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Reiseck v. Universal Communications of Miami, Inc.

United States District Court, S.D. New York

March 19, 2014

LYNORE REISECK, Plaintiff,
v.
UNIVERSAL COMMUNICATIONS OF MIAMI, INC., et al., Defendants.

OPINION AND ORDER

LORNA G. SCHOFIELD, District Judge.

Before the Court is Plaintiff's Motion for Default Judgment against Defendants Carl Ruderman, Universal Communications of Miami, Inc. ("Universal") and Blue Horizon Media, Inc. ("Blue Horizon"). For the following reasons, Plaintiff's motion is GRANTED, and the case is referred to Magistrate Judge Francis for an inquest on damages.

BACKGROUND

In 2004, Plaintiff commenced suit in the New York Supreme Court against Defendants Universal, Blue Horizon, Douglas Gollan, Carl Ruderman, Geoffrey Lurie and David Bernstein, alleging that they wrongfully withheld her overtime pay in violation of the Fair Labor Standards Act ("FLSA"), the New York Labor Law ("NYLL") and other state laws. In 2006, Defendants removed the action to the Southern District of New York. In 2009, the Court granted summary judgment in favor of Defendants on all of Plaintiff's claims, finding that Defendants were exempt from the overtime pay provisions because Plaintiff was an "administrative employee, " and dismissed the case. Reiseck v. Universal Commc'ns of Miami, No. 06 Civ. 777, 2009 WL 812258 (S.D.N.Y. Mar. 26, 2009) (Griesa, J.). On appeal, the Second Circuit vacated the Court's judgment insofar as it found that Plaintiff was a "salesperson" rather than an "administrative employee, " and remanded the case to determine, inter alia, whether Plaintiff was nevertheless precluded from recovery by the "outside salesperson" or "commissioned salesperson" exemptions. Reiseck v. Universal Commc'ns of Miami, Inc., 591 F.3d 101, 108 (2d Cir. 2010). In 2011, the Court held that Defendants were not entitled to the "commissioned salesperson" exemption, and reserved the "outside salesperson" exemption issue for trial. Reiseck v. Universal Commc'ns of Miami, Inc., No. 06 Civ. 777, 2011 WL 2078213 (S.D.N.Y. May 19, 2011) (Griesa, J.). In 2012, the Court granted summary judgment for Defendants Lurie and Bernstein on the ground that they were not Plaintiff's employers for purposes of FLSA and NYLL, but denied it as to Defendants Ruderman and Blue Horizon. Reiseck v. Universal Commc'ns of Miami, No. 06 Civ. 777, 2012 WL 3642375 (S.D.N.Y. Aug. 23, 2012) (Griesa, J.).

On July 12, 2013, the attorney for Defendants Ruderman, Universal and Blue Horizon moved to withdraw as counsel, representing that the three Defendants had discharged his firm on June 24, 2013, and directed his firm not to render further legal services. On July 16, 2013, the Court granted the attorney leave to withdraw, and ordered the corporate Defendants Universal and Blue Horizon to retain new counsel by July 29, 2013. On July 23, 2013, Plaintiff served the July 16, 2013, order upon Defendants.

On July 23, 2013, Defendant Ruderman filed a letter informing the Court of his intent not to defend the claims against him.

On August 22, 2013, the Court ordered Defendants Universal and Blue Horizon to show cause on September 9, 2013, why they should not be found in default and judgment entered against them on the issue of liability. On the same day, Defendants Universal and Blue Horizon were served with the August 22, 2013, order. On September 9, 2013, Defendants Universal and Blue Horizon failed to appear by counsel before this Court.

On November 22, 2013, Plaintiff filed a letter informing the Court that she had a signed settlement agreement with Defendant Gollan. Although Plaintiff represented that a Stipulation of Discontinuance was forthcoming, to date, no stipulation has been filed in connection with Defendant Gollan.

On December 13, 2013, Plaintiff filed the instant Motion for Default Judgment against the remaining Defendants Ruderman, Universal and Blue Horizon. On December 16, 2013, the Court ordered Defendants Ruderman, Universal and Blue Horizon to show cause on January 23, 2014, why they should not be found in default and judgment entered against them on the issue of liability. The Court subsequently adjourned the show cause hearing twice, to March 18, 2014. On March 18, 2014, Defendants Ruderman, Universal and Blue Horizon failed to appear before this Court.

On February 19, 2014, and again on March 13, 2014, Defendant Ruderman sent e-mails to the Court, asking that the Court closely scrutinize the amount of damages sought by Plaintiff. To date, Defendant Ruderman has not complied with the Court's several orders for pretrial submissions or filed a formal response to Plaintiff's Motion for Default Judgment.

STANDARD

"Rule 55 [of the Federal Rules of Civil Procedure] provides a two-step process' for the entry of judgment against a party who fails to defend: first, the entry of a default, and second, the entry of a default judgment." City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2d Cir. 2011) (quoting New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005)).

Pursuant to Rule 55(a), default may be entered against a defendant that has failed to plead or "otherwise defend." Fed.R.Civ.P. 55(a). "Although Rule 55(a) contemplates that entry of default is a ministerial step to be performed by the clerk of court, a district judge also possesses the inherent power to enter a default." Mickalis, 645 F.3d at 128 (citations omitted). The Second Circuit has "embraced a broad understanding of the phrase otherwise defend, '" id. at 129, finding the entry of default to have been proper in a variety of circumstances - e.g., the defendant's failure to appear for trial after a lack of diligence in pre-trial proceedings, Brock v. Unique Racquetball & Health Clubs, Inc., 786 F.2d 61, 63-65 (2d Cir. 1986); the defendant's use of obstructionist litigation tactics, Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981); or the defendant's willful disregard of court orders, Eagle Assocs. v. Bank of Montreal, 926 F.2d 1305, 1310 (2d Cir. 1991).

Specifically with respect to juridical entities, it is well established in this Circuit that corporations, partnerships and limited liability companies may not appear without counsel. See Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20, 22 (2d Cir. 1983) (noting that a corporation cannot proceed pro se); Eagle Assocs., 926 F.2d at 1310 (holding that a partnership may not be represented by a layperson). The Second Circuit has held that a defendant partnership's failure to comply with a court's order that it obtain counsel constitutes failure to "otherwise defend" for the purpose of Rule 55(a) such that an entry of default is justified. Id.; see also Mickalis, 645 F.3d at 130 (holding that entry of default was proper where the defendant, a limited liability company, failed to obtain counsel despite the court's warning that such failure would result in default). While "a defendant who defaults ...


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