Pacheco Lopez v. Mohammed et al
ORDER ADOPTING REPORT AND RECOMMENDATIONS: For the reasons in the attached Memorandum & Order, the Court adopts the recommendations and conclusions in the Report and Recommendation, with the exception of Judge Go's finding as to whether vacatur is unlikely to prejudice Plaintiff, and denies Defendants' motion to vacate the default judgment. Ordered by Judge Pamela K. Chen on 9/26/2017. (Lee, Helen)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
CELESTINO PACHECO LOPEZ,
- against -
MEMORANDUM & ORDER
14-CV-4443 (PKC) (MDG)
MOHAMMED MOHAMMED, ELRAWSHEH CAFE & RESTAURANT INC.,
EL-RAWSHEH CAFE INC., EL-RAWSHEH
CUISINE INC., KIRSTEN GOLDBERG,
PAMELA K. CHEN, United States District Judge:
On November 26, 2014, in this Fair Labor Standards Act (“FLSA”) and New York Labor
Law (“NYLL”) case, a default judgment was entered in the amount of $59,440.43, jointly and
severally, against Defendants Mohamed Mohamed, 1 El-Rawsheh Cafe & Restaurant Inc., ElRawsheh Cafe Inc., El-Rawsheh Cuisine Inc., and Kirsten Goldberg. (Dkt. 19.) On December 22,
2014, Defendant Mohamed filed a pro se notice of appeal as to the default judgment but did not
pay the filing fee. (Dkts. 20, 30.) Then, two months later, on February 20, 2015, all Defendants, 2
except Kirsten Goldberg, appeared and moved to vacate the judgment; Plaintiff opposed. (Dkts.
In the Complaint, Plaintiff spelled Defendant Mohamed’s name “Mohammed
Mohammed”, i.e., with two “m”s in the middle of both his first and last names. On September 21,
2016, Mohamed submitted an affidavit under the name “Mohamed Mohamed”, i.e., with only one
“m” in the middle, stating that Plaintiff had misspelled his name. (See Dkt. 34-1, September 21,
2016 Affidavit of Mohamed at 2.) On earlier dates, however, Mohamed had submitted two other
sworn affidavits under the name “Mohammed Mohammed.” (See Dkts. 22-3, 28.) Nevertheless,
the Court will refer to this Defendant as “Mohamed Mohamed”.
For the sake of brevity, the Court will refer to Defendants Mohamed, El-Rawsheh Cafe
& Restaurant Inc., El-Rawsheh Cafe Inc., El-Rawsheh Cuisine Inc. as “Defendants,” even though
Defendant Goldberg still has not made an appearance and does not join the other Defendants in
their motion to vacate the default judgment.
21–29.) This Court referred the motion to the Honorable Marilyn D. Go for an inquest. (February
23, 2015 Order.) After holding a traverse hearing on September 15, 2016, regarding service on
the individual Defendants Mohamed and Goldberg, Judge Go issued a Report and
Recommendation (“R&R”), dated March 17, 2017, recommending that the Court deny
Defendants’ motion to vacate the default judgment. (Dkts. 33, 37.) Defendants timely objected
to the R&R, to which Plaintiff did not respond. (Dkt. 39.) On April 28, 2017, Defendants sought
an automatic stay of this action, pursuant to Section 362 of the Bankruptcy Court, noting that ElRawsheh Cuisine Inc., one of the corporate defendants, had filed a Chapter 7 Petition in the United
States Bankruptcy Court, Eastern District of New York, on April 26, 2017. (Dkt. 41.) For reasons
explained in a May 22, 2017 Order, the Court stayed the case only as to Defendant El-Rawsheh
Cuisine Inc. (See May 22, 2017 Order.)
For the reasons set forth below, Defendants’ objections are overruled, and the Court adopts
Judge Go’s R&R, with the exception of the finding that vacatur is unlikely to prejudice Plaintiff,
and denies Defendants’ motion to vacate the default judgment.
The Court provides a summary of facts relevant only to Defendants’ motion to set aside
the default judgment. 3
Plaintiff Celestino Pacheco Lopez brought this action against his former employer ElRawsheh Cafe & Restaurant Inc., El-Rawsheh Cafe Inc., El-Rawsheh Cuisine Inc., d/b/a/ ElRawsheh (collectively, “El-Rawsheh” or the “Corporate Defendants”), the named owner and
manager (Mohamed), and another manager (Goldberg), to recover, inter alia, unpaid minimum
A more thorough discussion of the facts is available in Judge Go’s R&R and this Court’s
November 24, 2014 order granting a default judgment against Defendants. (See Dkts. 18, 37.)
wages, overtime wages, and statutory penalties under the FLSA and NYLL. (See Dkt. 1,
El-Rawsheh is a restaurant and hookah bar. (Compl. ¶¶ 1, 9; 10/30/14 Hr’g.) Plaintiff
worked there as a dishwasher and cleaner from mid-June 2013 through June 21, 2014. (Compl.
¶ 24; 10/30/14 Hr’g.) Plaintiff alleged that he worked every day from 4 p.m. until 4 a.m., without
breaks, for seven days a week. (Compl. ¶¶ 12, 24.) For his first week of work, El-Rawsheh paid
Plaintiff $350. (10/30/14 Hr’g.) Subsequently, Plaintiff was paid a flat rate of $420 a week for 84
hours of work, resulting in an effective rate of $5.00 per hour. (Compl. ¶ 24.) Plaintiff quit on
June 21, 2014. (10/30/14 Hr’g.) He did not receive payment for his last week of work. (Id.)
STANDARD OF REVIEW
When reviewing a report and recommendation by a magistrate judge, a district court “may
accept, reject, or modify, in whole or in part, the findings or recommendations made by the
magistrate judge.” 28 U.S.C. § 636(b)(1). The Court makes a “de novo determination of those
portions of the report or specified proposed findings or recommendations to which objection is
made.” 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3) (“The district judge must determine de
novo any part of the magistrate judge’s disposition that has been properly objected to.” (emphasis
added)). However, “[t]o accept the report and recommendation of a magistrate judge on a
dispositive matter to which no timely objection has been made, the district court need only be
satisfied that there is no clear error on the face of the record.” Bailey v. Wells Fargo Bank, N.A.,
15-CV-3249, 2016 WL 3661279, at *1 (E.D.N.Y. July 5, 2016).
Similarly, “[g]eneral or
conclusory objections, or objections which merely recite the same arguments presented to the
magistrate judge, are reviewed for clear error.” O’Diah v. Mawhir, No. 08-CV-322, 2011 WL
933846, at *1 (S.D.N.Y. March 16, 2011) (citing Farid v. Bouey, 554 F. Supp. 2d 301, 306 n.2
(N.D.N.Y. 2008) and Frankel v. N.Y.C., 06-CV-5450, 2009 WL 465645, at *2 (S.D.N.Y.
Feb. 25, 2009)). When the magistrate judge has conducted a hearing, “[the] district judge is not
required to hear or rehear any witness, and [the objecting party has] no right to present further
testimony when it offered no justification for not offering the testimony at the hearing before the
magistrate.” Telfaire v. Le Pain Quotidien, No 16-CV-5424, 2017 WL 1405754, at *1 (S.D.N.Y.
Apr. 18, 2017) (quoting Pan Am. World Airways v. Int’l Bhd. of Teamsters, 894 F.2d 36, 40 n.3
(2d Cir. 1990)). “In this district and circuit, it is established law that a district judge will not
consider new arguments raised in objections to a magistrate judge’s report and recommendation
that could have been raised before the magistrate but were not.” Illis v. Artus, 06-CV-3077, 2009
WL 2730870, at *1 (E.D.N.Y. Aug. 28, 2009) (citations and quotations omitted) (collecting cases).
“Federal Rule of Civil Procedure [‘Rule’] 60(b) governs motions for relief from a final
judgment . . . and provides six independent grounds for relief.” Burda Media, Inc. v. Viertel, 417
F.3d 292, 298 (2d Cir. 2005). Under Rule 60(b), a district court may vacate a judgment for any of
the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered
evidence . . . ; (3) fraud . . . , misrepresentation, or misconduct by an opposing party;
(4) the judgment is void; (5) the judgment has been satisfied [or] released . . . or it
is no longer equitable that the judgment should have prospective application; or (6)
any other reason justifying relief from the operation of the judgment.
In their motion to vacate, Defendants asserted that they were moving pursuant to
subsections (b)(1), (3), (4), and (6) of Rule 60. (Dkt. 22-9 at 3.) Judge Go concluded that none of
the Rule 60(b) subsections are grounds for vacating the judgment in this case. (See R&R
generally.) 4 Defendants now object to Judge Go’s conclusion that judgment should not be vacated
As previously noted, Rule 60(b)(6) provides a court with the authority to relieve a party
from a final judgment for “any other reason that justifies relief.” Although the R&R cites to Rule
60(b)(6) in discussing Defendants’ argument that the default judgment should be vacated because
under Rules 60(b)(1), (3), or (4). The Court has conducted a de novo review of the record and
addresses Defendants’ specific objections in turn.
As an initial matter, the Court notes that although there is a “strong preference for resolving
disputes on the merits,” N.Y. v. Green, 420 F.3d 99, 104 (2d Cir. 2005) (internal quotations
omitted), “a decision whether to set aside a default [judgment] is a decision left to the sound
discretion of the district court because ‘it is in the best position to assess the individual
circumstances of a given case and to evaluate the credibility and good faith of the parties,’”
McLean v. Wayside Outreach Dev. Inc., 624 F. App’x 44, 45 (2d Cir. 2015) (quoting Enron Oil
Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993)).
Validity of a Judgment
Rule 60(b)(4) provides: “On motion and just terms, the court may relieve a party or its legal
representative from a final judgment . . . [if] the judgment is void.” Fed. R. Civ. P. 60(b)(4). “A
default judgment is ‘void’ if it is rendered by a court that lacks jurisdiction over the parties.” City
of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 138 (2d Cir. 2011). “For a federal court to
exercise personal jurisdiction over a defendant, ‘the plaintiff’s service of process upon the
defendant must have been procedurally proper.’” Westchase Residential Assets II, LLC v. Gupta,
No. 14-CV-1435, 2016 WL 3688437, at *2 (E.D.N.Y. July 7, 2016) (quoting Licci ex rel. Licci v.
Lebanese Canadian Bank, SAL, 673 F.3d 50, 59 (2d Cir. 2012)); see also Sartor v. Toussaint, 70
F. App’x 11, 13 (2d Cir. 2003) (“A judgment is void for lack of personal jurisdiction over the
the Court lacked personal jurisdiction over Defendants due to defective service (see R&R at 11),
the Court infers that this reference to Rule 60(b)(6) is a typographical error and that the R&R, in
fact, is referring to Rule 60(b)(4), which permits vacating a judgment that is void, e.g., a judgment
obtained against defendants over whom the Court has no personal jurisdiction. Indeed, the R&R
separately addresses Defendants’ Rule 60(b)(6) argument later in the decision. (See R&R at 16.)
defendant where service of process was not properly effected.”). “[W]hen a judgment entered
against the defaulting party is void, the Court has no discretion and is compelled to grant the motion
for the reason that a void judgment cannot be enforced.” Sartor, 70 F. App’x at 13 (quoting
Wrobleski v. Morrissette, No. 96-CV-0182, 2000 WL 129184, at *1 (W.D.N.Y. Jan. 27, 2000)).
Service of the Complaint
Under Rule 4(e), a plaintiff may serve an individual by “following state law for serving a
summons in an action brought in courts of general jurisdiction in the state where the district court
is located or where service is made” or by “leaving a copy of [the summons and complaint] at the
individual’s dwelling or usual place of abode with someone of suitable age and discretion who
resides there.” Fed. R. Civ. P. 4(e)(1), (2)(B). Thus, the Court looks to New York Civil Practice
Law and Rules (“C.P.L.R.”) which enumerates several ways by which proper service can be
effected. Under New York C.P.L.R. Section 308, in addition to personal service, a plaintiff can
serve an individual by a combination of delivery and mail. Section 308(2) provides that an
individual may be served “by delivering the summons within the state to a person of suitable age
and discretion at the [person’s] actual place of business . . . and by either mailing the summons to
the person to be served at his or her last known residence . . . or [ ] actual place of business . . . .”
N.Y. C.P.L.R. § 308(2). “New York courts have construed ‘actual place of business’ to include
(1) a place where the defendant regularly transacts business, or (2) an establishment that the
defendant owns or operates, where there is a ‘clear identification of the work performed by [him]
with that place of business.’” Velez v. Vassallo, 203 F. Supp. 2d 312, 325 (S.D.N.Y. 2002)
(quoting King v. Galluzzo Equip. & Excavating, Inc., No. 00-CV-6247, 2001 WL 1402996, at *4
(E.D.N.Y. Nov. 8, 2001)).
“‘Normally, a plaintiff has the burden of proving personal jurisdiction in a case where a
defendant appears and contests such jurisdiction.’ Where a defendant has actual notice of a lawsuit
before a default judgment is entered, but does not challenge jurisdiction until after a default is
entered, the burden to prove lack of jurisdiction shifts to defendant.” Middleton v. Green Cycle
Hous., LLC, 689 F. App’x 12, 13 (2d Cir. 2017) (quoting “R” Best Produce, Inc. v. DiSapio, 540
F.3d 115, 126 (2d Cir. 2008)); see also Burda Media, Inc., 417 F.3d at 299 (“[O]n a motion to
vacate a default judgment based on improper service of process where the defaulting defendant
had actual notice of the original proceeding but delayed in bringing the motion, the defendant bears
the burden of proof to establish that the purported service did not occur.”). In New York, a process
server’s affidavit of service establishes a presumption of service, but “[a] defendant’s sworn denial
of receipt of service . . . rebuts [that] presumption . . . and necessitates an evidentiary hearing.”
Old Republic Ins. Co. v. Pac. Fin. Servs. of Am., Inc., 301 F.3d 54, 57 (2d Cir. 2002); see also
Weifang Xinli Plastic Prod. Co. v. JBM Trading Inc., 553 F. App’x 42, 45 (2d Cir. 2014). “But
no hearing is required where the defendant fails to swear to specific facts to rebut the statements
in the process server’s affidavits.” Weifang Xinli Plastic Prod. Co., 553 F. App’x at 45 (quoting
Old Republic Ins. Co., 301 F.3d at 57–58). In other words, a conclusory sworn denial of receipt
of service alone cannot rebut the presumption of service. See id. Furthermore, “courts may
discredit such denials of service when there is ‘ample evidence from which [to] conclude that [the
defendant’s] statements [denying receipt of service] lack credibility.’” De Curtis v. Ferrandina,
529 F. App’x 85, 86 (2d Cir. 2013) (alterations in original) (quoting Old Republic Ins. Co., 301
F.3d at 58).
Based on the traverse hearing, Judge Go found that Mohamed was properly served at his
place of business, and therefore recommended that Defendants’ motion to vacate the default
judgment on the basis of Rule 60(b)(4) should be denied. (R&R at 12–15.) Only Mohamed
contested Plaintiff’s assertion of proper service; the Corporate Defendants conceded that they had
been served properly. 5 (See Dkt. 36, Traverse Hr’g Tr. (“Tr.”) at 8 (Defendants conceding that the
Plaintiff properly served the Corporate Defendants through the Secretary of State); see also Dkt.
25-2, Ex. B, Affidavit of Service by Secretary of State as to El-Rawsheh Cafe & Restaurant Inc,
El-Rawsheh Cuisine Inc., and El-Rawsheh Cafe Inc.)
In his motion to vacate, Mohamed claimed that the Court never obtained personal
jurisdiction over him because he was never served with the Summons and Complaint. 6 Resolution
of this claim largely depends on the credibility of Rose Lawrence, the process server and legal
secretary at the office of Jeanne Mirer, Plaintiff’s attorney; Ihab Ilbana, the employee at
Mohamed’s workplace to whom Lawrence claims to have served the Summons and Complaint;
and Defendant Mohamed. Judge Go, after observing the witnesses’ demeanor and hearing their
testimony, found Lawrence’s testimony to be credible. (R&R at 13.) Ultimately, Judge Go
concluded that Defendants had not met their burden of demonstrating insufficient service, based,
in part, on her finding that Mohamed’s testimony lacked credibility for multiple reasons.
Specifically, Judge Go noted that (1) “[t]here would have been no reason for a person claiming to
be ‘Mohammed Mohammed’ to call [the office of Plaintiff’s attorney] in August 2014 had he not
received the summons” (id. at 13); (2) it was unlikely that Mohamed did not have actual notice of
the action months before filing his motion to vacate default judgment because, as George Fanous,
the president of El-Rawsheh testified, Fanous relied on Mohamed for reading and writing material
However, as discussed infra, the Corporate Defendants, along with Mohamed, seek to
vacate the default judgment on the basis of other subsections of Rule 60(b).
Mohamed does not object to Judge Go’s specific finding that El-Rawsheh Cafe was
Mohamed’s “actual place of business,” and that Ilbana, is a “person of suitable age and discretion.”
Rather, he denies that the Summons and Complaint were left with Ilbana, that Ilbana gave the
Summons and Complaint to Mohamed, and that Mohamed ever received the copy of Summons
and Complaint mailed to El-Rawsheh.
in English, and thus Mohamed was likely to have seen and read the Summons and Complaint ElRawsheh received from the Secretary of State; and (3) Mohamed’s failure to pay the filing fee
after he filed a pro se notice of appeal indicates that he had delayed addressing the default
judgment, in spite of having knowledge of it. (See R&R at 13–14.)
Mohamed argues that such findings of fact by Judge Go were in error, citing Green, 420
F.3d at 104, which states that “all doubts must be resolved in favor of the party seeking relief from
the judgment . . . .” Not only does Mohamed object to Judge Go’s finding that Mohamed was
properly served at his place of business, he also objects to certain findings relating to her
conclusion that Mohamed had actual knowledge of the lawsuit. Specifically, Mohamed asserts
that had he left a message for Plaintiff’s attorney, it could have been in response to an initiating
phone call, rather than in response to receiving copies of the Summons and Complaint via proper
service. (Dkt. 39 at 13.) He also contends that Judge Go failed to resolve doubt in favor of the
party seeking vacatur by concluding that had Fanous received the service from the New York
Secretary of State, he would have asked Mohamed for assistance in reading the service. (Id. at
14.) Finally, Mohamed objects to Judge Go’s finding that Defendants committed intentional delay
by not paying the fee for Mohamed’s pro se appeal of the default judgment. (Id. at 14.)
Here, the record includes ample evidence to support Judge Go’s determination that Plaintiff
properly served Mohamed. The affidavit of service notarized on August 4, 2014, indicates that on
July 29, 2014, Lawrence left copies of the Summons and Complaint with Ilbana at 2548 Steinway
Street in Astoria, New York, which was the address of El-Rawsheh, i.e., Mohamed’s place of
business, and also mailed a second copy via USPS First Class mail to the same address; the
affidavit of service also indicates that the “deliver and mail” process was completed within twenty
days of each other, as required under N.Y. C.P.L.R. § 308(2). 7 (See Dkt. 25-1, Ex. A, Affidavits
of Service to Mohamed and Goldberg.) In her affidavit, Lawrence describes Ilbana and the process
by which she gave him the Summons and Complaint. (See Dkt. 25, Affidavit of Rose Lawrence
(“Lawrence Aff.”), ¶ 5–8.) In her testimony at the hearing before Judge Go 8, Lawrence stated,
consistent with her previous affidavits, that she went to El-Rawsheh, asked to speak to Mohamed,
and was told by Ilbana that Mohamed was not there, but might return later (Tr. 10–11); that
Lawrence gave Ilbana envelopes containing the Summons and Complaint, which Ilbana took (Tr.
12); and that Lawrence also mailed them to the same address because she was unable to personally
serve Mohamed (Tr. 12–13). Thus, Plaintiff’s service on Mohamed was proper and sufficient
under New York law. See N.Y. C.P.L.R. § 308.
In addition, Lawrence testified at the hearing that Mohamed had called the offices of
Plaintiff’s attorney, Jeanne Mirer, on August 15, 2014, and asked that Mirer call him back at (718)
267-6222. (Tr. at 13–14.) Plaintiff also introduced a phone memo pad from August 2014 and
Although the affidavit of service does not specify the date on which the Summons and
Complaint were mailed to El-Rawsheh, the Court infers that the “deliver and mail” process
occurred within twenty days of each other because the affidavit of service was notarized on August
4, 2014. (See Dkt. 25-1, Ex. A, Affidavits of Service to Mohamed and Goldberg.)
The Court notes that Mohamed was not even entitled to a hearing on the service issue.
By merely providing conclusory affidavits denying service in his motion to vacate, Mohamed
failed to rebut the presumption of proper service; therefore, an evidentiary hearing was not
necessary. See DeCurtis v. Upward Bound Int’l, Inc., No. 09-CV-5378, 2012 WL 4561127, at *4
(S.D.N.Y. Sept. 27, 2012) (“‘[N]o evidentiary hearing is required where the defendant fails to
swear to specific facts to rebut the statement in the process server’s affidavits.’” (quoting Old
Republic Ins. Co., 301 F.3d at 58)), aff’d, 529 F. App’x 85; Cablevision Sys. N.Y.C. Corp. v. Okolo,
197 F. App’x 61, 62 (2d Cir. 2006) (finding that defendant’s general denial of service and
insignificant disagreements with process server’s physical description of recipient were
insufficient to necessitate an evidentiary hearing); (see also Dkt. 22-2, Affidavit of George Fanous
(“Fanous Aff.”), ¶ 4; Dkt. 22-3, Affidavit of Mohamed Mohamed (“Mohamed Aff.”), ¶ 4;
Affidavit of Ihab Ilbana (“Ilbana Aff.”), ¶¶ 2–3.) Nonetheless, Judge Go conducted a hearing at
which she received live testimony and other evidence.
September 2014 from Mirer’s office, which bore a notation about Plaintiff having called the office
and asking for a return call at (718) 267-6222. (Id.)
While the Court recognizes that the Second Circuit has expressed a “strong ‘preference for
resolving disputes on the merits,’” Green, 420 F.3d at 104, the Court still has the discretion to
preserve a default judgment based on the Court’s credibility determinations as to the parties’
differing accounts regarding service. See De Curtis, 529 F. App’x at 86 (endorsing the district
court’s credibility determination and holding that “[t]he district court was correct in rejecting
[defendant’s] motion to vacate on these grounds”); Old Republic, 301 F.3d at 59 (“In light of the
contradictory statements and incredible defenses presented by [the defendant], we find that the
district court also did not abuse its discretion in crediting [the process server’s] contemporaneous
account of service . . . .”); Weifang Xinli Plastic Prod. v. JBM Trading Inc., No. 11-CV-2710, 2014
WL 4244258, at *6 (E.D.N.Y. Aug. 26, 2014) (crediting testimony from witness that defendant
had initiated a phone conversation with him about the lawsuit, rejecting defendant’s assertion that
witness’s account was “inconsistent and self-serving,” and thus finding that defendant had actual
notice of the lawsuit), aff’d, 583 F. App’x 24 (2d Cir. 2014); BMG Music Pub. Ltd. v. Croma Music
Co., No. 01-CV-1941, 2003 WL 22383374, at *2 (S.D.N.Y. Oct. 16, 2003) (overruling defendants’
objection to magistrate judge’s recommendation that her motion to vacate the default judgment for
failure to execute adequate service be denied where a process server’s testimony as to service was
credible and consistent with other sworn affidavits).
Furthermore, as previously stated, the Second Circuit has explained that “courts may
discredit [ ] denials of service when there is ‘ample evidence from which [to] conclude that [the
defendant’s] statements lacked credibility.’” De Curtis, 529 F. App’x at 86 (alterations in original)
(quoting Old Republic Ins. Co., 301 F.3d at 58). Here, based on its de novo review of the record,
the Court agrees with Judge Go’s credibility determinations as to the testimony of Lawrence and
Mohamed. Lawrence’s testimony about hand-delivering and mailing copies of the Summons and
Complaint to El-Rawsheh on July 29, 2014, was consistent with her affidavit of service and the
additional affidavit she submitted in connection with Defendants’ motion to vacate. (Compare Tr.
9–21, with Dkt. 25, Lawrence Aff. and Dkt. 25-1, Ex. A, Affidavits of Service to Mohamed and
Goldberg.) Moreover, the affidavits of service identify an employee at El-Rawsheh, Ilbana, as the
person who received the Summons and Complaint from Lawrence, and Defendants do not deny
that Ilbana worked at El-Rawsheh. (See Tr. 30 (Mohamed’s testimony that Ilbana “was [ ] working
as a waiter [at El-Rawsheh]”).) Although Ilbana stated in his affidavit that no one ever came to
El-Rawsheh with copies of the Summons and Complaint on July 29, 2014, and that, had he
received such documents, he would have given them to Mohamed or Fanous (Dkt. 22-4, Affidavit
of Ihab Ilbana (“Ilbana Aff.”), ¶¶ 1–3), Ilbana did not testify on Defendants’ behalf at the hearing
before Judge Go. Furthermore, the credibility of Ilbana’s statements is undercut by the fact that
Lawrence identified Ilbana, including his first name, in the service affidavit—information that
Lawrence could only have gotten if she had, as she testified and attested to in her affidavits, gone
to El-Rawsheh, met Ilbana, and given him the Summons and Complaint. 9
Other evidence in the record also undermines Mohamed’s claim that he did not receive
proper service. As previously mentioned, Plaintiff provided evidence at the hearing that his
attorney, Mirer, received a message in August 2014 from a caller who identified himself as
“Mohamed Mohamed” and asked Mirer to return his call at (718) 267-6222, which Mohamed has
admitted is the phone number for El-Rawsheh. (See Dkt. 24-3, Ex. 3 (Copy of Message Notepad);
Indeed, the fact that Defendants have submitted a sworn affidavit that appears to contain
perjured information undermines Mohamed’s and the other Defendants’ credibility generally.
see also Tr. at 13–14, 29.) Moreover, while Mohamed and Fanous both testified at the hearing
that Mohamed received mail at El-Rawsheh (Tr. 27, 44), they now deny receiving six of the seven
mailings of documents related to the instant case 10 and also deny any knowledge of service by the
Secretary of State on the corporate Defendants. 11 (See Tr. 41 (Mohamed’s testimony that he did
not recall receiving anything from the Secretary of State regarding the lawsuit).) Mohamed and
Fanous’s claims (and sworn testimony) that, of the seven mailings, they only received the default
judgment—especially without any explanation as to how the other six mailings would not have
reached them—strains credulity.
In sum, based on a de novo review of the record, the Court finds that Defendants’ claims
that they never received copies of the Summons and Complaint and that they had no notice of the
lawsuit are not credible. 12 The Court further finds that Plaintiff properly served Defendant
Mohamed and all of the other Defendants. 13 Accordingly, the Court denies Defendants’ objections
In connection with Defendants’ motion to vacate, Plaintiff provided evidence that a
letter, advising Defendants of Plaintiff’s intent to file suit, was sent by Plaintiff’s attorney to
Defendants on July 5, 2014 (Dkt. 24-1, Ex. 1), and that two separate copies of the Summons and
Complaint (Dkt. 25-1, Ex. A, Affidavits of Service to Mohamed and Goldberg), in addition to
three separate copies of the Motion for Default Judgment and Affirmation were mailed to
Defendants (Dkt. 24-4, Ex. 4). Although Plaintiff has not provided evidence of mailing the default
judgment to Defendants, the Court infers that a copy of the judgment was also mailed to
Defendants given that Defendants filed a motion to vacate the judgment.
In connection with Defendants’ motion to vacate, Plaintiff has also submitted copies of
affidavits of service by the Secretary of State. (Dkt. 25-2, Ex. B).
In reaching this conclusion, the Court does not rely on Judge Go’s finding that Fanous
would have asked Mohamed for help with any legal documents mailed by the Secretary of State,
and does not address Defendants’ objections to that ruling.
“[I]n most cases where courts have shifted the burden to the defendant to disprove
service, . . . it was conceded or uncontroverted that defendant had knowledge of the underlying
suit before the entry of judgment.” Khaldei v. Kaspiev, No. 10-CV-8328, 2014 WL 2575774, at
*7 (S.D.N.Y. June 9, 2014) (collecting cases). Here, Defendants do not concede that they had
knowledge of the lawsuit against them. Only Fanous has stated that he may have talked to some
attorney, whom he could not identify, about the lawsuit (Tr. 39), but then provided vague and
to the R&R on this issue and Defendants’ motion to vacate the default judgment for failure to
provide adequate service pursuant to Rule 60(b)(4).
In objecting to Judge Go’s recommendation that this Court should not set aside the default
judgment pursuant to Rule 60(b)(3), Defendants rehash the arguments rejected by Judge Go.
Specifically, they assert that Plaintiff’s claim is based on fraud because he misrepresented his
duties and dates of employment. In support of their assertions that Plaintiff worked for them for
only two weeks and was fully paid, and that therefore the default judgment was obtained by fraud,
Defendants point to the fact that Plaintiff has alleged that a “Kirsten Goldberg” worked at ElRawsheh and named her a defendant, when no one by that name ever worked at El-Rawsheh.
Under Rule 60(b)(3), courts may vacate a final judgment where an adverse party used
fraud, misrepresentation, or misconduct in obtaining the judgment. Fed. R. Civ. P. 60(b)(3); see
also Entral Grp. Int’l, LLC v. 7 Day Cafe & Bar, 298 F. App’x 43, 44 (2d Cir. 2008) (quoting
State St. Bank & Tr. Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 176 (2d Cir. 2004)).
“‘[A] Rule 60(b)(3) motion cannot be granted absent clear and convincing evidence of material
misrepresentation,’ and to prevail ‘a movant must show that the conduct complained of prevented
the moving party from fully and fairly presenting his case.’” Entral Grp. Int’l, LLC, 298 F. App’x
at 44 (first quoting Fleming v. N.Y. Univ., 865 F.2d 478, 484 (2d Cir. 1989); and then quoting State
St. Bank & Tr. Co., 374 F.3d at 176); see also Koch v. Pechota, 632 F. App’x 24, 26 (2d Cir. 2016)
inconsistent testimony that the first time he learned of the lawsuit was when he “received later
document [sic]” (Tr. 38), presumably the default judgment, as he also testified that he never
received anything from the Secretary of State (Tr. 41). Thus, the Court does not find that the
burden to disprove service shifted to Defendants. Rather, the Court’s finding is that Plaintiff has
met his burden of demonstrating that service of process was validly effected.
(quoting Fleming, 865 F.2d at 484); Speaks v. Donato, 214 F.R.D. 69, 77 (D. Conn. 2003) (noting
that “[t]he moving party bears a heavy burden under Fed. R. Civ. P. 60(b)(3)”).
Here, Defendants have not provided “clear and convincing evidence” of fraud on the part
of Plaintiff. “In fact, they have not provided ANY evidence that [P]laintiff engaged in fraud,
misrepresentation or misconduct in the procurement of the default judgment.” Ptak Bros. Jewelry,
Inc. v. Ptak & Ptak, LLC, No. 06-CV-13732, 2011 WL 253424, at *4 (S.D.N.Y. Jan. 25, 2011)
(emphasis in original). Even if Plaintiff incorrectly alleged that a “Kirsten Goldberg” worked at
El-Rawsheh, that alone is not clear and convincing evidence of fraud.
With respect to Defendants’ assertion that Plaintiff has fraudulently alleged that he worked
at El-Rawsheh for one year, as the R&R points out, Defendants and Fanous “have not come
forward with time records to support their general allegations, even though they are required under
section 211(c) of the [Fair Labor Standards Act] and appurtenant regulations to keep such records.”
(R&R at 18.) With nothing more than Fanous’s affidavit stating that Plaintiff only worked for two
weeks at El-Rawsheh and was paid in full, Defendants have not met their heavy burden of
demonstrating fraud, as required under Rule 60(b)(3).
Accordingly, the Court denies Defendants’ objections to the R&R’s findings on this issue,
and concludes that the default judgment should not be set aside pursuant to Rule 60(b)(3).
Rule 60(b)(1) and the Three McNulty Factors
In recommending that the default judgment not be vacated pursuant to Rule 60(b)(1), 14
Judge Go properly considered the three McNulty factors. See S.E.C. v. McNulty, 137 F.3d 732,
738 (2d Cir. 1998). The Second Circuit discussed these factors in DeCurtis:
Although the R&R discusses the McNulty factors in the context of whether the judgment
should be vacated under Rule 60(b), the Court infers that this discussion specifically pertained to
whether the judgment should be vacated specifically under Rule 60(b)(1).
“When a district court decides a motion to vacate a default judgment pursuant to
the provisions of Rule 60(b), the court’s determination must be guided by three
principal factors: (1) whether the default was willful, (2) whether the defendant
demonstrates the existence of a meritorious defense, and (3) whether, and to what
extent, vacating the default will cause the nondefaulting party prejudice.” State St.
Bank & Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 166–67 (2d Cir.
2004) (internal quotation marks omitted). Of these factors, willfulness carries the
most weight. Though each factor is to be considered, a “default should not be set
aside when it is found to be willful.” Action S.A. v. Marc Rich & Co., Inc., 951
F.2d 504, 507 (2d Cir. 1991).
De Curtis, 529 F. App’x at 86 (alteration in original).
Defendants object to Judge Go’s findings that Defendants’ default was willful and that
Defendants do not have a meritorious defense. For the reasons discussed below, the Court finds
that all three McNulty factors weigh in favor of denying Defendants’ motion to vacate: (1)
Defendants’ default was willful; (2) Defendants have not sufficiently demonstrated that they have
a meritorious defense; and (3) Plaintiff is likely to be prejudiced if the entry of default and/or the
default judgment is vacated.
In their objection, Defendants contend that “the record does not support the finding that
any default by Mohamed was ‘willful’ . . . .” (Dkt. 39 at 3.) The Court disagrees.
“A default is willful when the conduct is ‘more than merely negligent or careless,’ but is
instead ‘egregious and not satisfactorily explained.’” Jaramillo v. Vega, 675 F. App’x 76, 76–77
(2d Cir. 2017) (quoting Bricklayers & Allied Craftworkers Local 2, Albany, N.Y. Pension Fund v.
Moulton Masonry & Const., LLC, 779 F.3d 182, 186 (2d Cir. 2015)). “In general, a defendant’s
failure to answer the complaint and respond to a motion for default judgment demonstrates
willfulness.” Murphy v. Snyder, No. 10-CV-1513, 2013 WL 934603, at *6 (E.D.N.Y. Mar. 8,
2013) (citing McNulty, 137 F.3d at 738–39), report and recommendation adopted, 2013 WL
1335757 (E.D.N.Y. Mar. 29, 2013).
Plaintiff has filed copies of multiple notices that were sent to Mohamed’s place of work,
El-Rawsheh, regarding the instant lawsuit; two of them were specifically addressed to Mohamed.
(See supra fn. 10; Dkt. 15-5, Affirmation of Service by Jeanne Mirer and Certificates of Mailing).
In addition, Plaintiff has provided credible evidence that Mirer sent Mohamed a letter on July 5,
2014, regarding Plaintiff’s intent to file a lawsuit for unpaid overtime wages (Dkt 24-1, Ex. 1, July
2, 2014 letter from Mirer to Mohamed regarding Plaintiff’s legal claims; Dkt. 24-2, Ex. 2, Copy
of USPS tracking result showing delivery of letter on July 5, 2014), and that Mohamed left a
message for Plaintiff’s counsel on August 15, 2014—less than a month after Plaintiff commenced
this lawsuit (see Dkt. 24-3, Ex. 3). Furthermore, Mohamed admitted to regularly receiving mail
at El-Rawsheh and that Ilbana was an employee there. (See Tr. 27, 30.) Nevertheless, Defendants
do not provide a satisfactory explanation as to why Mohamed did not receive any of the notices
related to this lawsuit, or why Defendants—including the Corporate Defendants, which do not
contest service—failed to take action promptly after receiving notice that an order of default had
been entered against them or at any earlier point. (See Dkt. 15-5, Affirmation of Service by Jeanne
In sum, given the Court’s rejection of Defendants’ conclusory denials about being served
(in Mohamed’s case) and/or being aware of this lawsuit, 15 as non-credible, the Court finds that
Defendants knowingly failed to answer the Complaint and respond to the motion for default,
thereby demonstrating willfulness for purposes of the McNulty analysis. See Lopez v. Traffic Bar
Indeed, any claim by the Corporate Defendants that they were unaware of this lawsuit or
the motions seeking a default order and judgment is contradicted by their admission that they were
properly served. (See Tr. at 8.)
& Restaurant Inc., No. 12-CV-8111, 2015 WL 545190, at *3 (“Of course, an opposing party may
contest the representations set forth in an affidavit of service. Here, the defendants have done so,
but have provided no support for their conclusory statements.”); see also World Magic Int’l AVV
v. Eddy Int’l Ltd., No. 09-CV-1447, 2010 WL 4457184, at *1 (S.D.N.Y. Nov. 1, 2010) (concluding
that default was willful after holding an evidentiary hearing and finding that defendant was served
with a summons and complaint and also finding defendant’s affidavit denying that he was served
Mohamed’s willful default can be further inferred from his delay in responding to the
default judgment. Default judgment was entered on November 26, 2014 (Dkt. 19), and Mohamed
learned of this, at the latest, by December 22, 2014, when he filed a notice of appeal (Dkt. 20).
But then he did not pay the necessary filing fee for his appeal, and filed his motion to vacate the
default judgment on February 20, 2015, two months after he had filed the notice of appeal. (See
Dkts. 19–22, 30.) While Defendants are correct that a defendant who has defaulted is certainly
free to pursue vacatur through legal representation, instead of through a pro se appeal, the delay
with which Defendants have done so in this case, despite their receipt of the numerous notices
regarding the lawsuit and the default proceedings, supports the Court’s conclusion that Defendants
knowingly chose to ignore the Summons and Complaint until well after a default judgment was
entered. Therefore, the Court concludes that Defendants’ default was willful. 16
Indeed, based on the record in this case, the Court concludes that Defendants likely
sought to bury their heads in the sand and hope that this lawsuit would disappear, only choosing
to respond after it was clear that the lawsuit was not going away and that Defendants might actually
have to pay money to Plaintiff.
Because the “existence of a meritorious defense is a key factor in the Rule 60(b) analysis .
. . [the Second Circuit has] held that ‘the absence of such a defense is sufficient to support [a]
district court’s denial’ of a Rule 60(b) motion.” Green, 420 F.3d at 109 (second alteration in
original) (quoting State Street, 374 F.3d at 174). “In order to make a sufficient showing of a
meritorious defense[,] . . . the defendant need not establish his defense conclusively, but he must
present evidence of facts that, if proven at trial, would constitute a complete defense.” Id. (quoting
McNulty, 137 F.3d at 740). A “‘defendant must present more than conclusory denials when
attempting to show the existence of a meritorious defense.’” Id. at 110 (noting that defendants
“failed to submit . . . even a single affidavit or any other evidence supporting their asserted
defenses” (quoting Pecarsky v. Galaxiworld.com, Ltd., 249 F.3d 167, 173 (2d Cir. 2001)); see also
McLean, 624 F. App’x at 45 (finding no meritorious defense because it was “made only in
conclusory terms and [was] not accompanied by any supporting evidence”). “‘The test of such a
defense is measured not by whether there is a likelihood that it will carry the day, but whether the
evidence submitted, if proven at trial, would constitute a complete defense.’” Pecarsky, 249 F.3d
at 173 (quoting Enron Oil, 10 F.3d at 98).
Here, while Defendants assert that Plaintiff worked for only two weeks and was paid in
full before he quit (Dkt. 34 at 8), they offer no support for these allegations other than Mohamed’s
and Fanous’s affidavits, and not, as the R&R notes, Plaintiff’s time or pay records, even though
Defendants were required to keep such records under Section 211(c) of the FLSA and New York
Labor Law. (R&R at 18 (citing Santillan v. Henao, 822 F. Supp. 2d 284, 291 (E.D.N.Y. 2012),
N.Y. Lab. Law § 196-a, and Padilla v. Manlapaz, 643 F. Supp. 2d 302, 307 (E.D.N.Y. 2009)).)
Though the Court recognizes that other courts in this Circuit have found that such bare affidavits
may be sufficient to demonstrate the existence of a meritorious defense for purposes of a motion
to vacate a default or default judgment, 17 the Court declines to find so here. Rather, based on the
combination of Defendants’ demonstrably false claims regarding service (and Mohamed’s belated,
false claim that he is not a manager, see infra), their willful delay in responding to this action, and
their unsupported assertions of their purported defense (particularly when records supporting their
defense should be readily available), the affidavits submitted by Defendants are entirely lacking
credibility and thus are equivalent to no evidence at all. Thus, the Court finds that Defendants
have failed to sufficiently demonstrate that they have a meritorious defense. See McLean, 624 F.
App’x at 45 (finding no meritorious defense because it was “made only in conclusory terms and
[was] not accompanied by any supporting evidence”). 18
To the extent Mohamed attempts to argue that he should not have been named as a
defendant because he had a minimal role in the operations of the current restaurant, this newly
asserted allegation, which conspicuously comes after the traverse hearing, is not credible in light
of Mohamed’s and Fanous’s earlier sworn statements discussing Mohamed’s managerial role.
(Compare Dkt. 34-1, September 21, 2016 Affidavit of Mohamed, ¶¶ 4–6, with Tr. 26 (Mohamed’s
testimony that he worked as a manager part-time) and Tr. at 38 (Fanous’ testimony that Mohamed
See e.g., Lopez, 2015 WL 545190, at *5 (finding that defendants alleged sufficient facts
to establish meritorious defense for purposes of motion to vacate default judgment, where all that
was provided were sworn declarations asserting that plaintiffs were never employed by defendants
and that all of defendants’ employees were sufficiently paid); Enron Oil, 10 F.3d at 98 (finding a
meritorious defense when defendants filed supporting affidavits); see also Llolla v. Karen Gardens
Apartment Corp., No. 12-CV-1356, 2016 WL 233665, at *4 (E.D.N.Y. Jan. 20, 2016) (“In the
context of a motion to vacate a default, a defense that the parties were properly paid constitutes a
‘meritorious defense.’” (alteration omitted) (quoting Addison v. Reitman Blacktop, Inc., 272
F.R.D. 72, 81 (E.D.N.Y. 2010))).
In the R&R, Judge Go similarly concluded that Defendants had failed to put forth a
meritorious defense because they relied on general allegations that Plaintiff had worked for only
two weeks and made false claims about his work, but failed to come forward with time records to
support their general allegations. (R&R at 18–19.)
was a manager at El-Rawsheh); see also Fanous Aff., ¶ 3 (stating that Mohamed is the “vicepresident” of El-Rawsheh and that both Mohamed and Fanous manage the restaurant); Mohamed
Aff., ¶ 3 (same).) Therefore, the Court agrees with Judge Go (R&R at 19) that this newly asserted
allegation is not credible and does not constitute a meritorious defense.
“In considering whether a plaintiff would be prejudiced if an entry of default were vacated,
the court must take into account more than mere delay or passage of time.” Lopez, 2015 WL
545190, at *5 (citing Davis v. Musler, 713 F.2d 907, 916 (2d Cir. 1983)). “Rather, it must be
shown that the delay ‘may thwart [the] plaintiff’s recovery or remedy,’ or ‘result in the loss of
evidence, create increased difficulties of discovery, or provide greater opportunity for fraud and
collusion.” Id. (alteration in original) (quoting Green, 420 F.3d at 110).
Judge Go found the prejudice factor to weigh slightly in favor of Defendants because the
delay between service of the Complaint and the filing of Defendants’ motion to vacate was less
than a year (R&R at 19), and Defendants do not object to that particular finding. Nonetheless, this
Court also considers whether vacating the default judgment will prejudice Plaintiff because one of
the Corporate Defendants, specifically El-Rawsheh Cuisine Inc., filed a Chapter 7 Petition in the
United States Bankruptcy Court immediately before filing their objections to the R&R. (Dkt. 41.)
While El-Rawsheh Cuisine Inc.’s financial situation is not entirely clear, because the corporate
Defendant that employed Plaintiff is undergoing liquidation, Plaintiff’s recovery is almost certain
to be thwarted if judgment were to be vacated at this juncture. See Lopez, 2015 WL 545190, at *5
(finding the prejudice factor to weigh against vacating the default judgment where defendant
employer had closed and thus was no longer profitable and plaintiff had a reasonable concern that
defendants “may be judgment-proof by the conclusion of the litigation”); see also Gesualdi v.
Quadrozzi Equipment Leasing Corp., 11-CV-115, 2016 WL 7322333, at *5 (E.D.N.Y. Dec. 15,
2016) (taking into account defendants’ ongoing proceedings in bankruptcy court and finding that
plaintiffs would be prejudiced if default judgment were vacated). Moreover, because Plaintiff’s
employer is undergoing liquidation, and it has been more than three years since Plaintiff worked
at El-Rawsheh, vacating the default judgment would result in further delay and the likely loss of
evidence. Accordingly, the Court finds that the prejudice factor weighs heavily against vacating
the default judgment.
Because the Court finds that all three McNulty factors weigh against vacating default
judgment, Defendants’ motion to vacate pursuant to Rule 60(b)(1) should be denied. 19 See De
Curtis, 529 F. App’x at 86; World Magic Intern. AVV v. Eddy Int’l Ltd., No. 09-CV-1447, 2010
WL 4457184, at *3 (S.D.N.Y. Nov. 1, 2010) (that defendant’s default was willful reason enough
to deny motion to vacate default judgment—“[n]egligent defaults may be excusable; deliberate
defaults are not.” (citing Gucci Am., Inc. v. Gold Ctr. Jewelry, 158 F.3d 631, 635 (2d Cir. 1998)
and In re Enron, Inc., 326 B.R. 46, 51 (Bankr. S.D.N.Y. 2005))).
For the foregoing reasons, the Court adopts the recommendations and conclusions in the
R&R, with the exception of Judge Go’s finding as to whether vacatur is unlikely to prejudice
Plaintiff, and denies Defendants’ motion to vacate the default judgment.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: September 26, 2017
Brooklyn, New York
As to all other portions of the R&R to which Defendants have not raised objections, the
Court finds no clear error and adopts those portions as well.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?