Weingeist v. Tropix Media and Entertainment

Background

Rachel Weingeist brought claims for unpaid wages and overtime under the Fair Labor Standards Act (FLSA), along with related state-law claims, against Tropix Media & Entertainment, Tropix Holdings LLC, Tropix, Inc., Mario Baeza, Taymí Cespedes, Javier Rodriguez, and Tania Milan. The court later referred to Tropix, Inc. doing business as Tropix Media and Entertainment as “Tropix.” The court entered a default judgment for Weingeist on November 5, 2020, awarding $78,899.63.

Baeza, Tropix Holdings LLC, and Tropix, Inc. doing business as Tropix Media & Entertainment—the “Defaulting Defendants”—moved under Federal Rules of Civil Procedure 55(c) and 60(b) to vacate the default judgment. They argued primarily that service of process was improper. They also submitted a proposed answer and materials supporting defenses, including Baeza’s statement that Weingeist worked as a consultant rather than an employee.

Service of Process

The summonses for all defendants were left with a security guard or doorman at Baeza’s Fort Lee, New Jersey apartment building. Under Federal Rule of Civil Procedure 4(e), an individual may be served personally, at a dwelling with a suitable person who resides there, or through an authorized agent. The court found that personal service and service through an authorized agent had not occurred. It also found uncertainty about whether a building doorman satisfied the requirement that the recipient reside at the defendant’s dwelling.

The court considered New Jersey law because the papers were left in New Jersey. It assumed, for purposes of the motion, that the Fort Lee apartment qualified as Baeza’s dwelling or usual place of abode. But the court could not determine whether the doorman was a competent household member residing there, as required by New Jersey’s service rule. Because the record did not show that the doorman transmitted the papers to Baeza promptly, the court concluded that Weingeist had not carried her burden of showing proper service on the individual defendants.

The court separately considered service on the corporate defendants through the New York Secretary of State. It found that Weingeist had submitted facially valid affidavits of service and that service on the corporate defendants appeared proper under New York law. The court therefore distinguished the uncertain service on the individual defendants from the apparently proper service on the corporate defendants.

The court also rejected Weingeist’s argument that service on Wilder Knight, an attorney, through email, telephone, or text message was sufficient. Whether Knight represented Baeza and the corporate defendants was disputed, Knight had not entered an appearance in the action, and Weingeist had not obtained a court order authorizing alternative service. The court therefore could not conclude that service through Knight was proper.

Reasons for Vacating the Judgment

Under Rule 60(b)(4), a judgment is void when the court lacked personal jurisdiction because service was not properly made. The court stated that a void judgment must be set aside. It also considered the separate factors used for relief from a default judgment under Rules 60(b)(1) and 60(b)(6): whether the default was willful, whether the defendants had a potentially valid defense, and whether vacating the judgment would prejudice Weingeist.

The court found that the record did not show deliberate or egregious conduct by the Defaulting Defendants. Although they waited from November 2020 until June 2021 to seek relief, the court concluded that the delay did not rise to the level of willfulness. The court also noted that the early COVID-19 pandemic may have contributed to the default.

The Defaulting Defendants showed a potentially valid defense. Baeza stated that Weingeist was a consultant, not an employee, and supplied an earnings statement showing payment through IRS Form 1099-MISC to “Perera & Company.” Because the FLSA claims would depend in part on whether Weingeist was an employee or an independent contractor, the court found that the defendants had presented a colorable defense rather than merely conclusory denials.

The court found no sufficient prejudice to Weingeist from vacating the judgment. The passage of time, litigation costs, and attorney fees were not enough. The court also noted that Weingeist had not taken action to collect the default judgment between November 2020 and June 2021.

Disposition

The court granted the motion to vacate the default judgment. Baeza and the corporate defendants were directed to answer by April 21, 2022. Because service on Cespedes, Rodriguez, and Milan was also not clearly proper, Weingeist was directed to submit a status report concerning her action against them by the same date. The Clerk of Court was directed to terminate the motion.