John D. Whitfield, Plaintiff, v. LEEBA (2023)

In this action concerning the rights of freelance workers, defendant moves in motion sequence 004 to dismiss plaintiff's amended complaint under CPLR 3211. In motion sequence 003, defendant moves to consolidate the present action with a prior action brought by plaintiff in Supreme Court, Kings County, Index No. 523750/2021 (Richard Velazquez, J.). These motions are consolidated for disposition. Defendant's motion to dismiss is denied; its motion to consolidate is granted.

DISCUSSION

Defendant's Motion to Dismiss (Mot Seq 004)

Plaintiff's claims in this action are brought under the Freelance Isn't Free Act (FIFA), enacted in 2017 and codified in chapter 20 of the New York City Administrative Code.¹ Defendant contends that these claims are barred by documentary evidence under CPLR 3211 (a) (1), that they are time-barred under CPLR 3211 (a) (5), and that they fail to state a cause of action under CPLR 3211 (a) (7). Defendants' contentions are unpersuasive. The motion to dismiss is denied.

Plaintiff's Claim under Administrative Code § 20-928

Plaintiff's first cause of action is based on Administrative Code § 20-928. That provision requires a hiring party who has retained services of a freelance worker that are worth at least $800 to reduce to writing the contract between hiring party and worker. (See Administrative Code § 20-928 [a].) Plaintiff alleges that defendant refused to reduce their qualifying contractual arrangement to writing in violation of § 20-928. These allegations state a cause of action.

Defendant moves to dismiss this cause of action under CPLR 3211 (a) (5) as time-barred. FIFA claims have a two-year limitations period. (See Administrative Code § 20-933 [a] [2].) Plaintiff filed his complaint on May 27, 2022, rendering untimely all claims accruing before May 27, 2020. Defendant argues that plaintiff began working for defendant as an employee, rather than as a freelancer, in June or July 2020; and that as a result, plaintiff could not have performed $800 or more in freelance work between May 27, 2020, and June or July 2020, practically speaking. But plaintiff's complaint alleges that he accepted an offer of employment from defendant only in June 2020, and that he did not begin working for defendant as an employee until July. (See NYSCEF No. 18 at ¶¶ 15-16.) And defendant itself submitted two invoices totaling $800 that plaintiff sent to defendant on May 29, 2020, and June 29, 2020, respectively—within the limitations period.² (See NYSCEF No. 25.)

Plaintiff's Claim under Administrative Code § 20-929

Plaintiff's second cause of action is brought under Administrative Code § 20-929. That provision requires hiring parties to pay freelance workers either on the payment date set by the contract or, absent a set payment date, no later than 30 days from the completion of the contractual work. (Administrative Code § 20-929 [a] [1]-[2].) It also provides that once the freelancer has begun performing that contractual work, a hiring party may not "require as a condition of timely payment that the freelance worker accept less compensation than the amount of the contracted compensation." (Id. § 20-929 [b].) Plaintiff alleges that defendant did not pay him on time as required by § 20-929 (a) (see NYSCEF No. 18 at ¶¶ 44); and that defendant improperly conditioned his receiving any payment on the release of funds of defendants that the City of New York had frozen (see id. at ¶ 45; see generally id. at ¶¶ 6-20).

Defendant moves to dismiss this claim as, in effect, barred by documentary evidence under CPLR 3211 (a) (1); and for failure to state a cause of action under CPLR 3211 (a) (7). Defendant also seeks dismissal of the vast majority of plaintiff's damages claim as untimely under CPLR 3211 (a) (5).

The branch of the motion brought under CPLR 3211 (a) (7) is denied: Plaintiff's allegations clearly state a cause of action under Administrative Code § 20-929.

With respect to the branch of defendant's motion under CPLR 3211 (a) (1), defendant relies on documents that it asserts prove that plaintiff received various payments from defendant, rendering untrue plaintiff's allegation that he was required to "receive no payment at all for ongoing services until defendant's ceased annuity and welfare funds were released" (NYSCEF No. 18 at ¶ 45). This court finds defendant's assertion unpersuasive. At most, the evidence submitted by defendant shows that it made one payment to plaintiff in September 2019, which the complaint itself discusses (see NYSCEF No. 18 at ¶ 14), and that defendant made several payments to plaintiff after he began working for defendant as an employee in July 2020. (See NYSCEF No. 25 at 1.) That is not sufficient to conclusively refute plaintiff's allegations and theory of liability, as required to warrant dismissal of plaintiff's second cause of action at the pleading stage.

The Branch of Defendant's Motion Seeking Dismissal of Damages Claims Accruing Before May 27, 2020

Defendant also contends, in the alternative, that this court should dismiss as time-barred plaintiff's claims for damages to the extent they stem from acts allegedly committed before May 27, 2020. (See NYSCEF No. 33 at 1.) This court declines to do so.

Plaintiff has alleged that defendant and its agents concealed their wrongdoing (i.e., failing to provide a written contract and failing to pay him on time) by repeatedly assuring him that a written contract was unnecessary and that he would be fully paid once defendant's funds were released by the City. (See NYSCEF No. 18 at ¶¶ 11 & n 1, 12 & n 2, 17, 18, 25, 37, 38.) These allegations are sufficient to support an application of equitable estoppel barring defendant's limitations defense. (See Simcuski v Saeli, 44 NY2d 442, 448-450 [1978].)

Defendant misplaces its reliance on Shoreham Hills, LLC v Sagaponack Dream House, LLC, which rejected an equitable-estoppel-based opposition to a CPLR 3211 (a) (5) motion to dismiss. (See NYSCEF No. 33 at 1-2, citing 2020 NY Slip Op 50326[U] [Sup Ct, Suffolk County, Mar. 4, 2020] [Emerson, J.].) The Shoreham Hills court relied on the failure of the plaintiff in that case to allege more than a failure by the defendant to disclose its wrongdoing. (See 2020 NY Slip Op 50326[U], at *2, citing Corsello v Verizon New York, Inc., 18 NY3d 777, 789 [2012].) But here, unlike in Shoreham Hills and Corsello, plaintiff has specifically alleged that defendant and its agents did not merely fail to tell plaintiff about the acts on which plaintiff now relies, but made affirmative misrepresentations to cover up the wrongfulness of defendant's conduct when plaintiff raised the issue with them. Given those allegations, it would be inappropriate to dismiss plaintiff's pre-May 2020 damages claims at the pleading stage.

Defendant's Motion to Consolidate (Mot Seq 003)

Defendant also moves under CPLR 602 to consolidate this action with Whitfield v Law Enforcement Employees Benevolent Association (LEEBA), Index No. 523750/2021, filed in September 2021 in Supreme Court, Kings County. The motion is granted.

On reviewing the papers in Index No. 523750/2021, this court agrees with defendant's position (see NYSCEF No. 20 at ¶ 7) that the facts underlying the two actions are sufficiently similar to warrant consolidation to avoid duplication of effort and the risk of inconsistent verdicts.

Plaintiff's opposition to defendant's motion does not show that his substantial rights would be prejudiced by consolidation. Plaintiff argues that because his allegations in this action establish a rebuttable presumption under FIFA, and his allegations in the Kings County action do not give rise to a similar presumption of liability, consolidating the actions risks jury confusion. This court sees no reason, however, why a properly instructed jury would be unable to distinguish between the two sets of claims and apply a rebuttable presumption of liability to the FIFA-based causes of action but not to the other causes of action. Plaintiff also asserts that consolidation would improperly "diminish . . . [an]other basis of liability" in violation of Administrative Code § 20-935 (b). (See NYSCEF No. 30 at 5.) To the contrary, if plaintiff's FIFA claims are also adjudicated in the Kings County action, those claims will "supplement . . . not diminish or replace" the bases of liability alleged in plaintiff's complaint in that action (Administrative Code § 20-935 [b])—as the statute directs.³

Accordingly, it is

ORDERED that defendant's CPLR 3211 motion to dismiss (mot seq 004) is denied; and it is further

ORDERED that plaintiff's application for sanctions under 22 NYCRR § 130-1.1 is denied; and it is further

ORDERED that defendant's motion to consolidate (mot seq 003) is granted, and venue of this action is changed from this Court to Supreme Court, Kings County, where it shall be consolidated with the pending action brought under Index No. 523750/2021; and it is further

ORDERED that, within 30 days from entry of this order, counsel for movant shall serve a copy of this order with notice of its entry upon the Clerk of this Court, shall pay the appropriate transfer fee, if any, and shall contact the staff of the Clerk of this Court and cooperate in effectuating the transfer; and it is further

ORDERED that the Clerk of this Court shall transfer the file in this action to the Clerk of Supreme Court, Kings County, and shall mark his records to reflect such transfer; and it is further

ORDERED that the Clerk of the Court shall coordinate the transfer of the file in this action with the Clerk of Supreme Court, Kings County, so as to ensure an efficient transfer and consolidation and to minimize insofar as practical the reproduction of documents, including with regard to any documents that may be in digital format.

4/09/2023

FOOTNOTES

1.   For a recent discussion of FIFA, see Little Known Law Can Lead to Large Liability: The Freelance Isn't Free Act, Mar. 31, 2023 at 4, col 4.

2.   In any event, even if this court were to conclude that plaintiff had failed to bring his § 20-928 claim within the two-year limitations period, plaintiff has sufficiently alleged for pleading purposes that defendant is equitably estopped from raising that defense. (See Section I.C, infra.)

3.   Plaintiff argues that defendant's counsel committed a sanctionable misstatement of fact in stating, in defendant's memorandum of law in support of the motion to dismiss that it "wishes to make the Court aware that is has filed a motion to consolidate this action with his prior action." (See NYSCEF No. 30 at 6 [plaintiff's memorandum of law], quoting NYSCEF No. 24 at 4.) This court agrees with defendant that this statement properly referred to the motion to consolidate brought as motion sequence 003 in this action, rather than inaccurately representing that defendant had moved in the Kings County action to consolidate the two cases. To the extent plaintiff's argument on this point constitutes an informal sanctions application, the application is denied.

Gerald Lebovits, J.