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Mason Tenders District Council of Greater New York v. Wtc Contracting

September 16, 2011

MASON TENDERS DISTRICT COUNCIL OF GREATER NEW YORK,
PLAINTIFF,
v.
WTC CONTRACTING, INC., BAYSIDE CONTRACTING ASSOCS. CORP.,
DEFENDANTS.



The opinion of the court was delivered by: Denise Cote, District Judge:

OPINION AND ORDER

Plaintiff Mason Tenders District Council of Greater New York ("Mason Tenders") filed the complaint in this action on January 29, 2010, asserting claims under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 1985. The complaint alleged that WTC Contracting, Inc. ("WTC Contracting") had failed to contribute to various benefit funds pursuant to the terms of a collective bargaining agreement ("CBA") to which it was a signatory. Bayside Contracting Associates Corp. ("Bayside") was alleged to be liable as an alter ego of WTC Contracting or as a single employer with WTC Contracting under federal labor law. On May 6, Mason Tenders filed affidavits stating that both WTC Contracting and Bayside had been served on March 12 when the complaint and summons had been served on the New York Secretary of State (the "Secretary").

This Court scheduled an initial pretrial conference to take place on June 18 by order dated May 13. On June 17, Mason Tenders filed an affirmation that a notice of the initial pretrial conference had been served on the defendants by first class mail. None of the defendants appeared at the initial pretrial conference. Upon the motion of Mason Tenders, the Court entered an order to show cause on June 25 why a default should not be issued against the defendants. On June 28, Mason Tenders served the order to show cause by first class mail on the defendants at the addresses on file for them with the Secretary. On July 16, a default judgment was entered against WTC Contracting and Bayside. The Secretary notified Mason Tenders on July 25 that while it had forwarded the complaint and summons on Bayside at the Bayside, New York address it had on file (the "Bayside Address") by certified mail, the package was returned as unclaimed by anyone at that address.

Bayside filed this motion to vacate the default judgment entered against it on July 15, 2011, a year after the entry of the default judgment. The motion was fully submitted on August

5. For the reasons stated below, Bayside's motion is denied.

DISCUSSION

Under Federal Rule of Civil Procedure 55(c), "[a] court may set aside any default that has [been] entered for good cause shown, and if a judgment has entered on the default, the court is authorized to set the judgment aside in accordance with the provisions of Rule 60(b)." New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). A court may vacate a judgment for any of the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence . . .; (3) fraud . . ., misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.

Fed. R. Civ. P. 60(b). Bayside brings its motion to vacate pursuant to Rule 60(b)(1) and (6).

When a district court decides a motion to vacate a default judgment pursuant to the provisions of Rule 60(b), the court's determination must be guided by three principal factors: (1) whether the default was willful, (2) whether the defendant demonstrates the existence of a meritorious defense, and (3) whether, and to what extent, vacating the default will cause the non-defaulting party prejudice.

State Street Bank and Trust Co. v. Inversions Errazuriz Limitada, 374 F.3d 158, 166-67 (2d Cir. 2004) (citation omitted). "The district court must consider all of these factors." Commercial Bank of Kuwait v. Rafidain Bank, 15 F.3d 238, 243 (2d Cir. 1994). "A motion to vacate a default judgment is addressed to the sound discretion of the district court," Green, 420 F.3d at 104 (citation omitted), although the Second Circuit has expressed a "strong preference for resolving disputes on the merits." City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 129 (2d Cir. 2011) (citation omitted). "Accordingly, in ruling on a motion to vacate a default judgment, all doubts must be resolved in favor of the party seeking relief from the judgment in order to ensure that to the extent possible, disputes are resolved on their merits." Green, 420 F.3d at 104.

I. Willfulness of the Default

"[A] finding of bad faith is [not] a necessary predicate to concluding that a defendant acted willfully. . . . [I]t is sufficient that the defendant defaulted deliberately." Gucci America, Inc. v. Gold Center Jewelry, 158 F.3d 631, 635 (2d Cir. 1998). "[T]he court may find a default to have been willful where the conduct of counsel or the litigant was egregious and was not satisfactorily explained." Securities and Exchange Commission v. McNulty, 137 F.3d 732, 738 (2d Cir. 1998).

Thus, defaults have been found willful where, for example, an attorney failed, for unexplained reasons, to respond to a motion for summary judgment; or failed, for flimsy reasons, to comply with scheduling orders; or failed, for untenable reasons, after defendants had purposely evaded service for months, to answer the complaint; or failed, for incredible reasons, to appear for a scheduled pretrial ...


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