United States District Court, S.D. New York
April 22, 2014
JOSE CASTRO Plaintiff,
FJC SECURITY SERVICES, INC., Defendants.
ORDER ADOPTING REPORT AND RECOMMENDATION
PAUL A. CROTTY, District Judge.
On April 29, 2013, pro se plaintiffJose Castro ("Plaintiff') filed his Amended Complaint against his employer, RTC Security Services, Inc. ("Defendant"), alleging discrimination and retaliation. After Defendant failed to answer or otherwise move with respect to the Amended Complaint, the Clerk of Court entered default against Defendant on January 14, 2014. On January 17, 2014, Magistrate Judge Kevin Nathaniel Fox ordered Defendant to show cause as to why the entry of default should be set aside pursuant to Federal Rule of Civil Procedure 55(c).
On March 10, 2014, Magistrate Judge Fox issued a Report & Recommendation ("R&R") recommending that the Court grant Defendant's motion to set aside the entry of default. See Report and Recommendation, ECF No. 38. While Magistrate Judge Fox rejected Defendant's arguments that default should be set aside because Defendant was not properly served with the Amended Complaint and because the default was not willful, he recommended that the default be set aside since there was no prejudice to Plaintiff, there may be a meritorious defense, there was no bad faith, and default would not have a harsh result. See id. at 5-10. Both parties filed timely objections.
For the reasons that follow, the Court adopts Magistrate Judge Fox's R&R in its entirety; and GRANTS Defendant's motion to set aside the entry of default.
I. Legal Standard
A. Review of Report and Recommendation
A district court may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1). When a timely objection has been made, the court is required to review the contested portions de novo. See Arista Records LLC v. Doe, 604 F.3d 110, 116 (2d Cir. 2010); Greene v. WC. I Holdings Corp., 956 F.Supp. 509, 513 (S.D.N.Y. 1997). The court, however, "may adopt those portions of the Report to which no objections have been made and which are not facially erroneous." La Torres V. Walker, 216 F.Supp.2d 157, 159 (S.D.N.Y. 2000).
B. Default Judgment
When a defendant fails to answer or otherwise respond to a complaint, upon Plaintiffs request, the Clerk of Court is to enter default. Fed.R.Civ.P. 55(a). This is distinct from the step of entering a default judgment under Federal Rule of Civil Procedure 60(h), which occurs after an entry of default. See City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2c1 Cir. 2011). "For good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b)." Fed.R.Civ.P. 55(c).
"The test under Rule 55(c) for setting aside a default is more lenient than the test under Rule 60(b) for setting aside a default judgment." Broder v. Charles Pfizer & Company, 54 F.R.D. 583, 583 (S.D.N.Y. 1971). In determining whether to set aside an entry of default, the Court must consider three factors: (i) whether Defendant's default was vaful; (ii) whether Plaintiff would be prejudiced by vacatur of the default entry; and (iii) whether Defendant has a meritorious defense to the action. In re Men's Sportswear, Inc., 834 F.2d 1134, 1138 (2d Cir. 1987). Courts may also consider other relevant equitable factors. See Enron Oil Corp. v. Diakuhara, I 0 F.3d 90, 96 (2c1 Cir. 1993). Any doubts about setting aside a default entry should be resolved in favor of the party moving to vacate so that the matter may be decided on the merits. Traguth Zuck, 710 F.2d 90, 94 (2d Cir. 1983).
A. Whether Defendant Has a Meritorious Defense
Plaintiff objects to Magistrate Judge Fox's conclusion that Defendant has a meritorious defense. Upon de 110V0 review of this objection, the Court finds it unpersuasive, as some Title vii allegations may be time barred.
Further, Magistrate Judge Fox considered several other defenses raised by Defendant in weighing the meritorious defense factor. Specifically, Magistrate Judge Fox concluded that the following other defenses have merit: (I) some of Plaintiff's claims are not administratively exhausted; (2) Plaintiff's allegation of race discrimination fails to state a claim; (3) Plaintiff's allegation of defamation fails to state a claim., (4) and Plaintiff's remaining allegations are baseless. Because Plaintiff does not challenge these defenses and the Court concludes that these findings are not facially en-oneous, the Court adopts Magistrate Judge Fox's findings regarding Defendant's meritorious defenses. See La Torres, 216 F.Supp.2d at 159.
B. Whether Plaintiff Will Suffer Prejudice if Default is Vacated
Plaintiff also argues that "default would prejudice the adversary because the decision to grant the defendant's motion on the ground of misleading and untrue statement will bring a harsh or unfair result on the plaintiff." See Pl.'s Obj. at 3. Nonetheless, Plaintiff has not been diligent in pursuing this litigation; and he can point to no good reason for this claim of prejudice. Thus, after reviewing this objection de novo, the Court concludes that Plaintiff will suffer no prejudice if default is vacated.
C. Remaining Objections
Defendant objects to Magistrate Judge Fox's rationale for his decision; not his recommendation that default be set aside. Accordingly, the Court need not address these objections.
After reviewing the remaining portions of Magistrate Judge Fox's R&R for clear error and having found none, the Court adopts the R&R in its entirety and GRANTS Defendant's motion to set aside the entry of default pursuant to Rule 55(c). The Clerk of Court is directed to tem inate the motion at Docket Number 27. The reference to Magistrate Judge Fox is continued for further proceedings.