Currently before the Court is a Motion to vacate a default judgment pursuant to Federal Rule of Civil Procedure 60(b) filed by Defendant G.D.M. Properties, L.L.C. ("G.D.M.") on October 16, 2007. Dkt. No. 28. A hearing was held on September 16, 2008 to assist the Court in determining whether G.D.M. was served with process through personal service on co-Defendant Diane Kennedy ("Kennedy") at Ellenville on February 15, 2006. Dkt. Nos. 47, 48. Plaintiff DaimlerChrysler Financial Services Americas, LLC (DaimlerChrysler) has notified the Court that it no longer opposes G.D.M.'s Motion to vacate the default judgment. Dkt. No. 51.
This lawsuit arose out of the collapse and subsequent bankruptcy of non-party Ellenville Dodge-Chrysler-Jeep, Inc. ("Ellenville"). Since 1999, Kennedy has been a member of G.D.M., which owned and operated the real property upon which Ellenville was located, and an officer, director, and shareholder of Ellenville. Kennedy and G.D.M., among others, guaranteed Ellenville's debt to DaimlerChrysler through Loan and Security Agreements dated April 15, 2002. Dkt. No. 1, Exs. B, C, D, E. On January 30, 2006, Ellenville filed for bankruptcy, and on April 19, 2007, Kennedy did so in her personal capacity.
On February 6, 2006, Chrysler commenced the present action against Defendants G.D.M. and Kennedy to recover $1,332,962.86 on the Loan and Security Agreements between the parties which guaranteed Ellenville's debt. Both G.D.M. and Kennedy failed to answer the Complaint, and defaults were entered against them on June 1, 2006 and October 19, 2006 respectively. Defendants moved to vacate those default judgments, and the Court granted Kennedy's Motion due to excusable neglect. Motion (Dkt. No. 28); Order (Dkt. No. 43).
Under Local Rule 7.1(b)(3) of the Local Rules of Practice for the Northern District of New York, "[w]here a properly filed motion is unopposed and the Court determines that the moving party has met its burden to demonstrate entitlement to the relief requested therein, the non-moving party's failure to file or serve any papers... shall be deemed as consent to the granting or denial of the motion, as the case may be, unless good cause be shown." N.D.N.Y.
L.R. 7.1(b)(3). Here, Plaintiff does not oppose G.D.M.'s properly filed Motion to vacate the default judgment. Therefore, the only remaining issue is whether G.D.M. has met the burden "to demonstrate entitlement to the relief requested." N.D.N.Y. L.R. 7.1(b)(3). This burden requires simply that G.D.M.'s motion be "facially meritorious." See, e.g., Hernandez v. Nash, 2003 WL 22143709, at *2 (N.D.N.Y. 2003); Burns v. Trombly, 2008 WL 2003804, at *7 (N.D.N.Y. 2008).
The power to vacate a judgment is within the court's sound discretion, and particularly appropriate in the case of default judgments, primarily because of the harsh results that normally accompany such judgments, and the general tendency to prefer a trial on the merits. Peckarsky v. Galaxiworld.com Ltd., 249 F.3d 167, 174 (2d Cir. 2001); American Alliance Ins. Co., Ltd. v. Eagle Ins. Co., 92 F.3d 57, 61 (2d Cir. 1996); Enron Oil Corp v. Diakuhara, 10 F.3d 90, 95-96 (2d Cir. 1993).
Rule 60(b) states that on "motion and upon such terms as are just," the court may relieve a party from final judgment on grounds that the judgment is "void." FED. R. CIV. P. 60(b). Since service of process is the means by which the Court asserts jurisdiction to adjudicate the rights of a party, a judgment is void if the Defendant was not properly served because the Court is powerless to enter judgment against that Defendant. See Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 84-87 (1988); Velez v. Vassallo, 203 F.Supp.2d 312, 317-318 (S.D.N.Y. 2002).
Although Rule 60(b) states that "[t]he motion shall be made within a reasonable time," "[i]t has oft been stated that, for all intents and purposes, a motion to vacate a default judgment as void may be made at any time." FED. R. CIV. P. 60(b); Beller & Keller v. Tyler, 120 F.3d 21, 24 (2d Cir. 1997). Accordingly, G.D.M. is not time barred from making this Motion pursuant to Rule 60(b)(4).
Since this action was filed in the Northern District of New York, the proper method of service is governed by New York law. See FED. R. CIV. P. 4. Under New York law, service of a summons and complaint may be made on a limited liability company by personally delivering a copy of process upon a member of the company. N.Y.C.P.L.R. §311-a. G.D.M. is a New York limited liability company, and Kennedy is an authorized member of G.D.M. It is on this basis that Plaintiff claimed G.D.M. was served with process through personal service on Kennedy at Ellenville on February 15, 2006.
Under New York law, a process server's affidavit of service establishes a prima facie case of the account of the method of service, and, therefore, establishes a presumption of proper service. Old Republic Ins. Co. v. Pacific Fin. Servs., 301 F.3d 54, 57 (2d Cir. 2002). However, where, as here, the Court is presented with a sworn denial of service by the Defendant, the affidavit of service is rebutted and the plaintiff must establish jurisdiction by a preponderance of the evidence at a hearing. See, e.g., Balancio v. Santorelli, 267 ...