Taylor v. C6 Disposal Systems, Inc.

Western District of Texas, txwd-5:2019-cv-00347

MOTION to Set Aside 23 Clerk's Entry of Default by Charles Taylor.

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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION CHARLES TAYLOR, § Individually and on behalf § Civil Action No. 5:19-cv-00347-ESC of all others similarly situated § § Plaintiff § JURY TRIAL DEMANDED § v. § COLLECTIVE ACTION § PURSUANT TO 29 U.S.C. § 216(b) C6 DISPOSAL SYSTEMS, INC. § § CLASS ACTION PURSUANT TO Defendant § FED. R. CIV. P. 23 PLAINTIFF'S MOTION TO SET ASIDE ENTRY OF DEFAULT Plaintiff Charles Taylor files this Motion to Set Aside Entry of Default against him (ECF No. 23), and will respectfully show the following. I. BACKGROUND On April 4, 2019, Plaintiff filed his Original Class/Collective Action Complaint against Defendant alleging that Defendant failed to pay him, and his similarly situated co-works, all of their federally mandated wages. On May 2, 2019, Defendant answered and asserted counterclaims against Plaintiff.1 Plaintiff's answer to Defendant's Counterclaim would have been due twenty days after service, or May 23, 2019. Through an inadvertent scheduling error, the deadline for Plaintiff to respond to Defendant's counterclaim was not calendared, and Plaintiff's counsel subsequently failed to file a responsive document—in this case, a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). 1 While Plaintiff asserts that Defendant's "Fraud" counterclaim is not only legally and factually unsupported, Plaintiff notes that it is also not permissible under the FLSA. Motion to Set Aside Clerk's Entry of Default Page 1 On June 26, 2019, counsel for the Parties conferred regarding the subpoena issue before this Court and according to this Court's Order. See ECF Nos. 14, 16, and 21. At that time, and after inquiry regarding the same, the undersigned counsel for Plaintiff advised counsel for Defendant that the failure to answer was due to a calendaring error and that Plaintiff would promptly be filing a Motion for Leave to Answer the Counterclaim with this Court. Defendant subsequently filed its Opposed Motion for the Entry of Default against Plaintiff Charles Taylor. On, June 27, 2019, the Clerk of the Court entered a Default against Plaintiff Taylor. See ECF No. 23. By this Motion, Plaintiff respectfully asks this Court to set aside the default entered against him and seeks leave of Court to file a responsive pleading to Defendant's counterclaim. II. ARGUMENT & AUTHORITY Default judgments are generally disfavored and should not be granted on the claim when the only basis for the default is that the defending party has failed to meet a procedural time requirement. See Lacy v. Sitel Corporation, 227 F.3d 290, 292 (5th Cir.2000). "As a general rule, entry of a default judgment is treated as a conclusive and final adjudication of the issues necessary to justify the relief awarded." See Stevenson v. Verizon Wireless (VAW), LLC, No. CIV A 308-CV-0168-G, 2009 WL 188188, at *1 (N.D. Tex. Jan. 27, 2009) (citing Jackson v. FIE Corporation, 302 F.3d 515, 525 n. 29 (5th Cir. 2002)). Resultingly, "[d]efault judgments are a drastic remedy, not favored by the Federal Rules and resorted to by courts only in extreme situations." See id. (citing Sun Bank of Ocala v. Pelican Homestead and Savings Association, 874 F.2d 272, 276 (5th Cir.1989)). Courts generally refuse to enter a default judgment if the defending party has made any type of appearance in the suit by responding to the complaint. See Stevenson, 2009 WL 188188, at *1 (citing Securities and Exchange Commission v. Amerifirst Funding, Inc., 2007 WL 4226921 (N.D. Tex. Nov.29, 2007); Dahlstrom v. Moore, 2007 WL 2908448 (E.D. Tex. Oct. 3, 2007); Bilbe v. Belsom, 2006 WL 3388482 (E.D. La. Nov.21, 2006)). In fact, "[a] party 'is not entitled to a default judgment as a matter of right, even Motion to Set Aside Clerk's Entry of Default Page 2 where the [opposing party] is technically in default.'" Stevenson, 2009 WL 188188, at *1 (quoting Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996)). Instead, the decision as to whether to enter a default judgment is left to the sound discretion of the court. Lindsey v. Prive Corporation, 161 F.3d 886, 893 (5th Cir. 1998). When determining whether entry of default judgment is warranted in a particular matter, courts may consider "whether material issues of fact are at issue, whether there has been substantial prejudice, whether the grounds for default are clearly established, whether the default was caused by a good faith mistake or excusable neglect, the harshness of a default judgment, and whether the court would think itself obliged to set aside the default on the defendant's motion." Id. Looking at these factors set forth by the Fifth Circuit Court of Appeals, it is clear that the entry of default is not appropriate in this matter. A. Material Issues of Fact Are at Issue Defendant's counterclaim is premised on the position that Plaintiff committed fraud by working through his lunch breaks. See ECF No. 5, ¶¶ 88–101. The basis of Plaintiff's lawsuit is that he and other similarly situated employees regularly worked through their 30-minute meal period break, with Defendant's knowledge, despite having that 30-minute break deducted from their daily time. See ECF No. 1, ¶¶ 27–32. Defendant's counterclaim is, at best, an affirmative defense—not an affirmative claim—and cuts to the heart of the key issues in this litigation. Because there are significant material issues of fact at issue, this factor does not favor default. B. Entry of Default Against Plaintiff Would Be Harsh As discussed above, Defendant's "counterclaim" is truly an affirmative defense against liability from Plaintiff's FLSA allegations. As a result, a default judgment against Plaintiff on the fraud allegations—allegations that he strenuously denies—would hinder, if not preclude, his ability to recover in his action against Defendant. Plaintiff contends that such a harsh result is not appropriate Motion to Set Aside Clerk's Entry of Default Page 3 as the result of counsel's inadvertent failure to meet a procedural time requirement. This further warrants that the Clerk's Entry of Default against Plaintiff be set aside. C. Defendant Has Not Been Prejudiced Although Plaintiff inadvertently failed to timely file his Motion to Dismiss Defendant's counterclaims against him, Defendant has not been prejudiced. The delay was minimal, not only have deadlines not elapsed, they have not yet been set in this case. Importantly, because Plaintiff's very claim explicitly denies the allegations contained in the counterclaim, Defendant has been on notice of Plaintiff's position from the day it was served with this lawsuit. See generally ECF No. 1. D. Plaintiff's Failure to Respond Was the Result of Excusable Neglect "Throughout the Fifth Circuit, courts have found calendaring errors sufficient to establish excusable neglect." Evanston Ins. Co. v. Washington Cty. Country Club, LLC, No. 4:16-CV-144-DMB- JMV, 2017 WL 4293162, at *2 (N.D. Miss. Sept. 27, 2017) (citing Gamez v. Hosp. Klean of Tex., Inc., No. 12–cv–517, 2013 WL 1089040, at *2 (W.D. Tex. Mar. 14, 2013) (inadvertent calendaring error not willful); Parks v. Miss. Dep't of Corr., No. 1:12–cv–275, 2013 WL 1420237, at *2 (S.D. Miss. Apr. 8, 2013) (failure to respond due to clerical error did not constitute willful default); Shelby v. City of El Paso, No. 12–cv–0200, 2012 WL 3929395, at *2 (W.D. Tex. Sept. 7, 2012) (refusing to find willful default where defendant missed deadline for filing response due to staff oversight and computer error)); Stevenson, 2009 WL 188188, at *2. Plaintiff has at all times made his position with regard to Defendant's counterclaim clear to Defendant's counsel—not only were his actions not fraudulent, they were performed at all times with Defendant's knowledge. See ECF No. 1. Despite having clarified his position for Defendant, Plaintiff inadvertently failed to timely file an answer with this Court, specifically addressing each of Defendant's contentions. Plaintiff's failure to formally respond was caused by an inadvertent failure to calendar the answer deadline—a calendaring error that has now been fully addressed with all counsel and staff to Motion to Set Aside Clerk's Entry of Default Page 4 ensure that there are no further errors in this or other cases. This factor also favors a determination to set aside the default judgment against Plaintiff. IV. CONCLUSION For these reasons, Plaintiff respectfully requests that this Court SET ASIDE the Entry of Default issued by the Clerk of the Court on June 27, 2019, and allow Plaintiff to filed the attached Answer to Defendant's Counterclaims, hereby attached as Exhibit A. Date: June 27, 2019 Respectfully submitted, ANDERSON ALEXANDER, PLLC By: /s/ Clif Alexander Clif Alexander Texas Bar No. 24064805 clif@a2xlaw.com Lauren E. Braddy Texas Bar No. 24071993 lauren@a2xlaw.com Alan Clifton Gordon Texas Bar No. 00793838 cgordon@a2xlaw.com Carter T. Hastings Texas Bar No. 24101879 carter@a2xlaw.com 819 N. Upper Broadway Corpus Christi, Texas 78401 Telephone: (361) 452-1279 Facsimile: (361) 452-1284 Attorneys for Plaintiff and the Putative Class Members Motion to Set Aside Clerk's Entry of Default Page 5 DECLARATION OF LAUREN BRADDY As counsel for the Plaintiff herein, I declare under penalty of perjury and pursuant to 28 U.S.C. § 1746 that the foregoing facts are based upon my personal knowledge and are true and correct. /s/ Lauren Braddy Lauren Braddy CERTIFICATE OF SERVICE I hereby certify that on June 27, 2019, I electronically filed the foregoing document with the clerk of the court for the U.S. District Court, Western District of Texas, using the electronic case filing system of the court. The electronic case filing system sent a "Notice of Electronic Filing" to the attorneys of record who have consented in writing to accept this Notice as service of this document by electronic means. /s/ Clif Alexander Clif Alexander Motion to Set Aside Clerk's Entry of Default Page 6