Central Laborers' Pension, Welfare and Annuity Funds v. Berco Construction, Inc. et al
Filing
25
ORDER DENYING 23 and 24 Motions for Leave to File Entry of Appearance Out of Time and Set Aside Default filed by defendants Berco Construction, Inc. and Jenifer Heitzig. These defendants are, however, GRANTED LEAVE to file new motions for entry of appearance and to set aside entry of default that comply with Rule 55(c) and the standard set out in this Order. The motions must be filed on or before January 17, 2012. Signed by Judge William D. Stiehl on 1/9/12. (bjw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
CENTRAL LABORERS’ PENSION,
WELFARE AND ANNUITY FUNDS,
Plaintiff,
v.
BERCO CONSTRUCTION, INC.,
RICHARD SCHUETZ, individually,
JENIFER HEITZIG, individually, and
BERCO INDUSTRIAL, INC.,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
No. 10-CV-209-WDS
ORDER
STIEHL, District Judge:
Before the Court are defendants Berco Construction, Inc.’s and Jenifer Heitzig’s motions
for leave to file entry of appearance out of time and to set aside default (Docs. 23 & 24). Plaintiff
Central Laborers’ Pension Welfare & Annuity Funds has filed this action against defendants
Berco Construction, Inc., Jenifer Heitzig, Richard Schuetz, and Berco Industrial, Inc. alleging
violations of the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1132, 1145.
Originally, plaintiff served Berco Construction, Inc., Heitzig, and Schuetz, but they failed
to appear. Plaintiff then moved for entry of default, which the Clerk entered (Doc. 9). A few
months later, though, plaintiff asked to set aside that entry of default so it could add Berco
Industrial, Inc. as a defendant. The Court granted the motion, and plaintiff filed an amended
complaint on April 1, 2011 (Doc. 14).
Over seven months passed without an answer or motion, however, and again plaintiff
moved for entry of default against the same three defendants as before, Berco Construction,
Schuetz, and Heitzig (Doc. 17). Default was entered on November 16, 2011 (Doc. 18). After that,
Berco Construction and Heitzig jointly filed two successive motions attempting to set aside entry
of default (Docs. 19 & 21), but both were stricken by the Clerk for various errors. On December
19, 2011, Berco Construction and Heitzig each filed a separate motion, and those are the motions
now before the Court (Docs. 23 & 24).
The motions state that their counsel, who represents both defendants, neglected to file her
appearance in time through inadvertence and excusable neglect. They also state that counsel knew
plaintiff had filed a motion for entry of default, but she did not know default had been entered.
Further, the motions say plaintiff has no objection to them.
Federal Rule of Civil Procedure 55(c) permits the district court to set aside an entry of
default “for good cause.” To successfully set aside an entry of default, the moving party must
demonstrate (1) good cause for its default, (2) quick action to correct it, and (3) a meritorious
defense to the plaintiff’s complaint. Cracco v. Vitran Exp., Inc., 559 F.3d 625, 630 (7th Cir.
2009); Sun v. Bd. of Trs. of Univ. of Ill., 473 F.3d 799, 810 (7th Cir. 2007); Pretzel & Stouffer v.
Imperial Adjusters, Inc., 28 F.3d 42, 45 (7th Cir. 1994); United States v. Di Mucci, 879 F.2d
1488, 1495 (7th Cir. 1989). The same test applies whether the motion seeks relief from entry of
default, under Rule 55(c), or from default judgment, under Rule 60(b), but the test “is more
liberally applied” in the context of an entry of default. Cracco, 559 F.3d at 631 (quoting Di
Mucci, 879 F.2d at 1495). The Seventh Circuit, as a matter of policy, favors trial on the merits
over default judgment. Id.
Here, defendants have not shown good cause for their default. Over seven months passed
after plaintiff’s amended complaint was filed and default was entered, but defendants still have
not filed answers or otherwise defended. See Pretzel & Stouffer, 28 F.3d at 45 (“[O]n the date the
court entered the default order [the defendant] had not yet filed its answer even though three
weeks had passed since the deadline for filing.”). This is also the second entry of default against
2
these defendants. Counsel states that she neglected to enter her appearance “through inadvertence
and excusable neglect.” But this bare statement is not sufficient even under the lenient standard
of Rule 55(c). See Cracco, 559 F.3d at 629, 631 (the defendant’s late answer was inadvertent
where its registered agent had forwarded the summons and complaint to employees who did not
understand their significance). “Routine” problems, such as a mistaken calendaring of a hearing
date and miscommunication between attorney and client, are not good cause for defaulting.
Pretzel & Stouffer, 28 F.3d at 45. Without some explanation from defendants, it is impossible for
the Court to decide whether their lack of an answer was the result of something excusable, as in
Cracco. The Court therefore concludes that defendants have not shown good cause for their
default.
Moreover, defendants do not suggest any defense to plaintiff’s amended complaint, let
alone a meritorious one. To satisfy this showing, the defendant must provide the court and
opposing party with the nature of the defense and a factual basis for that defense. See Cracco, 559
F.3d at 631. A meritorious defense requires more than just a “general denial” or “bare legal
conclusions.” See Pretzel & Stouffer, 28 F.3d at 46 (citing Breuer Elec. Mfg. Co. v. Toronado Sys.
of Am., 687 F.2d 182, 186 (7th Cir. 1982)). Defendants’ motions here do not say whether they
have any meritorious defense.
Because defendants failed to meet two of the requirements for setting aside an entry of
default, the Court need not consider the third requirement, whether the moving party took quick
action to correct the default. See Pretzel & Stouffer, 28 F.3d at 46–47 (“[T]he speed with which
[the defendant] may have acted to correct the default cannot change the result.”). But defendants
here did not take quick action. The amended complaint was filed on April 1, 2011, and still no
answer has been filed.
3
Accordingly, the Court DENIES Berco Construction, Inc.’s and Jenifer Heitzig’s motions
for leave to file entry of appearance out of time and to set aside default (Docs. 23 & 24). They are,
however, GRANTED LEAVE to file new motions for entry of appearance and to set aside entry
of default that comply with Rule 55(c) and the standard set out in this Order. The motions must
be filed on or before January 17, 2012.
IT IS SO ORDERED.
DATED: January 9, 2012
/s/ WILLIAM D. STIEHL
DISTRICT JUDGE
4
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?