Sutton et al v. Clayton Hospitality Group, Inc. et al

Filing 35

ORDER granting 23 Motion to Set Aside 11 Entry of Default as to Clayton Hospitality Group, Inc., 12 Entry of Default as to Carol Uranick. Signed by Magistrate Judge Thomas B. Smith on 9/15/2014. (SMW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
JOHN SUTTON, ROBERT HENDERSON
and JAMIE MARZOL,
Plaintiffs,
v.

Case No: 6:14-cv-571-Orl-40TBS

CLAYTON HOSPITALITY GROUP, INC.
and CAROL URANICK,
Defendants.
ORDER
This matter comes before the Court on Defendants’ Motion to Set Aside Clerk’s
Default. (Doc. 23). Plaintiffs have not responded to the motion within the time allowed
despite the Court having granted them a ten-day extension. (Doc. 29). Accordingly, the
Court treats the motion as unopposed.
This is a Fair Labor Standards Act case in which both Defendants were served on
April 29, 2014. (Docs. 1, 8–9). Defendants failed to respond to the complaint and on
June 12, the Clerk entered their default. (Docs. 11–12). On July 31, Plaintiff moved for
a default judgment. (Doc. 18).
On August 9, 2014, Defendants appeared through counsel and moved to set the
defaults aside. (Doc. 21). The Court denied the motion without prejudice for failure to
comply with Local Rules 3.01(a) and (g). On August 14, Defendants renewed their
motion to set aside the defaults. (Doc. 23). They allege that they did not timely receive
the summons and complaint from the registered agent for Defendant Clayton Hospitality
Group, Inc. (Doc. 23, ¶ 2a). They add that, when they did receive the summons and

complaint, they “attempted to negotiate a resolution to the lawsuit ... rather than
immediately file an Answer and Affirmative Defenses.” (Id., ¶ 2b). Defendants allege
that once they received the motion for default judgment they “in a timely and expeditious
manner sought legal counsel who could assist them in setting aside the default and
answering the Complaint.” (Id., ¶ 2d). Defendants assert that they have a meritorious
defense that Plaintiffs were independent contractors rather than employees. (Id., ¶ 4).
Rule 55(c) of the Federal Rules of Civil Procedure provides that entry of default
may be set aside for “good cause.” The Eleventh Circuit recognizes “a strong policy of
determining cases on their merits” and views default judgments “with disfavor.” In re
Worldwide Web Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003). District courts must
apply the good cause standard liberally. Compania Interamericana Export-Import, S.A.
v. Compania Dominicana de Aviacion, 88 F.3d 948, 951 (11th Cir. 1996). Factors
relevant to a determination of good cause include “whether the default was culpable or
willful, whether setting it aside would prejudice an adversary, and whether the defaulting
party presents a meritorious defense.” Id. Courts also consider “whether the public
interest is implicated, whether there was significant financial loss to the defaulting party,
and whether the defaulting party acted promptly to correct the default.” Id.
While Defendants did not act promptly until the motion for default judgment was
filed they have raised a colorable defense and Plaintiffs have not responded to the motion
let alone claim prejudice if it is granted. Accordingly, the Court GRANTS the motion and
directs the Clerk to set aside the defaults. Defendants have through September 19,
2014 to respond to the complaint.

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DONE and ORDERED in Orlando, Florida on September 15, 2014.

Copies furnished to Counsel of Record

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