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Global Creditors Corp. v. Diamond Logistics, Inc.

United States District Court, D. New Jersey

August 6, 2014

GLOBAL CREDITORS CORP. d/b/a GLOBAL CREDITORS NETWORK, Plaintiff,
v.
DIAMOND LOGISTICS, INC., Defendant.

REPORT AND RECOMMENDATION

MICHAEL A. HAMMER, Magistrate Judge.

I. INTRODUCTION

This matter is before the Court by way of plaintiff Global Creditors Corp.'s ("Plaintiff") motion to strike the answer of defendant Diamond Logistics, Inc. ("Defendant") for violating Fed.R.Civ.P. 16 and Fed.R.Civ.P. 37 and to enter default and default judgment upon Defendant pursuant to Fed.R.Civ.P. 55. Pl.'s Mot. to Strike Def.'s Answer and Enter Default, D.E. 40. Plaintiff bases its motion on Defendant's failure to provide discovery as ordered by this Court. See Order, D.E. 36. Pursuant to Local Civil Rule 72.1, the Honorable Faith S. Hochberg, United States District Judge, referred the motion to the Undersigned for Report and Recommendation. Defendant did not oppose or otherwise respond to the motion, despite Plaintiff having served the application on Defendant at its address of record. Certificate of Service, D.E. 40, at 4. The Court considered this motion without oral argument pursuant to Fed.R.Civ.P. 78. For the reasons set forth below, the Undersigned recommends that the Court grant Plaintiff's motion to strike Defendant's Answer and enter default. The Undersigned further respectfully recommends that the Court deny Plaintiff's motion to enter default judgment without prejudice to Plaintiff's right to renew that motion, on notice to Defendant, after default has been entered.

II. BACKGROUND

A. Factual Background and Procedural History

On December 6, 2012, Plaintiff filed a complaint in New Jersey Superior Court, Middlesex County, Law Division, Special Civil Part against Defendant alleging a collections claim of $11, 666.00. See Compl., D.E. 1, at 2. Acting as the assignee of All Phase Logistics Inc. ("APL"), Plaintiff alleged that APL had performed motor-carrier services for Defendant from June 4, 2011 to March 16, 2012, but that Defendant had failed to make payment pursuant to the parties' contract.

Defendant removed the matter to the Court, invoking federal question jurisdiction pursuant to 28 U.S.C. § 1331.[1] See Notice of Removal, D.E. 1. Defendant answered on March 6, 2013. See Answer, D.E. 9. On July 1, 2013, Plaintiff propounded a First Set of Interrogatories and Notice to Produce Documents on Defendant. See Certification of Anthony Sarno, Jr., Esq. ("Sarno Cert."), D.E. 40, at ¶ 3.

In October 2013, defense counsel moved to withdraw from this matter. In support of the motion, defense counsel stated in pertinent part as follows

3. The client, Diamond Logistics, Inc. (the "Client") has failed to communicate or respond regarding a matter material to this firm's representation of the client.
4. Representatives of this law firm have written to the Client on numerous occasions and have received no response. The Client has since terminated his relationship with our firm and asked us to no longer serve as its legal counsel.

Certif. of Thomas C. Martin, Esq., D.E. 26-1, ¶¶3-4. On November 7, 2013, the Court granted the motion. Order, D.E. 29. To afford Defendant, a corporate entity, the ability to retain new counsel, the Court stayed this matter until December 23, 2013. Id.

Defendant did not retain new counsel. On February 21, 2014, Plaintiff filed a motion to compel Defendant to answer discovery requests. See Pl.'s Mot. to Compel Discovery Answers, D.E. 30-1. Defendant did not oppose the motion. The Court scheduled a status conference for March 31, 2014, and made clear that in-person attendance was mandatory. Order, D.E. 34. However, no representative of Defendant appeared at the conference.

The Court granted Plaintiff's motion and gave Defendant until April 30, 2014 to provide answers to Plaintiff's First Set of Interrogatories and Notice to Produce Documents. See Order, D.E. 36. The Court instructed that if Defendant failed to provide answers to the outstanding discovery, Plaintiff could move for an order striking Defendant's answers and defenses, for entry of default, and then, if appropriate, default judgment. Id . On April 1, 2014, Plaintiff served a copy of the March 31, 2014, Order on Defendant. See Sarno Cert., D.E. ...


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