Lugo v. Allstate Ins. Co.

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ANGELO LUGO, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant.

No. 2:19-cv-07150 (JMA) (JMW)

United States District Court, E.D. New York

August 10, 2022

Jonathan A. Tand, Esq. and Jon L. Norinsberg, Esq. Attorneys for Plaintiff

REPORT AND RECOMMENDATION

JAMES M. WICKS United States Magistrate Judge

Plaintiff Angelo Lugo (“Plaintiff” or “Lugo”) commenced this civil action on December 20, 2019, pursuant to the Age Discrimination in Employment Act (“ADEA”) and the New York Human Rights Law (“NYHRL”).^[1] In short, Lugo alleges that Defendant Allstate Insurance Company (“Defendant” or “Allstate”) unlawfully discriminated against him based upon his age. Before the Court on referral from the Honorable Denis R Hurley^[2] is Plaintiff's motion for default judgment. (DE 18.) For the reasons that follow, the undersigned respectfully recommends that the Plaintiff's motion be DENIED in its entirety.

FACTUAL BACKGROUND

Plaintiff is a 51-year-old male who resides in Nassau County, New York. (DE 1, ¶ 1.) Plaintiff began working for Allstate in or around 1990 as a personal line representative. (Id. at ¶ 4.) Over time he held various positions such as clerical manager, total loss representative, agent in the centralized theft department, and adjuster defending damages in the casualty department. (Id.) In either 2000 or 2001, Plaintiff began working a position at the negotiation desk in the casualty department, a position he held until his termination on January 31, 2017. (Id. at ¶ 5.)

In November 2013, an individual by the name of Robert Marinello took over as “Claims Leader” and made significant changes to Allstate's management practices. (Id. at ¶ 6.) Beginning approximately three months after Mr Marinello's appointment, Plaintiff alleges Allstate's management began to target him. (Id. at ¶ 6.) Plaintiff alleges the following instances of targeting:

(i) Plaintiff was blamed for a verdict in excess of policy limits that was delivered in one of Plaintiff's cases while Plaintiff was out sick notwithstanding Plaintiff's efforts to obtain authority to settle the matter within the limits of the policy (id. at ¶ 7);

(ii) In 2014, Allstate's management started taking files that were ready for review from the more senior employees and giving them to younger employees (id. at ¶ 8);

(iii) In 2015, Allstate's management merged the "repped" (represented) and "unrepped" (unrepresented) cases together and gave all the easier cases to younger representatives whereas older representatives, such as Plaintiff, were assigned complex multi-party case files (id. at ¶ 8);

(iv) The term "sunsetter" was used by Allstate's management for anyone tenured over 12+ years to indicate their responsibility to start creating the next workforce (id. at ¶ 10);

(v) In or around 2015, Allstate's management created a concept of "mentoring," forcing older employees to train younger employees who would become their replacements, instead of receiving formal training from management. This put more work on the older employees (id.)

(vi) Plaintiff was almost always selected for discretionary “monthly progress meetings” to be evaluated although there was no baseline for evaluations and Plaintiff was not given target assessments or informed as to how he was being evaluated (id. at ¶ 12);

(vii) Younger representatives were acknowledged for positive customer surveys, while Plaintiff was not (id. at ¶ 13);

(viii) Following a 6-month absence from work due to a family emergency, Plaintiff's manager commented that he didn't expect or think Plaintiff would return to work (id. at ¶ 14);

(ix) Following his return to work, Plaintiff's work was specifically targeted and constantly critiqued (id. at ¶ 15);

(x) While most employees were allowed to attend an offsite destressing program called “Fitness for Life,” Plaintiff was told he was not allowed to attend because a regional claims manager “didn't think it was a good idea” (id. at ¶ 16); and

(xi) Plaintiff was fired without warning for “unacceptable production,” was unable to return to his desk to collect his things and was escorted to his car (id. at ¶17).

Plaintiff alleges that Allstate exhibited a pattern and practice of removing other older co workers. (Id. at ¶ 18.) Specifically, Plaintiff alleges his colleagues Vince Candela (over 65-years old) and Joseph Dissler (in his late-40s) preemptively retired or were also terminated after experiencing the same targeted harassment as Plaintiff. (Id.)

PROCEDURAL HISTORY

On December 20, 2019, Plaintiff commenced this action against Allstate asserting unlawful discrimination on the basis of Plaintiff's age in violation of the ADEA and NHL. (DE 1.) Magistrate Judge Anne Y. Shields^[3] scheduled an initial conference for April 8, 2022, which was ultimately cancelled due to onset of the COVID-19 pandemic. (Electronic Order, dated March 31, 2020.) On July 13, 2020, Plaintiff filed a motion for extension of time to serve the Complaint, which was granted by the Court. (DE 7; Electronic Order, dated July 15, 2020.)

By March 9, 2021, Plaintiff had still not yet served Allstate with the Complaint, and so the Court issued an order for Plaintiff to show cause in writing as to why the action should not be dismissed pursuant to Fed.R.Civ.P. 4(m). The very next day, on March 10, 2021, Plaintiff filed an affidavit of service stating the summons for Allstate was “personally served. . . on the individual” at 878 Veterans Memorial Highway, Hauppauge, NY 11788, on August 24, 2020, sworn to on August 24, 2020. (DE 10.) Plaintiff's counsel further submitted a letter explaining that “[t]he complaint in the instant matter was served in August of 2020” and that he “believed that the affidavit of service was filed previously by office staff but upon receipt of the court's prior order, learned that the affidavit was not filed.” (DE 11.) Counsel further asserted that since service, he had received no correspondence from Allstate or its attorneys. (Id.) The Court withdrew its order to show cause and directed Plaintiff to request a certificate of default and subsequently move for default. (Electronic Order, dated March 11, 2021.)

Plaintiff promptly requested a certificate of default. (DE 13.) However, Plaintiff's request was denied by the Clerk because the “affirmation in support of the request [did] not demonstrate, as required by Local Rule 55.1(b)(3), that the pleading to which no response has been made was properly served.” (Electronic Order, dated April 19, 2021.) On April 22, 2021, Plaintiff filed another affidavit of service, sworn to on April 21, 2021, this time stating that service was made on “Jodie Irwin, who is designated by law to accept service of process on behalf of Allstate Insurance Company” on August 24, 2020. (DE 14.) The affidavit of service further provides that service was accepted by Ms. Irwin as an authorized representative outside of the building bearing the company name because COVID-19 regulations limited the process server's ability to enter the building. (Id.).

On May 27, 2021, the Clerk for the Eastern District of New York issued a certificate of default against Allstate. (DE 16.) On December 29, 2021, Plaintiff filed the instant motion for default. (DE 18.)

LEGAL STANDARD

There is a two-step process for the granting of default judgments under Fed.R.Civ.P. 55. First, the Clerk of the Court enters default when a party fails to plead or otherwise defend the action. See Fed.R.Civ.P. 55(a); see also Loc. Civ. R. 55.2. Second, after the clerk's certificate of default is issued and posted on ECF, a party may apply or move for entry of a default judgment. Fed.R.Civ.P. 55(b); see also Loc. Civ. R. 55.2(b).

The decision to grant a motion for default is left to the sound discretion of the district court. United States v. Dougherty, CV 15-554 (ADS) (AKT), 2016 WL 5112063, at *3 (E.D.N.Y. Aug. 1, 2016), report and recommendation adopted by 2016 WL 4705549 (E.D.N.Y. Sep. 7, 2016). A default constitutes an admission of all well-pleaded factual allegations in the complaint, except those relating to damages. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); see also Joe Hand Promotions, Inc. v. El Norteno Rest. Corp., No. 06 CV 1878(RJD)(JMA)., 2007 WL 2891016, at *2 (E.D.N.Y. Sept. 28, 2007) (finding that a default constitutes an admission of all well-pleaded factual allegations in the complaint and the allegations as they pertain to liability are deemed true).

Even though a plaintiff's claims are deemed admitted upon default, the Court must nevertheless determine whether the admitted allegations satisfy the legal elements of the causes of action. That is, a plaintiff must still demonstrate that the allegations set forth in the complaint state valid claims. See City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (suggesting that “a district court is ‘required to determine whether the plaintiff's allegations establish the defendant's liability as a matter of law'” prior to entering default judgment) (quoting Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009)) (alterations omitted). In short, before a motion for a default judgment can be granted, the court must ensure that (1) Plaintiff satisfied all required procedural steps in moving for default judgment (see Local Civ. R. 55.2); and that (2) Plaintiff's allegations, when accepted as true, establish liability as a matter of law. See Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009).

ANALYSIS

I. JURISDICTIONAL ISSUES

A. Service on Allstate and Personal Jurisdiction

Before obtaining a default judgment, a plaintiff must establish proper service of the Summons and Complaint on the defaulting party pursuant to Rule 4 of the Federal Rules of Civil Procedure....