Aramark Educational Services, LLC v. V/Gladieux Enterprises, Inc., et al

Filing 25

ORDER granting 20 Motion to Set Aside Clerks Entry of Default. Signed by District Judge Lawrence P. Zatkoff. (MVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ARAMARK EDUCATIONAL
SERVICES, LLC.,
Plaintiff,

Case No. 12-12060

v.

Hon. Lawrence P. Zatkoff

TIMOTHY M. GLADIEUX, and
V/GLADIEUX ENTERPRISES, INC.,
Defendants.
__________________________________________/
OPINION AND ORDER
AT A SESSION of said Court, held in the United States Courthouse,
in the City of Port Huron, State of Michigan, on March 5, 2013
PRESENT: THE HONORABLE LAWRENCE P. ZATKOFF
UNITED STATES DISTRICT JUDGE
I. INTRODUCTION
This matter is before the Court on Defendants’ Motion to set aside Clerk’s entry of default [dkt
20]. Plaintiff has filed a response. The Court finds that the facts and legal arguments are adequately
presented in the parties’ papers such that the decision process would not be significantly aided by oral
argument. Therefore, pursuant to E.D. Mich. L.R. 7.1 (f)(2), it is hereby ORDERED that the motion be
resolved on the briefs submitted. For the following reasons, Defendants’ motion is GRANTED.
II. BACKGROUND
On or about May 7, 2012, Plaintiff Aramark Educational Services, LLC filed a three-count
complaint in this Court, alleging two counts of breach of contract, and one count of fraud relating to a
written contract for vending services (“Contract”) at the University of Toledo, in Toledo, Ohio. The
contract was between Plaintiff, a Delaware corporation, and Defendant V/Gladieux Enterprises, Inc.

(“VG”) an Ohio corporation that was at some time located at 3400 Executive Parkway, Toledo, Ohio.
Additionally, Plaintiff names Timothy M. Gladieux (“Gladieux”), a non-party to the contract, as a
defendant. Gladieux is a resident of Michigan. Plaintiff brought the case under 28 U.S.C. § 1332, as a
diversity action.
Plaintiff states that, pursuant to the Contract, VG was required to purchase, pay for, provide and
maintain all equipment necessary for performance of the Contract and to contribute $280,000.00 in
equipment (the “Equipment”) to the University of Toledo. According to Plaintiff, VG installed the
Equipment at the University’s facilities, and Gladieux represented to Plaintiff that the Equipment
contributed to the University was owned by VG free and clear of any liens. Unbeknownst to Plaintiff,
rather than purchasing the Equipment and contributing it to the University,VG leased or financed the
Equipment from Huntington National Bank (“HNB”). Plaintiff states that when VG defaulted under its
agreement with HNB, Plaintiff was forced to purchase the Equipment from HNB and suffered damages
in the amount of at least $114,000.00 (the purchase price for the Equipment).
On June 5, 2012, Defendants filed a Motion to Dismiss [dkt 3] claiming improper venue.
On January 25, 2013, the Court entered an Order denying the Motion to Dismiss is its entirety [dkt 9].
Pursuant to Fed. R. Civ. P. 12, Defendants were required to file responsive pleadings to Plaintiff’s
Complaint on or before February 8, 2013. Defendants failed to file any responsive pleading to Plaintiff’s
Complaint after the denial of the Motion to Dismiss. On February 13, 2013, Plaintiff filed Requests for
Clerk’s Entry of Default as to Defendants and Requests for Clerk’s Entry of Default Judgment as to
Defendants. On February 13, 2013, the Clerk filed Entry of Default against Defendants due to their
failure to file a responsive pleading to Plaintiff’s Complaint. On February 17, 2013, Defendants filed the
instant Motion seeking to set aside the Clerk’s Entry of Default.
III. LEGAL STANDARD

2

Pursuant to Fed. R. Civ. P. 55(c), the Court may set aside the Entry of Default for “good cause.”
In evaluating whether good cause exists in a given case, courts consider whether: (1) the default was
willful; (2) a set-aside would prejudice the plaintiff; and (3) the alleged defense is meritorious. Dassault
Systemes, SA v. Childress, 663 F.3d 832, 839 (6th Cir. 2011). The Court “enjoys considerable latitude
under the ‘good cause shown’ standard” to grant a defendant relief from a default entry. See Waifersong
Ltd. Inc. v. Classic Music Vending, 976 F.2d 290, 292 (6th Cir. 1992)
IV. ANALYSIS
A. Willfullness
Defendants briefing is not clear as to why Defendants failed to file a responsive pleading.
Defendants seem to cite “simple carelessness,” and state that, “[a]t most [Defendants’] failure to answer is
neglectful, not intentional.” The Court notes that Defendants’ answer was not egregiously late, as it was
filed only 11 days after the deadline. Moreover, before filing their responsive pleading, Defendants filed
the instant Motion, four days after Plaintiff requested entry of default.

As such, the Court finds that

Defendants’ untimely responsive pleading was the result of counsel’s oversight, not willfulness or
otherwise culpable conduct.
B. Prejudice to Plaintiff
Defendants assert that Plaintiff will not be prejudiced by setting aside the default because it was
“merely procedural” and Defendants’ failure to answer was unintentional. Moreover, the parties were
engaged in settlement negotiations during the relevant time period. Defendants further state that were the
Court to set aside the default Plaintiff would, at most, be required to litigate the case on the merits, which
does not constitute prejudice. See Shepard Claims Serv., Inc. v. William Darrah & Assoc., 796 F.2d 190,
193 (6th Cir. 1986).

3

Plaintiff does not appear to have addressed this factor, and therefore, the Court agrees with
Defendants and finds that no prejudice to Plaintiff would result should the Court set aside the Clerk’s
Entry of Default.
C. Meritorious Defense
Defendants’ defense in this case appears to be that VG was not required to contribute $280,000 in
equipment because the Agreement states that “[VG] represents that it will make a separate financial
commitment to [Plaintiff] in the amount of $280,000.” According to Defendants, a “commitment” meant
that they were not required to affirmatively take any action, only to “commit” to take action at some point.
Thus, according to Defendants, all VG was required to do was “promise” Plaintiff that VG contribute
$280,000 in equipment.
Defendants also set forth a defense to Plaintiff’s attempt to pierce the corporate veil and hold
Gladieux liable for the acts of VG:
plaintiff wants to pierce the corporate veil in a pathetic attempt to seek a judgment from
defendant Timothy Gladieux. While plaintiff makes unsubstantiated allegations that the
distinct identity of V/Gladieux’s status, they fail to provide one single allegation showing
any reason for such a ludicrous request. In fact their own contract with they seem to like
to mis-quote states that “Subcontractor (V/Gladieux) is a recognized and experienced
provider of the Services.” Exactly how did this recognized and experienced corporation,
which had been doing this for years suddenly fall from its own personality?
(errors in original). Defendants’ “meritorious” argument as to Count III is that:
Plaintiff again makes allegations with nothing to back it up. Clearly the alleged contract is
controlling in this matter, and it is without mention of a requirement of owning the
equipment outright, or a transfer to the University free and clear of liens. The argument is
entirely absurd, and without merit. What if the equipment had a value much higher, and
encompassed the $280,000 Section 7(D) of the alleged contract. Clearly and
unquestionably, a meritorious defense exists in this matter.
(errors in original). Thus, Defendants appear to argue that Plaintiff has not provided evidence to support
the allegations in the Complaint. The Court notes, however, that Plaintiff is not required to support the
allegations in the Complaint with evidence. Rather, Plaintiff need only set forth a short and plain

4

statement that it is entitled to relief; and factual allegations sufficient “to raise a right to relief above the
speculative level” so that the claim is “plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555, 570 (2007); Fed. R. Civ. P. 8.
Nevertheless, although Defendants’ brief is rife with errors and hardly coherent in places, the
Court will—at this stage of the proceedings—liberally construe Defendants’ argument that under the
terms of the Contract, they were only required to “commit” to providing the Equipment. Despite the
deficiencies, the Court finds that Defendants were otherwise responsive in this case by timely filing their
Motion to Dismiss and by engaging, to some extent, in settlement discussions with Plaintiff. The interests
of justice weigh in favor of allowing Defendants to defend against Plaintiff’s claims.
V. CONCLUSION
Accordingly, and for the reasons set forth above, Defendants’ Motion to set aside Clerk’s entry of
default [dkt 20] is GRANTED.
IT IS SO ORDERED.
s/Lawrence P. Zatkoff
LAWRENCE P. ZATKOFF
UNITED STATES DISTRICT JUDGE

Date: March 5, 2013

5