J&J Sports Productions, Inc. v. Three Brothers of Hyattsville, LLC

Filing 14

MEMORANDUM AND ORDER GRANTING 11 motion to set aside the order of default and SETTING ASIDE 9 Clerk's entry of default. Signed by Judge Deborah K. Chasanow on 12/24/2015. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
J&J SPORTS PRODUCTIONS, INC.
:
v.

:

Civil Action No. DKC 15-1327

:
THREE BROTHERS OF HYATTSVILLE,
LLC

:

MEMORANDUM OPINION AND ORDER
Presently pending and ready for resolution in this case
involving alleged violations of the Federal Communications Act of
1934 is a motion to set aside the order of default, filed by
Defendant Three Brothers of Hyattsville, LLC (“Defendant”).
No. 11).

(ECF

The relevant issues have been briefed and the court now

rules, no hearing being deemed necessary.

Local Rule 105.6.

For

the following reasons, Defendant’s motion will be granted.
I.

Background
Plaintiff J&J Sports Productions, Inc. (“Plaintiff”) filed a

proof of service indicating that Defendant was served on July 22,
2015.

(ECF No. 6).

Plaintiff subsequently filed a motion for

clerk’s entry of default due to Defendant’s failure to file a
timely answer.

(ECF No. 8).

Default for want of answer or other

defense was entered October 23, 2015.

(ECF No. 9).

On November 17, 2015, Defendant filed a motion to set aside
the order of default (ECF No. 11), supplemented by a memorandum in
support of the motion (ECF No. 12).

Defendant asserts that its

resident agent and managing member, Gerardo Labastida, did not

immediately receive a copy of the summons and complaint because he
had not updated company records with the Maryland State Department
of Assessments and Taxation.

(Id. at 1-2).

Having retained

counsel, Defendant now intends to respond to and defend this
lawsuit.

(Id. at 2).

Plaintiff filed a response in opposition

arguing, inter alia, that Defendant has not satisfied the “good
cause” standard.
II.

(ECF No. 13).

Defendant did not file a reply.

Analysis
Pursuant

to

Rule

55(c)

of

the

Federal

Rules

of

Civil

Procedure, a court may “set aside an entry of default for good
cause.”

In deciding a motion to set aside entry of default

judgment, a district court “should consider whether the moving
party has a meritorious defense, whether it acts with reasonable
promptness, the personal responsibility of the defaulting party,
the prejudice to the party, whether there is a history of dilatory
action, and the availability of sanctions less drastic.”

Payne ex

rel. Estate of Calzada v. Brake, 439 F.3d 198, 204-05 (4th Cir.
2006) (citations omitted).

The United States Court of Appeals for

the Fourth Circuit has:
repeatedly expressed a strong preference that,
as a general matter, defaults be avoided and
that claims and defenses be disposed of on
their merits. E.g., Tazco, Inc. v. Director,
Office of Workers Compensation Program, U.S.
Dep’t of Labor, 895 F.2d 949, 950 (4th Cir.
1990) (“The law disfavors default judgments as
a general matter.”); Consolidated Masonry &
Fireproofing[, Inc. v. Wagman Constr. Corp.],
383 F.2d [249, 251 (4th Cir. 1967)] (“Generally
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a default should be set aside where the moving
party acts with reasonable promptness and
alleges a meritorious defense.”).
This
imperative
arises
in
myriad
procedural
contexts, but its primacy is never doubted.
Colleton Preparatory Acad., Inc. v. Hoover Universal, Inc., 616
F.3d 413, 417 (4th Cir. 2010) (footnote omitted).

Defendant’s

motion must be “liberally construed in order to provide relief from
the onerous consequences of defaults and default judgments.”

Id.

at 421 (citing Tolson v. Hodge, 411 F.2d 123, 130 (4th Cir. 1969)).
Here, all factors militate in favor of setting aside the entry
of default, albeit some more forcefully than others.

Plaintiff

argues that Defendant fails to assert a meritorious defense, as
Plaintiff’s
liability.
establish

allegations

largely

go

(ECF No. 13, at 3-4).
the

existence

of

a

to

damages

rather

than

“[A]ll that is necessary to
‘meritorious

defense’

is

a

presentation or proffer of evidence, which, if believed, would
permit either the Court or the jury to find for the defaulting
party.”

United States v. Moradi, 673 F.2d 725, 727 (4th Cir. 1982)

(citing Central Operating Co. v. Utility Workers of America, 491
F.2d 245, 252 n.8 (4th Cir. 1974).

Defendant attaches an affidavit

of Mr. Labastida in which he affirms that “[b]ecause the claim
arises from an incident that occurred in the restaurant more than
two years ago, it has been difficult to investigate the allegations
and determine the accuracy of the claim.”
Defendant

also

contends

that

Plaintiff’s
3

(ECF No. 12-1 ¶ 8).
complaint

alleges

insufficient facts, and that “Defendant should be permitted to
conduct

discovery

Plaintiff’s

claims

with

regard

as

to

to

the

liability

factual

under

the

basis

of

statute

[]
and

applicability of the proper measure of damages if liability is
established.”

(ECF No. 12, at 3).

In light of the liberal

construction that is to be afforded the defaulting party in these
circumstances,

Defendant

has

made

a

sufficient

showing

of

a

meritorious defense.
In addition, Defendant’s delay has been minimal, and “delay in
and of itself does not constitute prejudice to the opposing party.”
Colleton

Preparatory,

616

F.3d

at

418

(citation

omitted).

Plaintiff also asserts that it will be prejudiced by Defendant’s
professed loss of access to records and former employees.

(ECF No.

13, at 7 (“If there are no records to access, Plaintiff’s efforts
to perform discovery will likely be severely limited.”)).

There is

no indication, however, that Defendant’s delay created this issue;
such

prejudice

whether

presumably

Defendant

answered

would

have

in

August

existed
rather

irrespective
than

of

November.

Defendant retained counsel and filed the pending motion less than
one month after default was entered.

Under these circumstances,

Defendant acted with reasonable promptness once it received actual
notice of the pendency of this action after entry of default.

See

Wainwright’s Vacations, LLC v. Pan Am., 130 F.Supp.2d 712, 718
(D.Md. 2001) (finding reasonably prompt a delay of just over one
4

month

between

entry

of

default

and

the

defendant’s

motion).

Accordingly, at this early stage of the litigation, there would be
no significant prejudice to Plaintiff if the motion were granted.
Moreover, the parties agree that there is no history of
dilatory

action,

and

there

sanctions are unavailable.

is

no

showing

that

less

drastic

Defendant contends that retaining and

paying counsel to file the pending motion is itself a sanction.
(ECF No. 12, a 4).

Hiring counsel would have been necessary under

any circumstances, but the time spent on filing the motion is
indeed an added expense.

Plaintiff asks that it be awarded counsel

fees as an alternative sanction.

(ECF No. 13, at 8).

At this

juncture, however, the court declines to do so.
Ultimately, in light of the strong preference that defaults be
avoided and that claims and defenses be resolved on their merits,
the motion to set aside the order of default will be granted.
III. Conclusion
Based on the foregoing, it is this 24th day of December, 2015,
by the United States District Court for the District of Maryland,
ORDERED that:
1.

The motion to set aside the order of default filed by

Defendant Three Brothers of Hyattsville, LLC (ECF No. 11), BE, and
the same hereby IS, GRANTED;
2.

The clerk’s entry of default (ECF No. 9) BE, and the same

hereby IS, SET ASIDE; and
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3.

The clerk will transmit copies of this order to counsel

for the parties.

/s/
DEBORAH K. CHASANOW
United States District Judge

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