Cunningham v. Park Lane Digital Media et al

Filing 65

REPORT AND RECOMMENDATION: In light of the foregoing the magistrate judge recommends that the defendants motion (Docket No. 42) be Granted and the default judgment entered against them be found void and the default judgment be vacated. The magistrate judge further recommends that plaintiff's subsequent service of the defendants be found to be in compliance with Rule 4 (m). Signed by Magistrate Judge Jeffery S. Frensley on 7/25/2017. (xc:Pro se party by regular mail. ) (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(jw)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION

CRAIG CUNNINGHAM
Plaintiff,
v.
LEXINGTON DOC PREP, LLC, et al.
Defendants.

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Civil No. 3:15-cv-467
Judge Trauger
Magistrate Judge Frensley

REPORT AND RECOMMENDATION
Pending before the court is a Motion to Set Aside the Finding of Default and to Vacate
Order Granting Default Judgment by defendants Michael Dazzo (“Dazzo”) and Lexington Doc
Prep, LLC. (“Lexington”). Docket No. 42. Plaintiff has filed a response in opposition to the
motion. Docket No. 44. Defendants assert that service of process was never achieved and thus
the court has no personal jurisdiction to grant the default judgment. For the reasons set forth
herein, the undersigned recommends that the motion be GRANTED.
I.

Background.

This civil action was commenced against these defendants by the filing of an amended
complaint on August 14, 2015. Docket No. 7. The Complaint alleges the defendants among
others violated the Telephone Consumer Protection Act (“TCPA”) and Fair Debt Collection
Practices Act (“FDCPA”) through a series of unwelcomed automated phone calls. Docket No. 7.
The clerk issued a summons as to these defendants on August 19, 2015. Docket No. 8. The
summons were returned executed as to these defendants by plaintiff on September 9, 2015.
Docket Nos. 10 and 11. The clerk entered a default against defendants Lexington and Dazzo
(Docket No. 16) and following a hearing at which the defendants did not attend and were

unrepresented by counsel, the magistrate judge recommended that a default judgment be entered
for plaintiff in the total amount of $19,000.00 against these defendants. Docket No. 31. The
report and recommendation was accepted (Docket No. 34) and judgment was entered for the
plaintiff. (Docket No. 35). The defendants thereafter filed the pending motion to set aside the
default and vacate the judgment in this matter. Docket No. 42.
In support of their argument to vacate the defendants submit that they were not properly
served and thus the court has no personal jurisdiction. Id. With respect to Mr. Dazzo, the
defendants contend that service of process “was claimed by the wrong person.” Docket No. 42-1,
p. 3. As such, they contend personal service was not achieved on Mr. Dazzo. Id. With respect to
defendant, Lexington, defendants contend that while the summons properly identified Michael
Dazzo as the agent authorized to accept process, neither he nor anyone authorized on his behalf
actually accepted the summons. Id.
Defendants rely on the affidavit of Mr. Dazzo wherein he states that he is the only agent
authorized by Lexington to accept service, that he did not receive service of process for the
summons and the complaint for either himself or Lexington and that he did not sign the return
receipt for certified mail returned to the court by Plaintiff and does not know who did. Docket
No. 42. Plaintiff responds that applying the standard of Federal Rule of Civil Procedure 60(b),
and the three part test under United Coin Meter Company v. Seaboard Coastline Railroad, 705 F.
2d 839, 844 (6th Cir. 1983), for analyzing such a motion, the relief is not proper. Docket No. 44,
pp. 4-7. Specifically, plaintiff contends that the default “was willful and the result of deliberate
action of Michael Dazzo to list a fake address for himself with the Secretary of State for Florida
for Lexington Doc Prep, LLC in order to avoid service of process.” Id. at p. 4. Plaintiff asserts
that had the defendant listed a proper address with the Secretary of State of Florida service would

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have been perfected. Id. at p. 6. He further argues that he would be prejudiced by setting aside
the default because records may no longer exist and defendants have not alleged a meritorious
defense to the underlying TCPA claims. Id. at p. 7.
II.

Analysis

“[W]ithout proper service of process, consent, waiver, or forfeiture, a court may not
exercise personal jurisdiction over a named defendant.” King v. Taylor, 694 F.3d 650, 655 (6th
Cir. 2012) (citing Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999)).
It is a “bedrock principle that a defendant is not obliged to engage in civil litigation unless the
defendant is properly notified of the action and brought under the court’s authority, i.e., personal
jurisdiction, by formal service of process.” Arthur v. Litton Loan Servicing LP, 249 F. Supp. 2d
924, 928 (E.D. Tenn. 2002). Actual notice of the lawsuit by the defendant is immaterial to the
question of whether that defendant was properly served. LSJ Inv. Co., 167 F.3d at 322 (citing
Friedman v. Estate of Presser, 929 F.2d 1151, 1155–56 (6th Cir. 1991)); Genesis Diamonds,
LLC v. John Hardy, Inc., No. 3:15-cv-01093, 2016 WL 3478915, at *6 (M.D. Tenn. June 27,
2016). “And in the absence of personal jurisdiction, a federal court is ‘powerless to proceed to an
adjudication.’” King, 694 F.3d at 655 (quoting Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574,
584 (1999)).
The federal rules provide that service on an individual be completed by any manner
accepted in the state where the district court is located or where service is made, or by
“delivering a copy of the summons and the complaint personally; leaving a copy of each at the
individual’s dwelling or usual place of abode with someone of suitable age and discretion who
resides there; or delivering a copy of each to an agent authorized by appointment or by law to

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receive service of process.” Fed. R. Civ. P. 4(e). Service by certified mail is not permitted under
the federal rules unless accompanied by a waiver of personal service.
A. Setting Aside Default Judgment Under Rule 60(b)
Under Federal Rule of Civil Procedure 55(c), “[t]he court may set aside an entry of
default for good cause, and it may set aside a final default judgment under Rule 60(b).” Fed. R.
Civ. P. 55(c). Here, because defendants argue that the court did not have personal jurisdiction to
enter judgment against them, their claim is best construed as one for relief from a void judgment
under Rule 60(b)(4).
As a general rule, “[w]here Rule 60(b) is invoked to set aside a default judgment, the
court must both consider the Rule 55 equitable factors . . . and find that one of the specific
requirements of Rule 60(b) is met.” Thompson v. American Home Assur. Co., 95 F.3d 429, 433
(6th Cir. 1996). However, where a party seeks to set aside a default judgment because it is
void—and not for reasons like mistake or inadvertence—the court may not deny the motion
based on a weighing of the equities. Jackson v. FIE Corp., 302 F.3d 515, 524 (5th Cir. 2002).
See also S.E.C. v. Internet Solutions for Business, Inc., 509 F.3d 1161, 1165 (9th Cir. 2007).
“[T]he district court has no discretion––the judgment is either void or it is not. If the judgment is
void, the district court must set it aside.” Id. (internal quotations omitted); Burrell v. Henderson,
434 F.3d 826, 831 (6th Cir. 2006) (“[D]enying a motion to vacate a void judgment is a per se
abuse of discretion.”).
B. Validity of Service of Process
The validity of the court’s jurisdiction here is determined by whether whoever signed the
certified mail return receipt was authorized to accept service. Agency for this purpose is held to a
rigorous standard. “The bare fact that an alleged agent actually accepts process for the defendant

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is not enough to constitute valid service of process. There must be evidence that the defendant
intended to confer upon its agent the specific authority to receive and accept service of process
for the defendant. Arthur, 249 F. Supp. 2d at 929 (quoting 4A Charles Alan Wright and Arthur
R. Miller, Federal Practice and Procedure § 1097 (3d ed. 2002)).
Dazzo states by affidavit that he is the only agent authorized by Lexington to accept
service of process for a summons and complaint, that he did not sign for service of process for
either himself or Lexington, has no knowledge of the identity of those who allegedly signed the
certified service but that they were not authorized to sign by him and he did not receive service
of process. Docket No. 42-2.
The Tennessee Rules of Civil Procedure permits service by registered return receipt or
certified return receipt mail. See Tenn. R. Civ. P. 4.05 (1)(a), (3)-(4). While Mr. Dazzo testifies
that he has no idea who signed for the documents, even if they were employees or
representatives of the defendant the Tennessee Supreme Court has concluded that “a corporate
agent with the authority to sign for and receive the corporation’s certified mail does not, without
more, qualify as an agent authorized by appointment to receive service of process on behalf of a
corporate defendant.” Hall v. Haynes, 319 S. W. 3d 564, 583-84 (Tenn. 2010).
Service by certified mail on an individual is generally insufficient under Florida law
unless accompanied by a waiver of personal service. Dyer v. Wal-Mart Stores, Inc. 318 Fed.
Appx. 843, 844 (11th Circuit 2009)(citations omitted). Service of process on an individual can be
“made by delivering a copy of it to the person to be served with a copy of the complaint, petition,
or other initial pleading or paper, or by leaving the copies at his or her’s usual place of abode
with any person residing therein who is fifteen years of age or older and informing the person of
the contents.” Fla. Stat. § 48.031(1)(a). With respect to corporations, the Florida Rules of Civil

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Procedure (“Fla. R. Civ. P.”) provide for service of process by certified mail but only is the
defendant agrees to waive personal service. Fla. R. Civ. P. 1.070(i). Florida courts have held that
service by certified mail, without an accompanying waiver, is not sufficient under rule 1.070.
Transport and General Insurance Co. v. Receiverships of Ins. Exch. Of the Americas, Inc., 576
So. 2d 1351, 1352 (Fla. 1st DCA 1991).
The undersigned finds insufficient evidence that whoever signed the return receipt was
authorized to accept service of process for these defendants. It is undisputed there was no
personal service. The return receipt does not clearly identify that the individual who signed the
return receipt was authorized to accept service of process for these defendants. Although the
return receipt contains two boxes next to the signature line titled “agent” and “addressee,”
neither box was marked. This combined with the representations in the affidavit of Mr. Dazzo
establish that there is insufficient evidence upon which to find that proper service took place
under Federal, Tennessee or Florida law. Thus, the undersigned finds that plaintiff has failed to
establish that these defendants were properly served; this court therefore lacked jurisdiction to
enter a default or default judgment against them; and that the judgment should be set aside and
void pursuant to Federal Rule of Civil Procedure 60(b)(4).
Defendants do not ask that the court dismiss this action against them because they were
not served within the time provided by Rule 4(m). Rule 4(m) gives courts the discretion to
dismiss an action if service is not timely or to “order that service be made in a specified time.”
Federal Rule of Civil Procedure 4(m); United States v. Ninety Three Firearms, 330 F 3d 414,
426 (6th Cir 2003). The court may exercise that discretion even in the absence of a showing of
good cause why service was not completed. Slenzka v. Landstar Ranger, Inc., 204 F.R.D 322,
326 (E. D. Mich. 2001). Here, plaintiff clearly believed his service was effective and had no

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reason to think otherwise until these defendants filed the present motion. Thereafter, within 30
days, plaintiff served these defendants through counsel and the defendants filed an answer to the
amended complaint. Docket No. 48. Given these considerations along with the fact that plaintiff
is pro se, the undersigned recommends that plaintiff’s subsequent service be determined as
timely.
III.

Recommendation

In light of the foregoing the magistrate judge recommends that the defendants motion
(Docket No. 42) be Granted and the default judgment entered against them be found void and the
default judgment be vacated. The magistrate judge further recommends that plaintiff’s
subsequent service of the defendants be found to be in compliance with Rule 4(m).
Under Rule 72(b) of the Federal Rules of Civil Procedure, any party has ten (10) days
from receipt of this Report and Recommendation in which to file any written objections to this
Recommendation with the District Court. Any party opposing said objections shall have ten (10)
days from receipt of any objections filed in this Report in which to file any response to said
objections. Failure to file specific objections within ten (10) days of receipt of this Report and
Recommendation can constitute a waiver of further appeal of this Recommendation. Thomas v.
Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed. 2d 435 (1985), reh’g denied, 474 U.S. 1111 (1986).

JEFFERY S. FRENSLEY
U. S. Magistrate Judge

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