Taylor v. American Van Lines, Inc. et al
MEMORANDUM OPINION Signed by Judge Colm F. Connolly on 11/19/2021. (nmf)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
C.A. No. 21-cv-00547-CFC
AMERICAN VAN LINES, INC., and
DOES 1 THROUGH 10,
Katherine Butler, KATE BUTLER LAW LLC, Wilmington, Delaware; Mark W.
Ishman, ISHMAN LAW FIRM, P.C., Raleigh, North Carolina.
Counsel for Plaintiff
William A. Crawford, FRANKLIN & PROKOPIK, Wilmington, Delaware.
Counsel for Defendant
November 19, 2021
Pending before me is a Motion for Entry of Default filed by Plaintiff Patricia
Taylor pursuant to Federal Rule of Civil Procedure 55(b)(2). DJ. 7. Plaintiff filed
the Complaint on April 14, 2021 . Plaintiff contends she served Defendant
American Van Lines, Inc. (AVL) with the Complaint on April 21 , 2021 and again
on May 17, 2021. D.I. 1,r,r 3-4. Defendant disputes that the April 21 service was
effective. D.I. 9 at 2. It does not dispute the effectiveness of the May 17 service
and it concedes that it was required under the Federal Rules of Civil Procedure to
file a response to the Complaint no later than June 4, 2021. Id. at 4. Plaintiff filed
her motion for entry of default on June 16, 2021. A VL entered its appearance on
June 18. It filed an opposition to Plaintiffs motion (D.I. 9) on June 24. It filed a
motion to dismiss the Complaint on June 25. D.I. 10.
For the reasons stated below, I will grant Plaintiffs motion.
This case stems from Plaintiffs move from Bethany Beach, Delaware to
McLean, Virginia. Plaintiff alleges that she arranged for A VL to transport her
furniture and household goods for a fee of $9,002.01. D.I. 1 ,r 12.
Plaintiff alleges that A VL contracted to complete packing and loading in
Delaware by August 1, 2019 and unloading and delivery in Virginia by August 3,
2019. Id. at ,r 13. In addition, AVL promised to supply trained professional
movers, 114 boxes, packing tape, and other materials it estimated would be
required to complete the job. Id. at ,r 14.
According to Plaintiff, when AVL arrived at her home on August 1, 2019,
it did not have the 114 boxes, packing tape, proper moving equipment, or a
sufficient number of team members. Id. at ,r,r 28, 31. In addition, two of the five
team members were not "trained professional movers." Id. at ,r,r 33, 36. And all of
the team members "behaved in an unprofessional manner by audibly arguing and
fighting with each other." Id. at ,r 44. Plaintiff alleges that these events caused
"great emotional distress" and "apprehension." Id. at ,r,r 32, 38.
Plaintiff further alleges that late in the evening on August 1, 2019, A VL' s
team leader for the move used his size, strength, and loud voice to intimidate
Plaintiff into paying an additional $7,000 to complete the job, and Plaintiff
authorized this additional payment under duress. Id. at ,r,r 54-67. A VL' s team
leader then drove the partially loaded moving truck to New York without
Plaintiffs consent. Id. at ,r,r 74-87. When the moving truck returned to Plaintiff's
Delaware home, the contents of the truck were damaged or missing. Id.
Meanwhile, other household goods belonging to Plaintiff were left outside in the
rain at her Delaware home. Id. at ,r,r 68, 86. And Plaintiff paid for the remaining
AVL team members to stay in a hotel for the night based on the promise that they
would return in the morning to complete the packing and loading of her household
goods. Id. at ,r,r 80-82. The team members did not return, id., and A VL did not
deliver Plaintiffs household goods to Virginia on or before August 3, id. at ,r 88.
Based on these events, Plaintiff asserts state law claims for unlawful
imprisonment, terroristic threatening, coercion, extortion, misapplication of
property, negligent hiring and supervision, constructive fraud, fraud in the
inducement, intentional infliction of emotional distress, and violation of the
Delaware Deceptive Trade Practices Act, 6 Del. C. § 2532, et seq.
Entry of default judgment is a two-step process. Before obtaining a default
judgment under Rule 55(b), there must be an entry of default pursuant to Rule
55(a). l0A Fed. Prac. & Proc. Civ. § 2682 (4th ed.). Under Rule 55(a), the clerk
must enter default "[w ]hen a party against whom a judgment for affirmative relief
is sought has failed to plead or otherwise defend, and that failure is shown by
affidavit or otherwise." Fed. R. Civ. P. 55(a). "This first step, entry of default, is a
ministerial step performed by the Clerk of Court." Austin v. Nugent, 2016 WL
7048994, at *4 (M.D. Pa. Dec. 5, 2016).
After entry of default, if the relief sought against the defaulted party is not
for a "sum certain or a sum that can be made certain by computation," the party
seeking default judgment must apply to the court for an entry of default judgment.
Fed. R. Civ. P. 55(b)(2). The entry of default judgment is "left primarily to the
discretion of the district court," but "[t]his discretion is not without limits,"
because "cases should be disposed of on the merits whenever practicable." Hritz v.
Woma Corp., 732 F.2d 1178, 1180-1181 (3d Cir. 1984).
Courts use the same standard to set aside an entry of default that they use to
enter a default judgment. Sourcecorp Inc. v. Croney, 412 F. App'x 455,459 (3d
Cir. 2011). That standard has three factors: "(l) whether the plaintiff will be
prejudiced; (2) whether the defendant has a meritorious defense; and (3) whether
the default was the result of the defendant's culpable conduct." Id. Each factor is
discussed in tum.
A. Meritorious Defense
The meritorious-defense factor is considered the "threshold issue" in setting
aside a default. Nationwide Mut. Ins. Co. v. Starlight Ballroom Dance Club, Inc.,
175 F.App'x519, 522 (3d Cir. 2006). A defendant does not "have the right to
have a default ... set aside automatically upon alleging a defense." Barad v. Aetna
Cas. & Sur. Co., 839 F .2d 979, 982 (3d Cir. 1988). The "standard is more
stringent." Nationwide, 175 F. App'x at 522. It requires a defendant to "set forth
with some specificity the grounds for his defense." Id. "The showing of a
meritorious defense is accomplished when 'allegations of defendant's answer, if
established on trial, would constitute a complete defense to the action."' United
States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984) (quoting
Tozer v. Charles A. Krause Mill. Co., 189 F .2d 242, 244 (3d Cir. 1951 )).
Here, A VL did not establish a meritorious defense. In a conclusory fashion,
AVL invokes "the Carmack amendment" and asserts that that amendment
"preempts state law claims." D.I. 9 at 5-6. A VL does not identify the specific
statute associated with the Carmack Amendment, does not recite the statutory
language showing that the Carmack Amendment governs A VL 's transaction with
Plaintiff, and does not provide any legal analysis showing that, under binding
precedent, the Carmack amendment preempts all ten of Plaintiff's state law claims.
Instead, AVL provides a string cite of cases, most of which are from other
appellate circuits, and none of which address preemption of the specific state law
claims Plaintiff asserts here. Id. "[S]imple denials or conclusionary statements"
are not enough to establish a meritorious defense. United States v. $55,518.05 in
U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984). Because AVL has not shown
that the Carmack Amendment is a complete defense against all of Plaintiffs' state
law claims, A VL has not established a meritorious defense.
A VL also asserts that five of Plaintiff's ten state law claims fail to state a
claim, because they are based on criminal statutes. Id. at 6. Indeed, the complaint
itself cites the applicable criminal statutes. See D.I. 1 ,r,r 94-123. Those state law
claims are unlawful imprisonment, terroristic threatening, coercion, extortion, and
misapplication of property. Because none of the criminal statutes provide a private
cause of action, Plaintiff cannot assert a civil claim based on these criminal
statutes. Brett v. Berkowitz, 706 A.2d 509, 512 (Del. 1998). Accordingly, AVL is
correct that these claims would not survive a motion to dismiss. Nevertheless, this
argument only disposes of half of Plaintiff's claims. Because the other five state
law claims would remain, AVL has not established a complete defense and,
therefore has not established a meritorious defense. Accordingly, this factor
weighs in favor of not setting aside an entry of default.
B. Delay Due to Culpable Conduct
To show culpable conduct, "more than mere negligence must be
demonstrated." Nationwide, 175 F. App'x at 523 (cleaned up). Cases where courts
have found a lack of culpability "typically involved innocent mishaps or mere
mistakes." Id. (collecting cases).
Here, it is difficult to conclude that AVL lacked culpability, because AVL
does not fully explain the cause of its delay. AVL states that it had until June 4,
2021 to respond to the Complaint. D.I. 9 at 4. A VL further states that "[b]oth the
insurer and undersigned counsel (less than 24 hours after being retained), contacted
Plaintiff's counsel to seek an extension of time to respond." D.I. 9 at 6-7.
Specifically, AVL's insurer sought an extension from Plaintiff's counsel on June
15, 2012, and AVL's counsel did the same on June 16, 2021. D.I. 9-2, Bxs. C, D.
What A VL does not explain, however, is the cause of the delay between June 4 and
June 15. The absence of any explanation does not reflect well on A VL,
considering that these facts are exclusively within its possession. Because A VL
failed to explain why it missed the June 4 deadline, this factor weighs in favor of
entering a default judgment.
C. Prejudice to Plaintiff
"Prejudice is established ... when a plaintiff's ability to pursue the claim
has been hindered by, for example, loss of available evidence, increased potential
for fraud or collusion, or substantial reliance upon the judgment." Nationwide, 175
F. App'x at 523 (cleaned up). "Delay in realizing satisfaction on a claim rarely
serves to establish a sufficient degree of prejudice." Id.
Plaintiff asserts that she will be prejudiced if this Court sets aside a default,
"because she will continue to be harassed and damaged by Defendant, i.e.,
Defendant's orchestration of its defense." D.I. 12 at 9. Plaintiff does not identify
any concrete acts of harassment by A VL during the course of this litigation.
Instead, Plaintiff appears to contend that she will be prejudiced if the default is set
aside, because then she will have to participate in the litigation and respond to
AVL's defense. It is not, however, prejudicial for Plaintiff to have to participate in
litigation she initiated. Accordingly, this factor weighs against entry of default.
Nevertheless, because the other two factors weigh in favor of a default entry,
I will grant Plaintiffs motion for entry of default.
For the foregoing reasons, I will grant Plaintiffs motion for entry of a
default (D.1. 7).
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