Armadillo Distribution Enterprises, Inc. v. Hai Yun Musical Instruments Manufacture Co. LTD.

Filing 21

ORDER: Defendant Hai Yun Musical Instruments Manufacture Co. LTD.'s Motion to Set Aside Clerk's Default 19 is GRANTED. The Clerk is directed to set aside the Clerk's Entry of Default 17 . Defendant Hai Yun Musical Instruments Manufacture Co. LTD. shall file its response to Armadillo Distribution Enterprises, Inc.'s Complaint by December 4, 2013. Signed by Judge Virginia M. Hernandez Covington on 11/20/2013. (KNC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ARMADILLO DISTRIBUTION
ENTERPRISES,INC., a
Florida Corporation
Plaintiff,
v.

Case No. 8:12-cv-1839-T-33EAJ

HAI YUN MUSICAL INSTRUMENTS
MANUFACTURE CO. LTD.,
a Chinese Corporation,
Defendant.
___________________________/
ORDER
This
Defendant

matter
Hai

Yun

comes

before

Musical

the

Court

Instruments

pursuant

Manufacture

to
Co.

LTD.’s, Motion to Set Aside Clerk’s Default (Doc. # 19),
filed on November 1, 2013. Plaintiff Armadillo Distribution
Enterprises, Inc. filed a response in opposition to Hai
Yun’s Motion on November 11, 2013. (Doc. # 20). For the
reasons stated below, this Court grants Hai Yun’s Motion.
I.

Factual Background
Armadillo filed a complaint against Hai Yun on August

14, 2012. (Doc. # 1). This Court granted Armadillo two
extensions of time to effect service on Hai Yun (Doc. ## 5,

7), and as a result, Armadillo had until September 15,
2013, to serve Hai Yun (Doc. # 7).
On

September

17,

2013,

Armadillo

filed

a

motion

requesting this Court stay the proceedings pending service
on

Hai

Yun.

(Doc.

#

10).

In

its

motion,

Armadillo

submitted, “Armadillo has made reasonable efforts to serve
Hai Yun in accordance with the provisions of the Hague
Convention. However, the nature of service of process on a
Chinese entity is a slow and drawn out procedure, one . . .
which Armadillo has no control over.” (Id. at ¶ 7).

On

September 18, 2013, this Court granted Armadillo’s motion
and the case was stayed and administratively closed until
March 18, 2014. (Doc. # 11). The Court further directed
Armadillo to file a status report on or before December 17,
2013, regarding its efforts to effect service on Hai Yun.
(Id.).
On October 18, 2013, Plaintiff filed a status report
and stated as follows:
On September 27, 2013, Armadillo was informed by
Crowe
Foreign
Services
that
Crowe
Foreign
Services had received the Hague Certificate of
Service from the Chinese Authorities. The Hague
Certificate of Service states that Hai Yun was
served on February 22, 2013. Unfortunately, the

2

authorities provided no explanation for the delay
in returning the Hague Certificate of Service.
(Doc. # 12 at ¶ 5). At that time, Armadillo requested this
Court lift the stay so that, pursuant to Federal Rule of
Civil Procedure 55(a), Armadillo could move for a Clerk’s
entry

of

default

for

Hai

Yun’s

failure

to

plead

or

otherwise defend this case. (Id. at ¶ 6).
On October 21, 2013, this Court lifted the stay and
re-opened

the

case.

Armadillo

filed

a

(Doc.
motion

#

15).

for

On

entry

October
of

18,

Clerk’s

2013,

default

against Hai Yun (Doc. # 14), and the Clerk entered default
against Hai Yun on October 22, 2013 (Doc. # 17).
On October 29, 2013, Jake C. Blanchard, counsel for
Hai Yun, filed a notice of appearance of counsel. (Doc. #
18). Thereafter, on November 1, 2013, Hai Yun filed the
present Motion to Set Aside Clerk’s Default. (Doc. # 19).
In its Motion, Hai Yun states:
As noted in [Armadillo’s] motion for entry of
Clerk’s
default,
[Armadillo]
“only
recently
received notice from the Central Authority of
China that Hai Yun had, in fact, been served on
February 22, 2013.”
* * *
While Hai Yun does not contest that service was
perfected under the Hague Convention’s procedures

3

for service in China, Hai Yun, too, was unaware
that
it
had
been
served
until
recently.
Specifically, neither Hai Yun nor the undersigned
counsel learned that Hai Yun had been served
until they received [Armadillo’s] motion for
entry of Clerk’s default and the Clerk’s entry of
default in this action.
* * *
Good cause for setting aside the Clerk’s default
exists, because . . . (1) Hai Yun did not
willfully or culpably allow the default to be
entered, and Hai Yun otherwise demonstrates
excusable neglect, (2) Hai Yun acted promptly
with the filing of this motion to set aside the
Clerk’s default, (3) [Armadillo] will not be
prejudiced by the setting aside of the Clerk’s
default in this case, and (4) Hai Yun has a
meritorious defense.
(Id. at ¶¶ 2-4).
II.

Legal Standard
Rule 55(c) of the Federal Rules of Civil Procedure

provides that “[f]or good cause shown the court may set
aside an entry of default.” Fed. R. Civ. P. 55(c). The
Eleventh Circuit has explained that “defaults are seen with
disfavor because of the strong policy of determining cases
on their merits.” Fla. Physician’s Ins. Co. Inc. v. Ehlers,
8 F.3d 780, 783 (11th Cir. 1993).

4

In determining whether good cause is shown for setting
aside a Clerk’s entry of default, courts generally evaluate
the following factors: (1) whether the default is culpable
or

willful;

prejudice
party

(2)

the

whether

adversary;

presents

a

setting
and

(3)

aside
whether

default

would

defaulting

defense.

meritorious

the

Compania

Interamericana Export-Import, S.A. v. Compania Dominicana
de Aviacion, 88 F.3d 948, 951 (11th Cir. 1996).
However, these factors are not exclusive, and courts
have examined other factors including “whether the public
interest

was

implicated,

whether

there

was

significant

financial loss to the defaulting party, and whether the
defaulting party acted promptly to correct the default.”
Id. at 951. Nonetheless, “[w]hatever factors are employed,
the imperative is that they be regarded simply as a means
of identifying circumstances which warrant the finding of
‘good cause’ to set aside a default.” Id. at 951-52. Upon
review of the Motion, the Court finds that good cause for
setting

aside

the

Clerk’s

entry

established by Hai Yun.
III. Discussion
A.

Culpable or Willful

5

of

default

has

been

According to Hai Yun, its failure to timely respond to
Armadillo’s complaint was not culpable or willful. (Doc. #
19 at 3). In support of this contention, Hai Yun argues:
(1) Armadillo was unaware that Hai Yun had been served on
February

22,

procedures
September

2013,

for
27,

pursuant

service
2013,

in

and

to

China

(2)

the

Hague

until

“neither

Convention’s

only
Hai

recently

Yun

nor

—

its

counsel learned that service had been perfected on Hai Yun
until [Armadillo] filed its motion for entry of clerk’s
default and such default was entered.” (Id. at 1-3).
However, in its response, Armadillo posits that “Hai
Yun

possessed

the

[service

documents]

in

ample

time

to

prevent its own injury.” (Doc. # 20 at 7). Specifically,
Armadillo submits that “[t]he Hague Certificate of Service
states that Hai Yun was served at its principal place of
business in accordance with Chinese Law under Article 5(a)
of the Hague Service Convention on February 22, 2013. The
[C]ertificate further states that the Complaint and Summons
were served on . . . Hu Hao, a staff member of Hai Yun, at
its place of business.” (Id. at ¶ 5). Therefore, “[m]inimal
internal procedural safeguards could and should have been
established
being

which

entered,”

would
and

have

“[t]he

failure

6

prevented

the

to

default

from

establish

such

minimum procedural safeguards . . . does not constitute
excusable neglect that would entitle Hai Yun to a vacation
of the Clerk’s Default.” (Id. at 7)(citing Gibbs v. Air
Canada, 810 F.2d 1529, 1537 (11th Cir. 1987)(“Default that
is

caused

procedural

by

the

movant’s

safeguards

failure

for

to

determining

establish
that

minimum

action

in

response to a summons and complaint is being taken does not
constitute default through excusable neglect.”)).
Throughout

this

action,

Armadillo

has

advised

this

Court of the difficulties involved in perfecting service on
a foreign entity. In its motion to stay, Armadillo stated
“the nature of service of process on a Chinese entity is a
slow and drawn out procedure, one . . . which Armadillo has
no control over.” (Doc. # 10 at ¶ 7). In fact, effectuating
service on Hai Yun proved to be so difficult that Armadillo
had to ask this Court for two extensions of time to do so,
and was unaware that Hai Yun had been served on February
22, 2013, until September 27, 2013. (See Doc. ## 5, 7, 12).
Only

now

associated

does
with

Armadillo
serving

downplay

foreign

the

entities,

difficulties
including

the

unexplained seven month delay between the date of service
and the date of notification of service.

7

While

it

is

undisputed

that

service

was

perfected

under the Hague Convention on February 22, 2013, this Court
finds

that

Hai

Yun’s

failure

to

respond

to

Armadillo’s

complaint was not willful, and was indeed excusable, given
the

difficult

nature

of

effecting

service

on

a

foreign

entity and the unexplained delay in returning the Hague
Certificate of Service in this case.
B.

Prompt Response

Furthermore, this Court finds that Hai Yun responded
promptly after entry of Clerk’s default. In light of the
status report Armadillo filed on October 18, 2013 (Doc. #
12), this Court entered an Order lifting the stay of the
case, and directed the Clerk to re-open the case (Doc. #
15). On October 18, 2013, Armadillo filed a motion for
entry of Clerk’s default against Hai Yun (Doc. # 14), and
the Clerk entered default against Hai Yun on October 22,
2013

(Doc.

#

17).

Hai

Yun

filed

the

present

Motion

on

November 1, 2013. (Doc. # 19). Given the quick turnaround
of events, as outlined above, this Court finds that Hai Yun
responded

promptly

after

the

against it.
C.

Prejudice

8

entry

of

Clerk’s

default

In its Motion, Hai Yun contends that “[Armadillo] will
not

be

prejudiced

by

the

setting

aside

of

the

Clerk’s

default because the default was entered only a few days
ago, and until just recently, [Armadillo] was unaware that
Hai

Yun

Armadillo

had

been

has

contradicting

not
Hai

served

in

provided
Yun’s

China.”
this

position.

(Doc.
Court

#

19

with

Instead,

at

3).

evidence
Armadillo

contends that “any alleged lack of prejudice to Armadillo
cannot overcome Hai Yun’s failure to present a meritorious
defense and failure to show excusable neglect.” (Doc. # 20
at 6).
Upon consideration, this Court finds that Armadillo
will not suffer undue prejudice if the Clerk’s default is
set aside. Armadillo merely secured a Clerk’s default, as
opposed to a final default judgment, and the passage of
time between the entry of Clerk’s default and Hai Yun’s
Motion, ten days, does not warrant the drastic penalty of
forever depriving Hai Yun of its ability to defend against
this action.
D.

Meritorious Defense

In its response, Armadillo argues that Hai Yun has
failed to allege facts supporting a meritorious defense.

9

(Doc. # 20 at 4). Specifically, “Hai Yun has not filed any
responsive pleading. The only pleading filed is [Hai Yun’s]
Motion to Vacate Default which argues in one sentence that
‘[w]ith

respect

to

the

fourth

factor,

Hai

Yun

has

meritorious defenses and seeks the opportunity to assert
such defenses and litigate this case on the merits.’” (Id.
at

5).

“To

establish

a

meritorious

defense,

the

moving

party must make an affirmative showing of a defense that is
likely to be successful.” S.E.C. v. Simmons, 241 F. App’x
660,

664

(11th

plaintiff’s

Cir.

claims

2007).

A

contained

general

in

an

denial

answer

or

of

the

another

pleading is insufficient. Id.; see Solaroll Shade & Shutter
Corp., Inc. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1133
(11th Cir. 1986).
In its Motion, Hai Yun has done nothing more than
generally

allege

that

it

has

meritorious

defenses,

and

therefore has failed to make an affirmative showing of a
defense that is likely to be successful. However, to the
extent that Armadillo contends that Hai Yun’s Motion should
be denied for failure to assert a meritorious defense, this
Court

is

not

persuaded.

The

Court’s

determination

of

whether good cause exists does not hinge on this factor
alone.

As

set

forth

above,

in

10

determining

whether

good

cause exists for setting aside a Clerk’s entry of default,
courts consider several factors, which include: (1) whether
the default is culpable or willful; (2) whether setting
aside

default

would

whether

the

defense.

However,

prejudice

defaulting
this

party
list

is

the

adversary;

presents
not

a

and

(3)

meritorious

exhaustive;

rather

courts can consider any relevant factor in an effort to
determine whether the circumstances warrant the finding of
good cause to set aside the Clerk’s entry of default.
In this case, the Court finds that the difficulties
surrounding service on a foreign entity, the seven month
delay in returning the Hague Certificate of Service, the
prompt response to the entry of Clerk’s default exhibited
by Hai Yun, and the lack of undue prejudice Armadillo will
endure

if

the

Clerk’s

default

is

set

aside,

provide

sufficient good cause to warrant setting aside the Clerk’s
entry of default.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)

Defendant Hai Yun Musical Instruments Manufacture Co.
LTD.’s, Motion to Set Aside Clerk’s Default (Doc. #
19) is GRANTED.

11

(2)

The Clerk is directed to set aside the Clerk’s Entry
of Default (Doc. # 17).

(3)

Defendant Hai Yun Musical Instruments Manufacture Co.
LTD. shall file its response to Armadillo Distribution
Enterprises, Inc.’s Complaint by December 4, 2013.
DONE and ORDERED in Chambers in Tampa, Florida, this

20th of November, 2013.

Copies to: All Counsel of Record

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