United States District Court, N.D. Texas, Dallas Division
PEYMAN FAZELI, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
DALLAS MTV, LLC f/k/a MANAGEMENT TEAM VALET, LLC d/b/a RP VALET, et al., Defendants.
MEMORANDUM OPINION AND ORDER
J. BOYLE, UNITED STATES DISTRICT JUDGE
the Court is Plaintiff's Motion for Entry of Default
Judgment (Doc. 25), Defendant Reza Saleh's Motion to
Dismiss Under Rules 12(b)(5) and 12(b)(6) (Doc. 28), and
Plaintiff's Motion for Leave to File Second Amended
Complaint (Doc. 44). For the following reasons, the Court
SETS ASIDE the clerk's entry of default against Saleh,
DENIES Plaintiff's Motion for Default Judgment and
Saleh's Motion to Dismiss, and GRANTS Plaintiff's
Motion for Leave.
March 17, 2016, Plaintiff filed suit against 13 Defendants,
both corporate and individual, under the Fair Labor Standards
Act, 29 U.S.C. §§ 201 et seq., for unpaid
tip credit and overtime compensation. See Doc. 1,
Compl. On June 15, 2017, Plaintiff filed his Motion to Extend
Time for Service and to Serve Via Substituted Service of
Process. Doc. 6. The Court granted in part and denied in part
that Motion. Doc. 7, Order. Specifically, the Court granted
an additional 30 days to serve all Defendants and substitute
service on the corporate Defendants. Id. But the
Court denied Plaintiff's request for substitute service
on the individual Defendants. Id.
July, 18, 2017, Plaintiff, yet to have served a single
Defendant, filed his second Motion to Extend Time for Service
and to Serve Via Substituted Service of Process (Doc. 8).
Once more, the Court granted in part and denied in part his
request. See Doc. 9, Order. This time, the Court
granted Plaintiff until August 18, 2016, an additional 30
days, to serve Defendants. Id. But the Court again
denied Plaintiff's request for substitute service, this
time as to all Defendants because Plaintiff sought to serve
them through the Texas Secretary of State or publication in a
served five of the 13 Defendants, including Saleh,
the Court's August 18 deadline. Doc. 23, Order to Show
Cause. On October 21, 2016, Plaintiff requested and the clerk
issued an entry of default against Saleh and Defendant Dallas
MTV, LLC. See Docs. 21, Request for Clerk's
Entry of Default; 22, Clerk's Entry of Default.
November 28, 2016, some eight months after Plaintiff filed
his suit, the Court issued an Order to Show Cause (Doc. 23)
directing Plaintiff, no later than December 6, 2016, to: (1)
serve those Defendants who had not been served; (2) request
entry of default on the three Defendants other than Saleh and
Dallas MTV who had been served or otherwise explain why he
had not requested entry of default; and (3) move for default
judgment against Saleh and Dallas MTV or otherwise explain
why he had not. In response, Plaintiff voluntarily dismissed
his claims against the unserved Defendants and moved for
default judgment against Saleh and Dallas MTV, but took no
action as to the three remaining Defendants who had been
served. Docs. 24, Notice of Voluntary Dismissal of Certain
Defs.; Doc. 25, Pl.'s Mot. Entry Def. J. Accordingly, the
Court dismissed Plaintiff's claims against those three.
Doc. 26, Order.
Saleh nor Dallas MTV responded to Plaintiff's Motion for
Entry of Default Judgment. But each moved to dismiss
Plaintiff's respective claims against them in early
January, some four-and-a-half months after they were
purportedly served and a month after Plaintiff moved for
default judgment. Docs. 27, Dallas MTV's Mot. Dismiss;
28, Saleh's Mot. Dismiss. Plaintiff, in turn, voluntarily
dismissed his claims against Dallas MTV. Doc. 33, Notice of
the foregoing procedural twists and turns, Saleh is the only
Defendant remaining in the case. Plaintiff has responded to
his Motion to Dismiss. Doc. 42, Pl.'s Resp. to Def.'s
Mot. Dismiss & Alternative Mot. for Leave [hereinafter
Pl.'s Resp.]. And as referenced, Saleh failed to respond
to Plaintiff's Motion for Entry of Default Judgment.
Accordingly, both Motions at issue are ripe for the
SETTING ASIDE DEFAULT
mentioned above, Saleh filed a Motion to Dismiss after
default was entered against him. He failed, however, to move
to set aside the clerk's entry of default. That said,
“[w]hen a defendant files a pleading subsequent to an
entry of default, a court may construe it as a motion to set
aside the default. Moreover, a court may set aside an entry
of default sua sponte.” Flores v.
Koster, No. 3:11-cv-0726-M-BH, 2012 WL 6928017, at *1
(N.D. Tex. Dec. 28, 2012) (internal citations omitted).
Federal Rule of Civil Procedure 55(c), a court “may set
aside an entry of default for good cause.” Fed.R.Civ.P.
55(c). Good cause “is not susceptible of a precise
definition, and no fixed, rigid standard can anticipate all
of the situations that may occasion the failure of a party to
answer a complaint timely.” In re Dierschke,
975 F.2d 181, 183 (5th Cir. 1992). That is why the
“good cause” standard is liberally construed.
Effjohn Int'l Cruise Holdings, Inc. v. A&L Sales,
Inc., 346 F.3d 552, 563 (5th Cir. 2003).
determine whether a defendant has shown good cause for a Rule
55(c) motion, a court should consider the following factors:
(1) whether the default was willful; (2) whether the
plaintiff would be prejudiced; and (3) whether the defendant
presents a meritorious defense. Dierschke, 975 F.2d
at 184. The court need not consider all of these factors.
CJC Holdings, Inc. v. Wright & Lato, Inc., 979
F.2d 60, 64 (5th Cir. 1992). What's more, “[t]hese
factors are nonexclusive; another factor often considered by
courts is whether the party acted promptly to correct the
default.” Flores, 2012 WL 6928017, at *2
(citing Effjohn, 346 F.3d at 563). Ultimately,
“‘[t]he decision to set aside a default decree
lies within the sound discretion of the district
court.'” Id. (quoting United States v.
One Parcel of Real Prop., 763 F.2d 181, 183 (5th
Court favors resolving actions on the merits and therefore
will resolve any doubts in favor of Saleh. See Lacy v.
Sitel Corp., 227 F.3d 290, 292 (5th Cir. 2000)
(observing that “federal courts should not be agnostic
with respect to the entry of default judgments which are
‘generally disfavored in the law'”) (internal
citation omitted); Gen. Tel. Corp. v. Gen. Tel. Answering
Serv., 277 F.2d 919, 921 (5th Cir. 1960) (“where
there are no intervening equities any doubt should, as a
general proposition, be resolved in favor of the movant to
the end of securing a trial upon the merits”).