King v. Regen Medical Management, LLC
- Alison Nathan
- 1:20-cv-06050
- U.S. District Court · Southern District of New York
- 9
In King v. Regen Medical Management, Judge Nathan set aside Regen’s defaults, administratively denied King’s default-judgment motion as moot, and denied oral argument.
The ruling benefits Regen Medical Management, LLC, and Regen Medical, P.C., by allowing them to defend against King’s claims instead of remaining in default. It leaves King’s claims to be litigated rather than decided through a default judgment.
What happened
In King v. Regen Medical Management, LLC, Rosie-Alice King alleged that the Regen defendants violated federal and New York wage laws by failing to pay minimum and overtime wages. After the Clerk entered defaults against two Regen defendants, King requested a default judgment, and Regen asked the court to set aside the defaults.
Judge Nathan considered whether Regen’s failure to respond was willful, whether Regen had potentially valid defenses, and whether setting aside the defaults would unfairly harm King. The court found little evidence of prejudice, concluded that Regen’s conduct was negligent but not willful, and found that Regen had identified potentially valid defenses, including that King may have been exempt from some wage-law requirements.
Judge Alison J. Nathan granted Regen’s motion to set aside the defaults. She administratively denied King’s motion for default judgment as moot and denied Regen’s request for oral argument.
The detailed version
- King v. Regen Medical Management, LLC · No. 1:20-cv-06050
- Alison Nathan
- Sept. 7, 2021
Background
Rosie-Alice King brought this employment case against Regen Medical Management, LLC, Regen Medical, P.C., Steven Victor, and Anna Rhodes. King alleged that the defendants violated federal and New York wage laws during her employment, including by failing to pay minimum and overtime wages.
The Clerk entered defaults against Regen Medical Management, LLC, and Regen Medical, P.C. King then moved for a default judgment. Regen appeared through counsel, filed an answer, and cross-moved under Rule 55(c) of the Federal Rules of Civil Procedure to set aside the defaults.
Legal standard
A default is an entry against a party that failed to plead or otherwise defend the case. Under Rule 55(c), a court may set aside an entry of default for “good cause.” Courts consider three factors: whether the default was willful, whether the defendant has a potentially meritorious defense, and whether setting aside the default would prejudice the party that obtained the default. The court also noted the strong preference for resolving disputes on their merits.
Court’s analysis
The court found little evidence that setting aside the defaults would prejudice King. King argued that Regen’s statements about whether one entity remained operational suggested possible lost evidence, discovery problems, or fraud. The court found those concerns speculative. Regen had appeared and answered relatively soon after the defaults, the parties had continued litigating and engaging in discovery, and King would still have an opportunity to pursue the case on its merits.
The court concluded that Regen’s default was not willful, although the issue was close. Regen claimed it did not receive service sent through the New York Secretary of State because it had recently changed its address. The court found that Regen had arranged for mail forwarding, that there was no evidence it knew the address was incorrect or deliberately avoided service, and that it acted diligently after Victor and Rhodes received service. The court described Regen’s conduct as negligent but not willful.
The court also found that Regen had identified potentially meritorious defenses. In particular, Regen argued that King may have qualified for an exemption from federal and New York wage requirements because of her administrative or learned-professional role. Regen also disputed King’s allegations about overtime work, required breaks, time records, and termination. The court did not decide whether these defenses would ultimately succeed; it found only that at least one could completely defeat one of King’s claims if proven.
Ruling
Judge Alison J. Nathan granted Defendants’ motion to set aside Regen’s default. The court administratively denied King’s motion for default judgment as moot and denied Regen’s request for oral argument. The order resolved docket numbers 33, 55, and 64.
Read the full 9-page opinion on CourtListener, the free public archive maintained by the Free Law Project.