MELO et al v. CUESTA CONSTRUCTION CORP. et al
Filing
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ORDER granting 43 Motion to Set Aside Default; denying as moot 41 Motion for Default Judgment; denying as moot 42 Motion for Default Judgment. Signed by Magistrate Judge Edwin G. Torres on 12/12/2017. (abu)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 17-21876-CV-WILLIAMS/TORRES
MARIO E. MELO, JULIO C. GALVEZ,
and YOAHY SABOGAL,
Plaintiffs,
v.
CUESTA CONSTRUCTION CORP., et al.,
Defendants.
/
ORDER ON MOTIONS FOR DEFAULT JUDGMENT AND MOTION
TO SET ASIDE CLERK’S DEFAULT
There are currently three Motions pending before this Court: (1) a Motion for
Default Judgment filed by Plaintiffs Mario L. Melo, Julio C. Galvez, and Yoahy
Sabogal (“Plaintiffs”) against Defendant All Construction & Developers North Miami
(“All Construction”), submitted on October 17, 2017 [D.E. 42]; (2) a Motion for Default
Judgment, brought by Cuesta Construction Corp. (“Cuesta”) on October 24, 2017, for
a Third Party Complaint it filed against All Construction [D.E. 41]; and (3) All
Construction’s Motion to Set Aside the Clerk’s Default [D.E. 43], entered in favor of
Cuesta on September 20 and Plaintiffs on October 15, 2017. [D.E. 34, 40]. For the
reasons stated below, we find that All Construction’s Motion should be GRANTED,
with the Motions filed by Plaintiffs and Cuesta being DENIED as moot. 1
I.
FACTUAL BACKGROUND
This claim arrived in federal court as a result of a lawsuit filed by Plaintiffs on
May 18, 2017. [D.E. 1]. Plaintiffs allege that Defendants Cuesta, All Construction and
certain other individuals violated the overtime and minimum wage provisions of the
Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (the “FLSA”), in addition to the
statute’s retaliation provisions. See 29 U.S.C. § 215(a)(3); D.E. 1, p. 21-26. The alleged
FLSA violations took place during Plaintiff’s alleged employment with Defendants as
construction workers, during a period of time in which each worked for the respective
Defendants on a hotel restoration project in Miami Beach, Florida. Cuesta and All
Construction argue that Plaintiffs are not “employees” as defined by the FLSA, and
as such cannot be held in violation of the statute. [D.E. 11, 24, 43].
The initial Complaint was served on Cuesta on May 25, 2017. [D.E. 8]. All
Construction received its copy of the complaint on June 8, 2017. [D.E. 12]. Cuesta
answered on June 15, 2017, and initiated a Third Party suit against All Construction
that same day. [D.E. 11]. Cuesta’s Third Party Complaint sought contractual and
common law indemnification from All Construction for any claims brought in
connection with the construction project against Cuesta, including those claims
The Plaintiffs’ Motion for Default against All Construction is mooted by the
Parties’ Motion for Settlement Approval, filed on December 9, 2017, which seeks
dismissal of all FLSA claims brought against All Construction in their entirety. [D.E.
55]. Cuesta’s Motion is mooted by this Order.
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asserted by Plaintiffs here. Id. [D.E. 11, p. 29-30]. All Construction received a copy
of the Third Party Complaint on June 23, 2017, but failed to timely respond under
the Federal Rules of Civil Procedure. [D.E. 20]. 2 Accordingly, Cuesta sought a clerk’s
entry of default against All Construction on September 19, 2017, and Plaintiffs
followed suit two weeks later. [D.E. 33, 39]. Those orders were entered by the clerk
on September 20 and October 15, 2017, respectively. [D.E. 34, 40].
Plaintiffs and Cuesta now ask this Court to enter default judgment against All
Construction for the FLSA and indemnity claims. All Construction opposes the
Motions and asks us to set aside the clerk’s default under Rule 55(c) of the Federal
Rules of Civil Procedure, arguing that its failure to respond to the Complaint occurred
as a result of excusable neglect. The Motions have been fully briefed, and each matter
is now ripe for adjudication.
II.
ANALYSIS
When 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. Fed. R. Civ. P. 55(a). Following a clerk’s entry
of default, a party must then petition the court for a default judgment. Id. at (b)(1). A
default may, however, be set aside for “good cause.” Id. at (c). “‘Good cause’ is a
mutable standard, varying from situation to situation.” Compania Interamericana
Plaintiff filed an Amended Complaint on June 22, 2017. [D.E. 16]. Cuesta
answered the Amended Complaint four days later on June 26 and once again included
its Third Party Complaint against All Construction. [D.E. 24]. Cuesta served a second
copy of the Third Party Complaint on All Construction on July 11, 2017. [D.E. 29].
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Export-Import, S.A. v. Compania Dominicana, 88 F.3d 948, 951 (11th Cir. 1996). In
determining whether a party demonstrates good cause to set aside a default, courts
should consider the following factors: (1) whether the default was culpable or willful;
(2) whether setting it aside would prejudice the adversary; (3) whether the defaulting
party presents a meritorious defense; (4) whether there is a threat of significant
financial loss to the defaulting party; and (5) whether the defaulting party acted
promptly to correct the default. Id.
All Construction offers a simple explanation for its failure to answer the crossclaim filed by Cuesta: Andres Leon, the principal for All Construction,
unintentionally misplaced the pleadings upon service, which resulted in the
company’s failure to calendar the relevant deadlines to respond. [D.E. 43, p. 2]. The
confusion came about during a time in which Mr. Leon had been frequently traveling
for work. Id. The Eleventh Circuit has found that “excusable negligent encompasses
situations in which failure to comply with a filing deadline is due to negligence,”
Cheney v. Anchor Glass Container Corp., 71 F.3d 848, 850 (11th Cir. 1990), and
recognizes that a clerical error or miscommunication can cause a party to
inadvertently overlook a filing deadline. See Walter v. Blue Cross & Blue Shield
United, 181 F.3d 1198, 1202 (11th Cir. 1998) (“‘Excusable neglect’ is understood to
encompass situations in which the failure to comply with a filing deadline is
attributable to negligence.”) (quoting Pioneer Investment Servs. Co. v. Brunswick
Assoc. Limited Partnership, 507 U.S. 380 (1993)). We view Mr. Leon’s mistake as
nothing more than a negligent act that resulted in his failure to respond to the claims
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asserted against him. Under these circumstances, this failure constitutes excusable
neglect and satisfies the “good cause” requirement of Rule 55(c). Walter, 181 F.3d at
1202 (characterizing a secretary’s failure to record a filing deadline as excusable
neglect); Cheney, 71 F.3d at 850 (miscommunication between associate and lead
attorney resulted in delayed filing constituted excusable neglect).
The other factors also weigh in favor of setting aside the default. First, there
is no indication that the entry of default occurred as a result of some willful or reckless
act by All Construction or Mr. Leon. Additionally, setting aside the default would not
prejudice Cuesta, as the case is in the early proceedings and involves a fairly simply
dispute over the relevant contract’s indemnification provisions. All Construction also
sets forth a meritorious defense to the claim in its Motion, arguing that it cannot be
considered the employer of the Plaintiffs for purposes of the FLSA, which could
conceivably avoid triggering the indemnity clause contained in the contract and
nullify the underlying claim brought by Cuesta. These factors also work to establish
good cause under Rule 55. See Jones v. Harrell, 858 F.2d 667, 669 (11th Cir. 1988)
(movant must make only a “bare minimum showing” to support a claim for relief
under the good cause standard set forth by Rule 55(c)).
In sum, we note that default judgments are generally viewed 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). Given this policy,
in addition to the demonstration of excusable neglect by All Construction and the lack
of any demonstrable prejudice to Cuesta, we find “good cause” to set aside the entry
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of the Clerk’s default here. Accordingly, the default should be vacated, and All
Construction is hereby ordered to respond to the Third Party Complaint within ten
(10) days of the date of this Order.
III.
CONCLUSION
For the foregoing reasons, it is hereby ORDERED and ADJUDGED that:
1.
All Construction’s Motion to Set Aside the Clerk’s Entry of Default [D.E.
43] is GRANTED. The Clerk’s Entry of Default is vacated, and All Construction must
respond to Cuesta’s Third Party Complaint within ten (10) days;
2.
Cuesta and Plaintiffs’ Motion for Default Judgment [D.E. 41, 42] are
DENIED as moot.
DONE AND ORDERED in Chambers at Miami, Florida, this 12th day of
December, 2017.
/s/ Edwin G. Torres
EDWIN G. TORRES
United States Magistrate Judge
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