Suazo v. Bryant Properties 769 LLC

Background

Hector Suazo sued Bryant Properties 769 LLC, asserting claims primarily based on unpaid overtime wages for work performed between 2016 and 2019. The opinion states that Suazo lived in the building at issue and served as its superintendent from approximately March 2016 through September 2019.

Suazo served the summons and complaint on the company through the New York Secretary of State. He later mailed the company a notice warning that its answer was overdue and that he intended to seek a default judgment. The company did not respond. It also did not appear at a May 4, 2022 hearing on Suazo’s request for a default judgment.

After that hearing, the court entered a default judgment on Suazo’s claim for unpaid overtime under the Fair Labor Standards Act. The May 26, 2022 judgment awarded $152,850 in unpaid overtime damages, $7,857.66 in attorneys’ fees, and $506 in costs.

The motion to reopen the judgment

Bryant Properties moved under Federal Rule of Civil Procedure 60(b)(1) and 60(b)(6) to vacate, or set aside, the default judgment. Under Rule 60(b)(1), a court may grant relief for mistake, inadvertence, surprise, or excusable neglect. Under Rule 60(b)(6), a court may grant relief for another reason that justifies relief, but that provision generally requires extraordinary circumstances and cannot be used for grounds that properly fall under Rule 60(b)(1).

The company stated that its headquarters had effectively closed during the pandemic, that employees worked remotely, and that it did not monitor its mail. It also asserted that it mistakenly believed a pandemic-related moratorium covered new, non-urgent lawsuits. The company said it learned of the judgment in or around May 2023, after a new building manager investigated the building’s affairs. It filed the motion on August 23, 2023.

Court’s analysis

Judge Katherine Polk Failla first ruled that the Rule 60(b)(1) request was untimely. The motion was filed nearly one year and three months after the May 26, 2022 judgment. The court rejected the company’s argument that the one-year deadline should run from the later filing of an abstract of judgment. The court explained that an abstract is a copy or summary of a judgment that can create a lien; it does not replace the judgment or restart the deadline.

The court also ruled that the motion was not filed within a reasonable time. Even accepting the company’s account, employees returned to normal in-person operations in late 2022 or early 2023, yet the company waited roughly eight months, at most, before filing its motion after it could have discovered the relevant mail. The court found that this unexplained delay was unreasonable.

The court then explained that, even if the motion had been timely, the company had not shown excusable neglect. The applicable factors included the reason for the delay, the length and effect of the delay, prejudice to Suazo, and whether the company acted in good faith. The court treated the reason for the delay as the most important factor. It ruled that the pandemic did not justify failing to review mail for nearly two years, particularly because mail continued to be delivered and the company could have arranged for forwarding or another way to review it. The company’s return to in-person operations also made reviewing the mail within its control.

The court found that Suazo could face prejudice because the passage of time and the building’s disorganized business affairs could make discovery more difficult. It treated the length of the delay and good faith as neutral. Overall, the court ruled that Bryant Properties had not provided highly convincing evidence that its neglect was excusable.

The court also denied relief under Rule 60(b)(6). It ruled that the motion was untimely under Rule 60(c)’s reasonable-time requirement and that the company had not shown extraordinary circumstances. In the court’s view, the facts showed that the default resulted mainly from the company’s failure to attend to its mail and its disorganized affairs, rather than circumstances that justified relief under the catchall provision.

The court noted that Bryant Properties acknowledged that service through the New York Secretary of State was technically proper. The court also noted that Suazo had separately mailed the company notice of the lawsuit and his intention to seek a default judgment. Because the company did not establish a basis for reopening the judgment, the court did not reach the merits of the defenses it said it could assert.

Disposition

The court denied Bryant Properties 769 LLC’s motion to reopen the judgment. The Clerk of Court was directed to terminate the motions at docket numbers 32 and 33.