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Cunningham v. Lexington Doc Prep, LLC

United States District Court, M.D. Tennessee, Nashville Division

July 25, 2017

CRAIG CUNNINGHAM Plaintiff,
v.
LEXINGTON DOC PREP, LLC, Defendants.

          Trauger Judge.

          REPORT AND RECOMMENDATION

          JEFFERY S. FRENSLEY U.S. Magistrate Judge

         Pending before the court is a Motion to Set Aside the Finding of Default and to Vacate Order Granting Default Judgment by defendants Michael Dazzo (“Dazzo”) and Lexington Doc Prep, LLC. (“Lexington”). Docket No. 42. Plaintiff has filed a response in opposition to the motion. Docket No. 44. Defendants assert that service of process was never achieved and thus the court has no personal jurisdiction to grant the default judgment. For the reasons set forth herein, the undersigned recommends that the motion be GRANTED.

         I. Background.

         This civil action was commenced against these defendants by the filing of an amended complaint on August 14, 2015. Docket No. 7. The Complaint alleges the defendants among others violated the Telephone Consumer Protection Act (“TCPA”) and Fair Debt Collection Practices Act (“FDCPA”) through a series of unwelcomed automated phone calls. Docket No. 7. The clerk issued a summons as to these defendants on August 19, 2015. Docket No. 8. The summons were returned executed as to these defendants by plaintiff on September 9, 2015. Docket Nos. 10 and 11. The clerk entered a default against defendants Lexington and Dazzo (Docket No. 16) and following a hearing at which the defendants did not attend and were unrepresented by counsel, the magistrate judge recommended that a default judgment be entered for plaintiff in the total amount of $19, 000.00 against these defendants. Docket No. 31. The report and recommendation was accepted (Docket No. 34) and judgment was entered for the plaintiff. (Docket No. 35). The defendants thereafter filed the pending motion to set aside the default and vacate the judgment in this matter. Docket No. 42.

         In support of their argument to vacate the defendants submit that they were not properly served and thus the court has no personal jurisdiction. Id. With respect to Mr. Dazzo, the defendants contend that service of process “was claimed by the wrong person.” Docket No. 42-1, p. 3. As such, they contend personal service was not achieved on Mr. Dazzo. Id. With respect to defendant, Lexington, defendants contend that while the summons properly identified Michael Dazzo as the agent authorized to accept process, neither he nor anyone authorized on his behalf actually accepted the summons. Id.

         Defendants rely on the affidavit of Mr. Dazzo wherein he states that he is the only agent authorized by Lexington to accept service, that he did not receive service of process for the summons and the complaint for either himself or Lexington and that he did not sign the return receipt for certified mail returned to the court by Plaintiff and does not know who did. Docket No. 42. Plaintiff responds that applying the standard of Federal Rule of Civil Procedure 60(b), and the three part test under United Coin Meter Company v. Seaboard Coastline Railroad, 705 F.2d 839, 844 (6th Cir. 1983), for analyzing such a motion, the relief is not proper. Docket No. 44, pp. 4-7. Specifically, plaintiff contends that the default “was willful and the result of deliberate action of Michael Dazzo to list a fake address for himself with the Secretary of State for Florida for Lexington Doc Prep, LLC in order to avoid service of process.” Id. at p. 4. Plaintiff asserts that had the defendant listed a proper address with the Secretary of State of Florida service would have been perfected. Id. at p. 6. He further argues that he would be prejudiced by setting aside the default because records may no longer exist and defendants have not alleged a meritorious defense to the underlying TCPA claims. Id. at p. 7.

         II. Analysis

         “[W]ithout proper service of process, consent, waiver, or forfeiture, a court may not exercise personal jurisdiction over a named defendant.” King v. Taylor, 694 F.3d 650, 655 (6th Cir. 2012) (citing Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999)). It is a “bedrock principle that a defendant is not obliged to engage in civil litigation unless the defendant is properly notified of the action and brought under the court's authority, i.e., personal jurisdiction, by formal service of process.” Arthur v. Litton Loan Servicing LP, 249 F.Supp.2d 924, 928 (E.D. Tenn. 2002). Actual notice of the lawsuit by the defendant is immaterial to the question of whether that defendant was properly served. LSJ Inv. Co., 167 F.3d at 322 (citing Friedman v. Estate of Presser, 929 F.2d 1151, 1155-56 (6th Cir. 1991)); Genesis Diamonds, LLC v. John Hardy, Inc., No. 3:15-cv-01093, 2016 WL 3478915, at *6 (M.D. Tenn. June 27, 2016). “And in the absence of personal jurisdiction, a federal court is ‘powerless to proceed to an adjudication.'” King, 694 F.3d at 655 (quoting Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999)).

         The federal rules provide that service on an individual be completed by any manner accepted in the state where the district court is located or where service is made, or by “delivering a copy of the summons and the complaint personally; leaving a copy of each at the individual's dwelling or usual place of abode with someone of suitable age and discretion who resides there; or delivering a copy of each to an agent authorized by appointment or by law to receive service of process.” Fed.R.Civ.P. 4(e). Service by certified mail is not permitted under the federal rules unless accompanied by a waiver of personal service.

         A. Setting Aside Default Judgment Under Rule 60(b)

         Under Federal Rule of Civil Procedure 55(c), “[t]he court may set aside an entry of default for good cause, and it may set aside a final default judgment under Rule 60(b).” Fed.R.Civ.P. 55(c). Here, because defendants argue that the court did not have personal jurisdiction to enter judgment against them, their claim is best construed as one for relief from a void judgment under Rule 60(b)(4).

         As a general rule, “[w]here Rule 60(b) is invoked to set aside a default judgment, the court must both consider the Rule 55 equitable factors . . . and find that one of the specific requirements of Rule 60(b) is met.” Thompson v. American Home Assur. Co., 95 F.3d 429, 433 (6th Cir. 1996). However, where a party seeks to set aside a default judgment because it is void-and not for reasons like mistake or inadvertence-the court may not deny the motion based on a weighing of the equities. Jackson v. FIE Corp., 302 F.3d 515, 524 (5th Cir. 2002). See also S.E.C. v. Internet Solutions for Business, Inc., 509 F.3d 1161, 1165 (9th Cir. 2007). “[T]he district court has no discretion--the judgment is either void or it is not. If the judgment is void, the district court must set it aside.” Id. (internal quotations omitted); Burrell v. Henderson, 434 F.3d 826, 831 (6th Cir. 2006) (“[D]enying a motion to vacate a void judgment is a per se abuse of discretion.”).

         B. Validity of ...


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