United States District Court, D. South Carolina, Florence Division
PATRICK MOXHET, ANTHONY JOHNSON, DANNY JOHNSON and JAMES KEITT, Plaintiffs,
TELSTAR CABLE COMMUNICATIONS, INC., and DAWN COLLINS and JAMES COLLINS, Individually, Defendants
For Patrick Moxhet, On Behalf of Himself and All Others Similarly Situated, Anthony Johnson, On Behalf of Himself and All Others Similarly Situated, Danny Johnson, On Behalf of Himself and All Others Similarly Situated, James Keitt, On Behalf of Himself and All Others Similarly Situated, Plaintiffs: Johnny Gardner, LEAD ATTORNEY, Gardner Law Firm, Conway, SC; Todd R Ellis, LEAD ATTORNEY, Todd Ellis Law Office, Irmo, SC; William James Luse, LEAD ATTORNEY, William J Luse Law Office, Myrtle Beach, SC.
James Collins, Individually, Defendant, Pro se, Surfside Beach, SC.
Dawn H Collins, Individually, Defendant, Pro se, Surfside Beach, SC.
REPORT AND RECOMMENDATION
Kaymani D. West, United States Magistrate Judge.
This matter is before the court on the motion of Defendant Telstar Cable Communications, Inc. (" Telstar") to set aside the court's entry of default against it. ECF No. 75; see also ECF No. 80. Plaintiffs submitted an opposition to the Motion, ECF No. 83, to which Telstar replied, ECF No. 86. The undersigned conducted a hearing on the motion on November 19, 2014. Having considered the parties' filings and argument of counsel at the hearing, the undersigned recommends Telstar's Motion for Relief from Entry of Default be granted and that this matter proceed on the merits as to Telstar and officers of Telstar--Defendants Dawn Collins and James Collins (collectively, the Collins Defendants).
I. Factual Background
Plaintiffs Patrick Moxhet, Anthony Johnson, Danny Johnson, and James Keitt brought this action against Telstar and the Collins Defendants as a purported Collective Action to recover unpaid wages under the Fair Labor Standards Act (" FLSA"). Am. Compl., ECF No. 8. The named Plaintiffs purport to bring this on behalf of " themselves and all others similarly situated, " and the Amended Complaint identifies the " Class Members" as " all of Defendants' current and former piece rate paid cable technicians, regardless of their classification as employee or independent contractor, who worked more than forty (40) hours in a workweek throughout United States during the three-year period before the filing of the Complaint." Am. Compl. ¶ 9. Appended to the Amended Complaint are consent forms signed by the named Plaintiffs, indicating their consent to be a plaintiff in this action.
Defendant Telstar and the Collins Defendants, all represented by the same counsel, appeared and filed an answer to Plaintiff's Amended Complaint denying many of Plaintiffs' allegations and setting out several affirmative defenses. ECF No. 12. Telstar became unable to pay its counsel's legal fees, and counsel sought to be relieved from representing Defendants. ECF No. 22; see Affidavit of James Collins ¶ 3, ECF No. 80-3. The court granted counsel's motion to be relieved, and gave Defendants 45 days to obtain new legal counsel. ECF No. 25. During this time, all Defendants sought an extension of discovery deadlines. ECF No. 28.
No new counsel appeared for Defendants within that 45-day period, and the undersigned advised all Defendants that Telstar, as a corporate defendant, could not represent itself, nor could a pro se individual represent it. ECF No. 36. The Collins Defendants, as individuals, were permitted to represent themselves pro se. Id. No counsel appeared for Telstar and, after giving additional time for Telstar to obtain counsel, the undersigned recommended default be entered as to Defendant Telstar. ECF No. 43. No objections were filed to that recommendation, and the court ordered the Clerk of Court to enter default against Defendant Telstar. ECF No. 52. The Clerk's entry of default as to Defendant Telstar was docketed on June 16, 2014. ECF No. 54. The court then conducted a status conference to discuss scheduling matters on July 21, 2014. Counsel appeared for Plaintiffs and, although the Collins Defendants were sent notice of the conference, they did not appear. Accordingly, the court instructed the Clerk of Court to contact the Collins Defendants by telephone. Defendant James Collins participated in the status conference, at which time a scheduling order was discussed--particularly regarding additional discovery and a damages hearing. Collins did not reference the entry of default as to Telstar and indicated that he did not understand that he was to appear at the status conference.
Subsequent to this status conference, the court issued a scheduling order instructing the parties to file any motions related to the entry of default as to Defendant Telstar no later than August 22, 2014. ECF No. 70. Plaintiffs filed a " Motion and Request for Damages Hearing Against Telstar Cable Communications, Inc." on August 21, 2014. ECF No. 72. The following day, counsel appeared for Telstar and filed the Motion to Set Aside Default now under consideration. ECF No. 75.
II. Applicable Law
The court may set aside an entry of default pursuant to Rule 55(c) of the Federal Rules of Civil Procedure on a showing of good cause. The rule should be construed liberally " to provide relief from the onerous consequences of defaults and default judgments." Lolatchy v. Arthur Murray, Inc., 816 F.2d 951, 954 (4th Cir. 1987) (quoting Tolson v. Hodge, 411 F.2d 123, 130 (4th Cir. 1969)). In Colleton Preparatory Academy, Inc. v. Hoover Universal, Inc., 616 F.3d 413, 417 (4th Cir. 2010), the Court of Appeals for the Fourth Circuit noted that it has " repeatedly expressed a strong preference that, as a general matter, defaults be avoided and that claims and defenses be disposed of on their merits." The primary factors to consider when reviewing a motion to set aside default under Rule 55(c) are prejudice to the non-moving party and whether the defendant has a meritorious defense. Cent. Operating Co. v. Utility Workers of Am., AFL-CIO, 491 F.2d 245 (4th Cir. 1974). A meritorious defense is shown when the moving party makes a presentation or proffer of evidence which, if believed, would permit the court to find for the defaulting party. Moradi, 673 F.2d 725. The court may ...