Hildebrand v. EnviroSeal TN, LLC et al

Filing 56

ORDER GRANTING 49 PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND REFERENCE TO THE MAGISTRATE JUDGE FOR DETERMINATION OF ATTORNEY'S FEES. The amount of reasonable fees shall be made by Magistrate Judge Bryant to whom that issue is REFERRED for determination. Signed by Chief Judge J. Daniel Breen on 5/17/16. (Breen, J.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
Kathleen Hildebrand,
Plaintiff,

No: 14-1263

v.
EnviroSeal TN, LLC,
Infinity Financial Services, LLC,
Marty White, and Peter Florio
Defendants.

ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND
REFERENCE TO THE MAGISTRATE JUDGE FOR DETERMINATION OF
ATTORNEY’S FEES

The Plaintiff, Kathleen Hildebrand, filed a complaint against the Defendants, Enviroseal
TN, LCC, Infinity Financial Services, LLC, Marty White, and Peter Florio, for violation of the
Fair Labor Standards Act on October 7, 2014. On September 22, 2015, the Court granted
Defendants’ attorney’s request to withdraw from representation. (Docket Entry (“D.E.”) 39.) In
the same order, the Court advised the corporate Defendants that, pursuant to relevant law, they
could not represent themselves in this case, and they were given thirty days to advise the Court
of their new attorney’s name. (D.E. 39.) The individual Defendants were instructed to advise the
Court of either the same or whether they would be proceeding pro se. (Id.) Defendants, Marty
White and Peter Florio, advised the Court, fifty-two days later, that they would represent
themselves. (D.E. 40, 41.) However, the corporate Defendants did not advise the Court of their
new counsel’s identity. Accordingly, the Court granted default judgment against Enviroseal TN,
LLC and Infinity Financial Services, LLC on March 1, 2016. (D.E. 45.)

On April 18, 2016, Plaintiff filed a motion for sanctions requesting that default judgment
be entered against the individual Defendants for failure to cooperate with the discovery process.
(D.E. 49.)

The Defendants have not responded to the motion and, in fact, have not

communicated with the Court since November, 2015.1 The following facts were adduced from
Hildebrand’s motion for sanctions. (D.E. 49-1.) Plaintiff scheduled depositions of White and
Florio on April 12, 2016. ( Id. 3.) Notices were served on March 28, 2016, both through the
Court’s ECF system and via first class mail to the Defendants’ address listed with the Court, 20
Whisper Creek Drive, Jackson, Tennessee, 38305. (Id.) Neither White nor Florio appeared at
the indicated place and time. (Id.) Transcripts were provided to the Court that memorialize
these attempted depositions. (D.E. 42-2, 42-3.)
Federal Rule of Civil Procedure 37(b)(2)(A)(vi), (C) provides that
(A) [i]f a party or a party’s officer, director, or managing agent—or a witness
designated under Rule 30(b)(6) or 31(a)(4)—fails to obey an order to provide or
permit discovery, including an order under Rule 26(f), 35, or 37(a), the court
where the action is pending may issue further just orders. They may include the
following:
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(vi) rendering a default judgment against the disobedient party;
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(C) Payment of Expenses. Instead of or in addition to the orders above, the court
must order the disobedient party, the attorney advising that party, or both to pay
the reasonable expenses, including attorney's fees, caused by the failure, unless
the failure was substantially justified or other circumstances make an award of
expenses unjust.
1

The Court set a telephone status conference to take place on May 9, 2016. (D.E. 48.)
Following standard Court procedure for pro se litigants, notice of the conference was issued
March 31, 2016, via certified mail sent to the address the Defendants had provided to the Court.
(D.E. 48.) These certified letters were returned as undeliverable by the United States Postal
Service. (D.E. 50, 51.) No forwarding address for White and Florio was available. Thus, the
status conference was canceled. (D.E. 52.)
2

Fed. R. Civ. P. 37(b)(2)(A)(vi), (C).
In addition to the provisions of the Federal Rules, it is well established that a federal
court has the inherent authority to grant default judgment when the circumstances warrant. See
Chambers v. NASCO, Inc., 501 U.S. 32, 47-50 (1991) (“A primary aspect of [a federal court’s]
discretion is the ability to fashion an appropriate sanction for conduct which abuses the judicial
process.”); In re Sunshine Jr. Stores, Inc., 456 F.3d 1291, 1304-06 (11th Cir. 2006) (upholding
entry of default judgment as proper use of court’s inherent authority where party failed to
respond to court orders and failed to appear before the court); Sparton Engineered Prods., Inc. v.
Cable Control Techs., Inc., 178 F.3d 1296 (6th Cir. 1999) (upholding a district court’s entry of
default judgment against the defendant for refusing to participate in the defense).
In determining whether default judgment is an appropriate sanction, the Court considers
four factors: (1) whether the failure to comply was based on inability or willfulness, bad faith, or
fault; (2) whether the adversary party has been prejudiced; (3) whether the sanctioned party was
on notice that noncompliance could lead to an ultimate sanction; and (4) whether lesser sanctions
are appropriate. See Bank One v. Abbe, 916 F.2d 1067, 1079 (6th Cir. 1990).
In the instant matter, the Court finds that the Defendants’ noncompliance with the
discovery process was willful.

Both White and Florio failed to appear at their scheduled

depositions. (D.E. 46, 47.) No explanation for their absence has been offered by the Defendants,
as they have not communicated in any way with the Court. However, they were on notice that
depositions were to take place and of their obligation to assist with discovery. Second, the
Plaintiff was prejudiced because of the time and money expended as a result of the delay—both
in discovery and in general. For example, the trial was set to begin on May 16, 2016. As of that
same date, it was apparent that the case has not progressed past the discovery phase. Thus,
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White and Florio’s actions have served to protract and obstruct the progress of the litigation.
Third, the Defendants were on notice that a failure to comply with the Court’s order could result
in entry of default judgment. (D.E. 44, 45.) The corporate Defendants, for which Florio and
White were officers, were sanctioned by the entry of default judgment less than three months ago
for their failure to comply with the Court’s orders. (D.E. 45.) Fourth, lesser sanctions would not
be effective. The Defendants have given no indication that they intend to comply with, or to
even acknowledge, the Court’s orders, and have failed to provide the Court a reliable method
with which to contact them.

Accordingly, the Court GRANTS Hildebrand’s request for

sanctions in the form of default judgment.
As White and Florio’s noncompliance is not substantially justified, see Fed. R. Civ. P. 37
(c), they are ordered to pay reasonable attorneys’ fees for the work performed by Plaintiff’s
counsel associated with this action, including but not limited to, fees associated with filing the
instant motion. The amount of reasonable fees shall be made by Magistrate Judge Bryant to
whom that issue is REFERRED for determination.

IT IS SO ORDERED this 17th day of May, 2016.
s/ J. DANIEL BREEN
UNITED STATES DISTRICT JUDGE

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