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Acosta v. Ashley's Quality Care, Inc.

United States District Court, N.D. Illinois, Eastern Division

April 4, 2018

Gustavo Acosta, Maria Del Carmen Rau, and Magdalena Torres, Plaintiffs,
v.
Ashley's Quality Care, Inc., Defendant.

          MEMORANDUM OPINION & ORDER

          Honorable Thomas M. Durkin United States District Judge

         Plaintiffs Gustavo Acosta, Maria Del Carmen Rau, and Magdalena Torres sued defendant Ashley's Quality Care, Inc. (“Ashley's”) under the Fair Labor Standards Act and Illinois Wage Payment and Collection Act for failure to pay minimum and overtime wages. Currently before the Court are: (1) Ashley's motion to vacate the order of default against it and to dismiss plaintiffs' citation to discover assets (R. 36); and (2) plaintiffs' motion for a turnover order (R. 29). For the reasons set forth below, Ashley's motion is denied, and plaintiffs' motion is granted.

         BACKGROUND

         Plaintiffs filed their complaint against Ashley's on May 19, 2016. R. 1. On July 5, 2016, special process server Kathleen DiNunno delivered the summons and complaint to 610 West Root Street, Chicago, Illinois-Ashley's place of business and the address of its registered agent, Frankie Jean Redditt. R. 39-1 ¶ 4. According to an affidavit filed by DiNunno, Ashley's receptionist Genorise Carmichael told DiNunno that Redditt was unavailable, but that Carmichael “was authorized to accept service on behalf of the business.” Id. ¶ 6. DiNunno therefore “left a copy of the summons, complaint, and [a] June 10, 2016 order from the Court with [Carmichael].” Id. ¶ 7. DiNunno attests that Carmichael “understood the nature of the documents served upon her as [DiNunno] informed [Carmichael] of their contents.” Id. ¶ 9. DiNunno's original affidavit filed with the Court on July 11, 2016 along with the return of service states: “Genorise Carmichael is authorized to accept service on behalf of the business.” R. 6 at 2.

         When Ashley's failed to answer the complaint, plaintiffs filed a motion for default, which they served on Ashley's (care of Redditt) by certified mail. R. 9 at 4. This Court granted “the entry of a default order” August 25, 2016. R. 12. Plaintiffs subsequently moved for a default judgment and served that motion on Ashley's (care of Redditt) by certified mail. R. 15 at 4. The Court entered default judgment against Ashley's on November 16, 2016. R. 19. The default judgment awarded plaintiffs damages for wages they represented by affidavit had been unpaid. Id.[1] In October 2017, plaintiffs issued a citation to discover assets to third-party PNC Bank (Ashley's bank). R. 22; R. 25. In December 2017, plaintiffs moved for a turnover order of $1, 824.30 in funds held by PNC Bank. R. 29.

         On February 5, 2018, Ashley's moved to vacate the default and to dismiss plaintiffs' citation to discover assets. R. 29. In support of its motion, Ashley's filed an affidavit from its human resource manager Clifford Davis stating that Carmichael “was not a corporate officer of Ashley's, ” “did not have corporate responsibilities at Ashley's, ” and was not “designated to receive service of process on Ashley's.” R. 36-1 ¶¶ 4-6. Ashley's also filed an affidavit from its payroll director Lazane Onar reciting alleged payments made to plaintiffs Del Carmen Rau and Acosta on certain dates, and attaching compensation records in support. R. 36-2.

         DISCUSSION

         I. Effectiveness of Service of Process

         Ashley's first argues that Carmichael did not have authority to accept service of process on behalf of Ashley's. Therefore, Ashley's says, the default judgment is void under Fed.R.Civ.P. 60(b)(4) and should be vacated.

         A. Standard

         If service is improper, a default judgment is void for lack of jurisdiction under Rule 60(b)(4). Relational, LLC v. Hodges, 627 F.3d 668, 672 (7th Cir. 2010) (“[A] judgment is void as to any party who was not adequately served.”). And “no court has the discretion to refuse to vacate that judgment once it recognizes its lack of jurisdiction.” Philos Tech., Inc. v. Philos & D, Inc., 645 F.3d 851, 855 (7th Cir. 2011).

         Under Fed.R.Civ.P. 4(h)(1), a corporation may be served “by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process.” A corporation also may be served by “following state law for serving a summons . . . in the state where the district court is located or where service is made.” Fed.R.Civ.P. 4(h)(1) & (e)(1). Illinois law provides that “[a] private corporation may be served . . . by leaving a copy of the process with its registered agent or any officer or agent of the corporation found anywhere in the State.” 735 ILCS 5/2-204(1).

         A plaintiff generally bears the burden of showing “that the district court has jurisdiction over each defendant through effective service.” Cardenas v. City of Chi., 646 F.3d 1001, 1005 (7th Cir. 2011). However, “‘where the agency of the person named on the return is disputed, the defendant has the burden of proving that the individual served was not a proper person to receive service.'” Iosello v. Lexington Law Firm, 2003 WL 21920237, at *3 (N.D. Ill. Aug. 12, 2003) (quoting Island Terrace Apartments v. Keystone Serv. Co., 341 N.E.2d 41, 44 (Ill.App.Ct. 1975)); accord Esquivel v. Doc Able's Auto Clinic, Inc., 2016 WL 1463768, at *2 (N.D. Ill. April 14, 2016).

         B. ...


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