Pena v. NY1 Transmissions Inc.

Background

Ivan Pena sued NY1 Transmissions Inc. and Motke Barnes for alleged violations of the Fair Labor Standards Act and the New York Labor Law. Pena requested certificates of default, stating that NY1 had been served through the New York Secretary of State and that Barnes had been personally served, but that neither defendant had appeared or answered. The Clerk issued certificates of default on December 14, 2023.

On April 20, 2024, counsel appeared for the defendants and filed a memorandum asking the court to deny Pena’s motion for a default judgment. A default judgment is a judgment entered when a party fails to defend the case, but the court emphasized that such judgments are generally disfavored because courts prefer to resolve disputes on their merits.

Court’s Standard

The court stated that, when deciding whether to enter a default judgment, courts consider whether the default was deliberate, whether denying the motion would prejudice the plaintiff, and whether the defaulting parties may have potentially valid defenses. When there is doubt about whether a default should be entered or vacated, that doubt generally favors the defaulting party.

Order

The court directed the parties to discuss whether they intended to file a joint stipulation—an agreement submitted to the court—asking to vacate the certificates of default. By June 1, 2024, the parties had to file either the proposed joint stipulation or a joint letter stating each party’s position. The court also stated that it would refer the matter to mediation by separate order.

The show-cause hearing scheduled for July 16, 2024, was adjourned without setting a new date. Judge Torres did not grant or deny Pena’s motion for a default judgment in this order.