Levine v. Pee Wee & Tyson, Ltd.: Appellate Clarification of Garden-Variety Emotional Distress and Attorney’s Fees Awards Under the NYCHRL After Default

I. Introduction

Levine v. Pee Wee & Tyson, Ltd., 2025 NY Slip Op 06850 (2d Dept Dec. 10, 2025), is a significant Appellate Division decision at the intersection of default practice and remedies under the New York City Human Rights Law (NYCHRL). Although it does not announce a radically new rule, it meaningfully clarifies:

What a plaintiff must prove at a damages inquest following a default in an NYCHRL employment discrimination case;
When a plaintiff’s uncorroborated testimony is sufficient to justify an award of emotional distress damages;
How courts should quantify “garden-variety” emotional distress under the NYCHRL; and
How to exercise discretion in awarding reasonable attorney’s fees and costs in NYCHRL actions, especially after a default.

The Second Department reverses the trial court’s wholesale denial of damages after an inquest, and itself fixes specific dollar amounts for compensatory damages ($7,500) and attorney’s fees ($7,500), plus costs. In doing so, it synthesizes state and federal authority to provide a practical template for handling similar NYCHRL defaults in the future.

This commentary analyzes the opinion’s background, reasoning, use of precedent, and its broader impact on New York discrimination litigation and default inquest practice.

II. Factual and Procedural Background

A. The Parties and Claims

The plaintiff, Raye Levine, was employed as a waitress by Pee Wee & Tyson, Ltd., doing business as Café Gitane. She commenced an action in December 2019 alleging:

Gender-based employment discrimination; and
Unlawful retaliation,

in violation of the New York City Human Rights Law (NYCHRL), codified at Administrative Code of the City of New York § 8-101 et seq.

B. Default Judgment and Inquest

By order dated June 13, 2022, the Supreme Court, Kings County:

Granted Levine’s motion for a default judgment against Pee Wee & Tyson, Ltd./Café Gitane; and
Directed an inquest on the issue of damages.

At the inquest:

Levine was the sole witness;
She testified as to:
- Her employment as a waitress;
- Her compensation (minimum wage plus tips);
- Her alleged loss of wages;
- Her emotional distress (being “really upset,” “helpless,” and experiencing “a lot of anxiety”).
She sought:
- $100,000 for lost wages;
- $150,000 for mental anguish;
- $250,000 for punitive damages;
- $25,160 for attorney’s fees plus $726.55 in costs.

C. Trial Court’s Disposition

Following the inquest, the Supreme Court held that Levine had “failed to prove entitlement to damages for which an award may be granted” and directed dismissal of the complaint in its entirety. Thus, despite the default on liability, Levine walked away with no recovery.

Levine appealed to the Appellate Division, Second Department. The court deemed her notice of appeal to be an application for leave to appeal under CPLR 5701(c), granted leave, and reached the merits.

III. Summary of the Appellate Division’s Decision

The Second Department reversed the Supreme Court’s order “on the law, on the facts, and in the exercise of discretion.” It held that:

By defaulting, Café Gitane admitted all liability-related allegations in the complaint; only the extent of damages remained to be determined at the inquest.
Levine failed to present sufficiently specific evidence to calculate lost wages, so no award of back pay was warranted.
Levine’s testimony, although modest and uncorroborated, was enough to establish compensable “garden-variety” mental anguish under the NYCHRL, and a $7,500 compensatory award for emotional distress was appropriate.
The record did not support an award of punitive damages under the NYCHRL’s heightened standard set forth in Chauca v. Abraham, 30 NY3d 325.
An award of attorney’s fees is discretionary under Administrative Code § 8-502(g); considering the limited complexity of the matter and the incomplete evidence about counsel’s experience, a reduced award of $7,500 in fees (plus $726.55 in costs) was reasonable.

The matter was remitted solely for the entry of a judgment in favor of Levine, against Pee Wee & Tyson, Ltd./Café Gitane, in the amounts specified. The Appellate Division itself fixed the figures, rather than sending the case back for a new inquest.

IV. Detailed Analysis

A. Effect of Default and the Scope of an Inquest

A core premise of the decision is the longstanding rule that a default admits liability but not damages. The court heavily relies on a line of cases reiterating the distinction between traversable allegations and allegations of damages.

1. Precedents on Default and Admitted Allegations

The court cites:

Abad v. Francis Lewis, LLC, 219 AD3d 1389 (2d Dept 2023): A defaulting defendant admits all “traversable allegations”, including the basic allegation of liability, but not the measure of damage.
Amusement Bus. Underwriters v. American Intl. Group, 66 NY2d 878 (1985): The Court of Appeals established that a defendant’s default is an admission of all factual allegations constituting the cause of action, but not of the amount of damages.
Jihun Kim v. S & M Caterers, Inc., 136 AD3d 755 (2d Dept 2016); Abbas v. Cole, 44 AD3d 31 (2d Dept 2007); Dominguez v. Malecon Shipping, Inc., 211 AD3d 913 (2d Dept 2022): These cases reiterate that default admits liability but not damages, and that the plaintiff must establish damages at an inquest.

Building on these authorities, the court restates the core rule:

“By defaulting, Café Gitane admitted all traversable allegations in the complaint, including the basic allegation of liability. However, an allegation of damage is not a traversable allegation and, therefore, a defaulting defendant does not admit the plaintiff’s conclusion of damages.”

2. Consequences for the Inquest

Once default has been entered, the only remaining issue is the quantum of damages. The Second Department makes this explicit by citing:

Castaldini v. Walsh, 186 AD3d 1193 (2d Dept 2020);
Gonzalez v. Wu, 131 AD3d 1205 (2d Dept 2015).

These cases confirm that an inquest is not an opportunity for the defaulting defendant to re-litigate liability; it is a focused proceeding to determine “the extent of the damages sustained.”

3. Burden of Proof at the Inquest

Even with liability conceded, the plaintiff still bears the burden of establishing a prima facie case of damages. The court quotes:

Bobbo Prop. Mgt., Inc. v. Faulkner, 235 AD3d 615 (2d Dept 2024);
Oparaji v. 245-02 Merrick Blvd, LLC, 149 AD3d 1091 (2d Dept 2017).

Thus, Levine was not entitled simply to her requested figures; she had to present evidence from which the trial court — and, on review, the Appellate Division — could reasonably calculate the amount of damages.

B. Appellate Review of a Nonjury Inquest

The Second Department frames its own power in reviewing the trial court’s inquest findings by invoking standard bench-trial review principles:

Diederich v. Wetzel, 170 AD3d 954 (2d Dept 2019);
Northern Westchester Professional Park Assoc. v. Town of Bedford, 60 NY2d 492 (1983);
Reingold v. Bowins, 180 AD3d 722 (2d Dept 2020);
Betsy Meyer Assoc., Inc. v. Lorber, 42 AD3d 509 (2d Dept 2007).

These cases collectively establish that:

“In reviewing a determination made after a nonjury trial, the power of this Court is as broad as that of the trial court, and we may render a judgment we find warranted by the facts, bearing in mind that, in a close case, the trial judge had the advantage of seeing the witnesses.”

Applied here, this meant the Second Department could:

Independently re-weigh the evidence of damages presented at the inquest;
Conclude that the trial court erred in awarding no damages at all; and
Direct entry of a judgment for specific amounts, without remanding for a new inquest.

This is doctrinally important: it confirms that when damages are tried to the court (whether as a bench trial or an inquest), the Appellate Division does not merely review for “abuse of discretion” but has a broad, quasi-de novo fact-finding authority, albeit with some deference to credibility assessments.

C. Lost Wages: The Need for Specific, Quantifiable Proof

Levine claimed $100,000 in lost wages, but the Appellate Division affirmed the denial of any back pay, emphasizing the need for specificity.

1. The Court’s Critique of the Plaintiff’s Evidence

The opinion notes that Levine testified she:

Worked as a waitress at Café Gitane;
Received minimum wage plus tips.

However, her testimony about:

The number of hours worked per week; and
The time period for which she claimed lost wages,

was “too vague to permit calculation” of damages, and she offered no additional documents (e.g., pay stubs, schedules, tax records).

2. Federal Authorities on Lost Wages in Discrimination Cases

The court bolsters its analysis by citing several federal district court decisions where vague or incomplete wage evidence resulted in denial or curtailment of back pay:

Davis v. Navada’s Bar & Lounge, LLC, 2024 WL 1531092, 2024 US Dist LEXIS 37759 (EDNY 2024);
Sanderson v. Leg Apparel LLC, 2024 WL 898654, 2024 US Dist LEXIS 37649 (SDNY 2024);
Munson v. Diamond, 2017 WL 4863096, 2017 US Dist LEXIS 85143 (SDNY 2017).

Though not binding on a New York state court, these opinions reflect consistent remedial principles in employment discrimination cases: lost wages must rest on reasonably precise evidence, not speculation.

3. State Cases on Proof of Damages

The court also references:

Bobbo Prop. Mgt., Inc. v. Faulkner, 235 AD3d 615 (2d Dept 2024);
Danka Off. Imaging Co. v. General Bus. Supply, 303 AD2d 883 (3d Dept 2003).

These cases stand for a broader commercial principle: damages must be proved with “reasonable certainty,” and cannot rest on conjecture. The same standard applies to wage-loss claims in employment litigation.

4. Practical Takeaway on Lost Wages

Levine confirms that even in a default setting — where liability is conceded — a plaintiff seeking back pay must present concrete evidence such as:

Work schedule (hours per week);
Rate of pay (including tips if calculable);
Duration of unemployment or period of reduced employment; and
Any mitigation efforts or intervening employment.

Absent such detail, courts are justified in denying wage-loss claims altogether.

D. Mental Anguish Under the NYCHRL: “Garden-Variety” Emotional Distress

The most consequential aspect of the opinion concerns mental anguish damages under the NYCHRL — whether they can be established solely by the plaintiff’s testimony and, if so, in what range.

1. Availability of Emotional Distress Damages Under the NYCHRL

The court begins with the NYCHRL’s remedial breadth:

Chauca v. Abraham, 30 NY3d 325 (2017): The Court of Appeals confirmed that the NYCHRL authorizes compensatory and punitive damages against liable employers and employees (Administrative Code § 8-502[a]).

The Second Department also notes that, under both city and state human rights laws, mental anguish damages are well-recognized. It cites:

DeCurtis v. Upward Bound Intl., Inc., 2011 WL 4549412, 2011 US Dist LEXIS 114001 (SDNY 2011);
Matter of New York City Tr. Auth. v. State Div. of Human Rights, 78 NY2d 207 (1991);
Cullen v. Nassau County Civ. Serv. Comm., 53 NY2d 492 (1981);
Matter of Port Wash. Police Dist. v. State Div. of Human Rights, 221 AD2d 639 (2d Dept 1995).

These cases affirm that emotional distress damages may be awarded even absent medical evidence, and that a victim’s own testimony can be sufficient if credible and reasonably detailed.

2. “Garden-Variety,” “Significant,” and “Egregious” Distress

The Second Department adopts the tripartite classification developed in federal employment discrimination jurisprudence:

“Garden variety” emotional distress: Usually based solely on the plaintiff’s testimony, describing distress in relatively general or conclusory terms, with no medical treatment or physical sequelae.
“Significant” distress: More substantial harm, often with some corroboration, more specific symptoms, or a longer duration.
“Egregious” distress: Severe and often long-lasting psychological injury, typically accompanied by professional treatment and/or exceptionally outrageous discriminatory conduct.

The court quotes:

MacMillan v. Millennium Broadway Hotel, 873 F Supp 2d 546 (SDNY 2012);
Olsen v. County of Nassau, 615 F Supp 2d 35 (EDNY 2009).

This categorization is increasingly used by both federal and state courts to calibrate emotional distress awards and promote consistency in damages.

3. Application to Levine’s Testimony

Levine testified that she was:

“Really upset”;
Felt “helpless”;
Experienced “a lot of anxiety.”

However:

She did not describe any physical manifestations (e.g., insomnia, weight loss, headaches);
She did not seek or receive medical or psychological treatment for her distress.

On these facts, the court found that Levine clearly suffered compensable mental anguish but that her case fell within the lowest band — “garden variety” emotional distress.

4. Quantum: Why $7,500?

To fix the amount, the court relies on both federal and state case law:

Miller-Rivera v. Eddie Jr.’s Sports Lounge, Inc., 2018 WL 3581735, 2018 US Dist LEXIS 1151 (EDNY 2018): The court found a modest emotional distress award appropriate based largely on uncorroborated testimony of anxiety and upset.
Matter of Framboise Pastry Inc. v. New York City Comm’n on Human Rights, 138 AD3d 532 (1st Dept 2016);
Matter of Palmblad v. Gibson, 63 AD3d 844 (2d Dept 2009);
Matter of Port Wash. Police Dist. v. State Div. of Human Rights, 221 AD2d 639 (2d Dept 1995);
Matter of A.S.A.P. Personnel Servs. v. Rosa, 219 AD2d 648 (2d Dept 1995);
Matter of Horgan v. New York State Div. of Human Rights, 194 AD2d 674 (2d Dept 1993).

These cases show that New York appellate courts have repeatedly upheld relatively modest awards — often in the $5,000–$15,000 range — for emotional distress where:

The plaintiff’s testimony is general;
There is no medical treatment;
The distress, while real, is not severe or long-lasting.

Against this backdrop, the Second Department concluded:

“Under those circumstances, an award of damages for mental anguish in the sum of $7,500 was warranted.”

This figure effectively anchors future “garden variety” NYCHRL cases where the evidence is similar: uncorroborated, subjective testimony of upset and anxiety, without physical manifestations or treatment.

5. Key Clarification

Importantly, the court rejects the trial court’s all-or-nothing approach. The Supreme Court had concluded Levine “failed to prove entitlement to damages” and dismissed her complaint entirely. The Second Department holds that:

Even minimal, non-medical testimony of emotional distress in a discrimination case can, and often should, support a modest compensatory award under the NYCHRL; and
Courts should not deny all damages simply because the evidence does not support the large sums requested.

This is a subtle but important clarification: modest proof justifies modest damages, not zero damages.

E. Punitive Damages Under the NYCHRL

The plaintiff requested $250,000 in punitive damages, but neither the trial court nor the Appellate Division found such relief warranted.

1. The Chauca Standard

The Court of Appeals in Chauca v. Abraham, 30 NY3d 325 (2017), clarified the standard for punitive damages under the NYCHRL:

Punitive damages are available where the wrongdoer has engaged in discrimination with willful or wanton negligence, or recklessness, or a conscious disregard of the rights of others, or conduct so reckless as to amount to such disregard.

This language draws from Home Ins. Co. v. American Home Prods. Corp., 75 NY2d 196 (1990). The standard is distinct from federal law (e.g., Title VII), and was intentionally framed more broadly to effectuate the NYCHRL’s remedial goals — but it still requires something more than mere liability.

2. Application in Levine

The Second Department concludes that Levine’s testimony did not establish that Café Gitane’s conduct met this heightened standard. No details appear in the opinion indicating particularly egregious or malicious behavior, beyond the underlying discrimination and retaliation already established by default.

The court’s conclusion is bolstered by citation to:

McDaniel v. Scotch & Soda Retail LLC, 2025 WL 401108, 2025 US Dist LEXIS 20398 (SDNY 2025), which applied Chauca and declined punitive damages under similar reasoning.

Thus, the decision reinforces a crucial point: not every successful NYCHRL plaintiff is entitled to punitive damages. There must be evidence of:

Willful or wanton conduct;
Conscious disregard of rights; or
Recklessness approaching such disregard.

In the context of a default, this also signals that plaintiffs should present specific testimony and, where available, documentary proof about the nature and context of the discriminatory acts if they seek punitive damages — not merely assert their availability in the complaint.

F. Attorney’s Fees and Costs Under the NYCHRL

A distinctive feature of the NYCHRL is its robust fee-shifting provision. The opinion provides useful guidance on calculating reasonable fees after a default judgment.

1. Statutory Basis

Administrative Code § 8-502(g) provides:

“In any civil action commenced pursuant to this section, the court, in its discretion, may award the prevailing party reasonable attorney’s fees, expert fees and other costs.”

The Second Department refers to:

Diggs v. Oscar De La Renta, LLC, 169 AD3d 1003 (2d Dept 2019);
Degregorio v. Richmond Italian Pavilion, Inc., 90 AD3d 807 (2d Dept 2011).

These cases confirm that:

A prevailing plaintiff may be awarded fees — it is not automatic;
The fees awarded must be reasonable and not excessive.

2. Factors Governing Reasonableness

The court enumerates familiar factors, paralleling the “lodestar” approach in federal practice:

Time and labor required;
Difficulty of the questions involved;
Skill required;
Lawyer’s experience, ability, and reputation;
Customary fee for similar services;
Results obtained.

Again, the court relies on Diggs and Degregorio for these factors, which are now standard in New York fee jurisprudence.

3. Application to Levine’s Fee Request

Levine requested:

$25,160 in attorney’s fees; and
$726.55 in costs, supported by billing records and documentation.

The Second Department accepts that:

Levine is the prevailing party (she obtained judgment on liability and compensatory damages); and
Fees and costs therefore may be awarded under § 8-502(g).

However, the court notes that:

The difficulty of the legal questions was not high (a single-plaintiff discrimination/retaliation claim resolved by default and brief inquest);
The time and labor required, though some was documented, did not justify the full requested fee in view of the modest results achieved;
Levine failed to present evidence about her counsel’s experience, ability, and reputation, which bears on the reasonableness of the hourly rate and overall fee.

Based on these considerations, the court concludes that a reduced fee of $7,500 is reasonable, and awards:

$7,500 in attorney’s fees; and
All requested costs of $726.55.

The court also cites Sass v. MTA Bus Co., 6 F Supp 3d 238 (EDNY 2014), a federal case illustrating the same principles of fee reasonableness in discrimination actions.

4. Significance

This part of the opinion underscores two important points:

Fee awards need not be proportional to damages. Here, the court awards fees roughly equal to the compensatory damages. While not a formal rule, this signals that even where damages are modest, substantial (but trimmed) fee awards remain appropriate to incentivize private enforcement of civil rights statutes.
Plaintiffs bear the burden of proving the reasonableness of requested fees. Detailed billing records, evidence of counsel’s experience, and explanations of the work performed are essential — especially when requested fees are significantly larger than the damages recovered.

V. Complex Concepts Simplified

1. Default Judgment and Inquest

Default judgment: When a defendant fails to appear or otherwise respond in a timely manner, the court may enter a default judgment, treating the factual allegations in the complaint as admitted (with exceptions).
Traversable allegations: Factual assertions about liability that a defendant could deny in a responsive pleading. These are deemed admitted by default.
Allegations of damages: Statements about the amount of harm or money owed. These are not automatically admitted by default and must be proved.
Inquest: A hearing held after default to determine the amount of damages. The plaintiff must present evidence (documents, testimony, etc.) from which the court can calculate a reasonable award.

2. The New York City Human Rights Law (NYCHRL)

A local civil-rights statute prohibiting discrimination and retaliation in employment, housing, and public accommodations (Admin. Code § 8-101 et seq.).
Considered more expansive and protective than its state and federal counterparts.
Allows for:
- Compensatory damages (including emotional distress);
- Punitive damages (under the Chauca standard);
- Attorney’s fees, expert fees, and costs to the prevailing party (§ 8-502[g]).

3. “Garden-Variety” Emotional Distress

Courts often categorize emotional distress claims into:

Garden variety: Mild to moderate distress described largely by the plaintiff’s own testimony, typically no medical treatment or physical symptoms. Awards often in the low five figures or less.
Significant: More detailed, longer-lasting distress, often corroborated by medical or third-party testimony; higher awards.
Egregious: Severe, long-term psychological injury, often involving treatment and/or particularly outrageous discrimination; highest awards.

Levine’s case squarely falls into the “garden-variety” category.

4. Punitive Damages Under the NYCHRL

Not automatic, even when liability is proven.
Require a showing of willful, wanton, or reckless disregard of the plaintiff’s rights.
Merely proving discrimination or retaliation is not enough; there must be evidence of aggravated misconduct.

5. Attorney’s Fees and Reasonableness Factors

Courts examine:
- Time spent and tasks performed (billing records);
- Reasonableness of hourly rates (based on experience and market rates);
- Complexity of the case;
- Results obtained (including damages and precedent set).
Even where damages are modest, courts may award substantial fees to promote enforcement of civil-rights laws.

6. Appellate Review of a Nonjury Decision

On appeal from a bench trial (or inquest), the Appellate Division has power as broad as the trial court’s:
It can re-weigh evidence, determine damages anew, and modify or reverse the judgment;
However, it gives some deference to the trial judge’s ability to observe witness demeanor and credibility.

VI. Impact and Future Implications

A. For Plaintiffs in NYCHRL Cases

Emotional distress is compensable even with modest proof.
Levine confirms that a plaintiff’s own testimony — even without medical evidence — can justify a nontrivial award of emotional distress under the NYCHRL, particularly where the distress is “garden variety.”
Be precise about economic loss.
Plaintiffs must come to an inquest prepared with specific, documentary evidence of wages and employment history. Vague testimony about hours or duration of unemployment will not support lost wage awards.
Prepare the record for punitive damages.
Plaintiffs who seek punitive damages must develop a factual record showing willful, reckless, or consciously indifferent misconduct, beyond basic liability.
Document attorney’s work and credentials.
Detailed time records, descriptions of work performed, and evidence of counsel’s experience are critical for maximizing fee awards, especially where the case resolves by default.

B. For Defendants and Their Counsel

Defaulting is dangerous, but not a blank check for damages.
Levine underscores that a default does not concede damages. Defense counsel, even if unable to contest liability, may still appear at an inquest or on appeal to challenge speculative or excessive damages.
Potential exposure for fees remains significant even in small cases.
The court’s willingness to award fees equal to the compensatory damages illustrates the risk that defending (or defaulting in) an NYCHRL action can lead to disproportionate fee exposure.

C. For Trial Courts

Avoid all-or-nothing outcomes at inquest where some harm is proven.
The decision implicitly cautions trial courts against denying all damages when a plaintiff has established at least some level of emotional harm. Courts should calibrate awards to the quality and quantity of the evidence rather than effectively nullifying liability.
Use the garden-variety/significant/egregious framework.
This decision further legitimizes the use of the tri-level framework for emotional distress, promoting greater consistency and predictability in awards.

D. For the Development of NYCHRL Remedies jurisprudence

Levine sits within a growing body of Second Department and federal decisions that:

Recognize the broad remedial purpose of the NYCHRL;
Yet insist that plaintiffs satisfy normal evidentiary requirements as to quantum of damages;
Encourage the use of comparative case law to determine reasonable ranges for emotional distress and attorney’s fees.

By expressly relying on both New York and federal authorities, the decision promotes a measure of uniformity in assessing NYCHRL remedies and will likely be cited frequently in:

Future default inquests involving discrimination claims;
Contested trials where plaintiffs present only subjective testimony of distress;
Motions for attorney’s fees under § 8-502(g).

VII. Conclusion

Levine v. Pee Wee & Tyson, Ltd. is an important clarification of how New York courts should handle damages and fees under the NYCHRL following a default judgment. It reaffirms core principles while refining their practical application:

A default admits liability but leaves damages to be proven at inquest;
Lost wages must be supported by specific and quantifiable evidence;
Even limited, uncorroborated testimony can sustain “garden-variety” emotional distress damages, here fixed at $7,500;
Punitive damages require a heightened showing of willful or reckless disregard of rights and are not presumed from liability alone;
Attorney’s fees under the NYCHRL are discretionary but available to prevailing plaintiffs, with reasonableness guided by familiar multi-factor tests.

In reversing the trial court’s denial of all damages and directing entry of a modest, carefully calibrated award, the Second Department underscores a crucial message: NYCHRL violations, once established, should ordinarily yield some meaningful remedy, even when the evidence supports only a modest measure of harm. At the same time, plaintiffs must be prepared to substantiate each component of damages with sufficient detail to enable courts to make reasoned, non-speculative awards.