American Packing and Crating of GA, LLC v. Resin Partners, Inc.
Filing
43
ORDER denying 37 Motion for Entry of Default; granting 38 Motion to Compel. Defendants have 21 days from the date this Order is served to respond to all of plaintiff's discovery requests. Signed by Magistrate Judge G. R. Smith on 12/1/16. (wwp)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
AMERICAN PACKING AND
CRATING OF GA, LLC,
)
)
Plaintiff,
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)
RESIN PARTNERS, INC., a
subsidiary of KETER PLASTICS,
LTD., an Israeli Corporation, d/b/a
KETER NORTH AMERICA;
KETER NORTH AMERICA, INC.;
and KETER NORTH AMERICA,
LLC,
CV415-256
)
)
)
)
)
)
)
)
Defendants.
ORDER
Plaintiff American Packing and Crating of GA, LLC sued
defendants Resin Partners, Inc. dlb/a Keter North America ("Resin
Partners"), Keter North America, Inc. ("Keter Inc."), and Keter North
America, LLC ("Keter LLC") for payment on three outstanding invoices
for services rendered. Doe. 1 (alleging breach of contract and suit on an
open account relating to "shipping, warehousing and logistics" services).
Though the Court denied defendants' motion to dismiss the second
amended complaint, doe. 36, and plaintiff filed a third amended
complaint, doe. 33, defendants failed to timely file an answer.
See doc.
39 (filed more than 14 days after the Court's denial of defendant's
motion to dismiss); Fed. R. Civ P. 12(a)(4)(A). Plaintiff requested that
the Clerk enter default against defendants, doe. 37, and filed a motion
to compel defendants to respond to propounded discovery, doe. 38.
Defendants have since opposed the request for entry of default but have
not opposed plaintiffs motion to compel, which is pending before the
undersigned. 1
A. MOTION TO COMPEL
Because defendants failed to respond to plaintiffs motion to
compel, the motion is deemed unopposed under Local Rule 7.5 (no
response means no opposition). Accordingly, plaintiffs motion to
compel (doe. 38) is GRANTED. Defendants must respond to plaintiffs
written discovery requests within 21 days after the date this Order is
served.
Plaintiff does not seek Rule 37 sanctions for defendants' failure to
1
In defendants' response to plaintiff's outstanding motion for default, they
represent that their failure to timely file an answer to the second amended complaint
was due to counsel's email "spam filter" miscategorizing the Court's CM/ECF report
on the Court's Order denying their motion to dismiss the second amended complaint.
Doc. 40 at 2. So, having been made aware of this oversight, defendants "filed their
Answer and Affirmative Defenses contemporaneously with the response."
Id.
Despite that defendants were now clearly aware of the updated docket, no opposition
to plaintiff's pending motion was filed.
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respond but requests "reasonable expenses" in bringing its motion. Doc.
38. Payment of expenses (including attorney's fees), however, typically
follows "after giving an opportunity to be heard." Fed. R. Civ. P.
37(a)(5)(A). Only if: (1) "the movant filed the motion before attempting
in good faith to obtain the .. . discovery without court action;" (2) the
failure to respond was justified; or (3) "other circumstances make an
award of expenses unjust," may a court decline to award expenses to a
prevailing party. Id.
None of those exceptions apply here, and defendants had their
chance to be heard. Consequently, the Court ORDERS that defendants
pay plaintiffs "reasonable expenses incurred in making" its motion to
compel, "including attorney's fees." Fed. R. Civ. P. 37(a)(5)(A). Within
14 days, the parties are DIRECTED to confer and make a good faith
effort to resolve this issue. Should the parties be unable to reach an
understanding, the plaintiff may submit an itemized list of expenses
and fees so the Court can issue an expense award. Defendants will then
have 10 days thereafter to contest plaintiffs' itemization.
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B. ENTRY OF DEFAULT UNDER RULE 55(A)
When a request for clerk's entry of default is properly supported,
the Clerk of Court is without discretion in granting a request for entry
of default. See Fed. R. Civ. P. 55(a) (when a party "fail[s] to plead or
otherwise defend, and that failure is shown by affidavit or otherwise,
the clerk must enter the party's default") (emphasis added). Plaintiffs
requeSt 2 for entry of default, doc. 37, supported by an accompanying
affidavit and filed after defendants failed to timely file an answer to the
second amended complaint or a responsive pleading to the third
amended complaint, should have been granted by the Clerk upon filing.
Fed. R. Civ. P. 55(a).
A few weeks after plaintiff filed its request for a Clerk's entry of
default under Fed. R. Civ. P. 55(a), defendants filed their (untimely)
answer to the amended complaint and opposition to plaintiffs request.
Docs. 39, 40. Their delay in doing so, they explained, was caused by
their computer/email erroneously "spam filtering ' this Court's dismissal
~
ruling. Doc. 40 at 2. Construing their opposition as a motion to set
2
Plaintiffs "request" was improperly docketed as a "motion," apparently because of
a docketing error by counsel or counsel's staff. See doc. 37.
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aside the entry of default, 3 the Court finds that the delay from
September 23, 2016 (when the motion to dismiss was decided) to
October 31, 2016 (when defendants filed their answer to the amended
complaint, apparently in response to plaintiffs request for entry of
default) meets the "good cause" requirement 4 of Fed. R. Civ. P. 55(c) for
setting aside entry of default. In assessing "good cause," courts
commonly consider, among other things, whether the default was
culpable or willful, whether the defaulting party presents a meritorious
defense, whether setting aside a default would prejudice the adversary,
and whether the defaulting party acted promptly to correct the default.
Wortham v. Brown, 2015 WL 2152826 at *1 (S.D. Ga. May 7, 2015)
(citing
Gompania Interamericana Exp.-Imp., S.A. v. Gompania
Defendants appear to misapprehend the distinction between an entry of default by
the Clerk of Court under Fed. R. Civ. P. 55(a) and a default judgment by the district
judge under Fed. R. Civ. P. 55(b). See doe. 40 at 3-5. One is an administrative
determination that a party has failed to timely plead or otherwise defend their case,
the other a final, substantive decision that is outcome determinative. The only
request filed thus far is a request for entry of default, which is a predicate to entry of
default judgment, but does not mean that default judgment has been entered.
' Fed. R. Civ. P. 55(c) applies a "good cause" standard for the setting aside of an
entry of default, as opposed to the more exacting "excusable neglect" standard. Perez
u. Wells Fargo N.A., 774 F.3d 1329, 1339 (11th Cir. 2014); E.E.O.C. v. Mike Smith
Pontiac GMC, Inc., 896 F.2d 524, 528 (11th Cir. 1990) ("The excusable neglect
standard that courts apply in setting aside a default judgment is more rigorous than
the good cause standard that is utilized in setting aside an entry of default.").
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Dominicana deAviacion, 88 F. 3d 948, 951 (11th Cir. 1996); Dierschke v.
O'Cheskey, 975 F.2d 181, 184 (5th Cir. 1992)). There is "a strong
preference that cases be heard on the merits . . . to afford a litigant his
or her day in court, if possible."
Perez, 774 F.3d at 1342; Fla.
Physicians Ins. Co., Inc. v Ehlers, 8 F.3c1 780, 783 (11th Cir. 1993)
("defaults are seen with disfavor because of the strong policy of
determining cases on their merits"). Where default was caused by
counsel's oversight, the court looks to whether counsel's conduct
appears to be "willful or contumacious" or in keeping with a pattern of
delay or willful conduct. See Perez, 774 F.3d at 1338.
Here, while plaintiff represents that defendants have engaged in
an ongoing pattern of delay tactics, see doc. 42, defendants' conduct in
failing to file a timely answer to the amended complaint does not
appear to have been willful or contumacious.
Wortham, 2015 WL
2152826 at *3 The record does not reflect an overall pattern of delay
or willful conduct by defendants, as they have been actively litigating
their case. Further, the record suggests that counsel, and not
defendants themselves, were responsible for the failure to answer the
amended complaint.
Id.
"While this Court takes seriously the
obligations of parties and their counsel to read and know the procedural
rules applicable to the forums in which they litigate . . . [defendants']
failure to answer [the amended complaint] within the required time
period was not culpable or willful under the less rigorous Rule 55(c)
good cause standard." Id.
Plaintiff argues that defendants have not demonstrated a
meritorious defense, but defendants' defense -- that plaintiff failed to
provide the services promised and bargained for and thus breached the
agreements at issue, see doc. 39 -- "would be a potentially meritorious
defense" to the allegations of the amended complaint.
Wortham, 2015
WL 2015 WL 2152826 at *3 A "proposed meritorious defense" is
enough under the Rule 55(c) "good cause" standard.
Id. And because
the Court finds that defendants have presented at least a "proposed
meritorious defense," plaintiff has not established that it "would be
In further support of defendants' assertion that the error was not willful, counsel
states that he acted quickly and filed a motion seeking to avoid the entry of default
and to file an answer to the counterclaim as soon as the issue was brought to his
attention. See Compania Interamericana, 88 F.3d at 951 (citing "whether the
defaulting party acted promptly to correct the default" as another factor relevant to
the Rule 55(c) good cause analysis). Though the opposition was not filed until 17
days after the request for entry of default was filed, this appears to have been driven
by plaintiff's counsel's categorization of the request as a "motion" when uploading it
to CM/ECF, triggering the creation of a two-week response deadline. See doe. 37.
Defendants timely responded by the deadline set forth on the docket entry.
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prejudiced merely because of the expenses of the continuing litigation"
or the "simple delay that attends in setting aside entry of default." Id.
at * 4
C. CONCLUSION
In sum, because the factors relevant to the Rule 55(c) good cause
analysis weigh in favor of setting aside the default and allowing the
case to proceed on the merits, plaintiffs motion for entry of default is
DENIED as moot. Doe. 37.
Further, plaintiffs unopposed motion to compel is GRANTED.
Doe. 38. Defendants have 21 days from the date this Order is served to
respond to all of plaintiffs discovery requests. Defendants also must
pay plaintiffs reasonable motion-to-compel expenses -- the amount to be
resolved as directed above.
SO ORDERED, this 1st clay of December, 2016.
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF GEORGIA
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