USA et al v. E-BIOFUELS, LLC et al

Filing 201

ENTRY - 185 Motion to Set Aside Default is granted. The Clerk is directed to update the docket to reflect that the Clerk's Entry of Default against Christine (Filing No. 193 ) has been set aside. Signed by Judge Tanya Walton Pratt on 2/12/2018. (Copy mailed to CARAVAN TRADING, LLC, CIMA GREEN, LLC, Joseph Furando, Joyce R Branda, and Tracy Lyle Hilmer) (MEJ)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
UNITED STATES OF AMERICA, ex rel.,
ALEXANDER CHEPURKO,
Plaintiff,
v.
E-BIOFUELS, LLC, CARAVAN TRADING,
LLC, CIMA GREEN, LLC, IMPERIAL
PETROLEUM, INC., JOSEPH FURANDO,
CHRISTINE FURANDO, CRAIG DUCEY,
CHAD DUCEY, and JEFFREY T. WILSON,
Defendants.

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Case No. 1:14-cv-00377-TWP-MJD

ENTRY ON MOTION TO SET ASIDE ENTRY OF DEFAULT
This matter is before the Court on Defendant Christine Furando’s (“Christine”) Motion to
Set Aside Entry of Default (Filing No. 185). Christine asserts that good cause exists to set aside
the Clerk’s Entry of Default against her (Filing No. 183) because she was unaware as a pro se
litigant that she needed to file an answer to the Second Amended Complaint filed by PlaintiffRelator Alexander Chepurko (“Chepurko”). Chepurko “takes no position” on Christine’s Motion
to Set Aside Entry of Default (Filing No. 193 at 1). 1
I. BACKGROUND
Chepurko initiated this action against Christine and the other named Defendants in 2012
(Filing No. 185 at 1; Filing No. 193 at 1). On August 5, 2014, Chepurko’s case was consolidated
with a case filed by another Plaintiff-Relator that had been transferred to the Southern District of
Indiana from the Northern District of Texas (Filing No. 52; Filing No. 185 at 2). Before these

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Although Chepurko does not object to the Christine’s Motion to Set Aside Entry of Default, he responded to the
Motion in order to clarify certain procedural and factual statements within the Motion (Filing No. 193).

cases were consolidated, Christine had retained counsel similar to the other named Defendants
(Filing No. 185 at 2).
On April 28, 2017, Christine was dismissed from this action without prejudice (Filing No.
112). However, on September 8, 2017, Chepurko filed his Second Amended Complaint, which
renamed Christine as a Defendant (Filing No. 152). Upon the filing of the Second Amended
Complaint, Christine received a Summons and a Waiver of Summons form (Filing No. 155; Filing
No. 165). After consulting with a local lawyer in New Jersey, Christine executed and returned the
Waiver of Summons on September 18, 2017 (Filing No. 165; Filing No. 185-1 at 2). The local
lawyer, however, did not inform Christine that she would need to retain counsel or that she had an
obligation to file an answer to the Second Amended Complaint (Filing No. 185 at 4; Filing No.
185-1 at 2).
As a result of her lack of legal knowledge, Christine failed to file an answer to the Second
Amended Complaint, and the Clerk of Court entered an Entry of Default against Christine on
December 14, 2017 (Filing No. 183). Christine has since retained counsel to defend her interests
in this action and requests that the Court set aside the Clerk’s Entry of Default against her (Filing
No. 185; Filing No. 185-1 at 2).
II. LEGAL STANDARD
A party seeking to vacate an entry of default prior to the entry of final judgment must show:
(1) good cause for the default; (2) quick action to correct it; and (3) a meritorious defense to the
complaint. While the same test applies for motions seeking relief from default judgment under
both Rule 55(c) and Rule 60(b), the test is more liberally applied in the Rule 55(c) context. Cracco
v. Vitran Express, Inc., 559 F.3d 625, 630–31 (7th Cir. 2009). The standard for applying Rule
55(c) is “lenient,” and the Seventh Circuit has a “policy of favoring trial on the merits over default

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judgment.” Cracco at 631. In order to establish good cause, a defaulted defendant must show
“something more compelling than ordinary lapses of diligence or simple neglect to justify
disturbing a default judgment.” Yong-Qian Sun v. Bd. of Trs., 473 F.3d 799, 811 (7th Cir. 2007).
A meritorious defense requires more than a “general denial” and “bare legal conclusions”. Breuer
Electric Manuf. Co. v. Toronado Systems of America, 687 F.2d 182, 186 (7th Cir. 1982).
III. DISCUSSION
The Court concludes that Christine had good cause for failing to answer Chepurko’s
Second Amended Complaint. Based on the advice she received from a local attorney in New
Jersey and her lack of legal understanding, Christine believed that she had fulfilled all of her
obligations with regard to the Second Amended Complaint by executing and returning the Waiver
of Summons (Filing No. 185-1 at 2). Once she learned that she needed to respond to the Second
Amended Complaint, Christine promptly retained counsel, within days of entry of the Clerk’s
default. Counsel promptly filed a motion to resolve Christine’s errors and to defend her against
Chepurko’s renewed claims. In addition, Christine has asserted a meritorious defense. She asserts
that she cannot be held liable in this civil action because the Court lacks jurisdiction to adjudicate
her claims (Filing No. 185 at 5). Chepurko’s lack of objection to Christine’s Motion further
supports the Court’s finding of good cause to set aside the Clerk’s Entry of Default.
IV. CONCLUSION
For the foregoing reasons, the Motion to Set Aside Entry of Default is GRANTED. The
Clerk is directed to update the docket to reflect that the Clerk’s Entry of Default against
Christine (Filing No. 193) has been set aside.
SO ORDERED.
Date: 2/12/2018

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DISTRIBUTION:

CARAVAN TRADING, LLC
.52 Park Avenue
Park Ridge, New Jersey 07656

Tracy Lyle Hilmer
UNITED STATES DEPARTMENT OF
JUSTICE - Civil Division
P.O. Box 261
Ben Franklin Station
Washington, D.C. 20044

CIMA GREEN, LLC
.52 Park Avenue, Suite A-7
Park Ridge, New Jersey 07656

David F. Hurley
HURLEY & HURLEY PC
[e-mail]

Joseph Furando, 65853-050
EDGEFIELD FEDERAL
CORRECTIONAL INSTITUTION
Inmate Mail/Parcels
P.O. Box 725
Edgefield, South Carolina 29824

Stephen Martin Kohn
KOHN KOHN & COLAPINTO LLP
[e-mail]

Joyce R Branda
UNITED STATES ATTORNEY’S
OFFICE
Commercial Litigation Branch
P.O. Box 261
Ben Franklin Station
Washington, D.C. 20044

Stephen M. Komie
KOMIE AND ASSOCIATES
[e-mail]
Brian J. McCabe
UNITED STATES DEPARTMENT OF
JUSTICE-Civil Division
[e-mail]

David K. Colapinto
KOHN KOHN & COLAPINTO
[e-mail]

Theodore J. Minch
SOVICH MINCH LLP
[e-mail]

John Andrew Goodridge
JOHN ANDREW GOODRIDGE LAW
OFFICE
[e-mail]

Shelese M. Woods
UNITED STATES ATTORNEY’S
OFFICE
[e-mail]

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