Rosenbaum v. Seybold

Decision Date23 May 2013
Docket NumberCAUSE NO.: 1:06-CV-352-TLS
PartiesTHOMAS ROSENBAUM, et al., Plaintiffs, v. CHAD SEYBOLD, et al., Defendants.
CourtU.S. District Court — Northern District of Indiana
OPINION AND ORDER

This matter is before the Court on the Plaintiffs' Request for Entry of Default Judgment as to the Pending Default Entries [ECF No. 501], filed on March 19, 2013. In the opening paragraph of this submission, the Plaintiffs assert that they "move to correct error and for reconsideration of this Court's Opinion and Order issued February 20, 2013, (ECF 489)." This introduction is not consistent with the title of the submission or with the six numbered paragraphs that follow the introduction. The Plaintiffs then repeat the request in closing, where they ask that the Court's Opinion and Order of February 20, 2013, be "vacated in part and modified in part such that the entry Prior Judgment be rendered a final judgment without it being nunc pro tunc." (Request 2, ECF No. 501.) This request for relief, which is the same request that the Plaintiffs have pending through a separate motion filed on March 4, which they titled "Plaintiffs' Motion to Correct Error, and Reconsider Regarding the Order of February 20, 2013 (ECF 489) and, Accordingly, the Finality of that Certain Final Judgment Issued August 30, 2011 (ECF 465 and 466)" [ECF No. 493], does not align with the title of docket entry 501 or its text. Because the Local Rules for the Northern District of Indiana require that motions "be filed separately," N.D. Ind. L.R. 7-1, because the Plaintiffs do not support the request to correct errorand for reconsideration in the text of docket entry 501, and because the Plaintiffs already have this same request pending in a different submission, the Court limits this Opinion and Order to a consideration of the requests for the entry of default and default judgment.

ANALYSIS
A. See What, LLC

In paragraph 3 of the Plaintiffs' Request, they address the status of Defendant See What, LLC. They assert that See What, LLC, was served on March 25, 2008, and request an entry of default by the Clerk for Defendant See What, LLC's failure to defend. The Plaintiffs cite docket entry 287 as proof of service. Docket entry 287 is a Verification of Service that was filed on March 25, 2008, in which Attorney Jeffrey A. Schreiber affirms that he accepted service of the Fourth Amended Complaint on August 3, 2008 (presumably, a typographical error), on behalf of See What, LLC, and other entities. Attorney Schreiber did not represent See What, LLC, at the time and never entered an appearance on behalf of See What, LLC. In an Opinion and Order issued on February 20, 2013, the Court noted that See What, LLC, had never been served with the Complaint. The Court then gave the Plaintiffs notice pursuant to Rule 4(m) that it would dismiss this action without prejudice against See What, LLC, unless the Plaintiffs showed good cause for the failure to timely complete process. The Plaintiffs have not made this showing.

Proof of service "must be by the server's affidavit." Fed. R. Civ. P. 4(l). The only "proof of service the Plaintiffs offer is the Verification of Attorney Schreiber. However, Attorney Schreiber was not the process server. The Plaintiffs, despite opportunity to do so, have not shown that they timely completed process. As this action has been pending against See What,LLC, for more than one hundred twenty days (indeed, for more than six years) with a failure to complete process, the Plaintiffs' request for entry of default is denied and the action against See What, LLC, is dismissed without prejudice pursuant to Rule 4(m) of the Federal Rules of Civil Procedure.

B. Seytron Properties, LLC

Paragraph 4 of the Plaintiffs' Request is directed to Defendant Seytron Properties, LLC. The Plaintiffs, citing docket entry 11, advise that Seytron Properties, LLC, was served on October 26, 2006. The Court, in its Opinion and Order of February 20, addressed the service of the original pleading that was memorialized in docket entry 11:

Seytron Properties, LLC, was served with the original Complaint [ECF No. 11]. There is no evidence on the docket that it was served with subsequent versions of the Complaint, despite the Magistrate Judge's directive to effectuate service of the Third Amended Complaint. The certificate of service for the Fourth Amended Complaint indicates that service was accomplished through the Court's electronic filing system. However, none of the parties who received electronic notice were counsel of record for Seytron Properties, LLC.1 It was not clear that Seytron Properties, LLC, had defaulted in connection with earlier complaints. (See Joint Mot. for Entry of Findings and J., ECF No. 55 (including Seytron Properties, LLC, as one of parties filing the joint stipulation).) Accordingly, the Plaintiffs were required to serve them with a copy of the Fourth Amended Complaint. See Fed. R. Civ. P. 5(a)(1)(B) (identifying "a pleading filed after the original complaint" as a paper that must be served on every party); Fed. R. Civ. P. 5(a)(2) (providing exception to service requirement for a party who is in default for failing to appear).

(2-20-13 Opinion & Order 13, ECF No 489.) The Court then advised that, due to "the uncertainty regarding service on Seytron Properties, LLC," it would "give the Plaintiffs anopportunity to effectuate service of the Fourth Amended Complaint on Seytron Properties, LLC, or submit the required proof of service for the Fourth Amended Complaint." (Id. 13-14.) The Court advised the Plaintiffs that if service was not completed, proof of service provided, or good cause shown for the failure to effectuate service, the Court would dismiss Seytron Properties, LLC, without prejudice.

Instead of completing service of the Fourth Amended Complaint or providing good cause for the failure to effectuate service, the Plaintiffs now request the entry of default by citing to the same docket entry pertaining only to service of the original complaint, which the Court has already determined is insufficient to establish default. Accordingly, because this action has been pending against Seytron Properties, LLC, for more than one hundred twenty days with a failure to complete process, the Plaintiffs' request for entry of default is denied and the action against Seytron Properties, LLC, is dismissed without prejudice pursuant to Rule 4(m) of the Federal Rules of Civil Procedure.

C. Seytron, L.L.C.

In paragraph 5 of the Plaintiffs' Request, they state that Seytron, L.L.C., a party that the Court previously identified as never being served with the pleading in this cause, "should be dismissed." The Court finds that the action against Seytron, L.L.C., is dismissed without prejudice pursuant to Rule 4(m) of the Federal Rules of Civil Procedure because this action has been pending for more than one hundred twenty days with a failure to complete process.

D. BPOE, LLC, Best Place on Earth, Seycad, LLC, Seycad Construction, LLC, Seytron Construction, LLC, Impact Financial, LLC, Impact Financial Group, LLC, and Gary L. Nunley

The Plaintiffs request a hearing on damages with respect to defaulted parties so that default judgment may be entered against them. By way of background, they note the Clerk's Entry of Default against BPOE, LLC, Best Place on Earth, Seycad, LLC, Seycad Construction, LLC, Seytron Construction, LLC, Impact Financial, LLC, and Impact Financial Group, LLC, [ECF No. 303], and against Gary L. Nunley [ECF No. 491].

The Court, in consideration of whether to enter default judgment under Federal Rule of Civil Procedure 55(b)(2), must exercise discretion. O'Brien v. R.J. O'Brien & Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir. 1993) (citing Merrill Lynch Mortg. Corp. v. Narayan, 908 F.2d 246, 250 (7th Cir. 1990)). The Court's discretion is guided by a series of threshold considerations intended to assess the propriety of a default judgment. Factors to consider include: (1) the amount of money potentially involved; (2) whether material issues of fact or issues of substantial public importance are present; (3) whether the default is largely technical; (4) whether the plaintiff has been substantially prejudiced by the delay involved; (5) whether the grounds for default are clearly established or are in doubt; (6) the merits of the plaintiff's substantive claim; and (7) the sufficiency of the complaint. 10A C. Wright, A. Miller, M. Kane, R. Marcus & A. Steinman, Federal Practice and Procedure: Civil § 2685 (3d ed.); 3-25 J. Moore et al., Moore's Manual—Federal Practice and Procedure § 25.102; see also Cameron v. Myers, 569 F. Supp. 2d 762, 764 (N.D. Ind. 2008).

The Court finds that there are issues surrounding several of the factors that impact the Court's discretion. First, the grounds for the entry of default are in doubt. Although summonseswere returned executed as to BPOE, LLC [ECF No. 7], Best Place on Earth [ECF No. 6], Seycad, LLC [ECF No. 8], and Seytron Construction, LLC [ECF No. 9] with respect to the original Complaint, these entities were not in default when the Plaintiffs filed their Amended Complaint just a few days later on November 6, 2006. The Plaintiffs then filed a Second Amended Complaint on November 16, 2006. Likewise, Nunley, who was served with the original Complaint on November 1, 2006 [ECF No. 19], was not in default when the Plaintiffs amended their pleadings.

Summons were returned executed for Impact Financial, LLC [ECF No. 46], Impact Financial Group, LLC [ECF No. 48], and Seycad Construction, LLC [ECF No. 47] on December 7, 2006. The summonses for these entities were first issued on November 14, 2006, a date that is after the date the Plaintiffs filed their Amended Complaint but before they filed the Second Amended Complaint. The dates of the filing of the Amended Complaint and issuance of summonses suggest that these summonses were issued and returned in connection with the Amended Complaint.

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