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Balfour Beatty Construction, LLC v. New Era Lending, LLC

United States District Court, M.D. Florida, Orlando Division

September 8, 2017

BALFOUR BEATTY CONSTRUCTION, LLC, Balfour,
v.
NEW ERA LENDING, LLC, et al., Defendants. Date Docket Entry

          ORDER

          THOMAS B. SMITH UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court on Balfour's Unopposed Motion for (A) Default Judgment and Permanent Injunction Against Certain Defendants and (B) Approval of Settlement Agreement Against Remaining Defendants (Doc. 233). Upon due consideration, the motion is granted.

         I. Background

         This case is before the Court on Plaintiff Balfour Beatty Construction, LLC's Second Amended Complaint, filed on January 20, 2017 (Docs. 87, 102). Balfour invokes this Court's jurisdiction pursuant to Federal Rule of Civil Procedure 22 and 28 U.S.C. § 1335 (Doc. 87). Balfour is the general contractor for the pool rehabilitation project (“Project”) at the Walt Disney World Polynesian Resort (Doc. 87 ¶ 31). It contracted with Defendant Lake Mechanical as a subcontractor (Id.). In turn, Lake Mechanical contracted with the subcontractors listed as Defendants in this case (Id.). Lake Mechanical failed to pay Defendants in full (Id.). Balfour is currently in possession of $102, 590.25 (the “Fund”), which is comprised of (a) $31, 469.41 for amounts invoiced by Lake Mechanical to Balfour and held in open payables; and (b) $71, 120.84 in retainage (Id.). Balfour filed this interpleader action for a judicial determination concerning ownership of the Fund (Id.).

         On January 27, 2017, Lapin Sheet Metal Company answered the Second Amended Complaint and filed a cross-claim for an equitable lien on $5, 662.50 in retainage and a cross-claim for breach of contract in the amount of $25, 069.69 (Doc. 101). On February 3, 2017, Defendant Stan Weaver and Co. answered and filed a cross-claim against all parties (Doc. 134). On February 6, 2017, Defendant Higgins Information Technologies, Inc. answered and filed a cross-claim against all Defendants (Docs. 161, 162). Defendant Trane U.S., Inc. answered the Second Amended Complaint on February 22, 2017 (Doc. 170). No other Defendants have responded to the Second Amended Complaint. Only Higgins Information and Stan Weaver responded to Lapin's cross-claim (Docs. 166, 171).

         Lapin Sheet Metal Company moved for the entry of default against all Defendants that had failed to respond to its crossclaim (Doc. 178). Later, Balfour moved for the entry of default against all Defendants who failed to respond to its Second Amended Complaint (Doc. 184). The Court granted in part and denied in part, both motions (Doc. 196). On April 13, 2017, pursuant to Fed.R.Civ.P. 55(a), the Clerk entered defaults against Defendants Robert Morrison as Assignee for the Benefit of Creditors of Lake Mechanical Contractors, Inc.; Petroleum Compliance Solutions, Inc; Unitherm, Inc.; New Era Lending, LLC; Hajoca Corporation; Orlando Winnelson Co.; Wright Express Financial Services Corporation; Tempaco, Inc.; Blacks Supply, Inc.; Holistic Test & Balance, Inc.; FCX Performance, Inc.; Ryan Herco Products Corp., Roberts Oxygen Company, Inc.; Andrews Filter and Supply Corporation; Moveable Container Storage, Inc.; Ace Staffing Unlmited, Inc.; and Hertz Equipment Rental Corporation (Docs. 197-213). On April 21, 2017, The Court granted Balfour's motion for default against Fastec Performance Warehouse, Inc. (Doc. 220). Hereafter, the defaulted Defendants are referred to collectively as the “Defaulting Defendants.” None of the Defaulting Defendants have moved to set aside the defaults or made any subsequent appearance in the case (Docket).

         Sunbelt Rentals, Inc., Bronson Ace Hardware, Inc., Johnstone Supply, Inc., and W.W. Grainger have all disclaimed any interest in the Fund (collectively, the “Disclaiming Defendants”) (Docs. 72, 74, 179, 180, 182, 185, 222). Balfour voluntarily dismissed its claim against Lysbeth United Refrigeration with prejudice (Docs. 183, 184, 186). And, Balfour has reached a settlement with Defendants Petroleum Compliance Solutions, Inc. n/k/a Procorr, Inc.; Higgins Information Technologies, Inc.; Lapin Sheet Metal Company; Trane U.S., Inc.; and Stan Weaver and Company (collectively, the “Settling Defendants”). Now, Balfour seeks the entry of final default judgment against the Defaulting Defendants, and approval of its settlement agreement with the Settling Defendants.

         II. Discussion

         A. Entry of Defaults

         As an initial matter, I find that the entry of defaults by the Clerk was proper. Court clerks are required to enter a defendant's default “[w]hen service of process is properly effected, but the served party fails to respond in a timely manner….” Kelly v. Florida, 233 F. App'x. 883, 885 (11th Cir. 2007) (citing Fed.R.Civ.P. 55(a)).

         Under the federal rules, a corporate defendant may be served by:

[D]elivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and-if the agent is one authorized by statute and the statute so requires-by also mailing a copy of each to the defendant[.]

Fed. R. Civ. P. 4(h)(1)(B). A corporate defendant may also be served by “following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made[.]” Fed.R.Civ.P. 4(h)(1)(A), 4(e)(1). Florida Statutes permit process to be served on a corporation by serving any one of the following persons: (a) the president, vice president or other corporate head; (b) the cashier, treasurer, secretary, or general manager; (c) any corporate director; (d) any officer or business agent residing in Florida; (e) or an agent designated by the corporation under Fla. Stat. 48.091.[2] See Fla. Stat. § 48.081. In Florida, the registered agent can be either an individual who resides in the state or another corporation authorized to conduct business in Florida. See Fla. Stat. § 607.0501(1)(b).

         If the address provided for the registered agent, officer, or director is a residence or private residence, “service on the corporation may be [made by] serving the registered agent, officer, or director in accordance with s. 48.031.” Fla. Stat. § 48.081(3)(b). Section 48.031, permits a process server to effect service on “any person residing therein who is 15 years of age or older ...” Fla. Stat. § 48.031(1)(a). When all other methods fail, section 48.081(3)(a) permits service on “any employee of the registered agent [even] during the first attempt at service . . . ” Once served with an original complaint, a defendant has 21 days within which to file a response. Fed.R.Civ.P. 12(a)(1)(A)(i). A defendant shall have 14 days to respond to the service of an amended complaint, plus an additional 3 days, if service is made by mail under Rule 5(b)(2)(C). See Fed.R.Civ.P. 15(a)(3).

         Robert Morrison was properly served as the assignee for the benefit of the creditors of Lake Mechanical Contractors, Inc. because he is an agent appointed by law to receive service of process on behalf the subcontractor's creditors. See In re: Lake Mechanical Contractors, Inc., Case No. 2016-CA-001382, in the Circuit Court for the Fifth Judicial Circuit in and for Lake County, Florida[3]; (Doc. 63 at 2); Fed.R.Civ.P. 4(h)(1)(B).

         Balfour's original complaint was properly served on the [individual and corporate] registered agents of the following Defendants:[4]

Entity

Date

Docket Entry

Petroleum Compliance Solutions, Inc. n/k/a Procorr, Inc. RA: John Marc Tamayo

12/19/16

123, 152, 257

Unitherm, Inc. RA: Charles Gorski

12/22/16

131, 159, 247

Hajoca Corporation d/b/a Hughes Supply, Inc. RA: Corporation Service Company (Kara Stover)

12/19/2016

112, 142

Orlando Winnelston Co. n/k/a Winsupply Orlando FL Co. RA: Corporation Service Company (Kara Stover)

12/19/2016

120, 121, 151

Entity

Date
Docket Entry

Petroleum Compliance Solutions, Inc. n/k/a Procorr, Inc.

RA: John Marc Tamayo

12/19/16
123, 152, 237

Unitherm, Inc. RA: Charles Gorski

12/22/16
131, 159, 247

Hajoca Corporation d/b/a Hughes Supply, Inc.

RA: Corporation Service Company (Kara Stover)

12/19/16
112, 142

Orlando Winnelston Co. n/k/a Winsupply Orlando FL Co.

RA: Corporation Service Company (Kara Stover)

12/19/16
120, 121, 151

Wright Express Financial Services Corporation n/k/a Wex Bank

RA: Corporation Service Company (Kara Stover)

12/19/16
132, 160, 246

Tempaco, Inc.

RA: Maria E. Robinson

12/16/16
128, 156

Blacks Supply, Inc. RA: Jason Black

12/20/16
107, 241

Holistic Test & Balance, Inc. RA: Nicholas Uffelman

12/22/16
145, 146

FCX Performance, Inc. a/k/a Solares Controls

RA: National Corporate Research, Ltd., Inc. (Ken Howell)

12/19/16
110, 242

Ryan Herco Products, Corp.

RA: C T Corporation System (Donna Moch)

12/15/16
125, 154, 239

Robert Oxygen Company, Inc.

RA: C T Corporation System (Donna Moch)

12/15/16
124, 153, 238

Andrews Filter and Supply Corporation RA: Mark Andrews

12/21/16
137, 236

Moveable Containers Storage, Inc.

RA: National Corporate Research, Ltd., Inc. (Ken Howell)

12/19/16
119, 150

Ace Staffing Unlimited, Inc. n/k/a Ace Staffing Unlimited Management, Inc

RA: Alexander Cvercko (employee, Barbara Law)[5]

12/22/16
136, 240

Hertz Equipment Rental Corporation n/k/a Here Rentals Inc.

RA: C T Corporation System (Donna Moch)

12/15/16
113, 143, 243

         Defendant New Era Lending LLC is a Delaware company, registered with the New York Department of State's Division of Corporations as a foreign limited liability company.[6] The return of service shows that the process server effected service on this Defendant by service on the New York Secretary of State by leaving two copies of the summons and complaint with Sue Zouky, authorized agent, in the secretary's office and by paying the statutory fee of $40 (Doc. 164). This form of service is effective in the state of New York, therefore, it is deemed proper here. See Fed.R.Civ.P. 4(h)(1)(A), 4(e)(1) (A plaintiff may also serve a defendant by “following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made[.]”); see also Perkins v. 686 Halsey Food Corp., 829 N.Y.S.2d 185, 186 (2007) (citing N.Y. Business Corporation Law § 306(b)(1) (McKinney 2017)); Shimel v. 5 S. Fulton Ave. Corp., 783 N.Y.S.2d 54, 55 (2004).

         Balfour's Second Amended Complaint was served on all defendants, by mail, between January 20, 2017 and January 31, 2017, in accordance with Fed.R.Civ.P. 5(b)(2)(C) (Doc. 184 at 2-3). Therefore, Defendants owed Balfour their responses to the Second Amended Complaint by the third week in February, 2017. All of the Defendants listed above failed to respond to Balfour's allegations and the entry of default against them was proper.

         B. Entry of Default Judgment

         A district court may enter a default judgment against a properly served defendant who fails to defend or otherwise appear if the factual allegations of the complaint, which are assumed to be true, provide a sufficient legal basis for entry of a default judgment. Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).[7]

         A court may enter a default judgment only if the factual allegations of the complaint, which are assumed to be true, provide a sufficient legal basis for entry of a default judgment. Id. In defaulting, a defendant “admits the plaintiff's well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established.” Id. "The defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law. In short, despite occasional statements to the contrary, a ...


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