Opinion
04 Civ. 4194 (LAK)(HBP).
September 8, 2005
REPORT AND RECOMMENDATION
TO THE HONORABLE LEWIS A. KAPLAN, District Judge,
I. Introduction
Defendants move for an Order pursuant to Rules 55(c) and 60(b) of the Federal Rules of Civil Procedure setting aside Your Honor's September 24, 2004 Order, finding defendants in default for failing to answer or move within the time limit prescribed by Rule 12(a)(1)(A) of the Federal Rules of Civil Procedure on the grounds that: (1) this Court lacks personal jurisdiction over defendants because service of process was improper pursuant to Section 253 of the New York Vehicle and Traffic Law ("N.Y. Veh. Traf. Law" § 253) and, alternatively, (2) defendants have demonstrated "good cause" for setting aside the default as their failure to answer was inadvertent and excusable when coupled with the judicial policy favoring the resolution of disputes on the merits rather than by default. Defendants also move for an extension of time to answer.
For the reasons set forth below, I respectfully recommend that defendants' motion to set aside the default on the ground that service of process was invalid be granted as to both defendants and that the action be dismissed without prejudice. If the forgoing recommendation is rejected, I recommend that defendants' motion to set aside the default under Rule 55(c) be granted as to both defendants.
II. Facts
The facts and procedural history relevant to the disposition of this motion can be concisely stated.
On June 4, 2004, plaintiff filed a Summons and Complaint with this Court commencing a personal injury action based on an alleged motor vehicle accident (Complaint ¶¶ 3-13; Second Amended Complaint ("Am. Complaint") ¶¶ 10-17). Plaintiff, a pedestrian, claims that while crossing a Manhattan street she suffered serious injuries as a result of being hit by a motor vehicle owned by defendant Abdoulaye Diop ("Diop") and operated by defendant Bah Bocar ("Bocar") (Complaint ¶¶ 3-13; Am. Complaint ¶¶ 10-17).
Defendant Abdoulaye Diop's first and last names were transposed in plaintiff's complaints and subsequent filings. Defendant's correct name is Abdoulaye Diop rather than Diop Abdoulaye (Affirmation of Sara Luca Salvi, Esq., dated February 17, 2005 ("Salvi Aff."), at ¶ 1).
Subject matter jurisdiction for plaintiff's claim is based on diversity of citizenship pursuant to 28 U.S.C. § 1332(a)(1) (Am. Complaint ¶ 6). Plaintiff's amended complaint states that defendant Diop is a citizen of North Carolina, (Am. Complaint ¶ 3), and that defendant Bocar is a citizen of Missouri (Am. Complaint ¶ 5). Plaintiff alleges that she is a citizen of New Jersey (Am. Complaint ¶ 1).
By Order dated June 21, 2004, Your Honor dismissed Plaintiff's initial complaint for failing to contain "any jurisdictional allegations" (Docket Item No. 2). Thereafter, Plaintiff requested relief from Your Honor's June 21, 2004 Order after numerous letter applications and proposed amended complaints. The first letter application, dated June 30, 2004, was denied by memo endorsement dated July 6, 2004 for failure to plead the citizenship of defendants (Docket Item No. 3). The second letter application for reconsideration, dated July 8, 2004, was denied by memo endorsement dated July 13, 2004 (Docket Item No. 6). The third letter application, dated July 14, 2004, was denied by memo endorsement dated July 17, 2004 for failure to plead the citizenship of plaintiff (Docket Item No. 8). Ultimately, by Order dated July 26, 2004, Your Honor granted plaintiff leave to file a Second Amended Complaint, vacated the dismissal for lack of subject matter jurisdiction and reopened the case (Docket Item No. 11).
Plaintiff's basis for personal jurisdiction over the defendants is New York's non-resident motorist long-arm statute, N.Y. Veh. Traf. Law § 253 (Am. Complaint ¶ 7). In two separate affidavits of service, both sworn to August 9, 2004, plaintiff states that "[o]n June 4, 2004, defendant[s] . . . [were] served with a Summons and Complaint by serving the New York State Secretary of State pursuant to VTL § 253. Annexed hereto is the affidavit of service" (Affidavits of Christine Ramirez, sworn to August 9, 2004 ("Ramirez Affs."), at ¶ 2). An identical affidavit of service, one for each defendant, is appended to the two Ramirez Affidavits stating that the Summons and Complaint for each defendant was delivered to an agent of the New York State Secretary of State on June 10, 2004 rather than on the June 4, 2004 date set forth in the Ramirez Affidavits (Affidavits of Hanna Nadeau, sworn to June 15, 2004 ("Nadeau Affs."), at ¶ 1).
The affidavit of service regarding Diop states, "VTL § 253 service was completed by mailing the Summons and Complaint certified mail. A copy of the proof of service as required by the statute is attached" (Affidavit of Christine Ramirez concerning Diop, sworn to August 9, 2004 ("Ramirez Diop Aff."), at ¶ 3). A copy of a signed and dated United States Postal Service domestic return receipt card is attached to the Diop affidavit (Ramirez Diop Aff. ¶ 3).
The affidavit of service regarding Bocar states, "VTL § 253 service was completed by mailing the Summons and Complaint certified mail. A copy of the face of the returned envelope as required by the statute is attached" (Affidavit of Christine Ramirez concerning Bocar, sworn to August 9, 2004 ("Ramirez Bocar Aff."), at ¶ 3). Attached thereto is a copy of the face of an envelope, marked certified mail, return receipt requested, addressed to Bocar at a Kalamazoo, MI residence and endorsed by the U.S. Postal Service "Return to Sender. Unclaimed." The envelope also bears various initials apparently representing attempts made at delivery and notice of the certified mailing (Ramirez Bocar Aff. ¶ 3).
Plaintiff states that "service of process was finally effected with the filing of proof of service on August 9, 2004 pursuant to Fed.R.Civ.P 4(e)(2) and the New York VTL § 253" (Letter from John P. Bostany, Esq., Plaintiff Counsel, to the Hon. Lewis A. Kaplan, United States District Judge, dated September 20, 2004 ("Bostany Letter"), at ¶ 1). The Court's docket sheet indicates that separate proofs of service, one for each defendant, were filed with this Court on August 10, 2004 (Docket Item No. 14-15).
By letter dated September 20, 2004, plaintiff sought the entry of a default judgment on the basis of defendants' failure to answer or move within the time prescribed under Rule 12(a)(1)(A) of the Federal Rules of Civil Procedure (Bostany Letter ¶ 4; Docket Item No. 17). Your Honor granted this letter application by memo endorsement dated September 24, 2004 (Docket Item No. 18).
On February 18, 2005, defendants filed the instant motion to set aside the default pursuant to Fed.R.Civ.P. 55(c) and 60(b), claiming a lack of personal jurisdiction due to improper service of process and, alternatively, that defendants have demonstrated "good cause" for setting aside the default (Salvi Aff. ¶¶ 36-37; Memorandum of Law in Support of Defendants' Motion, dated February 17, 2005 ("Defs.' Mem. in Supp."), at p. 7).
First, defendants argue that plaintiff's attempts at service of process did not comply with all of the specific requirements of the N.Y. Veh. Traf. Law § 253 (Salvi Aff. ¶¶ 26-35; Defs.' Mem. in Supp. pp. 5-6). In support of this argument, the individual defendants have submitted separate affidavits, one of which is translated from French to English, each stating that they did not reside at the addresses to which plaintiff sent the certified mailings containing the summons and complaint (Affidavit of Translation Bah Bocar, sworn to February 17, 2005 ("Bocar Trans. Aff."), at ¶ 2-3; Affidavit of Abdoulaye Diop, sworn to February 14, 2005 ("Diop. Aff."), at ¶ 2-3;). Bocar claims that he never received the certified mailing because he did not reside at the address to which plaintiff sent the summons and complaint (Bocar Trans. Aff. ¶ 2-3). Diop states that he received the mailing, but only after it was forwarded to him by his uncle who resides at the address to which the certified mailing was sent (Diop. Aff. ¶ 2-3).
Plaintiff argues that the use of an affidavit written in French — the native language of defendant Bocar — and translated into English by a member of plaintiff counsel's law firm is "not permitted" in accordance with the terms of 28 U.S.C § 1827(a)(2) (Memorandum of Law in Opposition to Defendants' Motion to Set Aside Default Judgment, dated March 7, 2005 ("Pl.'s Mem. in Opp'n"), at p. 5). This argument is frivolous. 28 U.S.C § 1827(a) states: "The Director of the Administrative Office of the United States Courts shall establish a program to facilitate the use of certified and otherwise qualified interpreters in judicial proceedings instituted by the United States." Clearly, the present action is not a "proceeding instituted by the United States" but rather a personal injury claim instituted by plaintiff through counsel. 28 U.S.C § 1827(a).
The Court's business would come to a screeching halt if it could not consider affidavits accompanying motions. . . . The Court presumes that [the affidavits] were translated for the Court's benefit.Prevot v. Phillips Petroleum Co., 133 F. Supp.2d 937, 941 (S.D. Tex. 2001).
Defendants alternatively argue that defendants' did not understand that they had to get attorneys to represent them in this case, and that "[a]ny default on [defendants'] behalf was unintentional and inadvertent" (Salvi Aff. ¶¶ 31, 34; Defs.' Mem. in Supp. p. 7).
III. Analysis
A. Burden of Proof and Procedural Due Process
1. Burden of Proof
When the validity of personal jurisdiction or service of process is challenged through a motion pursuant to Fed.R.Civ.P. 12(b)(2) or 12(b)(5), the plaintiff bears the burden of proving that process was properly served. See Vazquez v. Parks, No. 02 Civ. 1735 (LAK)(HBP), 2003 WL 1442087 at *6 (S.D.N.Y. Feb. 4, 2003), aff'd without opinion, (2d Cir. 2004), citing Three Crown Ltd. v. Caxton, Corp., 817 F. Supp. 1033, 1050 (S.D.N.Y. 1993); see also Am. Inst. of Certified Pub. Accountants v. Affinity Card, Inc., 8 F. Supp. 2d 372, 376 (S.D.N.Y. 1998); Lamar v. American Basketball Ass'n, 468 F. Supp. 1198, 1201 (S.D.N.Y. 1979). Conversely, when, as in this case, the validity of personal jurisdiction or service of process is raised in a motion to set aside a default, the movant bears burden of proof. See Burda Media, Inc. v. Viertel, 417 F.3d 292, 299 (2d Cir. 2005); Sartor v. Utica Taxi Center, Inc., 260 F. Supp.2d 670, 677 (S.D.N.Y. 2003); Velez v. Vassallo, 203 F. Supp.2d 312, 324 (S.D.N.Y. 2002); Rohm Haas Co. v. Aries, 103 F.R.D. 541, 543-44 (S.D.N.Y. 1984). Thus, defendants bear the burden of persuasion as to the lack of personal jurisdiction based on the alleged impropriety of service of process.
2. Procedural Due Process and N.Y. Veh. Traf. Law § 253
Valid service of process is an indispensable prerequisite to the assertion of personal jurisdiction over a defendant. Pearson v. Bd. of Educ., No. 02 Civ. 3629 (RCC), 2004 WL 2297354 at *3 (S.D.N.Y. Oct. 12, 2004), citing Omni Capital Int'l, Ltd. v. Rudolph Wolff Co., 484 U.S. 97, 104 (1987); Harte v. Iberia Airlines, No. 02 Civ. 3624 (LMM), 2002 WL 1870251 at *2 (S.D.N.Y. Aug. 13, 2002), citing Am. Inst. of Cert. Pub. Accountants v. Affinity Card, Inc., supra, 8 F. Supp.2d at 375. Rule 4(e) of the Federal Rules of Civil Procedure governs service of process on an individual. Pursuant to Rule 4(e), service can be obtained either "pursuant to the law of the state in which the district court is located . . .," Fed.R.Civ.P. 4(e)(1), or "by delivering a copy of the summons and of the complaint to an agent authorized by appointment or by law to receive service of process," Fed.R.Civ.P. 4(e)(2).
In order to exercise personal jurisdiction over a non-resident defendant, a federal court must look to the forum state's long-arm statute for the rules governing the service of process, in addition to ensuring that the exercise of jurisdiction over the defendant comports with the Due Process Clause of the Fourteenth Amendment. Omni Capital Int'l v. Rudolf Wolff Co., Ltd., supra, 484 U.S. at 102-04; Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 305 F.3d 120, 127 (2d Cir. 2002), citing LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210, 214, 735 N.E.2d 883 (2000); Mario Valente Collezioni, Ltd. v. Confezioni Semeraro Paolo, S.R.L., 264 F.3d 32, 37 (2d Cir. 2001); Bensusan Restaurant Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997); Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996); see also 4A Charles A. Wright Arthur R. Miller, Federal Practice Procedure § 1075 at 412 (3rd ed. 2002) ("If service of process is made pursuant to state law, the federal court must apply both federal and state law — federal law to determine the constitutional validity of service and state law to see if the procedures set out in the applicable state statute or rule have been followed.").
Thus, in order to exercise personal jurisdiction over the defendants, I must conclude that plaintiff has cleared two hurdles. First, plaintiff must have served defendants in accordance with state law. Henderson v. I.N.S., 157 F.3d 106, 123 (2d Cir. 1998) ("Personal jurisdiction of a federal court over a non-resident defendant is governed by the law of the state in which the court sits. . . ."), citing Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 510 (2d Cir. 1994); Kronisch v. United States, 150 F.3d 112, 130 (2d Cir. 1998); see also CutCo Industries, Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986), citing Arrowsmith v. United Press International, 320 F.2d 219, 223 (2d Cir. 1963) (en banc). Second, the assertion of jurisdiction must comport with Due Process. Due Process requires that service of process be "reasonably calculated, under all the circumstances," to inform parties of the action and provide an opportunity to be heard and respond. Mullane v. Central Hanover Bank Trust Co., 339 U.S. 306, 314 (1950);Mariash v. Morrill, 496 F.2d 1138, 1143 (2d Cir. 1974);Velazquez v. Thompson, 451 F.2d 202, 205 (2d Cir. 1971).
Section 253 of the N.Y. Veh. Traf. Law governs the service of process on non-residents motorists and vehicle owners involved in a motor vehicle accident within the state, and satisfies procedural due process:
When [a non-resident] came upon the highways of this State with his automobile, he subjected himself to our jurisdiction, and consented, while here, irrevocably to bind him in an action arising out of any accident in this State in which his automobile was involved. The statute is narrowly drawn to fit the need, provides all the procedural safeguards required for due process of law, and is applicable only to a cause of action arising in this State.Leighton v. Roper, 300 N.Y. 434, 443, 91 N.E.2d 876, 881 (1950); see also David Siegel, New York Practice § 97 (4th ed.) ("The statute is at root just a 'longarm' statute whose underlying theory is the same as CPLR 302.").
Section 253 appoints the New York Secretary of State as the authorized agent for service of process for all non-resident motorists and non-resident vehicle owners in civil actions arising out of the operation of a motor vehicle within the State of New York:
The use or operation by a non-resident of a vehicle in this state . . . or the use or operation in this state of a vehicle owned by a non-resident if so used or operated with his permission, express or implied, shall be deemed equivalent to an appointment by such non-resident of the secretary of state to be his true and lawful attorney upon whom may be served the summons in any action against him, growing out of any accident or collision in which such non-resident may be involved while using or operating such vehicle in this state . . . or with the permission, express or implied, of such non-resident owner.
The specific requirements for effectuating service of process pursuant to the non-resident motorist statute are set forth in paragraph 2 of Section 253, which provides, in pertinent part:
Service of such summons shall be made by mailing a copy thereof to the secretary of state at his office in the city of Albany, or by personally delivering a copy thereof to one of his regularly established offices, with a fee of ten dollars, and such service shall be sufficient service upon such non-resident provided that notice of such service and a copy of the summons and complaint are forthwith sent by or on behalf of the plaintiff to the defendant by certified mail or registered mail with return receipt requested. The plaintiff shall file with the clerk of the court in which the action is pending, or with the judge or justice of such court in case there be no clerk, an affidavit of compliance herewith, a copy of the summons and complaint, and either a return receipt purporting to be signed by the defendant or a person qualified to receive his certified mail or registered mail, in accordance with the rules and customs of the post-office department; . . . or, if the registered or certified letter was returned to the post office unclaimed, the original envelope bearing a notation by the postal authorities of such mailing and return, an affidavit by or on behalf of the plaintiff that the summons was posted again by ordinary mail and proof of mailing certificate of ordinary mail. . . . The foregoing papers shall be filed within thirty days after the return receipt or other official proof of delivery or the original envelope bearing a notation of refusal, as the case may be, is received by the plaintiff. Service of process shall be complete when such papers are filed. The return receipt or other official proof of delivery shall constitute presumptive evidence that the summons mailed was received by the defendant or a person qualified to receive his certified mail or registered mail; . . . The court in which the action is pending may order such extensions as may be necessary to afford the defendant reasonable opportunity to defend the action.
B. Personal Jurisdiction and Validity of Service
Defendants' argue that the Court lacks personal jurisdiction over them because plaintiff failed to complete service in accordance with the requirements of Section 253(2). A detailed discussion of each of defendants' specific arguments follows.
1. Six Day Discrepancy Between Affidavits
Defendants' first argument concerns a six day discrepancy between the dates in the Ramirez and Nadeau affidavits as to when the summons and complaint were delivered to the agent of the New York State Secretary of State (Salvi Aff. at ¶ 27; Defs. Mem. in Supp. at p. 3). This minor discrepancy appears to be nothing more than a proof reading oversight or typographical error; it does not control the disposition of the current motion. See Melwani v. Singh, 04 Civ. 1322 (HB), 2004 WL 1672556 at *2, n. 4 (S.D.N.Y. July 26, 2004) (apparent typographical errors are not defects in service sufficient to warrant dismissal of an action);accord Video-Cinema Films, Inc. v. Cable News Network, Inc., 98 Civ. 7128 (LBS), 98 Civ. 7129 (LBS), 98 Civ. 7130 (LBS), 2003 WL 1701904 at *2 (S.D.N.Y. Mar. 31, 2003) (typographical error was not an attempt to mislead the Court).
2. Service of Process After Dismissal
Defendants next argue — without citation to any authority — that "[b]ecause the envelope was not mailed until June 29, 2004, after the action has already been dismissed, . . . said attempt at completing service was a nullity" (Salvi Aff. ¶ 28).
Although neither the parties' research nor my own has found any authority directly addressing this argument, I conclude that the argument is without merit. "Once the complaint is filed with the court, the requirements of Rule 3 have been satisfied and the action is "pending," unless dismissed by the court under Rule 41(b) for lack of due diligence in prosecution, or under Rule 4(m) for failure to serve process on the defendant within 120 days of the filing." 4 Charles A. Wright Arthur R. Miller,Federal Practice Procedure § 1053 at 227-28 (3rd ed. 1998);accord Federal Election Com'n v. Salvi, No. 98 C 1321, 1999 WL 167009 at *2 (N.D. Ill. Mar. 23, 1999), aff'd, 205 F.3d 1015 (7th Cir. 2000) ("[U]nder Rule 3, a civil action is "commenced" with the filing of a complaint. . . . However, this language does not mean an action automatically ceases to exist once a party's complaint is stricken.").
A dismissal without prejudice, such as Your Honor's June 21, 2004 dismissal for plaintiff's failure to adequately plead diversity of citizenship, should not be construed as terminating the action so as to render it non-existent. See Voisin's Oyster House, Inc. v. Guidry, 799 F.2d 183, 188 (5th Cir. 1986). Where a basis for subject matter jurisdiction exists, a plaintiff's failure to plead that basis properly is a curable defect that does not render the proceeding a nullity. "In the case of a jurisdictional allegation that is insufficient under Rule 8(a)(1), Section 1653 of Title 28 expressly provides that 'defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.'" 6 Charles A. Wright, Arthur R. Miller Mary Kane, Federal Practice Procedure § 1474 at 523 (3rd ed. 1990), citing 28 U.S.C. § 1653. "[D]ismissals for insufficient pleadings are ordinarily with leave to replead. . . ." Stern v. General Elec. Co., 924 F.2d 472, 477 (2d Cir. 1991);Nagler v. Admiral Corp., 248 F.2d 319, 322 (2d Cir. 1957) (noting that "outright dismissal for reasons not going to the merits is viewed with disfavor in the federal courts"). Thus, the June 21, 2004 dismissal Order did not, as a practical matter, terminate this action.
Second, by Order dated July 26, 2004 (Docket Item Docket Item 11), Your Honor vacated the June 21, 2004 Dismissal Order. The subsequent vacatur of the dismissal order leaves the case as if the dismissal order had never been entered. See Wheeler v. John Deere Co., 935 F.2d 1090, 1096 (10th Cir. 1991); see also Black's Law Dictionary 1548 (6th ed. 1990) (To vacate means "[t]o annul; to set aside; to cancel or rescind. To render an act void. . . ."). To hold that service was invalid because one aspect of the service occurred after a sua sponte dismissal without prejudice and before the subsequent Order annulling the dismissal would, I submit, exalt form over substance with no countervailing benefit.
Thus, I conclude that this action was still "pending" when the certified mailing was attempted, and that service was not invalid because that aspect of service occurred between Your Honor's June 21, 2004 dismissal Order and the July 26, 2004 Order reinstating the case.
3. Defendants' Arguments as to Plaintiff's Failure to Properly Serve Process in accordance with N.Y. Veh. Traf. Law § 253(2).
Defendants next contend that plaintiff failed to properly complete service in accordance with the specific requirements of N.Y. Veh. Traf. Law § 253(2). Specifically, defendants argue that: (1) they did not reside at the addresses to which process was mailed (Salvi Aff. ¶¶ 31, 34; Bocar Aff. ¶¶ 2,3; Diop Aff. ¶¶ 2,3); (2) Diop was not properly served because he only received process after it was forwarded to him by his uncle (Salvi Aff. ¶ 34; Diop Aff. ¶ 3); (3) "[t]he affidavit of service fails to state that notice of the service on the Secretary of State was sent to [defendants], as required by the statute" (Salvi Aff. ¶¶ 30, 32); and (4) "the [Bocar] affidavit of service does not indicate that the Summons and Complaint were mailed again by regular mail as required by the [statute] when, as here, the summons and complaint is returned unclaimed" (Salvi Aff. ¶ 30).
Although I believe that dismissal is appropriate based on defendants' first argument, in order to minimize the likelihood of a remand, I shall address each of defendants' arguments.
(a) Plaintiff's Failure to Mail Process to Defendants' Actual Residences
Defendants first contend that plaintiff's mailings to them was defective because it was not sent to their actual residences (Salvi Aff. ¶¶ 31, 34; Bocar Aff. ¶¶ 2, 3; Diop Aff. ¶¶ 2,3).
Plaintiff's entire response to this argument consists of the following paragraph in plaintiff's memorandum of law:
Finally, Defendants' argument that they did not live at the address [sic] that appeared on the police report would not have carried the day for them anyway. See e.g., Toure v. Harrison, 6 A.D.2d 270, 271 (1st Dept. 2004) (service of process at a address listed with the DMV, albeit an incorrect address, is as a matter of law considered valid service "since this is the address provided by defendant for his driver's license and the police accident report").
(Memorandum of Law in Opposition to Defendants' Motion, dated March 7, 2005 ("Pl.'s Mem. in Opp'n"), at p. 5). Although defendants support their motion with affidavits that they did not reside at the addresses to which the summons and complaint were mailed at the time of the mailing, plaintiff has offered no evidence in support of her argument.
Plaintiff appears to be attempting to invoke the long line of New York cases holding that a defendant in an action arising out of a motor vehicle accident cannot contest the validity of service made at the address provided by the defendant at the time of the accident. See e.g., Toure v. Harrison, 6 A.D.3d 270, 271, 775 N.Y.S.2d 282, 283 (1st Dep't 2004); Benjamin v. Avis Rent-A-Car Systems, Inc., 208 A.D.2d 449, 450, 617 N.Y.S.2d 719, 719 (1st Dep't 1994) ("[D]efendant, having provided the Department of Motor Vehicles and the police at the scene of the accident with the address at which service was made, is estopped from asserting that such address was not his residence."); Deas v. Brunke, 199 A.D.2d 43, 44, 604 N.Y.S.2d 569, 570 (1st Dep't 1993), citing Sherrill v. Pettiford, 172 A.D.2d 512, 512, 567 N.Y.S.2d 859, 860 (2d Dep't 1991) and Harrington v. Dickinson, 159 A.D.2d 876, 877-78, 553 N.Y.S.2d 219, 219 (3d Dep't 1990); Gardner v. Tully, 227 A.D.2d 587, 588, 643 N.Y.S.2d 204, 205 (2d Dep't 1996) (where "a defendant has knowingly displayed an incorrect address to a plaintiff and the police at the scene of a motor vehicle accident, he is thereafter estopped from contesting jurisdiction and from challenging the diligence of the plaintiff's process server in ascertaining the defendant's correct address."); Lavery v. Lopez, 131 A.D.2d 820, 820, 517 N.Y.S.2d 182, 183 (2d Dep't 1987); Treutlein v. Gutierrez, 129 A.D.2d 791, 791-92, 514 N.Y.S.2d 781, 782 (2d Dep't 1987); Hill v. Jones, 113 A.D.2d 874, 875, 493 N.Y.S.2d 603, 604 (2d Dep't 1985) ("[D]efendant may not benefit from his own misrepresentation and he is estopped from contesting the validity of the service upon him."); McNeil v. Tomlin, 82 A.D.2d 825, 825-26, 439 N.Y.S.2d 430, 430 (2d Dep't 1981);Greenwood v. White, 25 A.D.2d 73, 74-75, 266 N.Y.S.2d 1012, 1013-14 (3rd Dep't 1966); accord David Siegel,New York Practice § 97 (4th ed.) ("If [defendant] voluntarily gives [plaintiff or police] an incorrect address, [defendant] may be estopped from pleading non-compliance and jurisdiction will result.").
Unfortunately for plaintiff, however, she offers no evidence whatsoever to support the factual predicate for this argument, namely that the defendants gave a false or inaccurate address at the time of the alleged accident. As mentioned above, plaintiff has submitted no affidavit or other material of evidentiary weight in support of her opposition. Since plaintiff makes this assertion only in her memorandum of law, it has no evidentiary weight. See e. g., Giannullo v. City of New York, 322 F.3d 139, 142 (2d Cir. 2003) (memoranda of law are not competent evidence); Streamline Capital, L.L.C. v. Hartford Cas. Ins. Co., No. 02 Civ. 8123 (PKC) (MHD), 2005 WL 66898 at *2 (S.D.N.Y. Jan. 11, 2005) (same); Craig v. First Web Bill, Inc., No. Civ.A.04-CV-1012 (DGT), 2004 WL 2700128 at *1 (E.D.N.Y. Nov. 29, 2004) (same); Cornell v. Assicurazioni Generali, S.p.A., Nos. 97 Civ. 2262 and 98 Civ. 9186, 2000 WL 1191124 at *1 (S.D.N.Y. Aug. 22, 2000) (factual allegations, made in plaintiff's memorandum of law, but not in the complaint or affidavits or other evidence, do not constitute evidence that can be considered on a motion to dismiss for lack of personal jurisdiction);Gallery 13, Ltd. v. Easter, No. 93 Civ. 8865, 1995 WL 258143 at *2 (S.D.N.Y. May 2, 1995) (same); Stilley v. Am. Chambers Life Ins. Co., No. 91 Civ. 7022, 1992 WL 147906 at *2 (S.D.N.Y. June 18, 1992) (same).
Thus, I am left with a record in which there is uncontradicted and unexplained evidence that the summons and complaint were not mailed to defendants' residences.
Although plaintiff may be able to muster evidence sufficient to raise an issue of fact concerning the estoppel argument suggested in her memorandum of law or sufficient to sustain the argument, she has not done so here. Accordingly, defendants' application to dismiss the action on the ground that the summons and complaint were not mailed to their actual residences, as required by N.Y. Veh. Traf. Law § 253(2), should be granted. See Fishman v. Sanders, 13 A.D.2d 993, 993, 216 N.Y.S.2d 734, 735 (2d Dep't 1961) ("[A]t the least, [process] must be addressed to the actual residence of the defendant."), citing Bauman v. Fisher, 12 A.D.2d 32, 36, 208 N.Y.S.2d 317, 321 (3rd Dep't 1960).
(b) Re-delivery of Process To Diop by his Uncle
Defendant Diop next asserts that he was not properly served because he only received process after it was forwarded to him by his uncle who, apparently, received and signed for the certified mailing. Although plaintiff offers no response to this argument, it clearly lacks a basis in law.
Where service is made by certified or registered mail, New York law presumes defendant's receipt of process even though the signature on the signed and dated return receipt is someone other than the defendant's. See Winfield v. C C Trucking, No. 02 Civ. 7688 (SAS), 2003 WL 21749610 at *2 (S.D.N.Y. July 29, 2003),citing Bingham v. Ryder Truck Rental Inc., 110 A.D.2d 867, 488 N.Y.S.2d 424, 426 (2d Dep't 1985); see also Mermelstein v. Maki, 830 F. Supp. 180, 182 n. 1 (S.D.N.Y. 1993) ("[R]eceipt by a defendant is presumed when a signed return receipt is obtained by the post office." (internal quotations omitted)).
"'If [a] third party receives the service of process on behalf of defendant, or receives the service and then returns or rejects the service, service is nonetheless effected.'" Winfield v. C C Trucking, supra, 2003 WL 21749610 at *2, quoting Rowland v. Giftcertificates.com, Inc., 195 F. Supp. 2d 509, 518 (S.D.N.Y. 2002). In Winfield v. C C Trucking, the defendants' failed to rebut this presumption as "[n]either [defendant] denied knowing the individuals who respectively signed for the mailings;" accordingly, the court held that "[i]t is fair to infer that [defendants] do know the third parties who signed for their mail and that those individuals were authorized to sign for the certified mailings." Winfield v. C C Trucking, supra, 2003 WL 21749610 at *4; see also Delicia v. Capozzi, 146 Misc.2d 194, 195, 549 N.Y.S.2d 914, 915 (Sup.Ct. Queens County 1989) ("[T]he signed return receipt by defendant's father upon the second attempt at service by mail to his parents' address was sufficient to give defendant notice of the action.").
Thus, it is immaterial in the present case that the certified mailing was received and signed for by Diop's uncle and subsequently forwarded to Diop. Further, Diop has not satisfactorily rebutted this presumption as he has not denied that his uncle was qualified to receive his certified mailings. In view of the signed and dated return receipt card appended to plaintiff's affidavit of service, Diop's receipt of process is presumed as a matter of law. Winfield v. C C Trucking, supra, 2003 WL 21749610 at *2; Rowland v. Giftcertificates.com, Inc., supra, 195 F.Supp. 2d at 518;Mermelstein v. Maki, supra, 830 F. Supp. at 182 n. 1.
(c) Plaintiff's Putative Failure to Serve Notice on Defendants that Plaintiff Served the Secretary of State
Defendants' argument that they were not provided with notice of service on the Secretary of State lacks a factual basis.
Although the opinions of the New York courts are not entirely uniform, a number of courts hold that valid service under N.Y. Veh Traf, Law § 253 requires that the defendant be served by mail with notice that plaintiff has served the Secretary of State. Jean-Laurent v. Nicholas, 182 A.D.2d 805, 805, 582 N.Y.S.2d 506, 506-07 (2d Dep't 1992) ("Although the plaintiffs mailed a copy of the summons and complaint, they failed to mail the necessary notice that the Secretary of State had also been served, which failure is fatal."), citing Dickinson v. Houston, 97 A.D.2d 665, 665-66, 469 N.Y.S.2d 207, 208 (3d Dep't. 1983) ("[T]he statutory requirements [of § 253] are twofold: both notice of service on the Secretary of State and a copy of the summons and complaint must be sent 'forthwith.". . . . [W]e are of the view that plaintiffs failed to comply with the prescribed statutory formula and that service was jurisdictionally defective."), and Metcalf v. Cowburn, 44 A.D.2d 650, 651, 352 N.Y.S.2d 740, 742 (4th Dep't 1974) ("[T]here must be substantial compliance with section 253 to make the service valid. . . . [P]laintiffs failed to mail to the defendant notice of service of the summons upon the Secretary of State. . . . We have held that such failures render the attempted service a nullity."), and McCoon v. Schoch, 30 A.D.2d 768, 768, 292 N.Y.S.2d 230, 231 (4th Dep't 1968) (service of process was found invalid where plaintiff failed give defendant, among other things, notice of service of the summons on the Secretary of State). Accord Ranieri v. Wilson, 34 A.D.2d 1084, 1085, 312 N.Y.S.2d 529, 530 (4th Dep't 1970) ("Because of plaintiff's failure to comply with the statutory provisions, the court acquired no jurisdiction over the defendants."); Dusminski v. Ladenheim, supra, 43 F. Supp. at 140 (holding that service was invalid where copy of the summons was mailed to the Secretary of State but notice of such service on the Secretary of State was not sent to the defendant in the registered mail containing the pleadings). Cf. Albrecht v. Gordon, 182 A.D.2d 1131, 1131, 583 N.Y.S.2d 99, 99-100 (4th Dep't 1992) ("[P]laintiffs' failure to include notice of service upon the Secretary of State in [a] mailing did not constitute a jurisdictional defect.").
Defendants, however, have offered no material of evidentiary weight suggesting that they were not served with notice of service on the Secretary of State. Rather, defendants merely contend that plaintiff failed to state in the affidavits of service that such notice was contained in her mailings (Salvi Aff. ¶¶ 30, 32). Neither defendants nor their counsel state in their affidavits that such notice was not included in the mailings sent to defendants. Instead, counsel argues only that plaintiff's affidavit of service does not indicate that a notice of service on the Secretary of State was served on defendants.
Under § 253(2), plaintiff was only required to file with this Court an "affidavit of compliance therewith." N.Y. Veh. Traf. Law § 253(2). Although plaintiff could have provided more detail in her affidavits of service, the statute does not mandate — as it does in subsequent provisions dealing with follow-up mailings for refused or unclaimed mail — that the affidavit of service must specify how plaintiff complied with every detail regarding service. See N.Y. Veh. Traf. Law § 253(2). Plaintiff's affidavit of service is not, in and of itself, jurisdictionally defective.
Consequently, I conclude that defendants have failed to satisfy their burden of at least raising an issue of fact that plaintiff failed to serve defendants with notice of service on the Secretary of State.
(d) Effect of Plaintiff's Failure to Follow-up By Ordinary Mail with an Additional Copy of Process after the Bocar Certified Mailing was Returned to Plaintiff "Unclaimed"
In their final and most cogent argument, defendants contend that plaintiff failed to comply with the requirements of § 253(2) with respect to Bocar by failing to follow-up her initial certified mailing of process with service by ordinary mail after the certified letter was returned "unclaimed."
A 1978 amendment to § 253(2) made service of process valid even though a certified mailing was returned "unclaimed," but only when certain enumerated conditions were satisfied. See Berlin v. Ogren, 72 A.D.2d 631, 632, 421 N.Y.S.2d 153, 154 (3rd Dep't 1979) (discussing the effect of this amendment). In order for process to be properly served in compliance with the statute, plaintiff must, upon return of the certified mailing to plaintiff by the postal service as "unclaimed," post an additional copy of process by ordinary mail and then file with the Clerk of the Court in which the action is brought the original envelope bearing the "unclaimed" notation and file an affidavit of compliance. N.Y. Veh. Traf. Law § 253(2); see e. g, Sosa v. Cumberland Swan, Inc., 210 A.D.2d 156, 157, 621 N.Y.S.2d 7, 8 (1st Dep't 1994).
Failure to comply with this follow-up mailing requirement is a fatal flaw to service under § 253(2). See e. g, Braderman v. Keitz, 13 A.D.3d 205, 206, 787 N.Y.S.2d 256, 257 (1st Dep't 2004) ("[P]laintiff has failed to comply with the additional requirements of VTL § 253(2) by failing to file an affidavit showing posting by regular mail and proof of such mailing."),citing Jean-Laurent v. Nicholas, supra, 182 A.D.2d at 805, 582 N.Y.S.2d at 506-07 ("[T]here is no proof in the record that they followed up the first unsuccessful mailing with a second mailing by ordinary mail as required by Vehicle and Traffic Law § 253(2)."); Dickinson v. Houston, supra, 97 A.D.2d at 665-66, 469 N.Y.S.2d at 208 ("[W]hen [a] letter was returned to plaintiffs "unclaimed", . . . follow-up service of a copy of the summons by ordinary mail [shall be] made."); Berlin v. Ogren, 72 A.D.2d 631, 632, 421 N.Y.S.2d 153, 154 (3rd Dep't 1979) (although declining to apply the recent § 253(2) amendments retroactively, the court noted "there was not full compliance with the provisions of the amended statute so as to validate the attempted service"); Cummins-Allison Corp. v. Bargarnik, 146 Misc.2d 1042, 1045, 553 N.Y.S.2d 981, 983 (N.Y. Civ. Ct. Kings County 1990) ("[E]ven if there had been service there was no ordinary mailing after the return of the certified mailing as required by section 253.")
Under § 253(2), plaintiff was expressly required to file with this Court an "affidavit [stating] that the summons and complaint was posted again by ordinary mail and proof of mailing certificate of ordinary mail." N.Y. Veh. Traf. Law § 253(2). Plaintiff failed to comply with the prescribed statutory formula under § 253(2). Plaintiff neglected to provide an affidavit and mailing certificate, both of which are mandatory under § 253(2), evidencing that process was posted again by ordinary mail after the certified letter was returned unclaimed. Service of process was therefore jurisdictionally defective on defendant Bocar for this additional reason.
(e) Summary
Accordingly, I respectfully submit that this motion be granted on the ground that this Court lacks personal jurisdiction over both defendant Diop and Bocar. Service of process was not validly effectuated on defendants pursuant to N.Y. Veh. Traf. Law § 253 in that plaintiff failed to offer any evidence in response to defendants' affidavits that the certified mailings were not sent to their actual residences. Further, plaintiff failed to file an affidavit and mailing certificate evidencing that process was posted again to Bocar by ordinary mail after the certified letter was returned "unclaimed" as required by N.Y. Veh. Traf. Law § 253(2).
Finally, defendants contend in the alternative that even if they have been properly served, the Court should exercise its discretion to set aside the default pursuant to Fed.R.Civ.P. 55(c). Rule 55(c) provides that "[f]or good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b)." Again, in order to minimize the possibility of a remand, I shall address this argument even though I concluded above that defendants were not validly served.
"In determining whether to set aside a party's default, the district court should consider principally '(1) whether the default was willful; (2) whether setting aside the default would prejudice the adversary; and (3) whether a meritorious defense is presented.'" Powerserve Intern., Inc. v. Lavi, 239 F.3d 508, 514 (2d Cir. 2001), quoting Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993); see also Commercial Bank of Kuwait v. Rafidain Bank, 15 F.3d 238, 243 (2d Cir. 1994); Davis v. Musler, 713 F.2d 907, 915 (2d Cir. 1983); Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981).
"Although the factors examined in deciding whether to set aside a default or a default judgment are the same, courts apply the factors more rigorously in the case of a default judgment . . . because the concepts of finality and litigation repose are more deeply implicated in the latter action." Enron Oil Corp. v. Diakuhara, supra, 10 F.3d at 96; accord Pecarsky v. Galaxiworld.com Ltd., 249 F.3d 167, 171 (2d Cir. 2001);Powerserve Int'l, Inc. v. Lavi, supra, 239 F.3d at 514;Gucci Am., Inc. v. Gold Ctr. Jewelry, 158 F.3d 631, 634 (2d Cir. 1998). To date, no default judgment has been entered in accordance with either Fed.R.Civ.P. 54(a) or the separate document rule embodied in Fed.R.Civ.P. 58. Thus, no final, appealable judgment has been entered yet in this action that would trigger the heightened requirements for vacatur of a default judgment under Fed.R.Civ.P. 60(b).
In applying the test, the court need be mindful of the Second Circuit's preference "that litigation disputes be resolved on the merits, not on default." Cody v. Mello, 59 F.3d 13, 15 (2d Cir. 1995). Moreover, the court resolves doubts in the movant's favor so that the case may be resolved, if possible, on the merits.American Stevedoring, Inc. v. Banana Distrib., Inc., 98 Civ. 5782 (BSJ), 1999 WL 731425 at *2 (S.D.N.Y. Sept. 20, 1999).Accord 04 Civ. 7722 et al (GEL), 2005 WL 1384049 at *2 (S.D.N.Y. June 07, 2005) ("This Court 'shares the general judicial distaste for disposing of cases by defaults . . . rather than on the merits.'"), quoting In re Litas Int'l, Inc., No. 04 Civ. 620 (GEL), 2004 WL 1488114 at *1 (S.D.N.Y. June 30, 2004); Powerserve Int'l, Inc. v. Lavi, supra, 239 F.3d at 514; Barnes v. Printron, Inc., 93 Civ. 5085 (JFK), 1999 WL 335362 at *1 (S.D.N.Y. May 25, 1999).
Fed.R.Civ.P. 54(a) provides that a "'[j]udgment' as used in these rules includes a decree and any order from which an appeal lies." "Even though denominated a 'judgment,' a nonappealable partial . . . judgment . . . does not qualify as a judgment under Rule 54(a)." 10 Charles A. Wright, Arthur R. Miller Mary K. Kane, Federal Practice Procedure § 2651 at 8-9 (3rd ed. 1998). Since Your Honor's September 24, 2004 Order finding defendants in default did not determine damages, it did not constitute a final, appealable judgment. Petereit v. S.B. Thomas, Inc., 63 F.3d 1169, 1175 (2d Cir. 1995); Western Geophysical Co. v. Bolt Assocs., Inc., 463 F.2d 101, 102-03 (2d Cir. 1972).
The distinction is significant because although a District Court must consider the same factors in deciding whether to set aside either a default or a default judgment, [the factors are applied] more rigorously to a default judgment "because the concepts of finality and litigation repose are more deeply implicated in the latter action."China Mariners' Assurance Corp. v. M.T.W.M. Vacy Ash, 96 Civ. 9553 (PKL), 1999 WL 126921 at *1 (S.D.N.Y. Mar. 9, 1999),quoting Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993).
Rule 60(b), the more stringent test for setting aside a default judgment, provides, in relevant part, that the court may relieve a party from a final judgment for "mistake, inadvertence, surprise, or excusable neglect," or where "the judgment is void." Fed.R.Civ.P. 60(b)(1) (4). Although both plaintiff and defendants make arguments on the basis of both Rule 55(c) and Rule 60(b) — perhaps out of an abundance of caution — Rule 60(b) does not apply in the current motion because no default judgment has been entered to date.
As discussed by Judge Lynch in In re Suprema Specialties, Inc., supra, 2005 WL 1384049 at *2, the Second Circuit has provided clear guidance with respect to striking a careful balance between the competing policies of clearing the Court's calendar and hearing cases on the merits: "[B]ecause defaults are generally disfavored and are reserved for rare occasions, when doubt exists as to whether a default should be granted or vacated, the doubt should be resolved in favor of the defaulting party." See also American Alliance Ins. Co., Ltd. v. Eagle Ins. Co., 92 F.3d 57, 61 (2d Cir. 1996) ("[a]lthough courts have an interest in expediting litigation, abuses of process may be prevented by enforcing those defaults that arise from egregious or deliberate conduct.").
The following sections discuss the arguments raised by counsel to each of the three factors outlined by the Second Circuit for setting aside a default: (1) willfulness of the default, (2) prejudice to the opposing party and (3) presentation of a meritorious defense.
1. Willfulness of Default
In determining wilfulness, the Court "will look for bad faith, or at least something more than mere negligence, before rejecting a claim of excusable neglect based on an attorney's or a litigant's error." American Alliance Ins. Co., Ltd. v. Eagle Ins. Co., supra, 92 F.3d at 60. Although a finding a bad faith will sustain a finding of willfulness, a finding of bad faith is not a necessary predicate to a finding of willfulness. Gucci Am., Inc. v. Gold Ctr. Jewelry, supra, 158 F.3d at 634.Accord RC Entm't, Inc. v. Rodriguez, 98 Civ. 8585 (BSJ), 1999 WL 777903 at *2 (S.D.N.Y. Sept. 29, 1999).
A default is deemed willful where a defendant simply ignores the complaint without action. Marziliano v. Heckler, 728 F.2d 151, 156 (2d Cir. 1984). Thus, "where a party is notified that he is in default and he apparently makes no effort to appear pro se or to explain his situation to the court, such neglect is inexcusable." Original Appalachian Artworks, Inc. v. Yuil Int'l Trading Corp., 105 F.R.D. 113, 116 (S.D.N.Y. 1985) (citation omitted).SDI Capital Res., Inc. v. 48-50 9th Operating, Inc., 98 Civ. 3784 (JSM), 1998 WL 512961 at *2 (S.D.N.Y. Aug. 18, 1998).
Plaintiff appears to be arguing that defendants conduct was willful because defense counsel was aware of the action "but elected to default as a matter of choice" (Pl.'s Mem. in Opp'n at p. 3). Defendants argue that any default was "unintentional," "inadvertent" because defendants either did not receive notice of the action or did not understand that it was advisable to retain an attorney to represent them in a civil action of this type (Salvi Aff. At ¶¶ 31, 34; Defendant's Mem. At p. 7). Defendants are arguing, in effect, that their conduct was "negligent" or "careless" at most.
Bocar denies that he actually received process or notice of the pending action (Salvi Aff. at ¶ 31; Bocar Trans. Aff. at ¶ 3). It has not been demonstrated in plaintiff's papers that Bocar was actually aware of the pendency of the action nor that he wilfully failed to make an appearance. See Horn v. Intelectron Corp., 294 F.Supp. 1153, 1155 (S.D.N.Y 1968):
Defendant's lack of knowledge of this suit and the consequent failure to appear or answer the complaint were clearly attributable to the action of the clerk in the office of defendant's former attorneys who caused the process served by the plaintiff through the Secretary of State to be returned unopened to the Secretary of State. Such an act would seem to be precisely that kind of 'excusable neglect' or, at the very least, 'inadvertence' contemplated by Rule 60(b).
Accordingly, I conclude that wilfulness has not been established on the part of defendant Bocar.
As to defendant Diop, Diop did receive notice of the action from his uncle who signed the return receipt and forwarded the certified mailing on to him (Salvi Aff. at ¶ 34; Diop Aff. at ¶ 3). However, it appears that Diop wrote a handwritten letter to plaintiff's counsel on July 21, 2004, less than a month after receiving notice of the action, arguing the merits of his case (Bostany Letter at ¶ 1). Moreover, in January 2005, Diop sent a letter to my chambers in which he also argued the merits of his case.
Thus, it appears that Diop made some "effort to appear pro se or to explain his situation to the court" which, when coupled with the statement in his affidavit that he was not aware that he needed a lawyer to defend him, (Salvi Aff. at ¶ 34; Diop Aff. at ¶ 3), provides a sufficient showing of excusable neglect.Original Appalachian Artworks, Inc. v. Yuil Int'l Trading Corp., 105 F.R.D. 113, 116 (S.D.N.Y. 1985) (citation omitted).
As to defense counsel's wilfulness, immediately after being retained, defense counsel requested plaintiff's consent to an extension of time to answer (Salvi Aff. at ¶ 19). Plaintiff denied this request (Salvi Aff. at ¶ 19). Defense counsel made an appearance at a conference scheduled for October 15, 2004 that was cancelled as a result of Your Honor's September 21 default order (Salvi Aff. at ¶ 20). On December 10, 2004, I issued a Scheduling Order setting forth a January 18, 2005 for plaintiff to file its Plaintiff's Proposed Finding of Fact and Conclusion of Law (Salvi Aff. at ¶ 21; Docket Item No. 21). On January 24, 2005, defense counsel attempted to respond to Plaintiff's Proposed Finding of Fact and Conclusion of Law, as well as to request vacatur of Your Honor's default Order (Salvi Aff. at ¶ 21). In response to this request, I directed counsel in a memo endorsed order dated January 25, 2005 to make any application for vacatur to Your Honor (Salvi Aff. at ¶ 21; Docket Item No. 25). Defense counsel filed the current motion on February 18, 2005 (Docket Item No. 26).
Based on the foregoing, defense counsel made a good faith effort at appearing in the action once retained. Although defense counsel neglected to file the current motion as promptly as might be expected, such neglect is not so substantial as to outweigh the strong preference in this Circuit for resolving cases on the merits.
2. Prejudice
Defendants advance only one argument as to why plaintiff has not suffered any prejudice as a result of the delay: at the time defendants' motion was filed, "it [had] been less than a year from the date of the accident" (Salvi Aff. At ¶ 37; Defendant's Mem. at p. 7).
Plaintiff's submission states that plaintiff would be prejudiced by setting aside the default because plaintiff has already "prepared Findings of Fact, Conclusions of Law and obtained costly affidavits from treating physician's" (Pl.'s Mem. in Opp'n at p. 6).
In order to establish prejudice, plaintiff must demonstrate "'that the delay will result in the loss of evidence, create increased difficulties for discovery, or provide greater opportunity for fraud and collusion.'" SDI Capital Resources, Inc. v. 48-50 9th Operating, Inc., supra, 1998 WL 512961 at *2, quoting Davis v. Musler, 713 F.2d 907, 916 (2d Cir. 1983). Accord Wilkins v. CTI Records, Nos. 96 Civ. 7245-7248 (WK), 1998 WL 214790 at *2 (S.D.N.Y. May 1, 1998); Snall v. City of New York, 97-CV-5204 (ILG), 1999 WL 1129054 at *2 (S.D.N.Y. Oct. 19, 1999), aff'd mem., 242 F.3d 367 (2d Cir. 2000).See also Mathon v. Marine Midland Bank, N.A., 875 F. Supp. 986, 993 (E.D.N.Y. 1995) (no prejudice found where some defendants had only recently accepted service and discovery had not yet commenced). "Delay alone does not establish prejudice."Uehigashi v. Kanamori, 00 Civ. 5390 (DLC), 2001 WL 649818 at *3 (S.D.N.Y. June 12, 2001), citing Enron Oil Corp. v. Diakuhara, supra, 10 F.3d at 98. Accord Davis v. Musler, supra, 713 F.2d at 916.
Plaintiff has failed to show "'that the delay will result in the loss of evidence, create increased difficulties for discovery, or provide greater opportunity for fraud and collusion.'" Discovery has not yet commenced in this action, and delay, without more, does not establish prejudice. Plaintiff's sole argument about the expense and possible futility of documents already filed with the Court is without weight or moment. Indeed, counsel will still be able to utilize these documents, perhaps with some revision, at other stages in the litigation. Accordingly, this factor weighs in favor of defendants.
3. Meritorious Defense
"The third and final prong of the test, whether a meritorious defense is presented, requires only that the defendant meet a 'low threshold.'" Holford USA Ltd., Inc. v. Harvey, 169 F.R.D. 41, 44 (S.D.N.Y. 1996), quoting Meehan v. Snow, 652 F.2d 274, 277 (2d Cir. 1981). Accord Randazzo v. Sowin, 97 Civ. 0967 (DC), 1998 WL 391161 at *3 (S.D.N.Y. July 13, 1998).
In connection with a motion to vacate a default judgment, a defendant must present more than conclusory denials when attempting to show the existence of a meritorious defense. See Enron Oil, 10 F.3d at 98. "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." Id.Pecarsky v. Galaxiworld.com Ltd., supra, 249 F.3d at 173.See also American Alliance Ins. Co., Ltd. v. Eagle Ins. Co., supra, 92 F.3d at 61, quoting Anilina Fabrique de Colorants v. Aakash Chemicals Dyestuffs, Inc., 856 F.2d 873, 879 (7th Cir. 1988) ("'[a] defense is meritorious if it is good at law so as to give the fact-finder some determination to make'"); Snall v. City of New York, supra, 1999 WL 1129054 at *2 (party seeking to avoid a default judgment or to set aside default "need not conclusively establish the validity of his [or her] defense, only that he [or she] has a potentially meritorious defense"); Securities Exch. Comm'n v. McNulty, 94 Civ. 7114 (MBM), 1996 WL 422259 at *5 (S.D.N.Y. July 29, 1996) ("conclusory statements do not suffice; the moving party . . . must support its general denials with some underlying facts") (inner quotation omitted), aff'd, 137 F.3d 732 (2d Cir. 1998).
Defendants' have made an adequate showing of a meritorious defense by supplying affidavits denying that the accident ever occurred. Specifically, Bocar, the putative driver of the vehicle claims he never made contact with plainitff and that plaintiff fell in front of his car (Bocar Trans. Aff. ¶ 5). Diop asserts the same defense (Diop Aff. ¶ 5). If credited by the fact finder, defendants' version of the alleged accident would constitute a complete defense.
Given the low threshold applicable under Rule 55(c) to demonstrate a sufficiently meritorious defense, paired with this Circuit strong preference for resolving cases on the merits, I find that defendants' statement of the facts, if proven at trial, would constitute a complete defense to plaintiff's claims. "To set aside a default, the movant must 'support its general denials with some underlying facts.'" RC Entm't, Inc. v. Rodriguez, supra, 1999 WL 777903 at *2, citing Sony Corp. v. Elm State Elec., Inc., 800 F.2d 317, 320-21 (2d Cir. 1986).
4. Summary
Defendants' default was not willful; it was more akin to negligence or carelessness, and, therefore, is excusable. In addition, plaintiff has failed show that it will suffer the requisite level of prejudice if the default is set aside. Finally, defendants' version of the facts, as set forth in affidavits, would provide a complete defense to plaintiff's claims if proven at trial. Accordingly, I conclude that the motion to set aside the default be granted.
IV. Conclusion
Based on the foregoing reasons, I respectfully recommend that defendants' motion to set aside the default on the ground that service of process was invalid be granted as to both defendants and that the action be dismissed without prejudice. I further recommend, if the foregoing recommendation is rejected, that defendants' motion to set aside the default under Rule 55(c) be granted as to both defendants.
V. Objections
Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from the date of this Report to file written objections.See also Fed.R.Civ.P. 6(a) and 6(e). Such objections (and responses thereto) shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Lewis A. Kaplan, United States District Judge, 500 Pearl Street, Room 1310, New York, New York 10007, and to the chambers of the undersigned, 500 Pearl Street, Room 750, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Kaplan. FAILURE TO OBJECT WITHIN TEN (10) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. Thomas v. Arn, 474 U.S. 140 (1985); United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983).