The opinion of the court was delivered by: NINA GERSHON, District Judge
REPORT AND RECOMMENDATION
On December 30, 2002, the United States filed this action
against defendant Grantley E. Crichlow, pursuant to
26 U.S.C. § 7401, seeking to reduce to judgment defendant's outstanding
liabilities for federal internal revenue taxes, plus statutory
accruals. By Notice of Motion dated April 9, 2003, plaintiff
moves for entry of a default judgment against defendant Crichlow
for failure to answer or otherwise respond to the Complaint.
The motion was referred to the undersigned to prepare a Report
According to the Complaint, Grantley E. Crichlow, who resides
in Brooklyn, New York, filed his federal income tax returns for
the tax years 1981, 1982, 1984, 1985, 1986, 1987, 1988, 1989,
1990, 1991, 1994, 1995, 1996, but failed to pay the amounts owed
in full. (Compl. ¶¶ 2, 3). The Secretary of the Treasury has
calculated the amount of unpaid taxes due and owing to be
$143,336.82. (Cirenza Decl.*fn1 ¶ 7). Penalties and interest
on this amount have been calculated as $633,459.78 through December 31, 2002. (Id.) Together, with
interest and penalties, the government alleges that defendant
owes a total of $776,796.60 in unpaid taxes, interest and
penalties up to December 31, 2002.*fn2
Plaintiff alleges that defendant was sent notices of assessment
and demands for payment for each of the amounts, but defendant
has nevertheless refused to, failed to, or neglected to pay.
Plaintiff thereafter commenced this action and served the
Complaint on defendant on February 3, 2003. Defendant failed to
answer or otherwise respond. (Cirenza Decl. ¶ 3).
On April 10, 2003, the Clerk of Court entered a default against
defendant. Plaintiff now seeks a default judgment in the amount
Rule 55(a) of the Federal Rules of Civil Procedure provides:
"[w]hen a party against whom a judgment for affirmative relief is
sought failed to plead or otherwise defend as provided by these
rules and the fact is made to appear by affidavit or otherwise,
the clerk shall enter the party's default." Fed.R.Civ.P. 55(a).
After a default has been entered against a party, if that party
fails to appear or otherwise move to set aside the default
pursuant to Rule 55(c), a default judgment may be entered. See
In determining whether a default judgment should enter, courts
have cautioned that a default judgment is an extreme remedy that
should only be granted as a last resort. See Meehan v. Snow,
652 F.2d 274, 277 (2d Cir. 1981). While the Second Circuit has
recognized the "push on a trial court to dispose of cases that, in disregard of the
rules, are not processed expeditiously [and] . . . delay and clog
its calendar," it has held that the district court must balance
that interest with its responsibility to "[afford] litigants a
reasonable chance to be heard." See Enron Oil Corp. v.
Diakuhara, 10 F.3d 90, 95-96 (2d Cir. 1993).
Before determining whether a default should enter here, the
court must first ascertain that the defaulting party has been
properly served with the summons and complaint. See Copelco
Capital, Inc. v. Gen. Consul of Bolivia, 940 F. Supp. 93, 94
(S.D.N.Y. 1996) (holding that "[a] court may not properly enter a
default judgment unless it has jurisdiction over the person of
the party against whom the judgment is sought, `which also means
that he must have been effectively served with process'")
(quoting 10 Charles Alan Wright, Arthur R. Miller, Mary Kay Kane,
Federal Practice & Procedure: Civil 2d § 2682, at 407 (1983)).
As the Supreme Court noted in Henderson v. United States,
"the core function of service is to supply notice of the pendency
of a legal action, in a manner and at a time that affords the
defendant a fair opportunity to answer the complaint and present
defenses and objection." 517 U.S. 654, 672 (1996). In following
the Supreme Court's definition of acceptable service, the Second
Circuit has held that there must be service "reasonably
calculated to provide actual notice of the action." Nat'l Dev.
Co. v. Triad Holding Corp., 930 F.2d 253, 258 (2d Cir. 1991),
cert. denied, 502 U.S. 968 (1991). If a defendant does not
receive service in compliance with Rule 4 of the Federal Rules of
Civil Procedure, and does not waive formal service, the court
lacks personal jurisdiction over the defendant. See Jackson v.
Hayakawa, 682 F.2d 1344, 1347 (9th Cir. 1982). ...