United States District Court, S.D. New York
LAURA TAYLOR SWAIN, District Judge.
In the above-captioned action, Plaintiff Billy Barnes ("Plaintiff") asserts employment discrimination claims pursuant to Title VII and the New York State Human Rights Law against Defendants New York State Division of Human Rights ("NYSDHR") and Beth Israel Medical Center ("Beth Israel"). Plaintiff obtained certificates of default and, on May 5, 2014, filed a motion for default judgment against both Defendants ("Motion for Default Judgment"). On May 9, 2014, Defendant Beth Israel filed a motion to vacate the Clerk's certificate of default ("Motion to Vacate") (docket entry no. 15). Plaintiff opposes Beth Israel's motion, asserting that he served Beth Israel properly with process.
The Court considers, first, Beth Israel's Motion to Vacate and second, Plaintiff's Motion for Default Judgment. For the following reasons, the Clerk's Certificates of Default against Beth Israel and the NYSDHR are vacated and Plaintiff's Motion for Default Judgment is denied.
Federal Rule of Civil Procedure 55(a) provides that, "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." After a default has been entered against a defendant and the defendant fails to appear or move to set aside the default under Rule 55(c), the Court may, on plaintiff's motion, enter a default judgment. Fed.R.Civ.P. 55(b)(2). Default judgments, however, are disfavored and there is a strong public policy favoring resolving disputes on the merits. Pecarsky v. Galaxiworld , 249 F.3d 167, 172 (2d Cir. 2001).
Rule 55(c) provides that "[t]he court may set aside an entry of default for good cause...." Good cause "should be construed generously." Enron Oil Corp. v. Diakuhara , 10 F.3d 90, 96 (2d Cir. 1991). When deciding 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." New York v. Green , 420 F.3d 99, 104 (2d Cir. 2005) (citing Powerserve Int'l, Inc. v. Lavi , 239 F.3d 508, 514 (2d Cir. 2001)).
In determining whether to set aside a defendant's default, the Court should consider three factors: "(1) whether the default was willful; (2) whether setting aside the default would prejudice the adversary; and (3) whether a meritorious defense is presented." Powerserve , 239 F.3d at 514. The Court may also consider relevant equitable factors, including whether the failure to appear was "a mistake made in good-faith and whether the entry of default would bring about a harsh or unfair result." Enron Oil Corp. , 10 F.3d at 96. If any doubt exists "as to whether a default should be granted or vacated, the doubt should be resolved in favor of the defaulting party." Id . Beth Israel's Motion to Vacate and Plaintiff's Motion for Default Judgment Against Beth Israel
In considering Beth Israel's Motion to Vacate and Plaintiff's Motion for Default Judgment against Beth Israel, the Court notes that Beth Israel raised timely objections indicating that it was improperly served in a letter addressed to the Court, which was filed on April 30, 2014, (docket entry no. 9), and in its Motion to Vacate. Having examined the circumstances of Plaintiff's attempted service of process and the entry of default against Beth Israel, the Court finds, for the following reasons, that there is good cause under Rule 55(c) to set aside the entry of default.
Service of process for this case is governed by Federal Rule of Civil Procedure 4 and Article 3 of the New York Civil Practice Law and Rules ("C.P.L.R."). Beth Israel is a nonprofit corporation. (Mem. Law Supp. Mot. Vacate 2, docket entry no. 19.) Under Federal Rule of Civil Procedure 4(h), service of process on a corporation in a judicial district of the United States must occur in accordance with the following provisions:
(A) in the manner prescribed by Rule 4(e)(1) for serving an individual; or
(B) by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and-if the agent is one authorized by statute and the statute so requires-by also mailing a copy of each to the defendant.
Federal Rule of Civil Procedure 4(e)(1), in turn, allows an individual to be served by "following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made."
C.P.L.R. Section 311, the state law governing personal service of a summons upon a corporation in an action brought in courts of general jurisdiction in New York, provides that "[p]ersonal service upon a corporation shall be made by delivering the summons" to "an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service.... A not-for-profit corporation may also be served pursuant to section three hundred six or three hundred seven of the not-for-profit corporation law." N.Y. C.P.L.R. 311 (McKinney 2010). Additionally, C.P.L.R. Section 306(b) provides that proof of personal service "shall... include, in addition to any other requirement, a description of the person to whom it was so delivered, including, but not limited to, sex, color of skin, hair color, approximate age, approximate weight and height, and other identifying features." N.Y. C.P.L.R. 306(b) (McKinney 2010).
Beth Israel's contention that it was not served properly is well founded. Plaintiff alleges that he served Beth Israel via personal service on David Marshall, Beth Israel's attorney, but the Proof of Service indicates that Plaintiff actually served papers on John Francavillo. There is no evidence that John Francavillo was authorized to receive service of process on behalf of David Marshall or Beth Israel or that Mr. Francavillo represented that he was authorized to receive service on behalf of Mr. Marshall or Beth Israel. See Francavillo Decl. ¶ 4-5. Nor is there any evidence that Mr. Marshall is authorized to receive service of process on behalf of Beth Israel. Thus, Plaintiff's attempted service did not comply with Federal Rule of Civil Procedure 4(h) or C.P.L.R. Section 311. The Proof of ...