Double Eagle Club, Inc. v. BG Capital Management South Florida, LLC et al

Filing 60

ORDER granting 48 Motion to Set Aside Default. The Court also directs the Clerk to LIFT the STAY of discovery in this case. The Court directs the Parties to file a revised 26(f) report within seven days of this order. Signed by Chief Judge J. Randal Hall on 10/18/2018. (maa)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION
5

DOUBLE EAGLE CLUB, INC.,

*
*

Plaintiff,

*

*

V.

BG CAPITAL MANAGEMENT SOUTH

CV 117-073

*

FLORIDA, LLC; BG SIGNATURE
*
PROPERTIES, LLC; HELMUT FORERO; *
and ROBERT D. GENOVESE,
*
■k

Defendants.

*

ORDER

Before the Court is a motion to set aside the default entered

against Defendant Helmut Forero {''Forero") .

(Doc. 48. )

Upon due

consideration, the Court GRANTS Forero's motion to set aside the
default.

(Id. )

The Court also directs the Clerk to LIFT the STAY

of discovery, which began on September 28, 2018 (doc. 59) and was
intended to continue until the Court considered the present motion.
The Court directs the Parties to file a revised 26(f) report within
seven days of this order.

(See id. )

I. Background

Plaintiff filed its original complaint on June 29, 2017, which
did not name Forero as a defendant.
Plaintiff

filed

a

motion

Genovese as defendants.

for

(Doc.

leave

39. )

(Doc.
to

1.)
add

On May 10,
Forero

and

2018,
Robert

Plaintiff filed its amended

complaint on June 6, 2018, naming Forero as a defendant.
Compl., Doc. 42.)

(Am.

Plaintiff named Forero as the registered agent

for service of process for Defendant BG Capital Management South
Florida, LLC (''EG Capital") and the Chief Financial Officer of BG
Signature Properties, LLC ("BG Signature").^

(Id. SISI 4-5.)

Forero was served with the amended complaint on June 14, 2018.

(Doc. 45.)

According to Forero, at the time he was served "he was

no longer an employee of BG Capital."
Mot. to Set Aside

(Mem. in Supp. of Forero's

Default ("Forero's Mem."),

Doc. 49, at 3.)

Forero "immediately notified [] BG Capital [] that he had been
added as a Defendant to the pending action . . . and confirmed []

BG Capital's responsibility to provide a defense to the action."
(Forero's Mot. to Set Aside Default, Doc. 48, 5 9.)

however,

"failed

to

retain

counsel

to

represent

interests" until after the Clerk's entry of default.

When

Forero did

BG Capital,

Forero's

(Id. 5 11.)

not appear, plead, or otherwise defend.

Plaintiff filed a motion for entry of default on July 10, 2018,
which the Clerk entered the following day.

(Docs. 46, 47.)

received notice of the entry of default on July 16th.

Mem. at 2.)

Forero

(Forero's

Four days later, on July 20th, Forero filed a motion

to set aside the default.

^ Plaintiff alleges Forero is liable both personally and in his official
capacity.

(Am. Compl. ^ 47.)
2

II. standard for Setting Aside an Entry of Default
Federal Rule of Civil Procedure 55(c) provides, ''The court

may

set

aside

an

entry

of

default

for

good

cause."

constitutes "good cause" varies from case to case.

What

Compania

Interamericana Exp.-Imp., S.A. v. Compania Dominicana de Aviacion,

88 F.3d 948, 951 (11th Cir. 1996).

To determine whether there is

good cause, courts have considered, but are not limited to, factors
such as "whether the default was culpable or willful, whether

setting it aside would prejudice the adversary, and whether the
defaulting party presents a meritorious defense."
omitted).
is

that

Id. (citations

Regardless of a court's chosen factors, "the imperative
they

be

regarded

simply

as

a

means

of

identifying

circumstances which warrant the finding of 'good cause' to set
aside a default."

Id.

The Court also notes the Eleventh Circuit's

"strong preference for deciding cases on the merits — not based on
a single missed deadline — whenever reasonably possible."

Perez

V. Wells Fargo, N.A., 774 F.3d 1329, 1332 (11th Cir. 2014); see
also Wahl v. Mclver, 773 F.2d 1169, 1174 (11th Cir. 1985) (per
curium).

III. Discussion

Plaintiff

argues

the

Court

should

deny

Forero's

motion

because (1) he "has not presented any meritorious defense," and

(2) "his filing presents no plausible excuse[] and displays an
intentional or reckless disregard for these judicial proceedings."
3

(Pl.'s Br. in Opp'n to Forero's Mot. to Set Aside Default, Doc.
50, at 3-11.)

Addressing the first argument. Plaintiff contends Forero's

initial pleadings do not ^^present any defense to [Plaintiff's]
claims against him."

(Id. at 3.)

Forero, however, argues he is

not liable because he "was not, and is not, an officer of [EG

Capital] or [EG Signature] at any time relevant to the allegations
in Plaintiff's Amended Complaint."

(Forero's Mem. at 2.)

Forero

expands his defense in his reply brief by stating the agreement at
issue was signed by EG Capital's former president, not Forero.
(Forero's Reply Er., Doc. 53, at 2.)

Furthermore, Forero argues

he is not personally liable for acts taken in his official
capacity.

(Id. at 2-3.)

"
[A] defendant need only show a *hint of a suggestion' to

meet the requisite standard of a meritorious defense."

Euonocore

V. Credit One Bank, N.A., No. 3:14-CV-067, 2014 WL 6620623, at *2

(M.D. Ga. Nov. 21, 2014) (quoting Moldwood Corp. v. Stutts, 410
F.2d 351, 352 (5th Cir. 1969)).

Although the Parties disagree as

to Forero's ultimate liability, Forero need not prove his entire
defense at this stage.

The Court finds Forero has shown at least

a "hint of a suggestion" of a meritorious defense.

Turning to Plaintiff's second argument, the

Court finds

Forero's lapse was not willful. Courts will deem a default willful
when the litigant displays "either an intentional or reckless

disregard for the judicial proceedings."
4

Compania, 88 F.3d at

951-52 (citation omitted).

An action may be deemed intentional or

reckless ''when a litigant has been given ample opportunity to

comply with court orders but fails to effect any compliance." Id.
Furthermore, courts are hesitant to deem a default willful when a

litigant takes prompt action to cure.

Farquharson v. Citibank,

N.A., 664 F. App'x 793, 797 (11th Cir. 2016) (per curium) (litigant

"promptly retained counsel as soon as it realized that there had
been a misunderstanding regarding its representation"); compare

Annon Consulting, Inc. v. BioNitroqen Holdings Corp., 650 F. App'x

729, 732 (11th Cir. 2016) (finding default willful when defendant
knew of "clerk's initial entry of default and still failed to file

a responsive pleading"), with Auto Owners Ins. Co. v. Sapp, No.
l:15-CV-90, 2017 WL 6210317, at *2 (M.D. Ga. Jan. 10, 2017) (court
set aside default because "both parties acted promptly to cure").
Forero's default was not willful.

Forero believed he had

taken care of his defense by confirming it was BG Capital's

responsibility

to

defend

him.

Upon

discovering

the

misunderstanding regarding his representation, Forero took prompt
action to cure.

The Court finds Forero's prompt response after

discovering the Clerk's entry of default supports setting aside
the default.

In addition to the factors Plaintiff invokes, the

Court finds no evidence that the short delay unfairly prejudices
Plaintiff.

Although Forero need not prove he meets every factor, see
Compania, 88 F.3d at 951, the above factors illustrate Forero has
5

shown good cause to set aside the default.

Due to Forero's

potentially meritorious defenses, his prompt actions to cure, and
the lack of prejudice to Plaintiff, the Court grants Forero's
motion to set aside the default.

IV. Conclusion

Upon due consideration, the Court GRANTS Forero's motion to
set aside the default.

(Doc. 48.)

The Court also directs the

Clerk to LIFT the STAY of discovery in this case.

The Court

directs the Parties to file a revised 26(f) report within seven

days of this order.

(See Doc. 59.)

ORDER ENTERED at Augusta, Georgia, this

of October,

2018.

J.

[IFF JUDGE

UNITED S ATES DISTRICT COURT
SOUTH

DISTRICT OF GEORGIA