Carriker et al v. City & County of Denver et al

Filing 40

ORDER Defendant ISSs Motion to Set Aside Clerks Entry of Default ECF No. 25 is GRANTED and the Clerks Entry of Default ECF No. 19 is VACATED; and Defendant ISS shall file an answer or responsive pleading on or before June 18, 2013, by Judge William J. Martinez on 5/29/2013.(ervsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 12-cv-2365-WJM-KLM
CLAYBORN CARRIKER, and
DORIS CARRIKER,
Plaintiffs,
v.
CITY AND COUNTY OF DENVER, COLORADO,
ISS FACILITY SERVICES, INC.,
KIM DAY, in her official capacity as Manager of Aviation,
DAVE LAPORTE, in his official capacity as Deputy Manager of Aviation for Facilities
Management, and
JOHN DOE(S), former and current Administrators or Employees of any Airport facility
maintained, operated, or controlled by the City & County of Denver or its Dept. of
Aviation or ISS FACILITY SERVICES, INC. in their Respondeat Superior, individual and
official capacities,
Defendants.

ORDER GRANTING MOTION TO SET ASIDE
CLERK’S ENTRY OF DEFAULT

Plaintiffs Clayborn Carriker and Doris Carriker (collectively “Plaintiffs”) bring this
slip and fall negligence action against Defendants City and County of Denver, Colorado,
ISS Facility Services, Inc. (“ISS”), Kim Day, Dave LaPorte, and John Doe(s) (collectively
“Defendants”). (Am. Compl. (ECF No. 11) ¶¶ 18-40.) Before the Court is Defendant
ISS’s Motion to Set Aside Clerk’s Entry of Default (“Motion”). (ECF No. 25.) For the
reasons set forth below, the Motion is granted.

I. BACKGROUND
Plaintiffs are a married couple residing in Florida. (Am. Compl. ¶¶ 6-8.) On
August 23, 2010, Plaintiffs were traveling through Denver International Airport when
Clayborn Carriker slipped on an unknown slippery substance on the restroom floor and
fell. (Id. ¶¶ 16, 22.) Plaintiffs filed a Complaint (ECF No. 1) on September 5, 2012, and
an Amended Complaint on October 5, 2012, alleging that Defendants’ negligence was
the proximate cause of Plaintiffs’ injuries under the Colorado Premises Liability Act,
Colo. Rev. Stat. §§ 13-21-115, et seq. (Am. Compl. ¶¶ 32, 40.)
On November 5, 2012, because ISS had filed neither an answer nor a
responsive pleading, Plaintiffs filed a Motion for Entry of Default. (ECF No. 18.) A
Clerk’s Entry of Default was entered against ISS on November 6, 2012. (ECF No. 19.)
On the following day, November 7, 2012, two attorneys entered appearances on behalf
of ISS (ECF Nos. 21, 22), and on November 9, 2012, ISS filed the instant Motion. (ECF
No. 25.) Plaintiffs filed a Response on November 26, 2012. (ECF No. 29.) ISS filed its
Reply on December 10, 2012. (ECF No. 32.)
II. LEGAL STANDARD
When a defendant “has failed to plead or otherwise defend, and that failure is
shown by affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P.
55(a). However, the Court may set aside an entry of default for “good cause”. Fed. R.
Civ. P. 55(c). “[I]n determining whether a defendant has met the good cause standard,”
courts consider “(1) whether the default was the result of culpable conduct of the

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defendant, (2) whether the plaintiff would be prejudiced if the default should be set
aside, and (3) whether the defendant presented a meritorious defense.” Hunt v. Ford
Motor Co., 65 F.3d 178 (10th Cir. 1995) (unpublished) (citing In re Dierschke, 975 F.2d
181, 183 (5th Cir. 1992)). The factors are not “talismanic,” and a court may choose not
to consider all three factors, or to consider additional factors. Id.
While “[t]he preferred disposition of any case is upon its merits and not by
default . . . , this judicial preference is counterbalanced by considerations of social
goals, justice and expediency, a weighing process which lies largely within the domain
of the trial judge’s discretion” when considering a motion to set aside a default. Gomes
v. Williams, 420 F.2d 1364, 1366 (10th Cir. 1970); see also Katzson Bros., Inc. v.
E.P.A., 839 F.2d 1396, 1399 (10th Cir. 1988) (noting that “default judgments are not
favored by courts”).
III. ANALYSIS
ISS argues in its Motion that it has shown good cause to set aside the Clerk’s
entry of default, because ISS was not culpable for its default, Plaintiffs will not be
prejudiced by the granting of the Motion, and ISS has meritorious defenses. (ECF No.
25 at 4-8.) The Court will consider each factor in turn.
A.

Culpable Conduct
“Generally a party’s conduct will be considered culpable only if the party

defaulted willfully or has no excuse for the default.” United States v. Timbers Pres.,
Routt Cnty., Colo., 999 F.2d 452, 454 (10th Cir. 1993) (citing 6 James W. Moore et al.,

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Moore’s Federal Practice ¶ 55.10[1] (2d ed. 1992)). Conversely, an unintentional or
good faith mistake is not considered culpable conduct for the purposes of Rule 55(c).
See id.; see also United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615
F.3d 1085, 1092 (9th Cir. 2010) (describing “culpable conduct” as “intentionally” failing
to answer, or acting in bad faith in order to take advantage of the opposing party, to
interfere with judicial decisionmaking, or otherwise trying to manipulate the legal
process).
Further, a party’s prompt motion to set aside an entry of default serves to
mitigate any culpability that may exist. Jenkins & Gilchrist v. Groia & Co., 542 F.3d 114,
123 (5th Cir. 2008); Zen & Art of Clients Server Computing, Inc. v. Res. Support
Assocs., Inc., 2006 WL 1883173, at *2 (D. Colo. July 7, 2006) (citing Savin Corp. v.
C.M.C. Corp., 98 F.R.D. 509, 51011 (N.D. Ohio 1983) (finding that a mistaken delay in
response was not willful because the defendant “expeditiously moved to remedy his
mistake”)).
Here, ISS claims that it mistakenly relied upon its insurance carrier to assign
counsel and timely respond to the Amended Complaint, and such an honest, good faith
mistake constitutes good cause. (ECF No. 25 at 5-6 (citing Zen & Art, 2006 WL
1883173 at *2).) ISS states that its insurance carrier gave it false assurances that
counsel was handling the case appropriately. (Id. at 6.) Additionally, ISS points out
that it filed its Motion only three days after the Clerk’s entry of default, mitigating any
culpability stemming from its “misplaced reliance” on its insurance carrier. (ECF No. 32
at 5.)
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In their Response, Plaintiffs argue that ISS’s attempt to blame its delay in
responding to the suit on its insurance carrier’s counsel does not constitute “excusable
neglect”, and that a party is held accountable for the omissions of its counsel. (ECF
No. 29 at 2-4.) However, Plaintiffs’ argument erroneously applies the legal standard for
setting aside a default judgment, which is governed by Rule 60(b), rather than that for
setting aside a clerk’s entry of default, governed by Rule 55(c). (Id. at 3-6 (citing Murray
v. Solidarity of Labor Org. Int’l Union Benefit Fund, 172 F. Supp. 2d 1134 (N.D. Iowa
2001) (evaluating a motion to set aside a default judgment)).) The good cause
standard under Rule 55(c) is significantly less demanding than the excusable neglect
standard necessary to set aside a default judgment under Rule 60(b). Dennis Garberg
& Assocs., Inc. v. Pack-Tech Int’l Corp., 115 F.3d 767, 775 n.6 (10th Cir. 1997).
Plaintiffs’ arguments are therefore inapposite.
The Court finds that ISS’s delay in responding was not attributable to culpable
conduct. Although Plaintiffs’ Response discusses at length the individual errors that
resulted in ISS’s default, there is no evidence that ISS’s delay was intentional, willful, or
in bad faith. (See ECF No. 29 at 3-6.) By all indications, ISS made a good faith error in
relying on a third party and failing to confirm compliance with the relevant deadlines.
ISS’s rapid response to the entry of default, filing the instant Motion within three days,
mitigates any culpability that may have resulted from its mistake. See Zen & Art, 2006
WL 1883173 at *2; Jenkins & Gilchrist, 542 F.3d at 123. Thus, under the liberal “good
cause” standards of Rule 55(c), the lack of culpable conduct weighs in favor of setting
aside the entry of default.
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B.

Prejudice to Plaintiffs
As in the analysis of culpable conduct, prejudice to the plaintiff is also mitigated

where the defendant acted quickly to remedy the mistake. See Procom Supply, LLC v.
Langner, 2012 WL 2366617, at *3 (D. Colo. June 21, 2012) (finding no prejudice in
setting aside entry of default when defendant filed a motion for relief three days after
default was entered); Zen & Art, 2006 WL 1883173, at *3 (finding no prejudice where
counsel entered an appearance seven days after the entry of default and filed a motion
for relief ten days after default was entered).
In their Response, Plaintiffs again cite cases involving the wrong legal standard,
and insist that they would be prejudiced by further delay as it would provide “greater
opportunities for fraud and collusion” between ISS, its insurer, and its subcontractor.
(ECF No. 29 at 6-7 (again citing Murray, involving a motion to set aside a default
judgment).) As evidence of such fraud, Plaintiffs cite a log report of Clayborn Carriker’s
injury that was written on August 23, 2011 and modified several days later. (Id. at 7.)
Even assuming that such a modification constituted fraud, Plaintiffs’ argument is
nonsensical; the Court fails to see how an extension of time for ISS to file its responsive
pleading—the practical consequence of setting aside the entry of default—would
increase the likelihood of further fraud involving a document from 2011 that has already
been produced, or how such a modification would be indicative of further wrongdoing.
(See ECF No. 25-4.) Plaintiffs make no other argument that they would be prejudiced
by the granting of the Motion. (See ECF No. 29.)

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ISS’s counsel entered an appearance the day after default was entered, and
filed its Motion only two days later—a mere four days after Plaintiffs filed their motion
requesting the entry of default. (See ECF Nos. 18, 19, 25.) Because discovery has
been stayed in this case since November 2, 2012, and no scheduling conference has
yet occurred, Plaintiffs have lost no time with regard to their opportunity to prepare their
case. (See ECF No. 16.) Accordingly, the Court finds no prejudice to Plaintiffs from the
granting of the instant Motion, and this factor also weighs in favor of setting aside the
entry of default.
C.

Meritorious Defenses
In determining whether a defendant has sufficiently meritorious defenses to set

aside an entry of default, “the court examines the allegations contained in the moving
papers to determine whether the movant’s version of the factual circumstances
surrounding the dispute, if true, would constitute a defense in the action.” In re Stone,
588 F.2d 1316, 1319 (10th Cir. 1978); Signed Pers. Check No. 730, 615 F.3d at 1094
(noting that “[a]ll that is necessary to satisfy the ‘meritorious defense’ requirement is to
allege sufficient facts that, if true, would constitute a defense”).
Here, ISS has raised disputes of fact as to ISS’s involvement in and knowledge
of Clayborn Carriker’s fall, as well as questions of causation, all of which would affect
ISS’s liability for Plaintiffs’ injuries. (ECF No. 25 at 7-8.) ISS has also indicated that the
role of its subcontractor, Whayne and Sons Enterprises, Inc., affects its legal status as
a “landowner” under the Colorado Premises Liability Act such that it may not be liable

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for Plaintiffs’ injuries. (Id. at 8.) If the facts are found to be as ISS has alleged, they
would constitute a defense to some or all of Plaintiffs’ claims. Thus, ISS has come
forward with defenses that it should have the opportunity to assert before the finder of
fact, and this factor also weighs in favor of setting aside the default.
In sum, the Court finds that ISS has demonstrated that its failure to timely
respond resulted from an honest mistake, that it moved quickly to remedy its mistake
and avoid prejudice to Plaintiffs, and that it has potentially meritorious defenses. Given
that “[t]he preferred disposition of any case is upon its merits and not by default,” the
Court finds that ISS has made a showing of good cause under Rule 55(c) to set aside
the clerk’s entry of default. See Gomes, 420 F.2d at 1366.
IV. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.

Defendant ISS’s Motion to Set Aside Clerk’s Entry of Default (ECF No. 25) is
GRANTED and the Clerk’s Entry of Default (ECF No. 19) is VACATED; and

2.

Defendant ISS shall file an answer or responsive pleading on or before June 18,
2013.
Dated this 29th day of May, 2013.
BY THE COURT:

William J. Martínez
United States District Judge
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