Canouse v. Protext Mobility, Inc.

Filing 51

ORDER denying 43 Motion to Set Aside Default re 43 MOTION to Set Aside Default Judgment. filed by Protext Mobility, Inc. However, there is no evidence that plaintiff's attempts to settle were made in bad faith, and in fact, they seem to have been made in an effort to accommodate defendant during a challenging time and to ensure that Protext could remain solvent and reorganize in a way that benefited both parties. The two years and more that have passed, with defendant 's knowledge, since the Judgment was entered bar relief under 60(b) (1), and the lack of highly convincing evidence excusing defendant's failure to act sooner leave it with a remedy (if any is available) against its defaulting lawyer. However, defendant may not be entirely without relief in its suit in a Florida state court. Defendant's motion is denied.. (Signed by Judge Louis L. Stanton on 5/20/2022) (ate)

ORIGlf~AL

Case 1:18-cv-03610-LLS Document 51 Filed 05/20/22 Page 1 of 4

·usocsDNY

DOCUMENT
ELECTRONICALLY FILED
DOC#: ___. _ _ _ _ ____,,_

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JOSEPH C. CANOUSE, an individual,

DATE FILED:

~}:1t(J-J......

Plaintiff,
- against PROTEXT MOBILITY,

18 Civ.

INC.,

03610

(LLS)

ORDER
Defendant.

Defendant Protext Mobility,
Civ.

P.

60(b)

Inc., moves pursuant to Fed. R.

to vacate the Default Judgment entered against it

on November 19, 2019, arguing that vacatur is appropriate where
Protext's attorney neglected the case, the Judgment contained
legal and factual errors and disregarded meritorious defenses,
and plaintiff acted in bad faith to mislead defendant into
believing they could reach settlement.
Canouse opposes the motion,

Plaintiff Joseph C.

arguing that defendant misrepresents

the facts surrounding the parties' relationship and the entry of
Default Judgment and that he would be unduly prejudiced if the
motion were granted.
Fed. R. Civ. P.

60(b)

sets forth the grounds for relief

from an entry of default judgment. Under either Sections
60 (b) (1)

or 60 (b) (6),

of default,

(2)

the Court considers "(1)

the willfulness

the existence of any meritorious defenses, and

(3) prejudice to the non-defaulting party." Vega v. Trinity
Realty Corp., No. 14-CV-7417
(S.D.N.Y.

(RJS),

2021 WL 738693, at *5

Feb. 24, 2021) (internal quotation marks omitted); see

also Kotlicky v. U.S.

Fid.

& Guar. Co.,
-1-

817 F.2d 6,

9 (2d Cir.

Case 1:18-cv-03610-LLS Document 51 Filed 05/20/22 Page 2 of 4

19 8 7) ("Generally, courts require tl:-:a t the evidence in support of
the motion to vacate a final judgment be 'highly convincing,'
that a party show good cause for the failure to act sooner, and
that no undue hardship be imposed on other parties.")

(internal

citations omitted).
Defendant seeks relief under Rule 60 (b) ( 6) , which
authorizes a district court to grant relief to a moving party
for "any other reason that justifies relief." To avail itself of
that Rule, defendant must demonstrate that "extraordinary
circumstances" warrant relief. Stevens v. Miller,
67

676 F.3d 62,

(2d Cir. 2012). But, "Where a party's Rule 60 (b) motion is

premised on grounds fairly classified as mistake,
or neglect, relief under Rule 60(b) (6)

inadvertence,

is foreclosed",

and the

motion is properly characterized as a Rule 60(b) (1) motion based
on "mistake, inadvertence, surprise, or excusable neglect". Id.
at 67-68; Fed. R. Civ. P. 60 (b) (1).
Defendant's motion is premised on its attorney's gross
negligence or incompetence in failing to answer the First
Amended Complaint or oppose the motion for default,

1

and is

properly considered under Rule 60(b) (1). See Harris v. United

Defendant does not show that his attorney completely abandoned his case,
such that the attorney's conduct was "so egregious and profound" to warrant
relief under Rule 60 (b) (6). Compare Murphy v. Snyder, No. CV 10-1513 JS AKT,
2013 WL 934603 (E.D.N.Y. Mar. 8, 2013), report and recommendation adopted,
2013 WL 1335757 (E.D.N.Y. Mar. 29, 2013) (granting relief under 60(b) (6)
where, despite defendants' consistent attempts to communicate with their
attorneys and remain apprised of the status of the case, the firm failed to
respond to multiple court filings or to comply with various court orders,
completely neglected defendants' case, and failed to address a blatant
conflict of interest) .
1

-2-

Case 1:18-cv-03610-LLS Document 51 Filed 05/20/22 Page 3 of 4

St ate s , 3 6 7 F . 3 d 7 4 , 8 1 ( 2 d Cir . 2 0 0 4 ) ( " In typical c iv i l
proceedings, this Court very rarely grants relief under Rule
60(b) (6)

for cases of alleged attorney failure or misconduct.");

see also Brooks v. Doe Fund,
(E.D.N.Y. Sept. 24, 2020)

Inc., 2020 WL 5706451, at *7

("To the extent that Plaintiff alleges

gross negligence, the Second Circuit has consistently resisted
granting Rule 60(b) (6)
party's lawyer.")

relief for the gross negligence of a

( internal quotation marks omitted) .

"A motion under Rule 60(b) must be made within a reasonable
time-and for reasons

( 1) ,

( 2) , and ( 3) no more than a year after

the entry of the judgment." Fed. R. Civ. P.
motion is therefore untimely.

60(c). Defendant's

It is brought nearly two and a

half years after judgment was entered and nearly two years after
defendant claims it first became aware of the entry. See Lewis
Deel.

<JI

33.

Defendant claims that its delay in moving to vacate the
judgment was caused by plaintiff's "year's long, bad faith
campaign of threats coupled with offers of settlement" which
lulled him into "a false sense of security that he would not
pursue the Judgment."

Lewis Deel. at 6,

<Jl<Jl

35-39. However,

there is no evidence that plaintiff's attempts to settle were
made in bad faith, and in fact,

they seem to have been made in

an effort to accommodate defendant during a challenging time and
to ensure that Protext could remain solvent and reorganize in a
way that benefited both parties. See Canouse Deel.
-3-

<Jl<Jl

9, 21, 31-

Case 1:18-cv-03610-LLS Document 51 Filed 05/20/22 Page 4 of 4

42; Ex. A.
The two years and more that have passed, with defendant's
knowledge,

since the Judgment was entered bar relief under

60(b) (1), and the lack of highly convincing evidence excusing
defendant's failure to act sooner leave it with a remedy (if any
is available)

against its defaulting lawyer. However, defendant

may not be entirely without relief in its suit in a Florida
state court. See Canouse Deel.

~

54.

Defendant's motion is denied.
So Ordered.
Dated:

New York, New York
May 20, 2022

t .... 1 1...s, .,..t,._

Louis L. Stanton
U.S.D.J.

-4-