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Kaskey v. Toidze

United States District Court, Third Circuit

November 18, 2013

MAYA TOIDZE, Defendant.



Before the Court is Defendant Maya Toidze’s Motion to Alter and Vacate Judgment by Default pursuant to Federal Rules of Civil Procedure 55(c) and 60(b). At the Court’s request, United States Magistrate Judge M. Faith Angell reviewed the briefs, held a hearing on this Motion, and filed a Report and Recommendation (“R&R”). Defendant filed objections to the R&R, and Plaintiff filed a response. For the reasons set forth herein, the Court will approve and adopt the R&R.

I. Factual and Procedural Background

The Court adopts the background information set forth in the R&R, and summarizes that information herein only to provide context for its opinion. The background from the R&R is supplemented with information taken from the docket in this case and from the docket in Cooke, et al. v. Toidze, et al., Civ. Act. No. 07-712 (D. Ct.).

In April 2007, Defendant Maya Toidze, along with other defendants, was sued by some of her business partners in Connecticut state court, and in May 2007 that case was removed to federal court in the District of Connecticut. In May 2007, at the recommendation of a friend, Toidze retained Braverman Kaskey P.C. (“Braverman”), a Philadelphia-based law firm, to represent her in that litigation. The retainer agreement provided that Toidze would compensate Braverman for providing legal services by paying the firm 1% of all equity interests in Maya’s Meals, a company in which Toidze had a substantial equity interest, for each $20, 000 of billable time incurred, and would also reimburse the firm for expenses advanced. Pursuant to the agreement, Braverman sent monthly billing statements to Toidze, which she never challenged. In 2008, Braverman moved to withdraw as counsel after settlement efforts stalled and Toidze stopped responding to Braverman’s attempts to communicate with her regarding the Connecticut litigation. The Connecticut court granted the motion to withdraw and Braverman terminated its representation of Toidze in July 2008. Toidze failed to pay Braverman for legal fees and expenses incurred from June 11, 2007 through July 2008, and therefore, in 2009, Braverman brought this lawsuit for breach of contract, seeking to recover a 17.52% equity interest in Maya’s Meals, valued at $350, 324.50, plus $26, 951.45 for unreimbursed expenses.

During the time Braverman represented Toidze, she lived at 46 Wooten Way North, Markham, Ontario, Canada. When Braverman sued Toidze for non-payment of legal fees, it attempted to serve process of the summons and complaint by process server and by mail sent to that address in Ontario. Braverman was not able to serve her at that address because she had moved. Braverman attempted to locate her by contacting the post office, checking telephone records, and conducting an internet search. Because Braverman was unable to serve Toidze at her last known address, it filed a motion for alternative service, asking to notify Toidze of the suit by newspaper publication. After a hearing, Magistrate Judge Angell found that Braverman had made a good faith effort to locate and serve Toidze, and the motion was granted.[1] In March 2010, notices were published in the Markham Economist & Sun, which serves the York region of Ontario, the site of Toidze’s last known address, and in the Legal Intelligencer in Philadelphia. Default was entered on May 10, 2010 after Toidze failed to appear, plead, or otherwise defend. Thereafter, Braverman filed a Motion for Default Judgment.

In a November 4, 2010 Memorandum and Order, Judge Pollack, who was then overseeing the case, noted that the contract provided for payment to Braverman of an equity interest in Maya’s Meals.[2] Judge Pollack further noted that Toidze, the only party to the contract with Braverman, was not the sole owner of Maya’s Meals, but held a 26.389% interest, and that transfers of interests appeared to be governed by an Operating Agreement which was not before the court. In addition, the Connecticut litigation among the partners in Maya’s Meals was still pending, and Toidze was one of the defendants in that action. Therefore, before ruling on the motion for default judgment, Judge Pollack directed Braverman to take certain actions, among which was the requirement that it file the November 4, 2010 Memorandum and Order on the docket in the Connecticut action, and serve it on all parties to the Connecticut litigation. Braverman complied with this requirement. With regard to Toidze, who it appears was proceeding pro se at that point in the Connecticut litigation, [3] on November 30, 2010, Braverman sent a copy of the summons and complaint, the November 4, 2010 Order, and the Motion for Default Judgment to Toidze at two e-mail addresses and by mail sent to two different Ontario addresses.[4] One of those Ontario postal addresses and one of the e-mail addresses matched those provided by Toidze in a pro se brief submitted in the Connecticut litigation less than a month earlier, around October 8, 2010.[5]

On October 11, 2011, after making the necessary factual and legal findings, including findings about the adequacy of alternate service, Judge Pollack entered default judgment against Toidze for quantum meruit damages. Judge Angell held a hearing to determine the amount of quantum meruit damages on January 11, 2012. Judge Angell recommended that Judge Pollak enter judgment in favor of Braverman in the amount of $377, 275.95, and Judge Pollack approved and adopted the R & R on February 22, 2012.

On December 4, 2012, Toidze’s husband Alexandre Ivankine filed a Motion to Intervene and Motion for Reconsideration of Judgment by Default. The case was reassigned to this Court following Judge Pollack’s death, and on February 5, 2013, the Court denied Ivankine’s Motions because he lacked standing. Nine days later, Toidze filed the Motion to Vacate Default Judgment which is presently before the Court. In her Motion, Toidze argues, inter alia, that she was not properly served by publication in Canada, because she had moved to Russia in 2008. The Court referred the motion to Judge Angell for an R&R, and Judge Angell issued the R&R after a hearing on the issues. Toidze then filed objections to the R&R, and Braverman responded to those objections.

II. Standard of Review

The Court will review de novo “those portions of the report or specified proposed findings or recommendations to which objection is made.”[6] The Court need not rehear testimony nor make independent assessments of credibility where the credibility assessments of the magistrate seem sound in light of the evidence.[7]

III. Discussion

A. Validity of Service

Federal Rule of Civil Procedure 60(b)(4) provides that relief from a final judgment may be granted if “the judgment is void.” If a complaint was not properly served, a default judgment would be void.[8] The Court notes that the federal rules require proper service, ...

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