CARAVEO v. NIELSEN MEDIA RESEARCH, INC., (S.D.N.Y. 2003)

RONALD ELLIS, Magistrate Judge

On October 31, 2002, pro se plaintiff Enrique Caraveo ("Caraveo") filed a complaint against twenty-five defendants for a wide-range of claims stemming from his employment with defendant Nielsen Media Research, Inc. ("NMR"). On April 17, 2002, defendant Unival filed and served its answer to Caraveo's First Amended Complaint. On April 8, 2002, Judge Sand ordered Caraveo to file a second amended complaint, clarifying which claims and factual allegations referred to which defendants. Caraveo's Second Amended Complaint was filed on May 8, 2002. On December 19, 2002, Caraveo filed a motion for default judgment against Unival. For the reasons set forth below, I recommend that Caraveo's motion for default judgment be DENIED.

The pertinent facts are set out in my Report and Recommendation dated January 22, 2003. For purposes of this motion, it should be noted that Unival has counsel both in New York and Michigan. See Affidavit in Opposition to Plaintiff's Motion for Default Judgment ("Def. Aff.") at ¶ 3. Caraveo has alleged that he served his Amended Complaint on Unival via their counsel in Michigan on May 2, 2002. See Affidavit in Opposition to Defendant Unival's Answer to Plaintiff's Motion for Default Judgment ("PI. Reply") at ¶ 4. Further, Caraveo's Affirmation of Service for his Second Amended Complaint, dated May 2, 2002, lists Bruce A. Vande Vusse, Vander Male, Bellamy, Gilchrist, V Ande ( sic) Vusse Cafferty, P.C. ("Michigan counsel") as attorneys for Unival. See Id. at Exh. A. Caraveo has also attached as exhibits other submissions to the Court which list Vander Male, Bellamy, Gilchrist Vande Vusse Cafferty, P.C., as counsel for Unival. Id. at Exh. B. Unival's New York counsel, however, claims that neither they nor Michigan counsel were ever served with the Amended Complaint. See Def. Aff. at ¶ 3. Unival claims that it only learned of Caraveo's Amended Complaint through co-defendants, and accordingly served and filed an answer to the Second Amended Complaint on November 25, 2002. Id. at ¶ 4.

A. Standard of Review for Default Judgment

As courts within this district have observed, "[i]n deciding a motion for default judgment, the Court considers the following three factors: 1) whether the defendant's default was willful; 2) whether defendant has a meritorious defense to plaintiff s claims; and 3) the level of prejudice the non-defaulting party would suffer as a result of the denial of the motion for default judgment." Mason Tenders District Council Welfare Fund v. Bold Construction Co., Inc., 2002 WL 1788024 * 2 (S.D.N.Y. 2002). Further, "[d]ispositions of motions for default judgment are left to the sound discretion of the district court." Id. The Second Circuit has warned, however, that "[w]hile courts are entitled to enforce compliance with the time limits of the [Federal Rules of Civil Procedure] by various means, the extreme sanction of a default judgment must remain a weapon of last, rather than first resort." Meehan v. Snow, 652 F.2d 274, 277 (2d Cir. 1981). The Court accordingly turns to the three factors.

The Second Circuit has defined "willfulness" in the context of a default judgment as "conduct that is more than merely negligent or careless." Securities and Exchange Commission v. McNulty, 137 F.3d 732, 738 (2d Cir. 1998). Further, "the court may find a default to have been willful where the conduct of counsel or the litigant was egregious and was not satisfactorily explained." Id. Although Unival's New York counsel was not served, Caraveo has attached numerous exhibits to his motion which demonstrate that Unival has been served via Michigan counsel throughout this case. See Pl. Reply, Exh. A-C. Further, in its Affidavit in Opposition, Unival acknowledges the participation of Michigan co-counsel. See Def. Aff. at ¶ 3. Unival, however, claims that Michigan counsel never received the Second Amended Complaint. Id. On the other hand, "[a] properly filed Affidavit of Service is prima facie evidence that service was properly effected." Arthur F. Williams, Inc. v. Helbig, 208 F.R.D. 41, 44 n. 8 (E.D.N.Y. 2002). The resolution of this conflict would probably require a hearing. The Court, however, finds it unnecessary to reach a definitive conclusion on this prong as the other two prongs clearly favor denial of the motion. The Court notes that defendants have not been hesitant to respond to plaintiff's claims when given the opportunity. There appears to be no incentive for them to ignore plaintiff's amended complaint.

"In order to make a sufficient showing of a meritorious defense . . . the defendant need not establish his defense conclusively, but he must present evidence of facts that, if proven at trial, would constitute a complete defense." McNulty, 137 F.3d at 740 (citations omitted). In his Second Amended Complaint, Caraveo asserts that "Counts 1-24 are asserted against Nielsen and MetLife Defendants." See Amended Complaint. He apparently considers Unival a "MetLife Defendant," although he alleges no facts which lead to his conclusion that Unival is "an agent of MetLife and Nielsen Media Research." Id. Indeed, in his 31 page, 265 paragraph complaint, he mentions Unival in one paragraph. Id. at ¶ 117. ("On or about August, September, October, November 2000, Gail E. Heneghan, MetLife and Nielsen Defendants conspired with George C. Whitaker ("Whitaker"), Midwest Eyecare, UNIVAL and Byron David Brent to fabricate fraudulent reports that would be used to interfere with plaintiff's right to employment and/or disability benefits.").

Unival is a private corporation that sets up Independent Medical Examinations ("IME") for group long-term disability claims. See Def. Aff. at ¶ 12. After Caraveo filed a claim against MetLife, Unival set up appointments for physicians to perform IMEs on him. Id. It therefore appears that Caraveo may not have a claim against Unival. Accordingly, Unival has a potentially viable and adequate defense to defeat entry of a default.

"To establish prejudice in the context of a default, there must be a showing that the delay will result in the loss of evidence, create increased difficulties of discovery, or provide greater opportunity for fraud or collusion." Helbig, 208 F.R.D. at 45 (citation omitted). Discovery in this case has been stayed pending two 12(b)(6) motions by two sets of defendants. There has been no prejudice to Caraveo, which he impliedly concedes in his reply papers.

For the foregoing reasons, I recommend that Caraveo's motion for default judgment be DENIED.

Pursuant to Rule 72, Federal Rules of Civil Procedure, the parties shall have ten (10) days after being served with a copy of the recommended disposition to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of the Court and served on all adversaries, with extra copies delivered to the chambers of the Honorable Leonard B. Sand, 500 Pearl Street, Room 1650, and to the chambers of the undersigned, Room 1970. Failure to file timely objections shall constitute a waiver of those objections both in the District Court and on later appeal to the United States Court of Appeals. See Thomas v. Arn, 474 U.S. 140, 150 (1985); Small v. Secretary of Health and Human Services, 892 F.2d 15, 16 (2d Cir. 1989) ( per curiam ); 28 U.S.C. § 636(b)(1) (West Supp. 1995); Fed.R.Civ.P. 72, 6(a), 6(e).