Joe Hand Promotions, Inc. v. Ashby et al

Filing 40

ORDER AND REASONS - the Court GRANTS defendant's motion 32 to set aside the default judgment and therefore VACATES its order and reasons 31 dated April 2, 2014. The Court also orders that defendant pay plaintiff the reasonable attorneys' fees it incurred in securing the entry of default, drafting the motion for default judgment, and responding to the motion under consideration.. Signed by Chief Judge Sarah S. Vance on 4/24/14.(jjs)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOE HAND PROMOTIONS, INC.

CIVIL ACTION

VERSUS

NO: 13-4747

TOMMY ASHBY, SR., TOMMY ASHBY,
JR., MARK ASHBY, AND WHEREHOUSE
BAR AND GRILL

SECTION: R

ORDER AND REASONS
Defendant Mark Ashby moves the Court to set aside the
default judgment entered against him.1 Because Ashby has shown
that relief from the judgment is warranted, the Court GRANTS his
motion.

I.

BACKGROUND
Plaintiff filed this lawsuit on June 7, 2013, alleging that

defendants Tommy Ashby, Sr., Tommy Ashby, Jr., Mark Ashby, and
Wherehouse Bar and Grill violated 47 U.S.C. §§ 553 and 605 by
intercepting a pay-per-view UFC broadcast and displaying it at
Wherehouse without Joe Hand's authorization.2 The record reflects
that Mark Ashby and Wherehouse were served on December 13, 2013,3
and Tommy Ashby, Jr. on December 16, 2013.4 Tommy Ashby, Sr. was
not served.5 None of the defendants timely responded to the

1

R. Doc. 32.

2

R. Doc. 1.

3

R. Docs. 7, 8.

4

R. Doc. 6.

5

See R. Doc. 5.

complaint.6
On January 21, 2014, plaintiff requested that a default be
entered against defendants Tommy Ashby, Jr., Mark Ashby, and
Wherehouse Bar & Grill.7 The Clerk of Court entered an order of
default as to those defendants on January 22, 2014,8 and
plaintiff moved for a default judgment on February 13, 2014.9 The
parties later stipulated to the dismissal of Tommy Ashby, Jr. and
Wherehouse Bar and Grill.10
On February 24, 2013, eleven days after Joe Hand first moved
for a default judgment, and nearly two months after his answer
was due, Mark Ashby (hereinafter "Ashby" or "defendant") filed an
answer to the complaint.11 Ashby asserted in his answer that he
is not liable to Joe Hand because, among other reasons, he "has
no affiliation with 'Wherehouse Bar & Grill' [where the offending
broadcast was allegedly displayed] and/or any person, firm[,]
corporation or other entity that does, or formerly, conducted
[sic] business under any such trade name."12
6

See R. Docs. 6, 7, 8.

7

R. Doc. 11.

8

R. Doc. 13.

9

R. Doc. 14.

10

R. Docs. 27, 29.

11

R. Doc. 18.

12

R. Doc. 18 at 8; see also id. ("[N]or did this
defendant ever exercise any control or enjoy any supervisory
capacity over any activities of such entity at any time.").
2

On April 2, 2014, the Court granted plaintiff's motion for a
default judgment against Ashby and awarded plaintiff $16,700 in
damages, costs, and attorneys' fees.13 Ashby now moves the Court
to set aside the default judgment under Federal Rule of Civil
Procedure 60(b)(1).14

II.

LEGAL STANDARD
Under Rule 55, which governs defaults and default judgments,

"[t]he court may set aside an entry of default for good cause,
and it may set aside a default judgment under Rule 60(b)." Rule
60(b), in turn, provides as follows:
On motion and just terms, the court may relieve a party
or its legal representative from a final judgment, order,
or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable
neglect;
(2) newly discovered evidence that, with reasonable
diligence, could not have been discovered in time
to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or
extrinsic), misrepresentation, or misconduct by an
opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released or
discharged; it is based on an earlier judgment that
has been reversed or vacated; or applying it
prospectively is no longer equitable; or
(6) any other reason that justifies relief.
In determining whether to set aside a default judgment under
Rule 60(b)(1), district courts should examine three factors:
"whether the default was willful, whether setting it aside would

13

R. Doc. 31.

14

R. Doc. 32.
3

prejudice the adversary, and whether a meritorious defense is
presented." Jenkens & Gilchrist v. Groia & Co., 542 F.3d 114, 119
(5th Cir. 2008) (quoting Matter of Dierschke, 975 F.2d 181, 183
(5th Cir. 1992)). "Courts may also consider whether the public
interest was implicated, whether there was a significant
financial loss to the defendant, and whether the defendant acted
expeditiously to correct the default." Id. (citing Dierschke, 975
F.2d at 183-84). Not all of the foregoing factors need be
considered. Id. If the defendant has failed to present a
meritorious defense, or if the court finds that the default was
willful, the court may deny the motion to set aside the default
judgment without further analysis. Id. at 119-20; see also 10A
Charles Allen Wright, et al., Federal Practice and Procedure §
2697 (3d ed. 2010) ("In most cases . . . the court will require
the party in default to demonstrate a meritorious defense to the
action as a prerequisite to vacating the default entry or
judgment."); Dierschke, 975 F.2d at 184 ("[W]hen the court finds
an intentional failure of responsive pleadings there need be no
other finding.").
In balancing the above factors, the court should be guided
by the principle that default judgments are not favored in the
law. See Dierschke, 975 F.2d at 183 ("[C]ourts 'universally favor
trial on the merits' . . . ." (internal quotation marks omitted)
(quoting Bridoux v. E. Air Lines, Inc., 214 F.2d 207, 210 (D.C.
Cir. 1954))). Thus, "any doubt should, as a general proposition,
4

be resolved in favor of [the defaulting party] to the end of
securing a trial upon the merits." Jenkens & Gilchrist, 542 F.3d
at 123 (quoting Gen. Tel. Corp. v. Gen. Tel. Answering Serv., 277
F.2d 919, 921 (5th Cir. 1960)); see also Rogers v. Hartford Life
& Acc. Ins. Co., 167 F.3d 933, 938 (5th Cir. 1999) ("Courts
construe Rule 60(b)(1) liberally to ensure that they resolve
doubtful cases on the merits.").

III. DISCUSSION
Ashby's principal argument in contending that the default
judgment should be set aside is that the Court mistakenly stated
in its order and reasons granting the default judgment that Ashby
had failed to file a responsive pleading to Joe Hand's
complaint.15 In fact, Ashby did file an answer on February 24,
2014 -- after the entry of default and after Joe Hand moved for a
default judgment, but before the Court's order granting the
motion for a default judgment. But this, standing alone, does not
entitle Ashby to relief -- the fact remains that Ashby's answer
was filed nearly two months late, after default was validly
entered against him.16 Accordingly, the Court must consider the
factors enumerated in Jenkens & Gilchrist in order to determine
whether relief from the default judgment is warranted. See

15

See R. Doc. 31 at 6.

16

Ashby did not file a motion for leave to file an outof-time answer, nor did he move to set aside the entry of
default.
5

Dierschke, 975 F.2d at 183 (when defendant appears in the action
after the clerk enters default but before the default judgment is
rendered, courts should consider those factors in determining
whether relief is warranted).
With regard to wilfulness, Ashby has presented no valid
reason for his failure to timely respond to the complaint. He
contends in his reply brief that his failure to respond was not
willful because he "is an unexperienced [sic] and unsophisticated
litigant" and because he had no interest in Wherehouse, the venue
where the offending broadcast was allegedly displayed.17 The
Court finds that this is not a valid explanation for Ashby's
dilatory conduct. See Express Air, Inc. v. Gen. Aviation Servs.,
Inc., 806 F. Supp. 619, 620-21 (S.D. Miss. 1992) (defendant's
belief that it was not a proper party to the suit was not a valid
excuse for its failure to respond to the complaint); R.R. Maint.
Laborers' Local 1274 Pension, Welfare, & Educ. Funds v. Am. R.R.
Const. Co., 96 F.R.D. 433, 436 (N.D. Ill. 1983) (rejecting
defendant's argument that his delay was excusable because he was
"merely a lay defendant who is unfamiliar with the legal process"
and noting that "[n]either ignorance nor carelessness on the part
of a litigant or his attorney provide grounds for relief under
Rule 60(b)(1)" (quoting Ben Sager Chems. Int'l v. E. Targosz &
Co., 560 F.2d 805, 809 (7th Cir. 1977))). It is undisputed that

17

R. Doc. 37-2 at 3.
6

Ashby was served with the complaint in December, and he was
clearly sophisticated enough to obtain counsel and respond to
plaintiff's allegations -- indeed, he did just that once the
motion for default judgment against him was pending.
Nonetheless, the Court is unable to conclude, on the present
record, that Ashby's failure to respond was actually willful. It
is possible that Ashby merely acted negligently in ignoring the
complaint and summons. Cf. Jenkens & Gilchrist, 542 F.3d at 123
("[A]ny doubt should, as a general proposition, be resolved in
favor [the defaulting party] . . . ."). Accordingly, although
this factor weighs against setting aside the default judgment,
the Court will proceed to consider the other factors described in
Jenkens & Gilchrist.
Turning to the next factor, whether defendant has presented
a meritorious defense, the Court finds that Ashby has alleged
facts in his answer that, if true, would allow him to prevail on
the merits of this suit. As noted above, Ashby contends that he
has no affiliation whatsoever with Wherehouse and thus had
nothing to do with the unauthorized broadcast of Joe Hand's UFC
program. This factor thus weighs in favor of setting aside the
default judgment. Id. at 122; see also DIRECTV, Inc. v. Meyers,
214 F.R.D. 504, 513 (N.D. Iowa 2003) (defendant's averment that
he had not unlawfully intercepted DIRECTV's satellite signal, as
alleged in the complaint, militated in favor of setting aside
default judgment); cf. Moldwood Corp. v. Stutts, 410 F.2d 351,
7

352 (5th Cir. 1969) (defendant seeking to set aside default
judgment must "show[], not by conclusion, but by definite
recitation of facts," that he has a valid defense to the
plaintiff's allegations).
With regard to the third factor, prejudice, the Court
concludes that Joe Hand has not shown that setting aside the
default judgment would cause it to suffer prejudice. Joe Hand
states conclusorily that "[t]here is a clear and present risk
that additional discovery difficulties will present themselves as
witnesses may become unavailable . . . and crucial
cable/satellite provider records may no longer be available," and
that "there exists a danger of fraud and collusion by the
Defendants, records destroyed, and/or fraudulent transfer of
assets in anticipation of an adverse monetary judgment."18 But
plaintiff provides no facts supporting its speculation that such
problems will occur, and the Court sees no reason to think that
they will. Cf. Jenkens & Gilchrist, 542 F.3d at 122 (finding
plaintiff's claims of prejudice "ineffectual" because it merely
"refer[red] to expected difficulties [it might] face if forced to
proceed with further litigation"). As Joe Hand acknowledges,
"requiring a plaintiff to prove his case does not constitute
prejudice." Id. (citing Lacy v. Sitel Corp., 227 F.3d 290, 293
(5th Cir. 2000)); accord Wright, et al., supra, § 2699.

18

R. Doc. 36 at 7.
8

The Court also finds that the amount of Ashby's potential
liability weighs in favor of setting aside the default judgment.
Although not astronomical, a $16,700 judgment would likely
constitute a significant burden on a single individual. See
Jenkins & Gilchrist, 542 F.3d at 122 (noting that the large value
of a claim militates in favor of a trial on the merits).
Considering the totality of the factors analyzed above, the
Court finds that setting aside the judgment is warranted. While
Ashby's failure to articulate a convincing explanation (or,
indeed, any explanation) for his failure to timely respond weighs
heavily in favor of letting the judgment stand, the remaining
factors cut the other way. Moreover, as noted above, in light of
the disfavored status of default judgments, doubtful cases should
be resolved in favor of a trial on the merits.
Joe Hand has requested that, in the event the Court sets
aside the default judgment, it award Joe Hand the reasonable
attorneys' fees it expended in securing the entry of default,
drafting the motion for default judgment, and responding to the
motion under consideration.19 See generally Wright, et al.,
supra, § 2700 (noting that court may grant relief from a default
judgment contingent on various conditions). The Court finds that
such an award is appropriate, given the lack of explanation for
Ashby's failure to timely respond. See Corso v. First Frontier

19

R. Doc. 36 at 7-8.
9

Holdings, Inc., 205 F.R.D. 420, 421 (S.D.N.Y. 2001) (conditioning
order setting aside default judgment on defendants reimbursing
plaintiff for the attorneys' fees expended on the motion to set
aside the default judgment because defendants' "defaults were . .
. due to their inattentiveness"). If the parties cannot stipulate
to the proper amount of attorneys' fees, plaintiff should file a
claim for attorneys' fees by affidavit with supporting
documentation.
IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS defendant's

motion to set aside the default judgment and therefore VACATES
its order and reasons dated April 2, 2014.20 The Court also
orders that defendant pay plaintiff the reasonable attorneys'
fees it incurred in securing the entry of default, drafting the
motion for default judgment, and responding to the motion under
consideration.
New Orleans, Louisiana, this 24th day of April, 2014.
__
_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

20

R. Doc. 31.
10