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Voyles v. Superior Staffing LLC

United States District Court, W.D. Louisiana, Lafayette Division

December 3, 2019

WILLIAM VOYLES
v.
SUPERIOR STAFFING LLC ET AL

          SUMMERHAYS, JUDGE.

          MEMORANDUM RULING

          PATRICK J. HANNA, UNITED STATES MAGISTRATE JUDGE.

         Before the Court is the Motion to Set Aside Default filed by Defendants, Superior Staffing, LLC, Superior Disaster Relief, LLC, and Scott Butaud (Rec. Doc. 24). Plaintiffs opposed. (Rec. Doc. 28). The Court conducted an evidentiary on November 14, 2019. Plaintiffs filed a Post-Hearing Brief, (Rec. Doc. 41), to which Defendants responded (Rec. Doc. 42). For the following reasons, the Motion is GRANTED, and the default entered against Defendants is hereby set aside.

         I. Facts and Procedural History

         Plaintiffs filed this lawsuit on October 30, 2018 against their employer for alleged Fair Labor Standard Act violations. (Rec. Doc. 1). Plaintiffs served Defendants on December 1, 2018. (Rec. Doc. 4, 5, 6). Plaintiffs' counsel was in contact with Mr. Butaud (CEO of Superior Staffing and Superior Disaster, referred to collectively as “Superior”) via email between December 2018 and June 2019 regarding production of Plaintiff's payroll records and employee files. (Rec. Doc. 28-1). Plaintiffs' counsel's email correspondence to Mr. Butaud includes a request to answer the pending lawsuit on March 12, and June 21, 2019. (Rec. Doc. 28-1, p. 4). Plaintiff's counsel's emails to Mr. Butaud do not specifically indicate that a default will be entered against Defendants. (Rec. Doc. 28-1, p. 4). Mr. Butaud is not a lawyer. (Rec. Doc. 40, p. 15).

         When Defendants did not timely file an answer, Plaintiffs moved for default on August 17, 2019, and the Clerk entered same on August 19, 2019. (Rec. Doc. 20 and 21). Although the Clerk sent notice of the entry of default to Defendants, the mail was twice returned as undelivered. (Rec. Doc. 22 and 23). Mr. Butaud testified at the November 14, 2019 evidentiary hearing that he did not receive notice of the entry of default. (Rec. Doc. 40, p. 34). Defendants filed the instant Motion to Set Aside Default on September 27, 2019. (Rec. Doc. 24).

         Mr. Butaud testified that he and the Superior CFO worked with the Puerto Rico Department of Labor (“DOL”) over several months to resolve Plaintiffs' FLSA complaints. (Rec. Doc. 40, p. 10-11. See also Rec. Doc. 24-1, p. 3). According to the Motion to Set Aside Default, on January 30, 2019, the Superior CFO provided documents to the DOL in response to Plaintiffs' complaints. (Rec. Doc. 24-1, referencing 24-2). Mr. Butaud testified that they received no further response from the DOL and thus believed the matter to have been resolved. (Rec. Doc. 40, p. 11-13).

         Defendants contended in the Motion to Set Aside Default that they received no further response from Plaintiffs' counsel after having apparently satisfied the DOL's inquiry. (Rec. Doc. 24-1, p.3). Nevertheless, Mr. Butaud admitted at the hearing to having corresponded with Plaintiff's counsel by email and telephone. (Rec. Doc. 40, p. 14; 16-18). He testified that his understanding was that once the DOL issue was apparently resolved, per his correspondence with a DOL representative in Puerto Rico, he assumed that the lawsuit was likewise resolved. (Rec. Doc. 40, p. 14-19). The Motion to Set Aside Default, filed on behalf of Mr. Butaud, states that he had no knowledge of this suit or default until their counsel discovered the suit while preparing to defend Defendants in an unrelated matter, and that they immediately filed the instant Motion to Set Aside. (Rec. Doc. 28-1, p. 4-5). Mr. Butaud admitted at the hearing to having reviewed and approved the Motion to Set Aside for filing. (Rec. Doc. 40, p. 27-28). He did not recall his previous interactions with Plaintiffs' counsel until seeing the emails attached to Plaintiffs' Opposition. (Rec. Doc. 40, p. 18; 29). Nonetheless, he admitted that he was aware of the lawsuit at the time the Motion to Set Aside was filed, but that he assumed it was resolved, based on his interactions with the DOL. He was not aware of the default. (Rec. Doc. 40, p. 14-15; 34).

         II. Law and Analysis

         F.R.C.P. Rule 55 governs default judgments and states that the court may set aside an entry of default for good cause. Rule 55(c). The Fifth Circuit set forth the general standard applicable to setting aside the entry of default as follows:

[F]ederal courts should not be agnostic with respect to the entry of default judgments, which are “generally disfavored in the law” and thus “should not be granted on the claim, without more, that the defendant had failed to meet a procedural time requirement.” Thus, “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.”
To determine whether good cause to set aside a default exists-a “decision necessarily ... informed by equitable principles”-“we have found it useful to consider three factors ... [:] whether the default was willful, whether setting it aside would prejudice the adversary, and whether a meritorious defense is presented.” Other factors may also be considered, including whether “the defendant acted expeditiously to correct the default.”

Lacy v. Sitel Corp., 227 F.3d 290, 292 (5th Cir. 2000) (Citations omitted.)

         Although a motion to set aside a default decree under Fed.R.Civ.P. 55(c) is somewhat analogous to a motion to set aside a judgment under Fed.R.Civ.P. 60(b), the standard for setting aside a default decree is less rigorous than setting aside a judgment for excusable ...


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