# Napoli v. 243 Glen Cove Avenue Grimaldi Inc.

> District Court, E.D. New York · September 6, 2019

URL: https://www.frixlaw.com/law-library/cases/10302805

## Case

- **Court:** District Court, E.D. New York
- **Decided:** September 6, 2019
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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

21

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10302805. Public record. Not legal advice.