Claytor v. The Mojo Grill and Catering Co of Belleview, LLC. et al
ORDER denying 24 Defendants' Motion to Set Aside Entry of Default and Default Judgment. Signed by Judge James S. Moody, Jr on 4/7/2015. (LN)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
STEVEN CLAYTOR, individually and
on behalf of all others similarly situated,
Case No: 5:14-cv-411-Oc-30PRL
THE MOJO GRILL AND CATERING
CO OF BELLEVIEW, LLC,
CABANA’S CATERING, LLC, and
RONDO FERNANDEZ, in his
THIS CAUSE comes before the Court upon Defendants’ Motion to Set Aside Entry
of Default and Default Judgment (Doc. 24) and Plaintiff’s response in opposition thereto
(Doc. 28). The Court, having reviewed the motion and response and having held a hearing
on this matter on April 6, 2015, concludes that Defendants’ motion should be denied.
Plaintiff initiated this action against Defendants alleging a claim for unpaid overtime
compensation under the Fair Labor Standards Act, 29 U.S.C. §§ 207, 216(b). (Doc. 1).
Defendants were served with the complaint on July 31, 2014.
Defendants failed to respond, Plaintiff moved for entry of default against Defendants
pursuant to Federal Rule of Civil Procedure 55(a), and default was entered against
Defendants on September 11, 2014. (Docs. 6, 7). Plaintiff then moved for final default
judgment against Defendants, which the Court granted. (Docs. 8, 10). A final default
judgment was entered against Defendants on October 28, 2014, in the amount of
$16,957.50. (Doc. 11). Plaintiff mailed a copy of each motion and the default final
judgment to Defendants at their registered address.
After default final judgment was entered, Plaintiff sought writs of garnishment
against Defendants’ accounts at Bank of America and Regions Bank, which the Court
granted. (Docs. 12, 13). The writs were issued on February 9, 2015. (Docs. 14, 15).
On March 10, 2015, Defendants filed the present motion seeking to set aside the
entry of default and final default judgment. (Doc. 24). Defendant Rondo Fernandez
explained that he received the summons and complaint and instructed the Chief Financial
Officer (“CFO”) and Chief Operating Officer (“COO”) of the Mojo Grill and Catering Co.
of Belleview, LLC and Cabana’s Catering, LLC, to retain an attorney to respond to the
complaint on behalf of all three defendants. 1 (Id., Ex. A). However, unbeknownst to Mr.
Fernandez, the CFO and COO failed to act as instructed, and he did not become aware of
the status of the case until the writs of garnishment were entered against Defendants’
Mr. Fernandez asserts that he did not receive copies of Plaintiff’s motions or the
copy of the final default judgment sent by Plaintiff to the address of the registered agent
Toby Fernandez is the registered agent for The Mojo Grill and Catering Co. of Belleview,
LLC and Cabana’s Catering, LLC, and she avers that Mr. Fernandez received copies of the
summonses and complaints for all three defendants. (Doc. 24, Ex. A).
because Defendants’ corporate headquarters changed locations during the pendency of this
action. Defendants assert that their failure to respond to Plaintiff’s claims was due to
“corporate confusion,” and they now request that the Court set aside the entry of default
and default judgment entered against Defendants on the basis of mistake, inadvertence,
surprise, or excusable neglect. (Id. at 2).
Generally, “defaults are seen with disfavor because of the strong policy of
determining cases on their merits.” Fla. Physician’s Ins. Co. v. Ehlers, 8 F.3d 780, 783
(11th Cir. 1993); accord In re Worldwide Web Sys., Inc. v. Feltman, 328 F.3d 1291, 1295
(11th Cir. 2003). Under Federal Rule of Civil Procedure 55(c), a “court may set aside an
entry of default for good cause, and it may set aside a default judgment under [Federal Rule
of Civil Procedure] 60(b).” The standard for setting aside an entry of default differs from
the standard for setting aside a default judgment. Namely, the “good cause” standard for
setting aside an entry of default judgment is less rigorous than the “excusable neglect”
standard for setting aside a default judgment. See EEOC v. Mike Smith Pontiac GMC, Inc.,
896 F.2d 524, 528 (11th Cir. 1990) (“The importance of distinguishing between an entry
of default and a default judgment lies in the standard to be applied in determining whether
or not to set aside the default.”). Because final default judgment has been entered against
Defendants, the Court must apply the excusable neglect standard of Rule 60(b).
Pursuant to Rule 60(b), “[o]n motion and just terms, the court may relieve a party
. . . from a final judgment, order, or proceeding for . . . mistake, inadvertence, surprise, or
excusable neglect.” Rule 60(b)(1). To qualify for relief under Rule 60(b)(1), Defendants
must establish (1) a meritorious defense, (2) a lack of prejudice to the non-defaulting party,
and (3) a good reason for the default. In re Worldwide Web Sys., Inc., 328 F.3d at 1295.
Moreover, “[t]he determination of what constitutes excusable neglect is generally an
equitable one, taking into account the totality of the circumstances surrounding the party’s
omission.” Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 934 (11th Cir. 2007). Thus, in
determining whether excusable neglect exists, a court may also employ a four-factor
balancing test, which includes weighing (1) “the danger of prejudice to the [opposing
party],” (2) “the length of the delay and its potential impact on judicial proceedings,” (3)
“the reason for the delay, including whether it was within the reasonable control of the
movant,” and (4) “whether the movant acted in good faith.” Pioneer Inv. Servs. Co. v.
Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993).
Defendants have established a meritorious defense to Plaintiff’s complaint (Doc.
24, Ex. B), which Plaintiff does not contest, and the record does not reflect that granting
Defendants’ request to set aside the default judgment would be overly prejudicial to
Plaintiff. Defendants allege that they failed to respond to Plaintiff’s complaint due to the
negligence of the employees charged with responding to the complaint. According to
Defendants, they did not become aware of their default until writs of garnishment burdened
their accounts to satisfy the default judgment. Defendants’ motion to set aside the default
judgment was filed almost seven and a half months after Plaintiff served Defendants with
the complaint and approximately one month after Defendants supposedly became aware of
the action. Although a delay of this magnitude is not condoned by the Court, because this
case remains in its infancy, the delay is not significantly prejudicial to Plaintiff in pursuing
his claims against Defendant, nor has it significantly impacted the judicial process.
While Defendants’ delay was not overly prejudicial to the parties or to the judicial
process, a factor to which the Court accords substantial weight in accordance with Cheney
v. Anchor Glass Container Corp., 71 F.3d 848, 850 (11th Cir. 1996), Defendants have
failed to show that the delay was caused by acts or omissions outside their reasonable
control. See In re Worldwide Web Sys., Inc., 328 F.3d at 1297 (recognizing that “[w]hile
the absence of prejudice to the nonmoving party and to the interest of efficient judicial
administration are of “primary importance,” the . . . determination of excusable neglect is
an equitable one that necessarily involves consideration of all three elements—a
meritorious defense, prejudice, and a good reason for not responding to the complaint”).
Stated differently, the Court concludes that Defendants failed to act with diligence to
ensure that their interests in this litigation were being protected and therefore they have
failed to present a good reason for the default.
First, Plaintiff rightfully highlights that this case does not represent the first occasion
on which Defendants failed to respond to Plaintiff’s claims. (Doc. 28 at 2). Plaintiff
previously filed this same action against Defendants on November 11, 2013, in Claytor v.
Mojo Grill & Catering Co. of Belleview, LLC, No. 5:13-cv-568-Oc-22PRL (M.D. Fla.
2013). As in the present case, a clerk’s entry of default was obtained against Defendants
because they failed to respond to Plaintiff’s complaint. See id. (Docs. 11, 12, 15).
Plaintiff’s previous action was dismissed without prejudice, however, for his failure to
comply with Local Rule 1.07. See id. (Doc. 16). Defendants’ explanation for their delay
in the present action fails to resolve their failure to respond to Plaintiff’s claims on more
than one occasion and indicates that Defendants’ failure to respond may be attributable to
more than a one-time oversight and is more likely the result of, at best, inadequate
procedural safeguards, and, at worst, culpable disregard for judicial proceedings.
Second, Plaintiff’s motion for entry of a clerk’s default against Defendants reflects
that the motion was mailed to the Mojo Grill and Catering Co. of Belleview, LLC, and
Cabana’s Catering, LLC at the address for their registered agent. (Docs. 6, 28). Likewise,
Plaintiff’s motion for final default judgment reflects mailing to all three defendants. (Docs.
8, 28). Plaintiff also asserted that he mailed a copy of the final default judgment to
Defendants contend that they did not receive copies of Plaintiff’s motions because
their corporate headquarters changed locations during the pendency of this action.
However, Defendants offer no account of the fate of the mail delivered to their previous
address. It appears that Defendants would have the Court believe that the post office would
simply continue to deliver mail to an address where it was clear the mail was not being
collected. And, even if the Court accepted Defendants’ explanation that the mail was being
left at the previous address, Defendants nevertheless had a duty to provide a forwarding
address and to update the address of their registered agent with the State of Florida.
Finally, Defendants have failed to establish that they had any procedural safeguards
in place or acted diligently in protecting their interests. Defendants failed to respond, not
once, but twice to Plaintiff’s claims. Defendants did not assert that they took any actions
to apprise themselves of the status of the case or to monitor its progress. Additionally,
Defendants’ explanation regarding their failure to receive Plaintiff’s motions or a copy of
the final default judgment demonstrates further negligence on behalf of Defendants in
diligently protecting their interests. This conduct, or lack thereof, demonstrates more than
mere negligence and rises to the level of culpable behavior. See SEC v. Simmons, 241 F.
App’x 660, 664 (11th Cir. 2007) (recognizing that “a party has a duty to monitor the
progress of his case”); Sloss Indus. Corp., 488 F.3d at 935 (noting that the Eleventh Circuit
has “consistently held that where internal procedural safeguards are missing, a defendant
does not have a ‘good reason’ for failing to respond to a complaint”).
If not for Defendants’ systemized negligence, the Court would be inclined to set
aside the default judgment in the interest of resolving this case on the merits. Although the
record does not demonstrate substantial prejudice to either the parties or to efficient judicial
administration, this lack of prejudice does not reconcile Defendants’ failure to proffer a
sufficient explanation for their failure to protect their interests in this case. See Nat’l R.R.
Passenger Corp. v. Patco Transp., Inc., 128 F. App’x 93, 95 (11th Cir. 2005) (upholding
a district court’s finding that a failure to employ minimum procedural safeguards for
responding to a complaint did not constitute excusable neglect).
In light of Defendants’ failure to adequately monitor the progress of this action or
to provide a satisfactory explanation for such failure, the Court concludes, after considering
the totality of the circumstances, that Defendants have not established excusable neglect
for their default and their motion should be denied.
Accordingly, it is therefore ORDERED AND ADJUDGED that:
1. Defendants’ Motion to Set Aside Entry of Default and Default Judgment (Doc.
24) is DENIED.
DONE and ORDERED in Tampa, Florida, this 7th day of April, 2015.
Copies furnished to:
Counsel/Parties of Record
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