IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
REDACTED, Plaintiff, vs. REDACTED, LLC, Defendant. CASE NO.: DEFENDANT’S RESPONSE TO PLAINTIFF’S MOTION FOR ENTRY OF DEFAULT JUDGMENT
RESPONSE TO DEFENDANT’S MOTION FOR DEFAULT
Defendant, Redacted, LLC, responds to Plaintiff’s Motion for Entry of Default [Doc 7] and states as follows1:
Plaintiff, Redacted, was employed at Raintree Apartments in Clermont, Florida by a company known as Pinnacle.2 Raintree of Lake County, Ltd., the owners of Raintree Apartments, fired Pinnacle and replaced it with a company named Redacted, Inc.
Defendant, Redacted, LLC, never hired, attempted to hire, interviewed, or met Ms. Redacted. She was never employed by and never sought employment with Redacted, LLC. Ms. Redacted never worked for Redacted, LLC (and, thus, never worked
any overtime for this company). Additionally, Redacted, LLC has never employed 15 or more persons.
When Defendant learned of the lawsuit Ms. Redacted filed, its in-house counsel wrote to her attorney advising him that he had the wrong Defendant. When Defendant was unable to contact counsel for Ms. Redacted via phone to discuss the matter, it immediately began to seek an attorney to represent it. However, due to an administrative misunderstanding, counsel was not retained until August 11, 2011. Not responding to the Complaint in this matter was an administrative oversight, and not willful. Defendant always intended to, and still intends to, defend this lawsuit.
A. The Default should be vacated pursuant to FRCP 55(c).
An entry of default is not a final judgment. 6 J. Moore, Federal Practice 55.03, at 55-32, 55.09, at 55-201 (2d ed. 1976); e.g., Orange Theatre Corp. v. Rayherstz Amusement Corp., 130 F.2d 185, 187 (3d Cir. 1942) (entry of default is a purely formal matter); Titus v. Smith, 51 F.R.D. 224, 226 (E.D. Pa. 1970) (entry of default is interlocutory); I.T.S. Rubber Co. v. Essex Rubber Co., 25 F.2d 180, 183 (D. Mass. 1922) (same). The distinction between the interlocutory act of entry of default and a default judgment, which represents final judicial action, is implicit in the separate treatment given the entry and the setting aside of defaults and default judgments in rules 55 and 60(b). Similarly, separate standards of review for the setting aside of defaults and default judgments are set forth in rules 55(c) and 60(b).
To set aside an entry of default, a movant need not meet rule 60(b) criteria, but need only establish “good cause.” Fed. R. Civ. P. 55(c). Courts are more lenient in treating rule 55(c) motions to set aside defaults than they are in treating rule 60(b)
motions to set aside default judgments. See e.g., United States v. Topeka Livestock Auction, Inc., 392 F. Supp. 944, 950 (N.D. Ind. 1975); Schartner v. Copeland, 59 F.R.D. 653, 656 (M.D. Pa.), aff’d inein., 487 F.2d 1395 (3d Cir. 1973); Broder v. Charles Pfizer & Co., 54 F.R.D. 583, 583 (S.D.N.Y. 1971); SEC v. Vogel, 49 F.R.D. 297, 299 n.2 (S.D.N.Y. 1969); Eisler v. Stritzler, 45 F.R.D. 27, 27-28 (D.P.R. 1968); Trueblood v. Grayson Shops, Inc., 32 F.R.D. 190, 195 (E.D. Va. 1963); see 6 J. Moore, Federal Practice 55.10, at 55-240 (2d ed. 1976); 10 C. Wright & A. Miller, supra note 10, § 2694, at 319.
Since this was a non-final default judgment, the Court can set it aside for “good cause” under Rule 55(c), without ever reaching the more stringent “excusable neglect” standard of Rule 60(b). Id.; Hinson v. Webster Indust., 240 F.R.D. 687, 691-92 (M.D. Ala. 2007) (same, citing Anheuser Busch; non-final judgments can be set aside or otherwise changed by district court at any time before they become final; such judgments can be set aside for “good cause” rather than stricter requirements of Rule 60(b)); see also E.E.O.C. v. Mike Smith Pontiac GMC, Inc., 896 F.2d 524, 527-28 (11th Cir. 1990) (“excusable neglect” standard of Rule 60(b) is more rigorous than “good cause” standard). “Good cause” is shown where the failure to timely respond to the complaint was not willful, the defaulting party acts promptly to vacate the default once counsel is obtained, a meritorious defense is provided, and the opposing party will suffer no prejudice if the default is vacated.” USA Flea Market, LLC v. EVMC Real Estate Consultants, Inc., 248 Fed. Appx. 108, 111 (11th Cir. 2007).
In this case, the failure to timely respond to the complaint was indisputably not willful. The failure to respond to the Plaintiff’s Complaint was an administrative oversight, and when it was discovered the Defendant immediately acted to vacate the
default and retain outside counsel. Therefore, pursuant to Rule 55(c), the Clerk’s default should be set aside.
B. The Plaintiff’s Complaint fails to state a valid claim.
As previously mentioned, the Court did not enter a default judgment against the Defendant so it should be set aside upon a showing of good cause. However, it may also be set aside if the Complaint failed to state a claim.
Even under the more strict standards applicable to a default judgment, a judgment “cannot stand on a complaint that fails to state a claim.” Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1371 n.41 (11th Cir. 1997); see also Wallace v. The Kiwi Group, Inc., – F.R.D. –, 2008 WL 58945 (M.D. Fla. Jan. 3, 2008) (“A court may enter a default judgment only if the factual allegations of the complaint, which are assumed to be true, provide a sufficient legal basis for entry of a default judgment.”). “[W]hile a defaulted defendant is deemed to ‘admit the plaintiff’s well-pleaded allegations of fact,’ he ‘is not held to admit facts that are not well-pleaded or to admit conclusions of law.’” Cotton v. Massachusetts Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005).
Twombly and Iqbal fundamentally changed the pleading requirements of Rule 8(a)(2) by requiring that a plaintiff plead facts sufficient to render his asserted claim or claims plausible. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Plausibility pleading, combined with the requirement that courts accept as true all factual allegations in a complaint, renders a plaintiff unable to plead untenable inconsistent facts. As noted by the Court in Iqbal:
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009), c.o. Thus, after Twombly and Iqbal, a plaintiff must plead “sufficient factual matter” which, “accepted as true,” makes the plaintiff’s claims facially plausible.
Plaintiff’s compliant fails to state a claim because it is so grossly inconsistent as to be facially implausible. Specifically, Counts I and II claim that Defendant failed to hire Plaintiff because of her alleged pregnancy. However, Count III claims that Defendant failed to pay Plaintiff overtime for hours worked. Clearly, Defendant could not have both failed to hire Plaintiff and failed to pay he overtime. Moreover, as previously mentioned, Defendant did not employ more than 15 persons. Therefore, her complaint fails to state a claim and the default judgment based on the defective pleading must be set aside.
C. The Default should be vacated even under the more strict standards of FRCP 60(B).
Although Defendant need only satisfy the lesser requirements of Rule 55(c) or show that the Plaintiff’s Complaint was defective, the facts set forth above also satisfy Rule 60(b)’s “excusable neglect” standard. As the Eleventh Circuit has explained, the Supreme Court has established a “flexible analysis” of “excusable neglect” that takes account of the fact that “excusable neglect” includes inadvertence, mistake or carelessness, as well as circumstances beyond the party’s control. Advanced Estimating System, Inc. v. Riney, 77 F.3d 1322, 1324 (11th Cir. 1996). When analyzing excusable neglect, courts should:
‘tak[e] account of all relevant circumstances surrounding the party’s omission,’ including ‘the danger of prejudice to the [nonmovant], the
length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith.’ . . . Primary importance should be accorded to the absence of prejudice to the nonmoving party and to the interest of efficient judicial administration.
Id. at 1325. As discussed above, there is no prejudice to Plaintiff in setting aside the default and Defendant has always acted in good faith.
Moreover, as per the attached affidavit, the Defendant has a meritorious defense. Specifically, Defendant has less than 15 employees and therefore it is not subject to either F.S. 760 (i.e. Count I) nor Title VII (i.e. Count II). See 42 U.S.C. § 2000e(b) (Title VII only applies to employers who employ 15 or more employees for 20 or more weeks in the current or preceding calendar year); Fla. Stat. Sec. 760, Definition of “Employer”. Additionally, Defendant never employed Plaintiff, and therefore does not owe her any overtime wages (i.e. Count III). Therefore, the Clerk’s Default should also be set aside pursuant to Rule 60(b). See .e.g FROF, Inc. v Harris 695 F Supp 827 (1988, ED Pa) (Default judgment against corporate officer vacated, where officer’s attorney believed that service had not been properly effected, wrote letter asserting that belief to plaintiff’s counsel 9 days after putative service, and received no substantial response to letter).
For the foregoing reasons, Defendant Redacted, LLC respectfully requests this Court to deny the Plaintiff’s Motion for Default Judgment, set aside the Clerk’s default, and permit it to defend this action on the merits.
Dated this 12th day of August, 2011.
Michael Massey, Esq.
Michael Massey, FBN 153680
Attorney for Defendant