Cain v. Consumers Solutions Group, LLC et al

Filing 37

MEMORANDUM OPINION AND ORDER re 28 MOTION for Default Judgment as to Defendants Consumer Solutions Group, LLC and Jonathan C. Frank & Associates, PLLC. The Defendants' 36 Opposition fails to persuade the Court to deny the motion f or default judgment. However, out of an abundance of caution, and recognizing the preference for deciding a case on the merits, the Court ORDERS Defendants' Opposition to the Motion is STRICKEN as untimely. Defendants are given seven days to enter the appearance of an attorney admitted to practice in the Northern District of Alabama and to move the Court to set aside the Clerk's Entries of Default, if they so choose. Plaintiff Adrian Cain is given seven days after the Defendants' time to file has expired to respond. Signed by Judge Virginia Emerson Hopkins on 5/8/2018. (JLC)

FILED
2018 May-08 PM 03:15
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ADRIAN CAIN,
Plaintiff,
v.
CONSUMERS SOLUTIONS
GROUP, LLC and JONATHAN C.
FRANK & ASSOCIATES, LLC,
Defendants.

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) Case No.: 2:16-CV-2031-VEH
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MEMORANDUM OPINION AND ORDER
I.

INTRODUCTION
The above-entitled civil action is before the Court on Plaintiff Adrian Cain’s

Motion for Default Judgment (the “Motion”). (Doc. 28). Cain seeks a judgment by
default against Defendants Consumers Solutions Group, LLC (“CSG”) and Jonathan
C. Frank & Associates, LLC (“Jonathan Frank”).
Cain filed the Complaint in this action on December 19, 2016, and the
Amended Complaint on August 18, 2017. (Docs. 1, 27). In her Amended Complaint,
Cain alleges that the Defendants violated Fair Debt Collection Practices Act. (Id. at
2-6).
CSG was served on December 21, 2016. (Doc. 6). On January 24, 2017, after

CSG failed to appear, answer, or otherwise defend, Cain filed a Motion for Entry of
Default. (Doc. 10). The Clerk filed the Entry of Default against CSG on January 25,
2017. (Doc. 12).
Jonathan Frank was served on May 2, 2017. (Doc. 19). On May 24, 2017, after
Jonathan Frank failed to appear, answer, or otherwise defend, Cain filed a Motion for
Entry of Default. (Doc. 20). The Clerk filed the Entry of Default against Jonathan
Frank on May 26, 2017. (Doc. 22).
On August 4, 2017, Cain moved to dismiss his class claims against CSG. (Doc.
25). The Court then ordered Cain “to file an amended complaint that eliminates the
class allegations in Count IV.” (Doc. 26 at 3). Cain was instructed to seek leave from
the Court in order to make any other change. (See id.). Cain filed her Amended
Complaint on August 18, 2017. (Doc. 27). She filed her Motion for Default Judgment
that is the subject of this Memorandum Opinion and Order on February 15, 2018.
(Doc. 28). As support for the Motion for Default Judgment, Cain submitted an
affidavit. (Doc. 28-2).
The Court ordered the Defendants to show cause by April 11, 2018, why the
motion should not be granted. (Doc. 29). The Court received an untimely opposition
to Cain’s Motion on May 4, 2018. (Doc. 36). In the opposition, Defendants ask the
Court to deny the motion for default judgment and allow them to file an answer. (See
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id.). Defendants give two reasons for such relief. (See id. at 1-2). First, they argue that
“service was improper” for both Defendants. (See id. at 1). Second, they argue that
“defaults are disfavored and cases should be judged on the merits.” (Id. at 2). The
Court will treat the opposition as a motion to set aside the Clerk’s entry of default.
II.

STANDARD
“The court may set aside an entry of default for good cause.” FED. R. CIV. P.

55(c). The Eleventh Circuit has explained that:
“ ‘Good cause’ is a mutable standard, varying from situation to
situation. It is also a liberal one—but not so elastic as to be devoid of
substance.” Coon v. Grenier, 867 F.2d 73, 76 (1st Cir.1989). We
recognize that “good cause” is not susceptible to a precise formula, but
some general guidelines are commonly applied. Id. Courts have
considered whether the default was culpable or willful, whether setting
it aside would prejudice the adversary, and whether the defaulting party
presents a meritorious defense. Rafidain Bank, 15 F.3d at 243; see also
Robinson v. United States, 734 F.2d 735, 739 (11th Cir.1984). We note,
however, that these factors are not “talismanic,” and that courts have
examined other factors including whether the public interest was
implicated, whether there was significant financial loss to the defaulting
party, and whether the defaulting party acted promptly to correct the
default. E.g., Dierschke v. O'Cheskey, 975 F.2d 181, 184 (5th Cir.1992).
“Whatever factors are employed, the imperative is that they be regarded
simply as a means of identifying circumstances which warrant the
finding of ‘good cause’ to set aside a default.” Id. However, if a party
willfully defaults by displaying either an intentional or reckless
disregard for the judicial proceedings, the court need make no other
findings in denying relief. Shepard Claims Service, Inc. v. William
Darrah & Associates, 796 F.2d 190, 194–95 (6th Cir.1986).
Compania Interamericana Export-Import, S.A. v. Compania Dominicana de
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Aviacion, 88 F.3d 948, 951-52 (11th Cir. 1996). “Where a plaintiff's service of
process is insufficient, a court may have good cause to set aside an entry of default
because the court lacked personal jurisdiction over the defendant and, as a result, had
no power to render judgment against it.” Thomas v. Bank of America, N.A., 557 F.
App’x 873, 875 (11th Cir. 2014) (citing sources).
“[D]efaults are seen with disfavor because of the strong policy of determining
cases on their merits.” Florida Physician’s Ins. Co., Inc. v. Ehlers, 8 F. 3d 780, 783
(11th Cir. 1993) (citing sources). “The defendant bears the burden of establishing
good cause to set aside an entry of default.” Insituform Technologies, Inc. v. Amerik
Supplies, Inc., 588 F. Supp. 2d 1349, 1352 (N.D. Ga. 2008) (citing sources).
The Eleventh Circuit “review[s] for abuse of discretion a district court's denial
of a motion to set aside an entry of default.” Annon Consulting, Inc. v. BioNitrogen
Holdings, Corp., 650 F. App’x 729, 732 (11th Cir. 2016) (citing Jones v. Harrell, 858
F.2d 667, 669 (11th Cir. 1988)).
III.

ANALYSIS
The Defendants have not met their burden to show good cause for vacating the

entry of default. First, the record shows that service was completed on both
Defendants. (Docs. 6, 19). “As a general rule, a signed return of service constitutes
prima facie evidence of valid service.” Insituform Technologies, 588 F.2d at 1353
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(citing sources). “This presumption can be overcome only by strong and convincing
evidence.” See id. (citing another source). According to the Alabama Secretary of
State, CSG’s registered agent was located at 2094 Myrtlewood Drive Montgomery,
Alabama 36111. (Doc. 35-1 at 1). That is where the summons was returned executed.
(Doc. 6). According to an exhibit submitted by Cain, the State Bar of Texas has
Jonathan Frank’s address as 700 Milam Street, Suit 1300 Houston, TX 77002. (Doc.
16-2). It appears that the summons was returned executed from this address. (Doc.
19). The Defendants have not even tried to overcome these record facts by anything
more than conclusory statements in their opposition. (See Doc. 36 at 1).
Defendants broadly claim that neither of the companies, nor their agents, have
received service. (Doc. 36 at 1). They have not submitted any affidavits in support of
this statement. Defendants also claim that they “have been domiciled at the same
address since the time the petition had been originally filed up until [the] present
time.” (See id.). The Court is unclear as to which “petition” Defendants are referring
to, but the Court notes that, according to the Alabama Secretary of State, CSG
changed its registered agent’s address in August 2017. (Doc. 35-1 at 1).
Defendants state that “[t]he motion for default judgment did have proper
service.” (Doc. 36 at 1). The Court assumes that Defendants are referring to the Order
To Show Cause. (Doc. 29 at 1) (ordering the Clerk of Court to serve the Order and
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Amended Complaint on the Defendants). However, the Defendants still filed their
opposition over three weeks late. (See Docs. 29, 36).
The opposition was filed by Jonathan Frank, the individual, purportedly
representing both Defendants – Jonathan Frank & Associates LLC and Consumer
Solutions Group, LLC. (See Doc. 36). The Court notes from reviewing CM/ECF that
no attorney has entered an appearance on behalf of either Defendant and there is no
indication in the opposition that Mr. Frank is admitted to practice in the Northern
District of Alabama. (See id. at 2). “The rule is well established that a corporation is
an artificial entity that can act only through agents, cannot appear pro se, and must
be represented by counsel.” Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir.
1985) (citing sources); see also U.S. v. Natalie Jewelry, No. 14-CR-60094, 2015 WL
150841, *5 (S.D. Fla. Jan. 13, 2015) (applying Palazzo to an LLC). Only counsel
admitted to this court can appear before this court. N.D. Ala. Local Rule 83.1(d).
Accordingly, this pleading is improper.
While the Defendants are correct that defaults are not preferred, this opposition
is totally inadequate to deny Cain’s Motion.
III.

CONCLUSION
Accordingly, the Defendants’ opposition fails to persuade the Court to deny the

motion for default judgment. However, out of an abundance of caution, and
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recognizing the preference for deciding a case on the merits, the Court ORDERS the
following:
•

Defendants’ opposition to the Motion is STRICKEN as untimely, filed
by someone who has not entered an appearance in the Northern District
of Alabama, and inadequate on the merits.

•

Defendants are given seven days to enter the appearance of an attorney
admitted to practice in the Northern District of Alabama and to move the
Court to set aside the Clerk’s Entries of Default, if they so choose. Cain
is given seven days after the Defendants’ time to file has expired to
respond. The Court will take the Motion and the additional briefing
under submission then, or earlier if the time to respond has elapsed
without a response.

•

The Clerk is DIRECTED to provide notice to all parties using the
addresses in Cain’s earlier notice. (Doc. 32).

DONE and ORDERED this the 8th day of May, 2018.

VIRGINIA EMERSON HOPKINS
United States District Judge

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