospective employers regarding Plaintiff, resulting in
prospective employers declining to employ Plaintiff." FAC ~ 154. However, Plaintiff has not
described the allegedly false statements or included "an indication of who made the
communication[s] [or] when [they] w[ere] made." Camp Summit, 2007 WL 1152894, at *10.
Plaintiff has thus "failed to afford [Flat Rate] sufficient notice of the communications
complained of to enable [it] to defend [itself]." Reilly, 181 F.3d at 271. Accordingly, the Court
grants the motion to dismiss Count XII, Plaintiffs defamation claim.
VII.

CONCLUSION
The Court grants in part and denies in part Defendants' motion to dismiss. Specifically,

the Court grants the motion to dismiss Counts IX (breach of contract), XI (breach of the
covenant of good faith and fair dealing), and XII (defamation). The Court denies the motion to
dismiss the other claims. This resolves Docket Number 19. An initial pretrial conference is
hereby scheduled for April 27, 2018, at 4:00 pm. The materials described at Docket Number 8
are due seven days before the conference.
SO ORDERED.

'2018
New York, New York
United States District Judge

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