US Flour Corporation v. Certified Bakery Corporation
MEMORANDUM AND ORDER denying 12 Motion for Default Judgment; adopting 15 Report and Recommendation. For the foregoing reasons, Plaintiff's objections to Judge Wall's R&R are OVERRULED, Judge Wall's R&R is ADOPTED IN ITS ENTIRET Y, and Plaintiff's motion for default judgment is DENIED without prejudice with leave to refile. Plaintiff shall file its renewed motion for default judgment within thirty (30) days of the date of this Memorandum and Order. Plaintiff is warned t hat if it does not move for default judgment within the time prescribed, Plaintiff's Second Amended Complaint will be dismissed without prejudice for failure to serve process. So Ordered by Judge Joanna Seybert on 3/5/12. C/ECF (Valle, Christine)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
US FLOUR CORPORATION,
MEMORANDUM & ORDER
-againstCERTIFIED BAKERY, INC. a/k/a CERTIFIED
Scott Adam Grauman, Esq.
Law Offices of Scott A. Grauman, Esq.
125-16 Queens Boulevard
Kew Gardens, NY 11415
Scott Cargill, Esq.
Lowenstein Sandler PC
65 Livingston Avenue
Roseland, NJ 07068
Samuel J. Teele, Esq.
Lowenstein Sandler PC
1251 Avenue of the Americas, 18th Floor
New York, NY 10020
SEYBERT, District Judge:
Pending before the Court are U.S. Flour Corporation’s
(“Plaintiff”) objections to Magistrate Judge William D. Wall’s
Report and Recommendation (“R&R”) recommending that Plaintiff’s
motion for default judgment be denied.
For the reasons stated
below, Plaintiff’s objections to Judge Wall’s R&R are OVERRULED,
and Judge Wall’s R&R is ADOPTED IN ITS ENTIRETY.
Plaintiff commenced this diversity action on June 3,
2010 (Docket Entry 1), filed an Amended Complaint on October 8,
2010 (Docket Entry 3), and filed a Second Amended Complaint 1 on
December 6, 2010 asserting claims against Defendant Certified
Bakery, Inc. a/k/a Certified Bakery Corporation (“Defendant”)
for breach of contract, account stated, and unjust enrichment
(Docket Entry 6).
On February 4, 2011, Plaintiff filed a Certification
Attached as exhibits to the Certification were two Affidavits of
One stated that a process server attempted to serve
December 23, 2010 “but the building is for sale.
real estate sign Chaus Realty.
There is a
So therefore I was unable to
(Docket Entry 8-2.)
The other stated that
The Court notes that the Second Amended Complaint was filed
without leave of court. See FED. R. CIV. P. 15(a)(1) (stating
that a party may amend its pleading only once as a matter of
course). However, leave to amend should be freely granted “when
justice so requires.” FED. R. CIV. P. 15(a)(2). Therefore,
despite Plaintiff’s failure to move to amend, the Court accepts
the Second Amended Complaint as the operative complaint.
December 22, 29, and 30, 2010 at his residence 9 Clark Place,
Tenafly, New Jersey.
(Docket Entry 8-4.) 2
also asserted that on January 4, 2011, Plaintiff served the
requested, and via first class mail on Sam Grunfeld
residence located at 9 Clark Place, Tenafly, New Jersey.
Defendant never answered or otherwise appeared in this
Thus, on February 7, 2011, Plaintiff moved for the
entry of default (Docket Entry 9), and on February 8, Plaintiff
filed an amended motion for the entry of default (Docket Entry
The Affidavit states:
There was a vehicle in the driveway.
confirmed with next door neighbor that
entity does reside at this address.
there was a name plate on the front door,
with the name Grunfelds. The lights were on
and there was a vehicle in the driveway.
Entity would not answer the door. Entity is
So therefore I was unable
to effectuate service.
(Docket Entry 8-4.) It is unclear from the process server’s
affidavit how he obtained this address, as the New Jersey
Business Entity Status Report indicating that Mr. Grunfeld is
Defendant’s registered agent states that his address is 20
Universal Place, Carlstadt, New Jersey. (Docket Entry 8-3.)
The Certification is misleading and should have stated that
Plaintiff served the Amended Summons and Second Amended
Complaint. (See Docket Entry 8-5, at 4-24.)
This is also incorrect: The certified mail and first class mail
were addressed to Sam Frunfeld. (Docket Entry 8-5, at 2-3.)
February 8, 2011, and Plaintiff moved for a default judgment on
March 3, 2011 (Docket Entry 12).
On March 8, 2011, the Clerk of the Court received a
letter dated February 24, 2011 from Richard J. Schwartz, Esq.
Mr. Schwartz indicated that he was counsel for Defendant and
“never received any notice of papers indicating that suit was
(Docket Entry 13.)
On March 21, 2011, the Court
referred the motion to Judge Wall for an R&R.
On March 22, 2011, Judge Wall issued an electronic
order scheduling a traverse hearing “at which the plaintiff must
establish proper service.
must be introduced.”
Appropriate witnesses and exhibits
A copy of this electronic order was mailed
to Mr. Schwartz.
The hearing took place on April 27, 2011.
Plaintiff was represented by Thomas Livolsi, Esq.
(not one of its attorneys of record in this case), and no one
Livolsi did not produce any witnesses or exhibits to establish
proper service at the hearing but rather rested on the papers
filed in support of the motion for default judgment.
issued his R&R that day recommending that default judgment be
denied for failing to establish proper service.
The R&R stated:
“To the Traverse Hearing, the plaintiff
introduced not a single witness or exhibit to establish proper
service, thus wasting the court’s time and completely failing to
meet its burden of proving service.”
(Docket Entry 15.)
On May 11, 2011, Plaintiff filed timely objections to
(Docket Entry 18.)
Specifically, Plaintiff argues
that Judge Wall erred in (1) finding that Defendant was not
properly served and (2) recommending that default judgment be
Standard of Review
“When evaluating the report and recommendation of a
magistrate judge, the district court may adopt those portions of
the report to which no objections have been made and which are
not facially erroneous.”
Walker v. Vaughan, 216 F. Supp. 2d
290, 291 (S.D.N.Y. 2002) (citation omitted).
A party may serve
and file specific, written objections to a magistrate’s report
and recommendation within fourteen days of being served with the
See FED. R. CIV. P. 72(b)(2).
modify, in whole or in part, the findings or recommendations
made by the magistrate judge.”
FED. R. CIV. P. 72(b)(3).
28 U.S.C. § 636(b)(1); see also
A party that objects to a report and
report and recommendation to which they object.
See Barratt v.
Joie, No. 96-CV-0324, 2002 WL 335014, at *1 (S.D.N.Y. Mar. 4,
2002) (citation omitted).
judge’s report, the Court must conduct a de novo review of any
contested sections of the report.
See 28 U.S.C. § 636(b)(1);
Pizarro v. Bartlett, 776 F. Supp. 815, 817 (S.D.N.Y. 1991).
if a party “makes only conclusory or general objections, or
simply reiterates his original arguments, the Court reviews the
Report and Recommendation only for clear error.”
Pall Corp. v.
quotation marks and citation omitted).
Furthermore, even in a
Kennedy v. Adamo, No. 02-CV-1776, 2006 WL 3704784, at *1 (E.D.N.Y.
Sept. 1, 2006) (internal quotation marks and citation omitted).
Here, Plaintiff raises two objections:
(1) that Judge
Wall erred in finding that it failed to establish proper service
and (2) that because proper service was established, default
judgment should have been granted.
Accordingly, the Court will
review those portions of the R&R de novo.
Plaintiff has not
objected to Judge Wall’s decision to hold a traverse hearing, so
the Court will review Judge Wall’s decision to do so for clear
The Court will briefly address Judge Wall’s decision
to hold a traverse hearing for clear error before discussing the
issues raised in Plaintiff’s objections de novo.
Judge Wall’s Decision to Conduct a Traverse Hearing
“Under New York law 5 a traverse hearing is required
when there exists a genuine issue of fact of whether service was
Escobar v. New York, No. 05-CV-3030, 2010 WL
629828, at *4 (E.D.N.Y. Feb. 22, 2010) (citing CSC Holdings,
Inc. v. Fung, 349 F. Supp. 2d 613, 617 (E.D.N.Y. 2004); LePatner
& Assocs., L.L.P. v. Horowitz, 24 Misc. 3d 187, 882 N.Y.S.2d
829, 832 (Sup. Ct. N.Y. Cnty. 2009); Dime Sav. Bank of N.Y. v.
Republic Ins. Co. v. Pac. Fin. Servs. of Am., Inc., 301 F.3d 54,
57 (2d. Cir. 2002) (citing Nyctl 1997-1 Trust v. Nillas, 288
A.D.2d 279, 732 N.Y.S.2d 872, 873 (2d Dep’t 2001)).
“[P]ersonal jurisdiction over a defendant in a diversity action
is determined by reference to the law of the jurisdiction in
which the court sits.” Hoffritz for Cutlery, Inc. v. Amajac,
Ltd., 763 F.2d 55, 57 (2d Cir. 1985) (citations omitted).
Id. at 57-58 (citing Skyline Agency, Inc. v. Ambrose Coppotelli,
Inc., 117 A.D.2d 135, 502 N.Y.S.2d 479, 483-84 (2d Dep’t 1986)).
Such a hearing is not necessary “where the defendant fails to
swear to ‘specific facts to rebut the statements in the process
Id. at 58 (quoting Simonds v. Grobman,
277 A.D.2d 369, 716 N.Y.S.2d 692, 693 (2d Dep’t 2000)).
since Defendants denied receipt of service via a letter from
their attorney and not via a sworn statement, a traverse hearing
was not required.
service and may conduct an evidentiary hearing even without a
See Marine Midland Bank, N.A. v. Miller, 664 F.2d
899, 904 (2d Cir. 1981); see also, e.g., SEC v. Napolitano, No.
99-CV-4807, 2006 U.S. Dist. LEXIS 82016, at *6 (E.D.N.Y. Nov. 3,
failure to submit a sworn rebuttal); Harris v. Wu-Tang Prods.,
Inc., No. 05-CV-3157, 2006 WL 1677127, at *6 (S.D.N.Y. June 16,
appropriate” to resolve defendant’s allegation that plaintiff
Therefore, Judge Wall’s exercising his discretion to
conduct a traverse hearing despite no sworn denial of service
from Defendant was not clear error.
Plaintiff’s Burden of Establishing Proper Service at
At the hearing, Plaintiff had the burden of proving
Hoffritz, 763 F.2d at 57; Marine Midland, 664 F.2d at 904.
Plaintiff did not call any witnesses or admit any exhibits.
Instead, Plaintiff asked Judge Wall to take judicial notice of
Judge Wall refused to do so and found that Plaintiff
failed to establish proper service by a preponderance of the
The Court agrees with Judge Wall.
The Federal Rules of Evidence provide that a “court
may judicially notice a fact that is not subject to reasonable
dispute because it: (1) is generally known within the trial
court’s territorial jurisdiction; or (2) can be accurately and
readily determined from sources whose accuracy cannot reasonably
FED. R. EVID. 201(b).
The date, time, and manner
in which Plaintiff’s process servers claim to have made service
are not such matters of general knowledge; therefore, Judge Wall
correctly refused to take judicial notice of these statements.
Cf. Cobble Hillbillies, L.L.C. v. Interior Design, 4 Misc. 3d
987, 990, 782 N.Y.S.2d 600, 602 (N.Y.C. Civ. Ct. 2004).
case cited by Plaintiff, Person v. White, No. 09-CV-3920, 2010
WL 2723210, at *3 (E.D.N.Y. July 2, 2010), stating that “the
Court may take notice of . . . items in the record of the case,”
notice on a motion to dismiss.
The traverse hearing, although
one-sided, was nonetheless a hearing:
The Federal Rules of
Evidence applied and Plaintiff had the burden of introducing
preponderance of the evidence.
See Hoffritz, 763 F.2d at 57;
Marine Midland, 664 F.2d at 904; Cobble Hillbillies, 4 Misc. 3d
at 990, 782 N.Y.S.2d at 602.6
failed to introduce any evidence at the traverse hearing, did
not satisfy its burden of establishing proper service.
Denial of Default Judgment
“A court may not properly enter a default judgment
unless it has jurisdiction over the person of the party against
whom the judgment is sought, which also means that he must have
been effectively served with process.”
Copelco Capital Inc. v.
Gen. Counsel of Bolivia, 940 F. Supp. 93, 94 (S.D.N.Y. 1996)
Even if Plaintiff’s counsel attempted to admit the affidavits
and Certification of Due Diligence at the hearing, which he did
not, such documents would have been excluded as inadmissible
hearsay. FED. R. EVID. 801-02; cf. Cobble Hillbillies, 4 Misc. 3d
at 989-90, 782 N.Y.S.2d at 601-02.
Plaintiff failed to establish proper service, the motion for
default judgment must be denied.
See id.; United States v.
Kadoch, No 96-CV-4720, 2011 WL 2680510, at *2 (E.D.N.Y. June 10,
2011) (“In the absence of proper service, it appears that this
default therefore must be voided.”), adopted by 2011 WL 2680362
(E.D.N.Y. July 8, 2011).
For the foregoing reasons, Plaintiff’s objections to
Judge Wall’s R&R are OVERRULED, Judge Wall’s R&R is ADOPTED IN
ITS ENTIRETY, and Plaintiff’s motion for default judgment is
DENIED without prejudice with leave to refile.
file its renewed motion for default judgment within thirty (30)
days of the date of this Memorandum and Order.
warned that if it does not move for default judgment within the
time prescribed, Plaintiff’s Second Amended Complaint will be
dismissed without prejudice for failure to serve process.
FED. R. CIV. P. 4(m); Gleason v. McBride, 869 F.2d 688, 692 (2d
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
5 , 2012
Central Islip, NY
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