Filing 24

ORDER denying Without Prejudice 18 Motion for Default Judgment. Signed by Judge Renee Marie Bumb on 1/7/2021. (rtm, )

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Case 1:18-cv-10556-RMB-JS Document 24 Filed 01/07/21 Page 1 of 7 PageID: 122 [Dkt. No. 18] IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE KELI HUNTER, Civil Action No. 18-cv10556 (RMB/JS) Plaintiff, v. BETTER SPEECH AND FEEDING CENTER, INC.; and SPEECH PATH SERVICES, LLC; and MELISSA MILES, as the Corporate Alter Ego MEMORANDUM ORDER Defendants. BUMB, District Judge Thi e ( M i J dg e a Hunter ( P ai i bef ) [D e he C he . N . 18] fi ed b M P ai i f Defa iff Ke i iff ) on January 3, 2020. For the reasons set forth below, Plaintiff Motion will be denied without prejudice to allow her to refile her Motion consistent with this Memorandum Order. Background Plaintiff Keli Hunter brings this suit against Defendants Be e S eech a d Feedi g Ce S eech Pa h Se P ai iff P ai iff ha e , I c., ( Be e S eech ), ice , LLC., ( S eech Pa h ), a d Me i a Mi e . Motion will be denied for several reasons. First, fai ed e e e Be e S eech Case 1:18-cv-10556-RMB-JS Document 24 Filed 01/07/21 Page 2 of 7 PageID: 123 registered agent, as ordered by United States Magistrate Judge Joel Schneider on May 8, 2019. [See Dkt. No. 12]. Second, Plaintiff has failed to provide sufficient evidence against Speech Path to warrant default judgment. Third, although Plaintiff has properly served Melissa Miles in her individual capacity, Plaintiff has not sufficiently established a basis for Miles individual liability. I. Service upon and evidence against Better Speech P ai iff and S eech Pa h each he Complaint avers that Defendants Better Speech e e ac i g beha f i hei ge he , i e e c ce f P ai , b a d iff H e . [Dkt. No. 1, pg. 2]. The Court, however, has not received any evidence regarding the relationship between these two companies. For example, the Plaintiff has not introduced any documents at all, including pay stubs, that would indicate an employeremployee relationship. P ai iff Amended Complaint [Dkt. No. 3], filed on July 25, 2018, adds Defendant Melissa Miles to the matter as the sole Director of Better Speech, and the sole managing member of Speech Path. Id. at 2. Plaintiff makes these assertions based on b ic b i e e i ec d . Plaintiff later provided the Court with documentation from the Business Entity Information and Records Service of the New Jersey Business Gateway 2 Case 1:18-cv-10556-RMB-JS Document 24 Filed 01/07/21 Page 3 of 7 PageID: 124 indicating that Melissa Miles is a Director of Better Speech. [Dkt. No. 9, Ex. D]. While Defendant Miles was successfully served in her individual capacity on April 6, 2019 [Dkt. No. 11], Plaintiff has failed to comply with the order issued by Judge Schneider on May 8, 2019. [Dkt. No. 12]. In that order, Judge Schneider instructed the P ai iff ha , i de e e Be e S eech, plaintiff need only effect service once more [emphasis added] upon Miles in her capacity a he c a i pursuant to N.J. Ct. R. 4:4-4(a)(6). Judge Schneider denied P ai iff di ec [Dkt. No. 12, page 5]. Motion for alternative service upon Better Speech and directed that P ai iff may serve Better Speech by personally serving Melissa Miles, in her capacity as Director of Better Speech, pursuant to N.J. Ct. R. 4:4-4(a)(6). Id. at 6. Si ce J dge Sch eide de , Plaintiff has not submitted proof that service was conducted upon Melissa Miles in her capacity as Director of Better Speech. Plaintiff seemingly de d J dge Sch eide de when she advised the Court on August 20, 2019 that she hired an investigator to locate Defendant Miles, after Miles failed to leave a forwarding address. [Dkt. No. 15]. The fact that Plaintiff successfully served Miles with the application for defa a d ice f c e e f defa [Dkt. No. 18, Ex. D] on November 12, 2019 in Bristol, Tennessee, however, does not 3 Case 1:18-cv-10556-RMB-JS Document 24 Filed 01/07/21 Page 4 of 7 PageID: 125 comply with J dge Sch eide order to serve the initial summons to Defendant Miles in her capacity as Director of Better Speech. Throughout the course of this case, Plaintiff has yet to properly serve Better Speech, as indicated in detail by Judge Schneider in his order. Thus, service upon Better Speech has not been effected and the Court will deny the Motion for Default Judgment against Better Speech without prejudice. II. Evidence against Speech Path P ai iff e e ci e b a d Amended Complaint asserts that Defendant Miles e ia ha di a a a i e c e ega d f he Defe da he Defe da e a a e e a e i a e , f ac i h he Defe da , ch a way that there exists serious ambiguity about the manner and capacity in which each of he Defe da a e ac i g. Id. at 10. While Plaintiff has provided the Court with business ec d i dica i g Defe da Mi e e a a Director with Better Speech, the Court has received no such evidence that denotes the relationship between Miles and Speech Path. Outside f he a ega i a e ed i P ai iff Amended Complaint, Plaintiff has not provided sufficient evidence of her entitlement to an award against Speech Path. Service of process was successfully effected upon Speech Path on August 31, 2018 [Dkt. No. 7], yet mere successful 4 Case 1:18-cv-10556-RMB-JS Document 24 Filed 01/07/21 Page 5 of 7 PageID: 126 service is insufficient to grant a Motion for Default Judgment without further evidence to support Plaintiff a ega i . In deciding a motion for default judgment, "the factual allegations in a complaint, other than those as to damages, are treated as conceded by the defendant." DIRECTV, Inc. v. Pepe, 431 F.3d 162, 165 (3d Cir. 2005). The Court, however, must make "an independent inquiry into 'whether the unchallenged facts constitute a legitimate cause of action'" and "must make an independent determination" regarding questions of law. Days Inn Worldwide, Inc. v. Mayu & Roshan, L.L.C., No. 06-1581, 2007 U.S. Dist. LEXIS 41997, 2007 WL 1674485, at *4 (D.N.J. June 8, 2007). Despite proper service upon Speech Path, the Court does not understand how, nor was it presented evidence of, hi c relationships with Defendants and Plaintiff. Indeed, Plai Amended Complaint alleges serious ambiguity a iff between the two Defendants. Plaintiff must do more to persuade this Court that she is entitled to judgment against Speech Path. The Court therefore denies the Motion for Default Judgment without prejudice. III. Defendant Miles as Corporate Alter Ego While Defendant Miles was successfully served in her individual capacity on April 6, 2019 [Dkt. No. 11], Plaintiff has failed to put forth sufficient evidence to support why Miles 5 Case 1:18-cv-10556-RMB-JS Document 24 Filed 01/07/21 Page 6 of 7 PageID: 127 should be personally liable in this case. To support personal liability on behalf of Miles requires an analysis as to how her actions and practices would allow for a piercing of the corporate veil. As Plaintiff seeks, piercing the corporate veil requires two elements: a unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist, and the circumstances must indicate that adherence to the fiction of a separate corporate existence would sanction a fraud or promote injustice. The Mall at IV Group Props., LLC v. Roberts, 2005 U.S. Dist. LEXIS 31860, *3 (D.N.J. 2005). The Court must consider six non-exhaustive factors in addressing the first element: 1) gross undercapitalization; ... 2) failure to observe corporate formalities, 3) non-payment of dividends; 4) the insolvency of the debtor corporation; siphoning of funds of the corporation by the dominant stockholder; 5) nonfunctioning of other officers or directors; absence of corporate records; and 6) the fact that the corporation is merely a facade for the operations of the dominant stockholder[s]. Craig v. Lake Asbestos of Quebec, Ltd., 843 F.2d 145, 150 (3d Cir.1988). For the second element, Plaintiff must allege that the corporation committed a fraud, injustice, or the like. The Mall 6 Case 1:18-cv-10556-RMB-JS Document 24 Filed 01/07/21 Page 7 of 7 PageID: 128 at IV, supra, at 10. None of these factors are detailed, much less mentioned, i P ai iff filings, and therefore the Court is unpersuaded that individual liability attributed to Defendant Miles is supported at this time. Therefore, the Motion for Default Judgment is denied without prejudice. THEREFORE, IT IS HEREBY on this 7th day of January, 2021 ORDERED that for the foregoing reasons, the Motion for Default Judgment is denied without prejudice. To the extent Plaintiff can cure the foregoing deficiencies, she may file a renewed motion. RENÉE MARIE BUMB UNITED STATES DISTRICT JUDGE 7

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