Opinion
No. 04 Civ. 3341 (JSR)(KNF).
July 28, 2004
REPORT and RECOMMENDATION
TO THE HONORABLE JED S. RAKOFF, UNITED STATES DISTRICT JUDGE
I. INTRODUCTION
Marcia Rafter ("Rafter") brought this action pro se, alleging, inter alia, violations of 42 U.S.C. § 1983, violations of the Racketeer Influenced and Corrupt Organizations Act, false arrest, malicious prosecution, and defamation. The defendants failed to respond timely to the plaintiff's amended complaint. Thereafter, the Clerk of Court noted the defendants' default, and Rafter made an application for a default judgment.
Defendants City of New York ("City") and Irvin Noak ("Noak") (collectively, "City defendants") oppose the plaintiff's application. Defendants Fleet Boston Financial Corporation, Fleet Bank, Charles Gifford, Xiamara Leto, and Kimberly Jenkins ("Fleet defendants") have not responded to the application.
For the reasons set forth below, I recommend that the plaintiff's application be granted with respect to the Fleet defendants and the City, and that it be denied with respect to Noak.
II. BACKGROUND
Rafter filed a complaint in this action on May 3, 2004. Subsequently an affidavit of service was filed indicating that she served the complaint upon all named defendants, by mail, on May 4, 2004. On May 25, 2004, before any defendant had filed or served a response to the complaint, Rafter filed an amended complaint, attached to which was a declaration of service indicating that she had served that document upon each named defendant, by mail, on May 17, 2004. On May 25, 2004, the Clerk of Court noted on the docket sheet maintained for this action that the defendants' respective answers were to be filed on or before June 4, 2004.
On June 4, 2004, the Clerk of Court certified that no defendant had filed an answer or otherwise moved with respect to either the complaint or the amended complaint. Accordingly, the Clerk of Court noted the default of the defendants. Cf. Fed.R.Civ.P. 55(a). Thereafter, Rafter submitted the instant application for a default judgment against the defendants, along with proof that she had served copies of her application upon all the defendants.
On June 8, 2004, the Fleet defendants filed an answer to the complaint, along with a jury demand and discovery demands ("first Fleet answer"). Affidavits of service attached thereto indicate that the first Fleet answer was served upon Rafter and the City defendants, by regular mail, on May 26, 2004, and again on May 27, 2004, by certified mail. On June 15, 2004, the Fleet defendants filed an answer to the amended complaint ("second Fleet answer"). The attached affidavit of service indicates that on June 10, 2004, the second Fleet answer was served, by certified mail.
On June 9, 2004, the City defendants filed an answer to the amended complaint ("City's answer"). According to the declaration of the City defendants' counsel, the City's answer was served, by mail, upon Rafter and the Fleet defendants on that same date.
In response to the instant application for a default judgment, counsel to the City defendants submitted to the Court a two-page letter ("Letter"), setting forth her clients' opposition to the application. The City defendants do not contend that service of the complaint or of the amended complaint was improper. Moreover, they acknowledge that the City received the complaint on May 5, 2004, and received the amended complaint on May 18, 2004. In the Letter, they state that, on June 9, 2004, it was learned — presumably by City defendants' counsel — that Noak had been served with the complaint, and "upon completing the representational process" with Noak, counsel to the City defendants served the City's answer upon the other parties to the action.
The City defendants contend that Rafter's application should be denied because: 1) their failure to answer the amended complaint timely was the "result of inadvertency and was neither willful nor in bad faith"; 2) the plaintiff has not demonstrated that she would be prejudiced by denial of the application; and 3) there was probable cause for the arrest out of which the plaintiff's false arrest and malicious prosecution claims arise, and thus the City defendants have a meritorious defense to those claims.
Rafter submitted a reply to the City defendants' response, in which she disputed the contentions set forth in the Letter.
The Fleet defendants have not responded to Rafter's application, and have not made any application for relief from their default.
III. DISCUSSION
Fed.R.Civ.P. 15(a) provides: "A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be the longer, unless the court otherwise orders." In this action, it is undisputed that the amended complaint was served by mail on May 17, 2004. Therefore, the defendants were obliged to serve a pleading or motion responsive to the amended complaint on or before June 4, 2004. See Fed.R.Civ.P. 6(e), 12(a) 15(a). Their failure to do so warranted the entry of their default by the Clerk of Court. See Fed.R.Civ.P. 55(a).The question before the Court is whether a judgment should be entered against the defendants, pursuant to Fed.R.Civ.P. 55(b). The City defendants' response to Rafter's application is, in substance, an application for relief from their default. Accordingly, the Court will consider their response an application for relief pursuant to Fed.R.Civ.P. 55(c).
Fed.R.Civ.P. 55(c) provides: "For 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)." A court must consider three factors in determining whether good cause exists for granting a defaulting party such relief: "(1) whether the default was willful; (2) whether setting aside the default would prejudice the adversary; and (3) whether a meritorious defense is presented." Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). In particular, "[t]he subjective inquiry into willfulness effectively distinguishes those defaults that, though due to neglect, are excusable, from those that are not." American Alliance Ins. Co., Ltd. v. Eagle Ins. Company, 92 F.3d 57, 61 (2d Cir. 1996). These factors are to be "generously construed" in favor of the defaulting parties.Enron, 10 F.3d at 96. However, "[a]n absence of prejudice to the nondefaulting party [does] not in itself entitle the defaulting party to relief." See Securities and Exchange Commission v. McNulty, 137 F.3d 732, 738 (2d Cir. 1998).
The determination to grant or deny an application for relief from a default or a default judgment is committed to the discretion of the district court. See Enron, 10 F.3d at 95. However, the scope of such discretion is narrowed by a "strong [policy of] favoring the resolution of genuine disputes on their merits." See Traguth v. Zuck, 710 F.2d 90, 94 (2d Cir. 1983) (internal quotation marks omitted) (quoting Jackson v. Beech, 636 F.2d 831, 835 [D.C. Cir. 1980]). In addition to considering these three factors, a court should consider "[o]ther relevant equitable" factors, such as whether a defendant was represented by counsel at the time of the default, and whether the entry of a default judgment would bring about a harsh result. See Enron, 10 F.3d at 97.
City Defendants 1. Willfulness
The City defendants' first contention is that their default is the result of inadvertence, and not the result of willfulness or bad faith. In support of this contention, the Letter states that the City defendants served their answer after Noak secured representation by the City's counsel. This statement suggests, at most, that Noak might have been a pro se litigant at the time that he defaulted, and, by implication, that this somehow contributed to his default. While minimal, this is sufficient to raise some slight doubt about the willfulness of Noak's default.
However, the Letter provides no information about the circumstances of the City's default. The City has an independent obligation to comply with the Federal Rules of Civil Procedure, and the failure of another defendant to answer does not relieve the City of that obligation. The Letter does not explain how the process of reaching a representation agreement with Noak might have caused the City to fail to answer timely, much less how that failure was inadvertent. The City has failed to demonstrate that its default was not willful.
2. Prejudice
The City defendants' second contention is that setting aside their default would not prejudice Rafter. Rafter contends that the City has purposefully delayed in addressing her allegations "in the hopes of pleading statutory limitations," and that, as a consequence, she has been prejudiced. In the context of an application to set aside a default or a default judgment, "delay alone is not a sufficient basis for establishing prejudice."Davis v. Musler, 713 F.2d 907, 916 (2d Cir. 1983) (internal citation omitted). "Rather, it must be shown that delay will result in the loss of evidence, create increased difficulties of discovery, or provide greater opportunity for fraud and collusion." Id. (citing C. Wright, A. Miller and M. Kane, Federal Practice and Procedure § 2699, at 536-37). Rafter's reply to the Letter does not identify any cognizable prejudice that would result from setting aside the City defendants' default. Nor does anything else in the record before the Court suggest that setting aside the City defendants' defaults would cause any of the types of difficulties set forth in Davis. Accordingly, it has not been shown that setting aside the City defendants' defaults would prejudice Rafter.
3. Meritorious Defense
The City defendants' third contention is that they have a meritorious defense to Rafter's claims of false arrest and malicious prosecution, namely, that "there was probable cause for the plaintiff's arrest, detention, and prosecution." A defendant seeking relief from a default or a default judgment based upon an assertion of a meritorious defense need not establish that defense conclusively. See Davis, 713 F.2d at 916; McNulty, 137 F.3d at 740. However, the defendant must "present evidence of facts that, if proven at trial, would constitute a complete defense."McNulty, 137 F.3d at 740 (quoting Enron, 10 F.3d at 98). Conclusory denials are not sufficient support for an asserted defense. Enron, 10 F.3d at 98. In this action, the City defendants have presented no competent evidence, in the form of affidavits or otherwise, in support of the defense they assert. They offer only a conclusory statement that probable cause existed in the circumstances of this case, and that such probable cause would constitute a defense to some of Rafter's claims.
Even if the existence of probable cause were established, it would not constitute a complete defense to Rafter's claims. For example, the substance of Rafter's civil rights claim is, in part, that excessive force was used against her in the course of her arrest and subsequent detention. Force used by a police officer in this context violates the Fourth Amendment if it is objectively unreasonable under the circumstances. See Graham v. Connor, 490 U.S. 386, 396-397, 109 S.Ct. 1865, 1872 (1989). The existence of probable cause to arrest, detain, and prosecute a defendant does not render objectively unreasonable force constitutional. Therefore, the defense the City defendants assert would not constitute a defense to Rafter's excessive force claim. Accordingly, the asserted defense, even if it were supported by competent evidence in the record before the Court, is not a complete defense.
The City defendants have not presented a meritorious defense.
4. Application of Enron Factors to the City Defendants
While default judgments are disfavored, see Traguth, 710 F.2d at 94, and while the factors set forth above are to be construed generously in favor of a defaulting party, see Enron, 10 F.3d at 96, these policies do not relieve such a party completely of its burden, under Fed.R.Civ.P. 55(c), to show good cause for setting aside a default. Of the factors discussed above, only the absence of prejudice to the plaintiff weighs in favor of setting aside the City's default. Moreover, the City does not contend that any other relevant, equitable factors warrant such relief. As noted previously, the mere absence of prejudice does not warrant such relief from a default.See McNulty, 137 F.3d at 738. The City has not provided any basis upon which the Court might determine that its default was not willful or that the City has a meritorious defense to Rafter's claims. Accordingly, the Court finds that the City has not shown good cause for setting aside its default. An inquest should be conducted, and the plaintiff should be required to establish the amount of damages, if any, that should be awarded against the City. See Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). Thereafter, a judgment by default should be entered against the City.
The Court is mindful that Rafter has demanded $25 million in damages. If the City's default did indeed lead to the award of such a substantial sum, that might appear to be a "harsh result" that could be treated as a mitigating factor. See Enron, 10 F.3d at 97. However, in the instant action, there is no basis in the record for concluding that Rafter actually would be awarded such a substantial sum. Before a default judgment could enter, Rafter would be required to establish the amount of her damages at an inquest. Cf. Fed.R.Civ.P. 55(b). Additionally, unlike the defendant in Enron, the City has not provided any basis for concluding that it made a good faith effort to comply with the rules — or even that its default was not willful — or that it has a meritorious defense to the claims asserted against it. Accordingly, the City is not entitled to benefit from mitigating factors that are equitable in nature.
The Letter does create some doubt about whether Noak's default was willful. Additionally, while Noak's possible pro se litigant status at the time of the default is not itself probative of Noak's willfulness or lack of willfulness, it is a mitigating factor that favors granting him relief from his default. See Enron, 10 F.3d at 97. The Court finds that these considerations, when combined with the absence of prejudice to the plaintiff, warrant setting aside Noak's default. Accordingly a judgment by default should not be entered against him.
Fleet Defendants
The Fleet defendants have not responded to Rafter's application for a default judgment, and so the Court treats Rafter's application as unopposed by those defendants. An inquest should be conducted, and the plaintiff should be required to establish the amount of damages, if any, that should be awarded against the Fleet defendants. See Flaks, 504 F.2d at 707. Thereafter, a judgment by default should be entered against the Fleet defendants.
IV. RECOMMENDATION
For reasons set forth above, I recommend that the plaintiff's application for a default judgment be granted with respect to the Fleet defendants and the City, and that an inquest be held for the purpose of determining the amount of damages to be awarded to the plaintiff against these defendants. I recommend further that the plaintiff's application be denied with respect to Noak.
V. FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from service of this Report to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Hon. Jed S. Rakoff, 500 Pearl Street, Room 1340, New York, New York, 10007, and to the chambers of the undersigned, 40 Centre Street, Room 540, New York, New York, 10007. Any requests for an extension of time for filing objections must be directed to Judge Rakoff. FAILURE TO FILE OBJECTIONS WITHIN TEN (10) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See Thomas v. Arn, 474 U.S. 140, 88 L.Ed.2d 435, 106 S.Ct. 466 (1985); 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).