Grille 54, LLC v. Grille 54 - Sheldon, LLC et al

Filing 17

ORDER: Defendants' Motion to Vacate Clerk's Default 12 is GRANTED. The Clerk is directed to set aside the Clerk's Entry of Default 8 9 . Defendants shall file their response to Plaintiff's Complaint by June 30, 2015. Plain tiff's Motion for Entry of Default Judgment 15 is DENIED AS MOOT. Defendants' Motion for Leave to File a Reply to Plaintiff's Opposition to Motion to Set Aside Default 16 is DENIED AS MOOT. Signed by Judge Virginia M. Hernandez Covington on 6/23/2015. (KNC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
GRILLE 54, LLC, a
Florida Limited Liability
Company
Plaintiff,
v.

Case No. 8:15-cv-966-T-33AEP

GRILLE 54 – SHELDON, LLC,
a Florida Limited Liability
Company, and JAMES DALLAS
OWENS,
Defendants.
___________________________/
ORDER
This

matter

comes

before

the

Court

pursuant

to

Defendants Grille 54 – Sheldon, LLC and James Dallas Owens’
Motion to Vacate Default (Doc. # 12), filed on June 9, 2015.
Plaintiff Grille 54, LLC filed a response in opposition to
Defendants’ Motion on June 18, 2015. For the reasons stated
below, this Court grants Defendants’ Motion.
I.

Background
On April 23, 2015, Plaintiff initiated this trademark

action.

(Doc.

#

1).

Plaintiff

executed

service

on

both

Defendants on May 11, 2015. (Doc. ## 5-6). Defendants failed
to timely file a response to Plaintiff’s Complaint, and as a

result, Plaintiff applied to the Clerk of the Court for entry
of default against both Defendants. (Doc. # 7).
On June 3, 2015, the Clerk entered default against both
Defendants.

(Doc.

##

8-9).

The

next

day,

a

Notice

of

Appearance was filed on behalf of Defendants. (Doc. # 10).
Thereafter, on June 9, 2015, Defendants filed the present
Motion. (Doc. # 12). On June 18, 2015, Plaintiff filed a
response in opposition to Defendants’ Motion (Doc. # 14), as
well as a Motion for Default Judgment against both Defendants
(Doc. # 15).
II.

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

provides that “The Court may set aside an entry of default
for good cause. . . .” 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).
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; (2) whether setting aside default would prejudice
the adversary; and (3) whether the defaulting party presents

2

a meritorious defense. 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.
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

Defendants have established good cause for this Court to set
aside the Clerk’s entry of default entered against them.
III. Discussion
A.

Culpable or Willful

Defendants contend that their failure to timely respond
to Plaintiff’s Complaint was neither culpable nor willful.
(Doc. # 12 at 4). According to Defendants, counsel for both
Plaintiff and Defendants had ongoing conversations regarding
either an extension of time to respond to the Complaint or a
stay of this litigation so that the parties could continue to

3

negotiate a potential sale of the restaurants in question.
(Id.; Doc. # 12-1; Doc. # 12-2). To that end, Defendants
submit

that

Plaintiff’s

counsel

“knew

[Defendants]

were

represented by [Defense counsel] and should have conferred
with [Defense counsel] prior to moving for default.” (Doc. #
12 at 4).
Furthermore, Defendants’ counsel asserts that throughout
the interactions amongst counsel, he was under the mistaken
impression that the Complaint was not served on Defendants
until May 21, 2015 – not May 11, 2015. (Id. at 5). Therefore,
Defendants contend that “while aware of the existence of the
lawsuit, the precise deadline for a response was not known
until the docket was checked by [Defendants’ counsel] on June
3, 2015, after the entry of clerk’s default.” (Id.).
In its response, Plaintiff argues, amongst other things,
that Defendants “do not and cannot challenge service of
process,” and according to Defendants’ counsel’s affidavit,
he was aware of this action prior to service and upon service
“in mid to late May of 2015.” (Doc. # 14 at 4). Thus, Plaintiff
provides that this “information is sufficient to apprise the
Defendants of their duty to respond to the Complaint in a
timely manner.” (Id.). In addition, Plaintiff alleges that
Defendants’ counsel never indicated that he needed additional

4

time to engage litigation counsel in this matter, and the
parties never “expressly discussed any specific extension of
time in this [a]ction.” (Id. at 5-6).
Upon consideration of the parties’ various arguments,
this Court is not persuaded by Plaintiff’s assertion that
Defendants’ Motion should be denied as “Defendants have not
demonstrated good cause and have instead misrepresented the
facts of default to this Court.” (Id. at 4). While Defendants’
counsel was admittedly mistaken about the date of service of
the

Complaint,

Defendants’

attempt

to

communicate

with

Plaintiff and their promptness in addressing the Clerk’s
entry of default supports finding the default not culpable or
willful.
B.

Prejudice

Defendants contend that setting aside the default would
not result in prejudice to Plaintiff. (Doc. # 12 at 8). To
that end, Defendants provide that although setting aside the
default results in “additional delay and expense,” such delay
and expense “would not be sufficient to defeat the presumption
that cases be tried upon their merits.” (Id.). Instead,
according to Defendants, Plaintiff needs to show that the
delay

“would

result

in

a

loss

of

evidence,

increased

opportunities of fraud, and discovery difficulties.” (Id. at

5

8-9)(citing Suntrust Bank v. Armsey, No. 09-80606-CIV, 2010
WL 731802, at *2 (S.D. Fla. Feb. 26, 2010)).
In response, Plaintiff argues that setting aside the
default would result in prejudice as (1) Defendants have not
presented a meritorious defense and (2) Defendants’ continued
use of the relevant marks “despite the termination of their
lease to do so will cause prejudice to Plaintiff . . . because
of the continued harm caused by Defendants’ use of the mark
on inferior quality goods.” (Doc. # 14 at 10).
Upon consideration, this Court finds that Plaintiff will
not suffer undue prejudice if the Clerk’s entry of default is
set aside. Plaintiff 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 Defendants’ Motion,
six days, does not warrant the drastic penalty of forever
depriving Defendants of their ability to defend against this
action. See Rodriguez v. Brim's Food, Inc., No. 13-cv-20600,
2013 WL 3147348, at *3 (S.D. Fla. June 19, 2013)(finding that
a “short time span” of eleven days did not “constitute a
period

of

length

that

would

proceedings.”).
C.

Meritorious Defense

6

result

in

prejudicial

Defendants present several defenses with respect to the
claims at issue in this action. (Doc. # 12 at 6). Regarding
the trademark claims, Defendants assert that “those claims
are barred by the doctrines of laches and estoppel,” and argue
that applicable statutes of limitations may likewise bar
Plaintiff’s claims. (Id.). In addition, Defendants “plan to
assert the defense of acquiescence to Plaintiff’s trademark
claims.” (Id. at 7). Furthermore, Defendants submit that they
“may also raise a number of factual disputes in defense of
the claims against them.” (Id.).
Plaintiff alleges that Defendants’ legal defenses are
not stated with sufficient specificity and are inapplicable
to the present case. (Doc. # 14 at 8). Plaintiff also argues
that Defendants make “bald denial[s] of the allegations of
the Complaint, unsupported by any factual allegation.” (Id.
at 9)(citing S.E.C. v. Simmons, 241 F. App’x 660, 664 (11th
Cir. 2007)). Thus, according to Plaintiff, Defendants do not
demonstrate a meritorious defense. (See Id. at 8).
“To establish a meritorious defense, the moving party
must make an affirmative showing of a defense that is likely
to be successful.” Id. at 664. A general denial of the
plaintiff’s claims contained in an answer or another pleading
is insufficient. Id.; see Solaroll Shade & Shutter Corp.,

7

Inc. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1133 (11th Cir.
1986). However, “[l]ikelihood of success is not the measure.”
Suntrust Bank, 2010 WL 731802, at *2 (quoting Keegel v. Key
West & Caribbean Trading Co., 627 F.2d 372, 374 (D.C. Cir.
1980)). “Instead, the movant need only provide ‘a hint of a
suggestion’ that her case has merit.” (Id.)(quoting Moldwood
Corp. v. Stutts, 410 F.2d 351, 352 (5th Cir. 1969)).
Here, Defendants have done more than generally allege
that they have meritorious defenses. Rather, Defendants have
explained

Plaintiff’s

allegations

and

the

elements

of

Plaintiff’s asserted claims, and stated specific facts, which
they believe make their contentions more meritorious than
Plaintiff’s

claims.

See

Griffin

IT

Media,

Inc.

v.

Intelligentz Corp., No. 07-80535-CIV, 2008 WL 162754, at *3
(S.D. Fla. Jan. 16, 2008)(finding that defendant provided a
“clear and specific statement showing, not by conclusion, but
by definite recitation of facts” that it had a colorable
defense.).
At this time, the Court declines to determine whether
Defendants’

asserted

defenses

have

merit.

Instead,

the

Court's review at this juncture is limited to an inquiry of
whether Defendants’ allegations are entirely devoid of merit.

8

Upon consideration, the Court concludes that Defendants have
colorable arguments to satisfy this factor.
D.

Prompt Response

Courts can consider any relevant factor besides the
three enumerated above in an effort to determine whether the
circumstances warrant the finding of good cause to set aside
the Clerk’s entry of default. See Compania, 88 F.3d at 95152. The Clerk of the Court entered default against both
Defendants on June 3, 2015. (Doc. ## 8-9). Defendants filed
the present Motion on June 9, 2015. (Doc. # 12). Given the
quick turnaround of events, as outlined above, this Court
finds that Defendants responded promptly after the entry of
Clerk’s

default

against

them.

Defendants

should

not

be

deprived of their ability to defend against this action.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)

Defendants’ Motion to Vacate Clerk’s Default (Doc. # 12)
is GRANTED.

(2)

The Clerk is directed to set aside the Clerk’s Entry of
Default (Doc. ## 8-9).

(3)

Defendants shall file their response to Plaintiff’s
Complaint by June 30, 2015.

9

(4)

Plaintiff’s Motion for Entry of Default Judgment (Doc.
# 15) is DENIED AS MOOT.

(5)

Defendants’

Motion

for

Leave

to

File

a

Reply

to

Plaintiff’s Opposition to Motion to Set Aside Default
(Doc. # 16) is DENIED AS MOOT.
DONE and ORDERED in Chambers in Tampa, Florida, this
23rd of June, 2015.

Copies to: All Counsel of Record

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