Evans, et al v. Loveland Automotive Investments, Inc., et al

Filing 24

ORDER Defendants Motion to Set Aside Entry of Default ECF No. 17 is GRANTED as to Defendant John Pipe; Defendant John Pipe shall file an answer or responsive pleading on or before December 6, 2013; Defendants Motion to Set Aside Entry of Defau lt ECF No. 17 is DENIED WITHOUT PREJUDICE as to Defendants Loveland Auto Transport, Inc. and Pipeline Auto Transport, Inc. Should these entities retain counsel to appear on their behalf, they may reassert the arguments raised in the Motion, by Judge William J. Martinez on 11/20/2013.(ervsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 13-cv-2415-WJM-KMT
WILLIAM EVANS, and
JEFFREY THAYER
Plaintiffs,
v.
LOVELAND AUTOMOTIVE INVESTMENTS, INC.,
JOHN RICHARD PIPE d/b/a LOVELAND AUTO TRANSPORT, and
PIPELINE AUTO TRANSPORT, INC.

Defendants.

ORDER GRANTING MOTION TO SET ASIDE
CLERK’S ENTRY OF DEFAULT AS TO JOHN RICHARD PIPE

Plaintiffs William Evans and Jeffery Thayer (together “Plaintiffs”) bring this action
against their former employers Loveland Automotive Investments, Inc., John Richard
Pipe d/b/a Loveland Auto Transport, and Pipeline Auto Transport, Inc. (collectively
“Defendants”) alleging violation of the Fair Labor Standards Act, 28 U.S.C. §§ 201 et
seq. (ECF No. 1.) Before the Court is a Motion to Set Aside Entry of Default (“Motion”)
filed by John Pipe on behalf of Defendants. (ECF No. 17.) For the reasons set forth
below, the Motion is granted as to John Pipe but denied as to Loveland Automotive
Investments, Inc. and Pipeline Auto Transport, Inc.
I. BACKGROUND
Plaintiffs worked as truck drivers for the Defendants, transporting vehicles across
state lines. (Compl. ¶ 1.) Plaintiffs allege that they were not paid for services that they

provided under a contract with Defendants, and that Defendants illegally deducted
amounts from their wages. (Id. ¶ 11.)
On September 5, 2013, Plaintiffs filed a Complaint alleging that Defendants
violated the Fair Labor Standards Act, breached their employment contract, and
violated other Colorado laws. (Id.) Defendants were all served on September 19,
2013, and their answers or responsive pleadings were due on October 10, 2013. (ECF
Nos. 9-11.) When Defendants failed to answer or otherwise respond to the Complaint,
Plaintiffs moved for entry of default. (ECF Nos. 12 & 14.) On October 17, 2013, default
was entered against Loveland Automotive Investments, Inc. and Pipeline Auto
Transport, Inc. (ECF No. 16.) Default was entered against John Pipe on November 13,
2013. (ECF No. 20.) On November 12, 2013, Defendant Pipe filed the instant Motion
on behalf of all Defendants. (ECF No. 17.)
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
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

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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”).
Additionally, the Motion is filed pro se and, therefore, the Court must liberally
construe his pleadings. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). The Court
cannot act as advocate for a pro se litigant, however, who must comply with the
fundamental requirements of the Federal Rules of Civil Procedure. Hall v. Bellmon, 935
F.2d 1106, 1110 (10th Cir. 1991).
III. ANALYSIS
Defendant Pipe moves to set aside the default on his own behalf, as well as on
behalf of the other two Defendants, which are corporate entities within his control.
(ECF No. 17.) The Court will consider the analysis as to each entity separately below.
A.

Corporate Entities
Both Loveland Auto Transport, Inc. and Pipeline Auto Transport, Inc. are listed

as corporate entities in the Complaint.1 (ECF No. 1 ¶ 5.) Defendant Pipe has signed

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The Court presumes that the Complaint’s label of these entities as corporations is
accurate and its analysis is based on this presumption. If the presumption is incorrect, and
these entities are not corporations, Defendants shall so notify the Court via an appropriate
filing.

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the Motion on behalf of these corporate entities, and thereby moved to set aside default
as to these entities. (ECF No. 17 at 2.) However, a corporation can appear in court
only through a licensed attorney. A non-attorney corporate officer may not represent
the corporation in court proceedings. See Rowland v. Cal. Men’s Colony, 506 U.S. 194,
201-02 (1993) (“It has been the law for the better part of two centuries . . . that a
corporation may appear in the federal courts only through licensed counsel.”); Harrison
v. Wahatoyas, LLC, 253 F.3d 552, 556 (10th Cir. 2001) (“As a general matter, a
corporation or other business entity can only appear in court through an attorney and
not through a non-attorney corporate officer appearing pro se.”).
The record does not indicate that Mr. Pipe is a licensed attorney and the Court
presumes that he is not. He cannot appear on behalf of the corporate entities simply
based on the fact that he is a principal in these organizations. Therefore, the Court
cannot deem the Motion to Set Aside to have been filed on behalf of the corporate
entities. Because the corporate entities have not appeared before the Court, and have
not contested the entry of default against them, the Motion to Set Aside is denied as to
these entities.
B.

John Pipe Individually
Because Defendant Pipe can represent himself in these proceedings, the Court

will consider the merits of the Motion as to him individually. In the Motion, Defendant
Pipe alleges he inadvertently misread the filings served on him, specifically as to the
timelines set forth therein. (ECF No. 17 ¶ 1.) Defendant Pipe states that he has
grounds for a strong defense, and that he intends to vigorously pursue both a defense

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of the claims against him, and counterclaims against the Plaintiffs. (Id. ¶¶ 3-4.)
The Court finds that Defendant Pipe has met his burden of showing that the
entry of default should be set aside. Construing the Motion liberally, the Court finds that
Defendant Pipe has shown that he has a defense to the claims against him and that he
intends to pursue such defense. The Court finds no evidence of culpable conduct; this
appears to be a simple case of inadvertence. See United States v. Timbers Pres.,
Routt Cnty., 999 F.2d 452, 454 (10th Cir. 1993) (holding that an unintentional or good
faith mistake is not culpable conduct).
The Court also finds that Plaintiffs will not be prejudiced by setting aside the
default. Defendant Pipe acted promptly to set aside the default, and this case is in its
very early stages. 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 of
Clients Server Computing, Inc. v. Res. Support Assocs., Inc., 2006 WL 1883173, at *3
(D. Colo. July 7, 2006) (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 sum, the Court finds that Defendant Pipe has demonstrated that his failure to
timely respond resulted from an honest mistake, that he moved quickly to remedy its
mistake and avoid prejudice to Plaintiffs, and that he 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 Defendant Pipe has made a showing of good cause

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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.

Defendants’ Motion to Set Aside Entry of Default (ECF No. 17) is GRANTED as
to Defendant John Pipe;

2.

Defendant John Pipe shall file an answer or responsive pleading on or before
December 6, 2013;

3.

Defendants’ Motion to Set Aside Entry of Default (ECF No. 17) is DENIED
WITHOUT PREJUDICE as to Defendants Loveland Auto Transport, Inc. and
Pipeline Auto Transport, Inc. Should these entities retain counsel to appear on
their behalf, they may reassert the arguments raised in the Motion.
Dated this 20th day of November, 2013.
BY THE COURT:

William J. Martínez
United States District Judge

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