CELERITECH INTERNATIONAL CORP v. SUPERSTAR HOLDINGS INC (2024)

ORDER DENYING DEFENDANT'S MOTION TO REOPEN

THIS MATTER comes before the Court on Defendant Superstar Holdings Inc.’s Motion to Set Aside Final Default Judgment ¹ (DE 21) (the “Motion”), filed July 25, 2024. The Court has also considered Plaintiff's Response (DE 27) filed August 1, 2024, as well as Defendant's Reply (DE 29), filed August 2, 2024. This matter is ripe for review.

I. BACKGROUND

On March 4, 2024, Plaintiff filed its Complaint against Defendant Superstar Holdings, Inc. alleging breach of contract and demanding $450,000 in damages. DE 1. On March 5, 2024, the Clerk of the Court issued a summons as to Defendant. DE 6. Thereafter, Plaintiff filed an affidavit and return of service on the docket indicating that Plaintiff served Defendant by means of corporate service on March 7, 2024, by delivering a copy of the Summons and Complaint to Isaiah Ross, an office assistant of Defendant's registered agent's office. DE 7. Pursuant to Federal Rule of Civil Procedure 12, Defendant had until March 28, 2024, to respond to Plaintiff's Complaint. However, Defendant did not file an Answer or other response to the Complaint by that date. Thus, on March 29, 2024, Plaintiff filed a Motion for Clerk's Entry of Default (DE 8), which was granted the same day (DE 9).

Plaintiff then moved for Final Default Judgment against Defendant. DE 10. On May 31, 2024, the Court granted the Motion for Default Judgment, entered Final Default Judgment, and awarded $495,944.85 in favor of Plaintiff. DEs 12, 13. Thereafter, on July 16, 2024, Plaintiff filed its Motion/Application for Writ of Garnishment on Wells Fargo Bank, N.A. DE 16. The Clerk issued the Writ of Garnishment the next day. DE 17. Garnishee Wells Fargo filed its Answer to Plaintiff's Writ of Garnishment on July 25, 2024, delineating the accounts which may be subject to the Writ of Garnishment. DE 18. The Answer disclosed three accounts, and Wells Fargo indicated that it would set aside a specific amount held in each account. DE 18 at 2–3.

Also on July 25, 2024, Defendant's counsel filed a notice of appearance (DE 20) and filed the present Motion arguing that the Court should set aside default and reopen this case because Defendant was never served with process and Defendant has meritorious defenses to Plaintiff's Complaint (DE 21). Thereafter, on July 29, 2024, Defendant filed its Emergency Motion to Stay Writ of Garnishment. DE 25. As a result of the Emergency Motion, the Court entered its Order Setting Expedited Briefing on that Motion. DE 26. Then, on August 7, 2024, the Court entered its Order Granting the Emergency Motion and staying writs of garnishment until the resolution of the present Motion.

II. LEGAL STANDARD

“Rule 60(b) ‘is an extraordinary remedy, which may be invoked only upon a showing of exceptional circumstances.’ ” Tucker v. Commonwealth Land Title Ins. Co., 800 F.2d 1054, 1056 (11th Cir. 1986) (quoting Griffin v. Swim-Tech Corp., 722 F.2d 677, 680 (11th Cir. 1984)). Relief from a final order pursuant to Rule 60(b) of the Federal Rules of Civil Procedure is appropriate on the basis of:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud ․ misrepresentation, or other misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged; it is based on the earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.

Fed. R. Civ. P. 60(b). “Rule 60(b) ‘strikes a delicate balance’ between the court's obligation to do substantial justice and the ‘sanctity of final judgments.’ ” Bainbridge v. Governor of Florida, 75 F.4th 1326, 1335 (11th Cir. 2023) (quoting Griffin, 722 F.2d at 680). Under Rule 60(b), district courts are vested “with the power ‘to vacate judgments whenever such action is appropriate to accomplish justice.’ ” Griffin, 722 F.2d at 680 (quoting Greater Baton Rouge Golf Ass'n v. Recreation & Park Comm'n., 507 F.2d 227, 228–29 (5th Cir. 1975)). Rule 60(b) motions “are directed to the sound discretion of the district court.” Id.

III. DISCUSSION

Defendant moves to set aside the final default judgment entered in Plaintiff's favor under Rule 60(b)(1), (3), (4), and (6). As explained below, the Court finds that Defendant is not entitled to the relief sought because service of process was properly effectuated thus foreclosing Defendant's Rule 60(b)(4) argument, Defendant has failed to provide a meritorious defense that would entitle it to relief under Rule 60(b)(1), Defendant fails to demonstrate any “extraordinary circumstances” justifying relief under Rule 60(b)(6), and Defendant's Rule 60(b)(3) argument is improperly raised.

A. The Judgment is not void due to insufficient service of process, therefore Defendant is not entitled to relief under Rule 60(b)(4).

The Court addresses the Rule 60(b)(4) argument first because if the default judgment is deemed void, Defendant's arguments under Rule 60(b)(1), Rule 60(b)(3), and Rule 60(b)(6) are moot. Defendant argues that under Rule 60(b)(4) the default judgment must be vacated because service of process in this case was improper under Rule 4(h)(1)(B). Mot. at 3–4. Specifically, Defendant argues Plaintiff's failure to mail a copy of the Complaint and Summons to Defendant's principal address renders service void. Id. In response, Plaintiff argues that service was proper because Plaintiff was not required to mail a copy of the Complaint and Summons to Defendant. Resp. at 7. Moreover, Plaintiff argues that service was properly effectuated under both Florida and Wyoming state law, and thus service in this case was compliant with the dictates of Rule 4. Id. at 5–9. In reply, Defendant argues that the office assistant that accepted service in this case, Isaiah Ross, was unauthorized to do so under Rule 4 because Isaiah Ross is not “an officer or managing agent of Defendant's registered agent.” Reply at 14–15.² Particularly, Defendant argues that under Rule 4(h)(1)(B), Plaintiff was required to effectuate service of process upon an officer, managing agent or general agent of Defendant's registered agent, not of Defendant. Id. at 16–17. Defendant also argues that under Rule 4(d), Plaintiff had a duty to request a waiver of service from Defendant. Id. at 15–16.

“Generally, where service of process is insufficient, the court has no power to render judgment and the judgment is void.” In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1299 (11th Cir. 2003) (citing Varnes v. Local 91, Glass Bottle Blowers Ass'n, 674 F.2d 1365, 1368 (11th Cir. 1982)) (citation omitted). Specifically, Rule 60(b)(4) provides that “[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding [if] ․ (4) the judgment is void[.]” Fed. R. Civ. P. 60(b)(4). “Generally, a judgment is void under Rule 60(b)(4) if the court that rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process of law.” Burke v. Smith, 252 F.3d 1260, 1263 (11th Cir. 2001) (citation and internal quotations omitted). “When evaluating a Rule 60(b)(4) motion, the district court possesses no discretion: the judgment is either void or it is not.” Rismed Oncology Sys., Inc. v. Baron, 638 F. App'x 800, 805 (11th Cir. 2015) (citation and quotations omitted). Importantly, “[t]he burden of proof in a Rule 60(b)(4) motion rests with the defendant.” In re Worldwide Web Sys., Inc., 328 F.3d at 1298–99 (citation omitted). The Court finds that Defendant has failed to carry its burden and Defendant was properly served.

Rule 4(h) commands that a corporation within a judicial district of the United States must be served

(A) in the manner prescribed by Rule 4(e)(1) for serving an individual; or ․ (B) by delivering 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)(A)–(B). Rule 4(e)(1) states that an individual within a judicial district of the United States may be served “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(e)(1). Thus, Plaintiff was required to either (i) deliver a copy of the complaint and summons to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process (Fed. R. Civ. P. 4(h)(1)(B)), or (ii) comply with Florida or Wyoming law governing service of process (Fed. R. Civ. P. 4(h)(1)(A)); Fed R. Civ. P. 4(e)(1).

i. Service under the Federal Rules

Service was proper under Rule 4(h)(1)(B). Under the Federal Rules of Civil Procedure, service on a corporation will be deemed proper where the plaintiff delivers a copy of the complaint and summons 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) (emphasis added).

The Return of Service Affidavit shows that service was to be effectuated upon Superstar Holdings, Inc. C/O R.A: Corporation Service Company, 1821 Logan Ave., Cheyenne, WY 82001. DE 7. The Return of Service Affidavit reflects that Defendant was served on March 7, 2024, through corporate service on Isaiah Ross, an “office Asst.” of Defendant's registered agent's office. Id. Plaintiff attached to its Response a copy of the Wyoming Secretary of State's website that lists Defendant as a Wyoming incorporated corporation. DE 27, Ex. A at 1. The Wyoming Secretary of State's website indicates that Defendant's registered agent is Corporation Service Company, with its address at 1821 Logan Ave, Cheyenne, Wyoming 82001. The undersigned takes judicial notice of the Wyoming Secretary of State's website as it is a public record. See American Marine Tech, Inc. v. World Group Yachting, Inc., 418 F.Supp.3d 1075, 1082 (S.D. Fla. 2019) (citations omitted) (taking judicial notice of corporate records available on Florida's Department of State website).

Importantly, though Defendant argues Isaiah Ross was unauthorized to accept service of process, Defendant has failed to proffer any evidence in support. Defendant's conclusory assertion is not entitled to any weight in the absence of fact explaining how Defendant derives this conclusion. As an employee of Defendant's registered agent, a fact which Defendant appears to concede, Isaiah Ross was authorized to accept service. See Ariza v. Chocomere LLC, No. 6:24-cv-452-PGB-EJK, 2024 WL 1929507, at *1 (M.D. Fla. May 2, 2024) (finding that service on an employee of defendant's registered agent that was a corporation was sufficient to meet the dictates of Rule 4(h)(1)(B)). Lastly, Plaintiff was not required to mail a copy of the Complaint and Summons to Defendant's principal address under the Wyoming statute regarding service of process because the Wyoming statute requires mailing in only limited circumstances, none of which apply in this case. See infra § III(a)(ii).

Defendant's second argument under the Federal Rules is also incorrect. Defendant argues that service was improper because Plaintiff failed to comply with Rule 4(d). Mot. at 3; Reply at 16. Defendant's reliance on Rule 4(d) is misplaced. Rule 4(d) specifically states that it is the defendant to be served that “has a duty to avoid unnecessary expenses” when a plaintiff is seeking to serve a defendant with process. Fed. R. Civ. P. 4(d). Moreover, Rule 4(d) continues, stating that “the plaintiff may notify such a defendant ․ and request that the defendant waive service of a summons.” Rule 4(d) (emphasis added). Nothing contained within Rule(d) mandates that Plaintiff should have sought a waiver of service from Defendant. Thus, because Defendant was subject to service under Rule 4(e), (f), or (h), it was Defendant's duty to avoid unnecessary expenses Plaintiff would have incurred had Plaintiff requested a waiver of service. No such waiver was ever requested in this case.

ii. Service under the Wyoming Rules

Service in this case was effectuated in Wyoming, and thus will be held to be valid so long as Plaintiff complied with Wyoming law. Fed. R. Civ. P. 4(e)(1). Wyoming Statute § 17-28-104 governs service of process on corporations via service in the state of Wyoming. The statute states in pertinent part:

(a) A business entity's registered agent, or the natural person having an agency relationship with the registered agent provided in W.S. 17–28–101(a), shall accept service of process, notice, or demand required or permitted by law that is served on the entity.

(b) ․

(c) A business entity may be served as provided in this section or as provided in the Wyoming Rules of Civil Procedure.

Wyo. Stat. § 17–28–104.

Defendant was properly served under Wyoming's Rules of Civil Procedure. Under Wyoming's Rules of Civil Procedure, service upon a corporation within the United States shall be made “by delivery of copies to any officer, manager, general agent, or agent for process[.]” Wyo. R. Civ. P. 4(h)(2)(A). As has been established, Plaintiff served a copy of the Complaint and Summons on Corporation Services Company, Defendant's registered agent by delivering a copy of the Complaint and Summons to Isaiah Ross. DE 7; See also supra pg. 7–8. Defendant has not proffered any facts or evidence to establish that Corporation Service Company was not authorized to accept service on its behalf or that Isaiah Ross lacked authority to receive service of process. Thus, service was also proper under Wyoming's Rules of Civil Procedure.

Defendant also contends that Isaiah Ross was not an authorized individual under the Wyoming Rules of Civil Procedure to accept service of process. Reply at 18. Principally, Defendant contends that “[t]here is no pretense that Mr. Ross was an officer, manager, general agent, or agent for service of process.” Id. Defendant relies on this argument to state that Plaintiff was thus required under the Wyoming Rules of Civil Procedure to mail a copy of the Complaint and Summons to the Defendant. Id. Plaintiff argued in its Response that Wyo. Stat. § 17-28-104(b) only requires mailing a copy of the complaint and summons to a defendant when the defendant does not have a registered agent. Resp. at 8. The Court agrees. Nothing contained within Wyo. Stat. § 17–28–104 states that Plaintiff was required to mail Defendant a copy of the summons and complaint after having served Defendant's registered agent. Rather, Wyoming law only requires such action if a corporation does not have a registered agent. See Wyo. Stat. § 17-28-104(b). Defendant also fails to factually support its conclusory assertion that Isaiah Ross was unauthorized to accept service on behalf of Corporation Service Company. Therefore, the Court finds that service was proper under Wyoming law and as a result, declines to analyze whether service would be proper under the Florida service of process statute.

B. Defendant is not entitled to relief from Final Default Judgment under Rule 60(b)(1) because it cannot establish mistake, inadvertence, surprise, or excusable neglect.

Having failed to show that the judgment is void, and now relying upon Fed. R. Civ. P. 60(b)(1) instead, Defendant seeks to demonstrate that final default judgment should be vacated because of mistake, inadvertence, surprise and/or excusable neglect. Defendant has failed to establish relief is warranted under Rule 60(b)(1). Mot. at 5. A defaulting party who seeks relief under Rule 60(b)(1) must show that “(1) it had a meritorious defense that might have affected the outcome; (2) granting the motion would not result in prejudice to the non-defaulting party; and (3) a good reason existed for failing to reply to the complaint.” In re Worldwide Web Sys., Inc., 328 F.3d at 1295. “The determination of whether a party meets this test is an equitable one, taking into account all three factors and the totality of the circumstances.” S.E.C. v. Pitters, 09-20957-CIV-EGT, 2011 WL 4527811 at *3 (S.D. Fla. Sept. 28, 2011) (citing Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 934–36 (11th Cir. 2007)).

The excusable neglect inquiry is “an equitable one” with “four factors pertinent to the analysis: ‘the danger of prejudice to the [opposing party], the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith.’ ” Coniglio v. Bank of Am., NA, 638 F. App'x 972, 974–75 (11th Cir. 2016) (alteration in original) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993)). “[E]xcusable neglect encompasses situations of negligence within the defaulting party's control” and the prejudice prong of the analysis is of “primary importance.” Id. at 975 (citing Pioneer, 507 U.S. at 388, 394, 397–99, 113 S.Ct. 1489).

i. Defendant Lacks a Meritorious Defense

Defendant argues in its Motion that it has meritorious defenses to Plaintiff's Complaint. Mot at 5. To establish “a meritorious defense that might have affected the outcome,” the moving party “must make an affirmative showing of a defense.” In re Worldwide Web Systems, Inc., 328 F.3d at 1296–97. A party moving under Rule 60(b)(1) must establish a meritorious defense “by a clear and definite recitation of the facts.” Gibbs v. Air Canada, 810 F.2d 1529, 1538 (11th Cir. 1987). “A general denial of the plaintiff's claims contained in an answer or another pleading is not sufficient.” S.E.C. v. Simmons, 241 F. App'x 660, 664 (11th Cir. 2007).

Defendant asserts that it has a meritorious defense to Plaintiff's Complaint as established in its proposed Answer and Affirmative Defenses (the “Proposed Answer”). Mot. at 5. Defendant attached a copy of its Proposed Answer to its Motion. See Id. at Ex. F. The Proposed Answer sets forth six affirmative defenses, which state in their entirety:

(1) Plaintiff fails to state a claim upon which relief can be granted against Defendant;

(2) Plaintiff is barred from obtaining the relief sought in the Complaint by the doctrines of estoppel, waiver, unclean hands, laches, or other equitable doctrines;

(3) Plaintiff's claims are barred in whole or in part because Plaintiff has failed to mitigate its alleged damages, if any;

(4) Plaintiff has waived any and all claims, rights and demands made in the Complaint;

(5) Plaintiff's claims may be barred because Defendant at all times complied in good faith with all applicable statutes and regulations;

(6) Defendant specifically denies that it acted with any willfulness, oppression, or malice towards Plaintiff.

Id. Ex. F. at 4.

In Response, Plaintiff argues that Defendant has not asserted any meritorious defense that would justify vacating the final default judgment. See Resp. at 9–12. Plaintiff continues, arguing that none of Defendant's proposed affirmative defenses are supported by facts which would alter the result of the default judgment against Defendant. Id. at 10. In all, Plaintiff argues that Defendant's proposed affirmative defenses are boilerplate legal conclusions amounting to a shotgun pleading. Id. at 10–11. In reply, Defendant expounds upon the proposed affirmative defenses in the Proposed Answer. Reply at 2. Specifically, Defendant argues that the Consulting Services Agreement (“CSA”) attached to Plaintiff's Complaint “is inchoate in that it does not include a specification of services to be provided in an attached Exhibit A—there is no such exhibit to the [CSA] and, to Defendant's knowledge, none exists.” Id. at 2. In other words, Defendant states it has a meritorious defense because the CSA was “incomplete” as the Parties never completed Exhibit A to the CSA. Id. at 7. Lastly, Defendant goes on to argue that Plaintiff will be unable to prove that there was a meeting of the minds under the CSA or a valid definition as to the scope of services Plaintiff was to provide under the CSA. Id. at 8.

As an initial matter, Defendants arguments in its Reply regarding the existence of meritorious defenses are inappropriate. Pursuant to Local Rule 7.1(c)(1), a reply memorandum is “strictly limited to rebuttal of matters raised in the memorandum in opposition without reargument of matters covered in the movant's initial memorandum of law.” S.D. Fla. Local Rule 7.1(c)(1). As such “[a] reply memorandum may not raise new arguments or evidence, particularly where the evidence was available when the underlying motion was filed and the movant was aware (or should have been aware) of the necessity of the evidence.” Baltzer v. Midland Credit Mgmt., Inc., No. 14-20140-CIV, 2014 WL 3845449, at *1 (S.D. Fla. Aug. 5, 2014) (citations omitted). “While raising new arguments on reply is generally inappropriate, reply evidence ‘may contain facts not previously mentioned in the opening brief, as long as the facts rebut elements of the opposition memorandum and do not raise wholly new factual issues.’ ” Lage v. Ocwen Loan Servicing, LLC, 145 F. Supp. 3d 1172, 1181 (S.D. Fla. 2015) (citing Giglio Sub s.n.c. v. Carnival Corp., No. 12-21680-CIV, 2012 WL 4477504, at *2 (S.D. Fla. Sept. 26, 2012) aff'd, 523 Fed.Appx. 651 (11th Cir. 2013)).

Here, Defendant argues for the first time in reply that no Exhibit A to the CSA was attached to Plaintiff's Complaint, because none exists, and thus no contract was ever formed between the parties. Reply at 7–8. But Defendant is not entitled to relief on this basis. Defendant attached the declaration of Alvaro Wong to its Reply. Reply at Ex. 1. Therein, Mr. Wong declares “[w]ith regards to the CSA document that was signed I can confirm that there is no exhibit A that was ever prepared, much less signed.” Id. ¶ 5. Additionally, Defendant also attached a declaration of Mr. Wong to its initial motion. Mot. at Ex. B. In that declaration, Mr. Wong mentions nothing about the CSA's proposed Exhibit A. See id. Rather, Mr. Wong's declaration in the initial motion only speaks to the alleged ineffective service of process in the case. Id. The same can be said of the declarations of Mr. Tejune Kang, and Ms. Eunice Hendrickson, which are also attached to Defendant's Motion. See Mot. at Exs. A, C. Certainly, that there was no Exhibit A to the CSA attached to Plaintiff's Complaint was information that was available when Defendant made its Motion. However, Defendant failed to raise this argument in its Motion. Also, Plaintiff's response makes no mention of an Exhibit A to the CSA.

Importantly, none of the meritorious defense arguments contained in Defendants reply rebut elements of Plaintiff's Response. Rather, Defendant's argument is being presented for the first time as an additional ground to grant the relief it requests in its initial motion. That is categorically improper. See Herring v. Secretary, Dep't of Corrections, 397 F.3d 1338, 1342 (11th Cir. 2005) (“As we have repeatedly admonished, arguments raised for the first time in a reply brief are not properly before a reviewing court.”); Foley v. Wells Fargo Bank, N.A., 849 F. Supp. 2d 1345, 1349 (S.D. Fla. 2012) (“Because it is improper for Defendant to raise this new argument in its Reply brief, the argument will not be considered.”). Defendant should have raised these arguments, along with the requisite supporting facts, in its initial Motion. Thus, the Court will not consider Defendant's arguments regarding the defense of lack of contract formation.

Furthermore, even if the alleged meritorious defenses had been properly raised, the Court also agrees with Plaintiff and finds that Defendant fails to properly assert a meritorious defense. Principally, Defendant has failed to specifically allege or otherwise explain simple facts regarding any of the “meritorious defenses” in either its Motion or its Proposed Answer. The affirmative defenses are in fact, not affirmative defenses, but conclusions, presented “at the highest order of abstraction.” Valdez, 328 F.3d at 1296.

Additionally, nothing contained in the Proposed Answer delineates a likelihood of success as to any one of Defendant's “meritorious defenses.” At best, Defendant's Proposed Answer contains six general denials of Plaintiff's allegations. That is simply not enough to warrant relief under Rule 60(b)(1). See Rolyn Companies, Inc. v. R & J Sales of Texas, Inc., 2008-cv-61618-CMA, 2009 WL 10667734, at *3 (S.D. Fla. July 30, 2009) (“Attaching a series of conclusory defenses without explaining how any would be successful is not enough” to make the required showing of having meritorious defenses). As such, Defendant has failed to demonstrate that it has meritorious defenses under Rule 60(b)(1).

ii. Defendant Fails to Establish a Good Reason for the Default

The next inquiry relevant to the excusable neglect analysis under Rule 60(b)(1) is whether the defaulting party has shown that “a good reason existed for failing to reply to the complaint.” Florida Physician's Ins. Co., Inc. v. Ehlers, 8 F.3d 780, 783 (11th Cir. 1993). As to the third element of the Rule 60(b)(1) analysis, “ ‘a technical error or a slight mistake’ by a party's attorney should not deprive the party of an opportunity to present the merits of his claim.” Ehlers, 8 F.3d at 783 (citing Blois v. Friday, 612 F.2d 938, 940 (5th Cir. 1980) (per curiam)).

Defendant argues that it failed to respond to the Complaint in a timely manner because “no proper service was made and as a result [Defendant] was unaware and unable to respond to the Complaint.” Mot. at 2. As evidence of this, Defendant attached the affidavits of Tejune Kang, Alvaro Wong, and Eunice Hendrickson to its Motion. Id. at Ex. 1–3. Tejune Kang, Defendant's founder and CEO, declared in his affidavit that “I was never served any notice of this lawsuit nor ever received any notice of this lawsuit.” Id. Ex. 1 at 1. Furthermore, Kang declared that Alvaro Wong, Eunice Hendrickson, or the employees in the New York office were never served or received notice of this suit. Id.

Alvaro Wong declared in his affidavit that “I have never received any correspondence of service for the lawsuit between [Plaintiff] and [Defendant].” Id. Ex. 2 at 1. Mr. Wong additionally stated that he questioned his staff in the Defendant's Florida office and confirmed that the Florida office did not receive any correspondence regarding this suit. Id. Lastly, Eunice Hendrickson states in her affidavit that she never received correspondence of service for this suit. Id. Ex. 3 at 2. Hendrickson continues, stating “I logged into our portal with the CSC the company that opened our corporation in Wyoming to verify if they have received any documents, correspondence or service for the lawsuit referenced. The portal shows all correspondence and services they received on our behalf and there are no documents from Celeritech ever received.” Id.

Defendant states that this case should be reopened under Rule 60(b)(1), and the final default judgment vacated, because the default judgment was a “surprise.” Id. at 5. Although Defendant insists upon lack of service of process as being the cause of the surprise, I have already resolved that issue. The question here is whether, notwithstanding that service was proper, whether Defendant has set forth a good reason for failing to respond to the Complaint. If Defendant in fact had no actual notice of the case due to some problem with communication with its registered agent, then I can consider that in determining whether Defendant has met the standard of excusable neglect.

In response, Plaintiff does not raise any argument specific to Defendant's reason for default. Rather, Plaintiff relies on the sufficiency of service of process. Resp. at 5–9. The Court has already found that service of process was properly effectuated in this case. In reply, Defendant does not provide the Court with any further argument as to “good reason” for failing to respond to the Complaint.

Thus, Defendant has not shown a “good reason” for failing to respond to the Complaint. This is because of a significant gap in the Defendant's proffered facts: Defendant supplies the Court with ample evidence from its employees attesting to their lack of knowledge of the lawsuit; but it does not provide any affidavit or declaration from the registered agent verifying that any sort of lapse actually occurred that resulted in the registered agent's failure to inform anyone at Defendant's company of the lawsuit. In the absence of facts to explain or otherwise close this gap, Defendant has not shown “good reason” to vacate the default judgment. And secondly, Defendant's delay in seeking this relief creates a significant obstacle in its effort to persuade the Court that it had “good reason” for failing to respond to the Complaint.

The Court finds it troublesome that Plaintiff filed a return of service, which purports to be valid on its face, listing Defendant's registered agent's address as the location where the Complaint and Summons were tendered, yet Defendant sets forth that it did not receive any communication from its registered agent regarding this lawsuit. Defendant has enlisted its registered agent to receive such process on its behalf, and has listed its registered agent to the public for such service. But Defendant makes no argument that the registered agent information on the return of service was incorrect. Rather, it merely states that it never received any notice from its registered agent regarding this lawsuit. This is problematic, as the Court has found, Plaintiff properly served Defendant in this case, and Defendant has not provided the Court with a declaration or affidavit from its registered agent to support the contention that the Complaint and Summons were never forwarded to any individual from Defendant's company. The Court finds this gap in facts to be fatal. In the face of a facially valid return of service, and without any explanation having been provided for a lapse in actual notice to Defendant, the Court declines to rely upon Defendant's counsel arguments, combined with the self-serving affidavits of Defendant's employees to vacate the default judgment in this matter.

Moreover, Defendant provided the Court with an affidavit from James M. Black, Defendant's New York counsel, and an email correspondence from Mr. Black to Plaintiff's counsel. DE 29-2 at 1. Mr. Black declared, under penalty of perjury, that on June 6, 2024, he received an email from Plaintiff's counsel notifying Mr. Black of the default entered against Defendant. DE 29-2 ¶ 7. Defendant did not take action in this case until July 25, 2024, the date in which it first appeared in this case and filed the present Motion. Thus, at a minimum, Defendant was on notice of the default judgment for 49 days prior to taking any action in this case. “The longer a defendant – even a foreign defendant – delays in responding to a complaint, the more compelling the reason it must provide for its inaction when it seeks to set aside a default judgment.” Sloss Industries Corp., 488 F.3d at 935. Defendant has in fact offered no reason at all for the near two-month delay in taking action in this case other than not having received notice of the initiation of this case. See In re Worldwide Web Sys., Inc., 328 F.3d at 1297–98 (defendant failed to demonstrate “good reason” under Rule 60(b)(1) for failing to move to set side judgment for nearly two months after learning of default judgment). Plainly stated, Defendant lacks any “good reason” for having failed to respond to the Complaint in a timely manner. Defendant fails to meet the third prong of the Rule 60(b)(1) analysis.

iii. Defendant has failed to show a lack of prejudice

As to the prejudice prong of the Rule 60(b)(1) analysis, Defendant has failed to assert why setting aside the default judgment would not prejudice Plaintiff. In fact, Defendant makes no mention of the prejudice prong in either of its papers. See Mot.; see also Reply. Plaintiff also fails to highlight any prejudice that would result if the default judgment is vacated. See Resp. However, because the Court has already found that Defendant lacks a meritorious defense and has failed to demonstrate good cause for failing to answer the Complaint, the Court will not examine the prejudice prong. See Ehlers, 8 F.3d at 783 (11th Cir. 1993); see also In re Worldwide Web Systems, Inc., 328 F. 3d at 1297 (finding that “the lack of substantial prejudice to the non-moving party” did not outweigh Defendants “failure to make even the barest showing of a meritorious defense or to present a good reason for failing to respond to the complaint.”).

C. Defendant is not entitled to relief from Final Default Judgment under the “Catch All” provision of Rule 60(b)(6).

Rule 60(b)(6) is the catchall provision of Rule 60(b) as it allows a court to relieve a party from a final judgment for any other reason that justifies relief. “The vacation of a judgment under Rule 60(b)(6) is an extraordinary remedy.” Booker v. Singletary, 90 F. 3d 440, 442 (11th Cir. 1996) (citing Ritter v. Smith, 811 F.2d 1398, 1400 (11th Cir. 1987), cert. denied, 483 U.S. 1010, 107 S.Ct. 3242, 97 L.Ed.2d 747 (1987)). The Eleventh Circuit has explained that “Rule 60(b)(6) motions must demonstrate ‘that the circumstances are sufficiently extraordinary to warrant relief.’ ” Aldana Del Monte Fresh Produce N.A., Inc., 741 F.3d 1349, 1355 (11th Cir. 2014) (quoting Cano v. Baker, 435 F.3d 1337, 1342 (11th Cir. 2006)). “The party seeking relief has the burden of showing that absent such relief, an ‘extreme’ and ‘unexpected’ hardship will result.” Griffin, 722 F.2d at 680 (citing United States v. Swift & Co., 286 U.S. 106, 119, 52 S.Ct. 460, 76 L.Ed. 999 (1932)). But ultimately, “whether to grant the requested relief is a matter for the district court's sound discretion.” Toole v. Baxter Healthcare Corp., 235 F.3d 1307, 1317 (11th Cir. 2000).

Mr. Black, in his affidavit, states that he “participated in a mediation effort to resolve disputes” between Plaintiff and Defendant. Reply Ex. 2 ¶ 3. Mr. Black's Affidavit also states that he sent an email communication to Plaintiff's counsel on January 15, 2024, stating Defendant's continued interest in reaching a “resolution.” Id. ¶ 5. Both Mr. Black's Affidavit, and the email correspondence demonstrate that Defendant was aware of Plaintiff's desire and actions to seek all remedies available to it. Because Defendant was made aware of these proposed actions, any hardship that would result from failing to grant Defendant's Motion would not be “unexpected.”

Defendant's Motion makes no mention of any extreme hardship that would result if the Court does not grant its Motion. More so, Defendant makes no argument, and proffers no facts or evidence, as to any extraordinary circumstances that would entitle it to relief under Rule 60(b)(6). A standalone citation to Rule 60(b)(6), without more, is not enough to provide Defendant with the relief it seeks. Nor would denial of Defendant's Motion bring about any “unexpected” hardship. Defendant makes clear in its Motion that it was aware that Plaintiff was seeking “remedies at law or equity, based on [Defendant's] breach of contract” as evidenced by Plaintiff's March 27, 2023 demand letter. Mot. Ex. 5 at 2. Given the lack of argument from Defendant, and the extraordinary nature of Rule 60(b)(6) relief, the Court finds that Defendant has failed to carry its burden. Defendant is thus not entitled to relief under Rule 60(b)(6).

D. Defendant's Rule 60(b)(3) Argument is Stricken.

In Reply, Defendant, for the first time, argues that this Court may vacate the default judgment under Rule 60(b)(3), pertaining to “fraud ․ misrepresentation, or other misconduct by an opposing party.” Specifically, Defendant argues that Plaintiff committed misconduct by suing under the Consulting Services Agreement because “does not state what services are to be provided because there is no Exhibit A defining such services.” Reply at 14. Defendant further contends that Plaintiff is taking this action to impute liability upon Superstar for the actions of its subsidiary “MLT.” Id. However, it is inappropriate to raise new arguments for the first time in a reply brief. See Supra at 12. The Court will not consider Defendant's Rule 60(b)(3) argument.

E. Defendant's Motion to Strike is Denied.

Defendant also included within its Reply a Motion to Strike Declarations. See Reply at 8–13. Particularly, Defendant seeks to strike the declarations that Plaintiff attached to its Complaint as they do not relate to the Consulting Services Agreement (the “CSA”) Plaintiff is suing under. Id. The Declarations attached to Plaintiff's Complaint support Plaintiff's cause of action by delineating what services were provided to the Defendant in this case, and Defendant's alleged subsequent breach of the terms of the CSA. Compl. ¶ 1. Taken together, the Declarations attached to the Complaint state that pursuant to the CSA, Plaintiff and Defendant's subsidiaries were to engage in a transfer of assets, which was ultimately completed but Defendant did not issue the agreed upon payment of $450,000 at the time of completion. Compl. Ex. B–F.

Defendant seeks to strike the Declarations because the CSA attached to the Complaint is incomplete as it fails to describe any scope of services. Specifically, Defendant argues the CSA states that Plaintiff “will provide the services listed on Exhibit A attached hereto and such other activities and functions, as mutually agreed to in writing from time to time during the Term (the “Services”). Reply at 7. But, as Defendant highlights, no such Exhibit A is attached to the CSA. Id. Thus, Defendant argues that the substance of the Declarations conflict with the written terms of the Consulting Services Agreement Plaintiff alleges Defendant breached. Id. at 8–13.

Federal Rule of Civil Procedure 7(b)(1) requires that requests for a court order be made by motion. Courts typically do not rule on requests embedded in a legal memorandum, as opposed to being raised in an actual motion. Storm Damage Sols., LLC v. RLI Ins. Co., No. 23-CV-23681, 2023 WL 8004314, at *2 (S.D. Fla. Nov. 17, 2023); see also Posner v. Essex Ins. Co., 178 F.3d 1209, 1222 (11th Cir. 1999) (“Where a request for [affirmative relief] simply is imbedded within an opposition memorandum, the issue has not been raised properly.”); Cottingham v. Wal-Mart Stores E., LP, No. 20-61991-CIV, 2020 WL 13357656 (S.D. Fla. Dec. 11, 2020) (refusing to consider a request to strike made in Defendant's reply because making such a request violates Local Rule 7.1(c)), which requires a reply to be strictly limited to rebuttal of matters raised in the memorandum in opposition, and Federal Rule of Civil Procedure 7(b)(1), which requires a request for a court order to be made by motion.

Because Defendant's request to strike portions of the declarations attached to Plaintiff's Complaint was not made by a separate motion and was instead contained within Defendant’ reply, it is not considered properly raised. See Holding Co. of the Villages, Inc. v. Little John's Movers & Storage, Inc., No. 5:17-CV-187-OC-34PRL, 2017 WL 9938032, at *1 (M.D. Fla. July 20, 2017) (“[A] request for affirmative relief, such as a request for leave to amend a pleading, is not properly made when simply included in a response to a motion.”). Defendant's motion to strike is therefore denied.

IV. CONCLUSION

For the reasons stated herein, it is ORDERED AND ADJUDGED that Defendant's Motion to Reopen (DE 21) is DENIED. The stay on pending or future writs of garnishment (DE 32) is hereby VACATED.

DONE and ORDERED in chambers at the James Lawrence King Federal Justice Building and United States Courthouse, Miami, Florida, this 19th day of November, 2024.

FOOTNOTES

1.   Although substantively a Motion to Set Aside Default and labeled as such on the docket, Defendant titles his Motion as a “Motion to Reopen Case.”

2.   The Court recognizes that under our Local Rules, a reply is limited to ten (10) pages. S.D. Fla. Local Rules 7.1(c)(2). Defendant's Reply totals 19 pages, which is well outside the bounds of the Local Rules. Defendant did not request leave to file a reply that exceeded the page limits set by our Local Rules. However, for purposes of this Order, the Court will consider the substance of the arguments insofar as they are used to rebut Plaintiff's Response.

JAMES LAWRENCE KING, UNITED STATES DISTRICT JUDGE