United States District Court, E.D. New York
January 20, 2015
U.S. EX REL. RELIABLE CONSTRUCTION, PM, INC., Plaintiff,
LAND FROG, INC., et. al, Defendants
Reliable Construction PM, Inc., Plaintiff, Pro se, Brooklyn, NY.
Daniel Bergen, Defendant, Pro se, Massapequa Park, NY.
For Innayah Services, Inc., K& M Construction NY, Corp., Defendants: Konstantinos Volakos, LEAD ATTORNEY, The Volakos Law Firm, P.C., Brooklyn, NY.
REPORT AND RECOMMENDATION
Cheryl L. Pollak, United States Magistrate Judge.
On December 27, 2013, plaintiff Reliable Construction PM, Inc. (" Reliable"), filed a Complaint against defendants Land Frog Inc. (" Land Frog"), Belikos, Inc. (" Belikos"), and Citizens Insurance Company of America (" Citizens"), under the Miller Act, 40 U.S.C. § 3133(b)(3)(B), alleging that defendants had failed to pay for work performed on a construction project for the Veterans Administration. On April 4, 2014, plaintiff filed an Amended Complaint, adding defendants Daniel Bergen, president of Land Frog, Merab Nozadze, president of Belikos, Innayah Services, Inc. (" Innayah"), K& M Construction NY, Corp. (" K& M"), NYC Brokerage Inc. (" NYC Brokerage"), and Saqib Saleem, an alleged officer of Innayah, K& M, and NYC Brokerage.
Although certain defendants, including Citizens, filed answers to the Complaint and Amended Complaint, a default was entered against defendants Land Frog and Bergen on February 5, 2014. Thereafter, on May 21, 2014, Bergen, proceeding pro se, requested leave to file an answer to the Amended Complaint on behalf of himself and Land Frog, and he subsequently moved to dismiss the Complaints against Bergen and Land Frog. On June 5, 2014, the Court denied Bergen's motion to represent Land Frog, and informed him that he could not represent Land Frog, since corporations must be represented by counsel. The Court further Ordered plaintiff to verify that Mr. Bergen had been properly served and to respond to Mr. Bergen's motion to dismiss by June 19, 2014.
On June 6, 2014, Ira D. Wincott, Esq., on behalf of the Milman Labuda Law Group PLLC, moved to withdraw as counsel for plaintiff Reliable, claiming that plaintiff had failed to participate in the prosecution of the case and failed to pay attorneys' fees. Mr. Wincott also requested a stay of the Court's June 5, 2014 Scheduling Order until the motion to withdraw was resolved.
On July 17, 2014, the Court granted Mr. Wincott's motion to withdraw as counsel. The Court Ordered Reliable to obtain counsel within thirty days, and warned that the Court would recommend dismissal of Reliable's claims if plaintiff failed to obtain counsel, since a corporation cannot proceed pro se in federal court. Plaintiff failed to obtain new counsel and did not seek additional time from the Court. Indeed, since July 17, 2014, the Court has heard nothing from plaintiff and no further action has occurred in the case.
On August 20, 2014, Citizens moved to dismiss the action pursuant to Federal Rule of Civil Procedure 41(b) in light of plaintiff's failure to obtain counsel and to prosecute the case. On September 4, 2014, the Honorable Allyne R. Ross referred Citizens' motion to the undersigned.
Federal Rule of Civil Procedure 41(b) provides for involuntary dismissal of an action where the " plaintiff fails to prosecute or to comply with [the Federal Rules of Civil Procedure] or a court order." The decision whether to dismiss a case for failure to prosecute lies within the discretion of the trial court. Colon v. Mack, 56 F.3d 5, 7 (2d Cir. 1995). The Second Circuit has identified five factors a district court must consider when deciding whether to dismiss a claim for failure to prosecute under Rule 41(b):
 the duration of the plaintiff's failures,  whether the plaintiff had received notice that further delays would result in dismissal,  whether the defendant is likely to be prejudiced by further delay,  whether the district judge has take[n] care to strik[e] the balance between alleviating court calendar congestion and protecting a party's right to due process and a fair chance to be heard . . . and  whether the judge has adequately assessed the efficacy of lesser sanctions.
LeSane v. Hall's Sec. Analyst. Inc., 239 F.3d 206, 209 (2d Cir. 2001). Although the Court need not consider the factors individually, in this case, they favor dismissal.
Under the first factor, the Court should consider both " whether the plaintiff is at fault for failing to prosecute, and . . . whether the plaintiff's failures were of significant duration." In re Air Crash Disaster off Coast of Nantucket Island, Massachusetts on October 31, 1999, No. 00 MD 1344, 2010 WL 1221401, at *7 (E.D.N.Y. March 29, 2010) (citing U.S. ex rel Drake v. Norden Sys., Inc., 375 F.3d 248, 255 (2d Cir. 2004)). There is no " magic number" of months sufficient to satisfy the first prong. Terry v. Incorporated Village of Patchogue, No. 05 CV 3398, 2010 WL 1993871, at *3 (E.D.N.Y. May 18, 2010); Lopez v. Catholic Chartities of Archdiocese of New York, No. 00 CV 1247, 2001 WL 50896, at *4 (S.D.N.Y. Jan. 22, 2001). In this case, almost six months have passed since July 17, 2014, when plaintiff was ordered to obtain new counsel, and more than six months have passed since plaintiff's counsel filed his motion to withdraw. Despite being warned that the case would be dismissed if the corporation failed to obtain counsel, as of the date of this Report and Recommendation, no attorney has filed a notice of appearance on behalf of plaintiff and the plaintiff has not asked the Court for an extension of time to obtain counsel. Plaintiff also failed to respond to Citizens' motion to dismiss, which was filed on August 20, 2014.
As for the second factor, plaintiff received clear notice that it risked dismissal if it did not obtain counsel. The Court's July 17, 2014 Order explicitly warned plaintiff that its case would be dismissed if it did not obtain counsel. Even if the Court had not warned plaintiff that its case might be dismissed, a defendant's motion to dismiss for failure to prosecute has been held to put the plaintiff on notice that his continued failure to prosecute the action could result in dismissal. See, e.g., Lopez v. Catholic Charities, 2001 WL 50896, at *4. Here, plaintiff also received notice through Citizen's motion to dismiss.
Turning to the third factor, " [p]rejudice to defendants resulting from unreasonable delay may be presumed .. . but in cases where delay is more moderate or excusable, the need to show actual prejudice is proportionally greater." Lyell Theatre Corp. v. Loews Corp., 682 F.2d 37, 43 (2d Cir. 1982). Moreover, the Court may presume that defendants are prejudiced where a corporate plaintiff does not heed its " duty of due diligence to move its case forward, " by failing to obtain counsel. Bay Chevrolet. Inc. v. General Motors Corp., Nos. 08 CV 233, 08 CV 4631, 2011 WL 4628743, at *2 (E.D.N.Y. Aug. 11, 2011), report and recommendation adopted, 2011 WL 4628743 (E.D.N.Y. Oct. 3, 2011). Although Citizens has not identified any specific prejudice that it has suffered in this case as a result of the delay to date, since plaintiff has made no effort to contact the Court and cannot proceed pro se,  there is good reason to conclude that the delay will continue, and prejudice to defendants can be presumed.
Under the fourth factor, the Court must balance calendar congestion and the plaintiff's right to present its case. See In re Air Crash Disaster off Coast of Nantucket Island, Massachusetts on October 31, 1999, 2010 WL 1221401, at *11 (citing U.S. ex rel Drake v. Norden Sys., Inc., 375 F.3d at 257). Here, the plaintiff's failure to obtain counsel means that the neither party can advance the case because, as a corporation, plaintiff may not represent itself pro se in federal court. See Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20, 22 (2d Cir. 1983) (holding that " it is established that a corporation, which is an artificial entity that can only act through agents cannot proceed pro se"). Thus, dismissal for failure to prosecute may be appropriate where a corporate plaintiff fails to obtain counsel. See Max Impact, LLC v. Sherwood Group, Inc., No. 09 Civ. 0902, 2013 WL 4451301, at *1 (S.D.N.Y., Aug. 19, 2013) (dismissing case for failure to prosecute " [b]ecause [plaintiffs] cannot prosecute this action pro se and have not retained new counsel within the time allotted"); see also Bay Chevrolet. Inc. v. General Motors Corp., No. 08 CV 233, 08 CV 4631, 2011 WL 4628743, at *2 (E.D.N.Y. Aug. 11, 2011), report and recommendation adopted. 2011 WL 4628743 (E.D.N.Y. Oct. 3, 2011) (holding that " [i]n determining whether to recommend dismissal, the Court must also take into account that a corporate defendant may not appear on its own behalf').
For this reason, the Court also sees no feasible alternative to dismissal. Since plaintiff cannot proceed without a lawyer, the Court's only option would be to grant plaintiff more time to obtain a lawyer. Plaintiff has already had ample time to obtain counsel, and has made no effort to contact the Court to request more time. Instead, plaintiff has failed to respond to the Court's Order for almost six months and seems to have entirely abandoned its claim. Accordingly, unless plaintiff contacts the Court within the next fourteen (14) days or an attorney representing the plaintiff files a Notice of Appearance within that same time frame, the Court respectfully recommends that the case be dismissed for failure to prosecute.
Any objections to this Report and Recommendation must be filed with the Clerk of the Court, with a copy to the undersigned, within fourteen (14) days of receipt of this Report. Failure to file objections within the specified time waives the right to appeal the District Court's order. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(e), 72(b); Small v. Sec'y of HHS, 892 F.2d 15, 16 (2d Cir. 1989).
The Clerk is directed to send copies of this Report and Recommendation to the parties either electronically through the Electronic Case Filing (ECF) system or by mail.