Cain v. United Mortgage Corp. et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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MICHAEL CAIN,
Plaintiff,
- against -
UNITED MORTGAGE CORP., and
EMMANUEL CATECHIS,
Defendants.
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MEMORANDUM DECISION AND
ORDER
21-cv-3325 (BMC)
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COGAN, District Judge.
This case is before the Court on defendants’ motion for partial reconsideration of the
Court’s October 15, 2025 Memorandum Decision and Order granting in part and denying in
part defendants’ motion for summary judgment. For the reasons set forth below, defendants’
motion is granted and plaintiff’s claim under New York Labor Law (“NYLL”) § 196-d is
dismissed.
BACKGROUND
Plaintiff brought this action under Title VII, 42 U.S.C. § 1981, the Age Discrimination
in Employment Act (“ADEA”), and corresponding provisions of state and local law, contending
that he was discriminated against and subjected to a hostile work environment, and that he was
terminated because of his race, his age, and in retaliation for his protected complaint regarding
race discrimination.
Invoking supplemental jurisdiction, plaintiff also brought claims for violations of NYLL
§ 191 (timely payment), NYLL § 195(1) (notice and recordkeeping), NYLL § 195(3) (wage
statement), and, the subject of this motion, NYLL § 196-d (unlawful retention of gratuities).
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The Court granted defendants’ motion for summary judgment on all age-based claims
and the retaliation claims and denied defendants’ motion on the race-based discrimination and
hostile work environment claims. The Court also granted defendants’ motion for summary
judgment on all NYLL claims except for § 196-d because defendants “ha[d] not challenged
that.”
Defendants move for reconsideration pursuant to Federal Rule of Civil Procedure 60(b)
and Local Civil Rule 6.3 with respect to the § 196-d claim. Defendants argue that they did, in
fact, seek summary judgment on this claim, and that dismissal of this claim is warranted.
Plaintiff has not opposed defendants’ motion.
DISCUSSION
To succeed on a motion for reconsideration, the moving party must “point to controlling
decisions or data that the court overlooked – matters, in other words, that might reasonably be
expected to alter the conclusion reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d
255, 257 (2d Cir. 1995). “[A]dvancing a new or expanded argument does not warrant
reconsideration ... inasmuch as a motion for reconsideration is not a vehicle to offer additional
support for an argument rejected previously by the Court.” Walker v. City of New York, No.
12-cv-840, 2012 WL 6563044, at *3 (E.D.N.Y. Dec. 17, 2012) (internal quotation marks and
quotations omitted). Nor should motions for reconsideration “be granted where the moving
party seeks solely to relitigate an issue already decided.” Shrader, 70 F.3d at 257.
“A motion for reconsideration should be granted only when the [moving party] identifies
an intervening change of controlling law, the availability of new evidence, or the need to correct
a clear error or prevent manifest injustice.” Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL
Irrevocable Tr., 729 F.3d 99, 104 (2d Cir. 2013) (internal quotation marks and quotation
omitted). “A district court commits clear error when a reviewing court would be ‘left with the
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definite and firm conviction that a mistake has been committed.’” Eckhart v. Fox News
Network, LLC, No. 20-cv-05593, 2022 WL 4579121, at *1 (S.D.N.Y. Sept. 29, 2022) (quoting
Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573 (1985)).
Defendants argue that the Court overlooked the portions of their motion for summary
judgment that addressed Count XVII, i.e., plaintiff’s NYLL § 196-d claim: defendants are right,
although it is understandable why the oversight occurred. Defendants addressed Count XVII in
Section IX of their opening memorandum (“PLAINTIFF CANNOT USE HIS SELF-SERVING
TESTIMONY TO VARY THE TERMS OF HIS WRITTEN EMPLOYMENT
AGREEMENT”) and Section V of their reply memorandum (“PLAINTIFF IS NOT
ENTITLED TO COMMISSIONS ON ANY CLOSED LOANS”). But defendants did not
mention “§ 196-d” even once in their memoranda. Given the sheer number of plaintiff’s causes
of action (17) and the overlap of arguments and facts relating to each of those causes of action,
defendants would have been wise to explicitly mention “§ 196-d” when discussing it.
Notwithstanding defendants’ imprecision, the fact remains that defendants did move for
summary judgment on the § 196-d claim. Defendants argued that plaintiff executed an
employment agreement prior to starting his position, and that the agreement did not provide for
payment of commissions. The reason was that under the Real Estate Settlement Procedure Act,
an unlicensed sales assistant – as plaintiff was – may not receive commissions. Defendants
further argued that because plaintiff had a written employment agreement which did not provide
for 1% commissions, plaintiff could not use his verbal statements to alter the terms of that
agreement.
I reject this argument. Under New York law, the parol evidence rule does not preclude
plaintiff from introducing evidence of promises made after the signing of the contract. See
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Giordano v. Thomson, 438 F. Supp. 2d 35, 46 (E.D.N.Y. 2005). “Whether promises were made
to [p]laintiff by [d]efendants, and under what circumstances, comes down to the credibility of
the parties. Such a matter can be decided only by a jury.” Id. The Court suggested this
conclusion in footnote 7 of its decision: “His testimony on the oral agreements gives no
indication of when or why he consented to them. But even with that, I am constrained to allow
a jury to decide issues pertaining to plaintiff’s credibility.”
Plaintiff testified that shortly after he was hired, he entered into an oral side agreement
with Catechis where he would have the same duties and responsibilities as a licensed mortgage
loan officer and receive commissions of 1% for each loan on which he worked. Plaintiff
therefore argued that he was entitled to such commissions even in the absence of a writing. On
defendants’ motion for summary judgment, the Court cannot conclude otherwise. Additionally,
defendants have not given the Court enough information to conclude that the employment
contract was fully integrated and that any alleged oral agreement for commissions would alter
the terms of that agreement.
Defendants offer a new argument in their motion for reconsideration: that Ҥ 196-d,
which provides an avenue for employees to retain gratuities that are charged to customers and
improperly withheld, does not even apply to [p]laintiff’s request for a 1% commission on closed
loans, which is in the nature of a bonus, not a gratuity paid by a customer.” A new argument
typically would not warrant reconsideration. See Walker, 2012 WL 6563044, at *3. Here,
however, it does, because it alerts the Court to a clear error which it must now correct. And, in
any event, plaintiff has not opposed defendants’ motion.
On summary judgment, the Court improperly construed § 196-d as the NYLL’s
“anti-kickback” provision. But § 198-b applies to kickbacks. See Georgiou v. Harmon Stores,
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Inc., No. 22-cv-2861, 2023 WL 112805 (E.D.N.Y. Jan. 5, 2023). Section 196-d, on the other
hand, applies to gratuities and states:
No employer or his agent or an officer or agent of any corporation, or any other
person shall demand or accept, directly or indirectly, any part of the gratuities,
received by an employee, or retain any part of a gratuity or of any charge
purported to be a gratuity for an employee. This provision shall not apply to the
checking of hats, coats or other apparel. Nothing in this subdivision shall be
construed as affecting the allowances from the minimum wage for gratuities in
the amount determined in accordance with the provisions of article nineteen of
this chapter nor as affecting practices in connection with banquets and other
special functions where a fixed percentage of the patron’s bill is added for
gratuities which are distributed to employees, nor to the sharing of tips by a
waiter with a busboy or similar employee.
The statutory language suggests that a gratuity is a charge that a consumer incurs in
recognition of the service provided and in addition to the charge for the underlying good or
service. Plainly, a gratuity is a tip. The New York Administrative Code confirms this
understanding. See, e.g., Mayes v. Gerber Grp. Ltd. P’ship, 85 Misc.3d 1234(A) (table), 228
N.Y.S.3d 922 (N.Y. Sup. Ct. 2025) (“When determining whether a charge is to be considered a
gratuity, ‘[t]here shall be a rebuttable presumption that any charge in addition to charges for
food, beverage, lodging, and other specified materials or services ... is a charge purported to be
a gratuity.’” (quoting 12 NYCRR § 146-2.18(b)).). And in evaluating whether a charge is a
gratuity, the New York Court of Appeals focuses on “the expectation of the reasonable
customer.” Samiento v. World Yacht Inc., 10 N.Y.3d 70, 79, 854 N.Y.S.2d 83, 88 (2008)
(emphasis added). By contrast, a commission is a portion of the total value of a transaction that
a salesperson receives from his employer for completing the transaction. As plaintiff’s
arguments regarding his entitlement to commissions make clear, the “expectation” at issue is
not the customer’s, but his own – in this case, by virtue of an employment contract and an
alleged oral agreement with a manager.
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A commission is not a tip. For the reasons stated above, and because plaintiff has never
argued that he received or was entitled to tips from his customers, § 196-d is inapplicable.
CONCLUSION
The Court grants defendants’ motion for reconsideration, and grants summary judgment
to defendants on plaintiff’s NYLL § 196-d claim.
SO ORDERED.
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U.S.D.J.
Dated: Brooklyn, New York
November 13, 2025
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