Opinion
96-CV-2190 (ILG)
September 17, 2001
Melvin Ladner, Staten Island, New York, pro se.
Clare Hogenauer, Esq., New York, New York, Attorney for Defendant.
MEMORANDUM ORDER
SUMMARY
Defendant Bruce Hogenauer ("Hogenauer" or "defendant") moves pursuant to Fed.R.Civ.P. 60(b) to vacate a default judgment entered against him and defendant Proportional Count Associates, Inc. ("Proportional") on April 22, 1999. Hogenauer also seeks to dismiss the Complaint for failure of proper service, and on the grounds of collateral estoppel. For the reasons stated below, defendant's motions are granted.
BACKGROUND
This action arises out of ballot irregularities that took place during the 1993 New York City Community School Board elections. Plaintiffs in this action, Melvin Ladner ("Ladner") and Timothy Carl, are two unsuccessful candidates in those elections. In 1994, plaintiffs brought suit in this district against the City of New York and various New York City agencies pursuant to 42 U.S.C. § 1983 and 1985 alleging violations of their rights under the Fourteenth Amendment ("the 1994 action"). Ladner v. City of New York, 20 F. Supp.2d 509 (E.D.N.Y. 1998). The defendants in the 1994 action brought a third-party suit against Proportional Counts Associates, Inc., who had been contracted by the Board of Elections to count the ballots.
The parties do not dispute that Proportional Counts Associates, Inc., named as a third party defendant in the 1994 action, is the same entity as Proportional Count Associates, Inc. named in the present action.
In 1996, plaintiffs brought a separate suit in this district against Proportional and Hogenauer, an employee of Proportional who was the Staten Island Count Director for the 1993 School Board elections. That action was assigned to these chambers ("the present action"). Defendant Proportional filed an Answer, but Hogenauer did not. There is, however, no record of service of process on either defendant.
In 1998, Judge Gershon granted defendants' motion for summary judgment in the 1994 action, and the Complaint was dismissed. On May 19, 1999, default judgment was granted in the present action against both defendants for a total of $76 million and the case was closed. On May 11, 2000, Hogenauer brought this motion to vacate that default judgment.
Defendant claims neither he, nor his attorney, knew anything about the present action until long after the default judgment was entered. Since 1995, Hogenauer has been continuously institutionalized at the Kirby Psychiatric Center on Ward's Island in New York, and has had no other residence since that time. (See Laiken Aff.)
Plaintiff Ladner's purported service on defendant took place at 321 W. 88th Street, an address that Ladner believed was proper for service based on deposition testimony of defendant in the 1994 action. The current resident at that address has submitted an affidavit which states that: (1) she has lived at that address since 1965; (2) defendant has never resided at that address; and (3) she has on occasion received mail for defendant at that address. (See Sarlande Aff.)
DISCUSSION
I. Vacating the Default Judgment
Defendant moves to vacate the default judgment pursuant to Fed.R.Civ.P. 60(b)(1), which provides that a court may relieve the moving party from a final judgment if the judgment was obtained because of "mistake, inadvertence, surprise, or excusable neglect." In deciding whether to vacate a default judgment the court must consider: (1) whether the default was willful; (2) whether defendant has a meritorious defense; and (3) the level of prejudice to the plaintiff if the default is set aside. See Davis v. Musler, 713 F.2d 907, 915 (2d Cir. 1983). "Default judgment is an extreme sanction, and motions to vacate are generally granted liberally." Aini v. C. Kenneth Imports, Inc., No. 92 CV 6043, 1996 WL 148453, at *2 (E.D.N.Y. March 15, 1996). The court resolves doubts in the movant's favor so that the case may be resolved, if possible, on the merits. Id.; Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95-96 (2d Cir. 1993).
A. Willfulness
There is no evidence that defendant received actual notice of the Complaint and defendant has moved expeditiously since first becoming aware of the default judgment. Therefore, it cannot be said that the default of defendant was willful.
B. Meritorious Defense
To set aside a default, the movant must present a defense demonstrating "that if relief is granted the outcome of the suit may be different than if the entry of default or the default judgment is allowed to stand. . . Otherwise, the defaulting party may be held to admit all the factual allegations of the complaint." In re Martin-Trigona, 763 F.2d 503, 505 n. 2 (2d Cir. 1985) (per curiam) (citations omitted). While it is not necessary to establish the validity of the defense conclusively, Davis, 713 F.2d at 916, the moving party "must support its general denials with some underlying facts." Sony Corp. v. Elm State Elec., Inc., 800 F.2d 317, 320-21 (2d Cir. 1986).
All of plaintiff's allegations in the present case have been previously adjudicated in the 1994 action and were found to be without merit. Ladner v. City of New York, 20 F. Supp.2d 509 (E.D.N.Y. 1998), aff'd, 181 F.3d 83 (2d Cir.), cert. denied, 120 S.Ct. 502 (1999). As discussed more fully below, defendant clearly has a meritorious defense to the present action.
C. Prejudice
Delay alone is insufficient to establish prejudice; instead plaintiff must show that delay will "result in the loss of evidence, create increased difficulties of discovery, or provide greater opportunity for fraud and collusion." Davis, 713 F.2d at 916 (citation omitted). Plaintiff will not suffer any prejudice from the delay caused by the vacating of the default judgment. Therefore, defendant's motion to vacate the default judgment is granted.
II. Service of Process
Rule 12(b)(5) of the Fed.R.Civ.P. provides that a defendant may move to dismiss the complaint for "insufficiency of service of process." Rule 4(m) states that "if service of a summons and complaint is not made upon a defendant within 120 days after the filing of the complaint, the court . . . shall dismiss the action without prejudice as to that defendant or direct that service be effected within a specified time; provided that if plaintiff shows good cause for the failure, the court shall extend the time of service for an appropriate period."
Courts have held that the fact that plaintiff is proceeding pro se does not excuse him from properly serving the defendants. Morrison v. New York State Division for Youth Children, No. 98 Civ. 643, 2000 WL 532762, at *3 (N.D.N.Y. April 25, 2000) (citing Systems Signs Supplies v. United States Department of Justice, 903 F.2d 1011, 1013 (5th Cir. 1990)). However, when dismissing a pro se plaintiff's complaint for improper service will result in a statute of limitations bar to the renewal of his claim (as would be the case here), courts have excused improper service and considered the allegations of the complaint. Id.
In an apparent effort to refute Hogenauer's assertion that he was never served with the Complaint, Ladner states that a process server tried to "subpoena Mr. Hogenauer at 16 west 74th street P.H." but that the female behind the door at that address would not allow him in, and that phone calls made to that address were similarly unsuccessful. (Opp'n Papers to the Mot. to Vacate the Default J., at 2) The process server form Lander submits in support of his assertion is from an April 1997 attempt to subpoena Hogenauer for a deposition in the 1994 action, and therefore has no bearing or relevance to the issue of service in the present action.
17 West 74th Street P.H. is the address of Clare Hogenauer, Bruce Hogenauer's attorney and sister.
Rules 3 and 4 of the Federal Rules of Civil Procedure, taken together, provide for the tolling of the statute of limitations upon the filing of a complaint as long as the defendant is served within the following 120-day period unless the court extends the 120-day period, which the Court is permitted to do nunc pro tunc. See Dunson v. Rosen, No. 96 Civ. 6785, 1998 WL 3351, at *2 (S.D.N.Y. Jan. 5, 1998); Mason Tenders Dist. Council Pension Fund v. Messera, No. 95 Civ. 9341, 1997 WL 221200, at *5 (S.D.N.Y. April 1, 1997).
Considering that the statute of limitations would bar a refiled action, if plaintiff made diligent efforts to serve defendant at the address it had for him, this might be an appropriate case for extending the time for service nunc pro tunc. However, permitting plaintiff time to serve defendant would be futile given that the present action is barred based on collateral estoppel.
III. Collateral Estoppel
Collateral estoppel, known also as "issue preclusion," "prevents the parties' relitigation of an issue that was (a) raised, (b) litigated, and (c) actually decided by a judgment in their prior proceeding." Prime Management Co. v. Steinegger, 904 F.2d 811, 816 (2d Cir. 1990). To be bound by a prior judgment, a party in the subsequent litigation must have been a party to or a privity in the prior action; otherwise, it would be a violation of due process to enforce the prior judgment against that party. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 n. 7, 99 S.Ct. 645, 649 n. 7, 58 L.Ed.2d 552 (1979).
The relationship between Proportional and Hogenauer was that of principal and agent, or master and servant. Ladner v. City of New York, 20 F. Supp.2d 509, 512 (E.D.N Y 1998). In such situations when the complaining party has been given a full opportunity to litigate against one of the parties, and has been defeated on grounds other than a personal defense, he is not permitted to relitigate the same issue in a new action against the other. See Fairchild, Arabatzis Smith, Inc. v. Prometco (Produce Metals) Co., 470 F. Supp. 610, 617 n. 9 (S.D.N Y 1979); Citibank, N.A. v. Data Lease Financial Corp., 904 F.2d 1498, 1502 (11th Cir. 1990). Where the relationship between two parties is analogous to that of principal and agent, the rule is that a judgment in favor of either, in an action brought by a third party, rendered upon a ground equally applicable to both, should be accepted as conclusive against the plaintiff's right of action against the other, or as to any issues decided in the prior action. See id.
The issues to be decided in this case are exactly the same as those in the 1994 action. The plaintiffs are the same. Proportional who is a defendant in the present case was a third-party defendant in the 1994 action. Although Hogenauer was not a defendant in the 1994 action, it is his actions as an employee of Proportional, when he was the Staten Island Count Director for the 1993 School Board elections, that are alleged to have caused plaintiffs' damage. Ladner and Carl brought the 1994 action pursuant to 42 U.S.C. § 1983 and 1985(3) alleging violations of the Due Process and Equal Protection Clauses of the Fourteenth Amendment. See Ladner, 20 F. Supp.2d 509, 510. In the present action, Ladner and Carl allege violations of their "civil rights" and "constitutional rights" as well as the Due Process and Equal Protection Clauses. (See, e.g., Compl. ¶¶ 15, 21, 28) The malfeasance alleged in the 1994 action consisted of the following election irregularities: "missing" ballot boxes, altered ballots, the counting of sample ballots cast by voters, ballot boxes stuffed with "identical" ballots, the destruction of ballot stubs and Ladner's protest sheet, and the casting of ballots by dead individuals.See Ladner, 20 F. Supp.2d at 512-514. These same election irregularities are alleged in the present Complaint. (See Compl. ¶¶ 8-10, 12, 19, 22-23) Finally, the issues raised by plaintiff were litigated and actually decided by Judge Gershon in a thorough memorandum and order dated September 14, 1998, in which that Court granted summary judgment in favor of defendants and against the plaintiffs. See Ladner, 20 F. Supp.2d 509. As such, the present action is barred by collateral estoppel. See Haitian Ctrs. Council, Inc. v. McNary, 969 F.2d 1350, 1355 (2d Cir. 1992), rev'd on other grounds sub nom., Sale v. Haitian Ctrs. Council, Inc., 509 U.S. 155, 113 S.Ct. 2549, 125 L.Ed.2d 128 (1993).
CONCLUSION
For the reasons stated above, defendant's motions to vacate the default judgment and to dismiss the complaint are granted.