Nimer et al v. Adam Travel Services Inc.

Filing 46

ORDER Denying 42 Motion for Default Judgment and Setting Aside Default. Signed by District Judge George Caram Steeh. (BSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
KHETAM NIMER, an individual,
and MONA HAMED, an individual,
Plaintiffs,

Case No. 14-13689

v.

HON. GEORGE CARAM STEEH

ADAM TOURS OF NEW YORK, INC.,
a corporation,
Defendant.
_______________________________/

ORDER DENYING MOTION FOR DEFAULT
JUDGMENT (ECF No. 42) AND SETTING ASIDE DEFAULT
For the second time, Plaintiffs have moved for the entry of a default
judgment. The court granted Plaintiffs’ first motion for default judgment in
2015. On February 28, 2019, the court vacated the default judgment after
determining that Defendant had not been properly served with process.
ECF No. 25. Plaintiffs assert that they re-served the summons and
complaint on September 13, 2019. ECF No. 38-1. After Defendant failed to
respond, Plaintiffs obtained a clerk’s entry of default on May 7, 2020.
Plaintiffs filed a motion for default judgment on May 14, 2020.
On August 2, 2020, Defendant responded to the motion for default
judgment, requesting that the default be set aside and that it be permitted
-1-

to defend the case on the merits. 1 Pursuant to Federal Rule of Civil
Procedure 55(c), it is within the court’s discretion to set aside an entry of
default “for good cause.” Id. The court considers whether “(1) the default
was willful, (2) a set-aside would prejudice plaintiff, and (3) the alleged
defense was meritorious.” United Coin Meter Co. v. Seaboard Coastline
RR, 705 F.2d 839, 844 (6th Cir. 1983) (citation omitted). “Although ‘[a]ll
three factors must be considered in ruling on a motion to set aside an entry
of default,’ when a defendant has a meritorious defense and the plaintiff
would not be prejudiced, ‘it is an abuse of discretion for a district court to
deny a Rule 55(c) motion in the absence of a willful failure of the moving
party to appear and plead.’” United States v. $22,050.00 U.S. Currency,
595 F.3d 318, 324 (6th Cir. 2010). “In general, our cases discussing
motions to set aside default under Rule 55(c) are extremely forgiving to the
defaulted party and favor a policy of resolving cases on the merits instead
of on the basis of procedural missteps.” Id. at 322.
Defendant alleges that it has a meritorious defense: that Plaintiffs’
claims are barred by the statute of limitations. Defendant has satisfied this

Although Defendant has not filed a motion to set aside the default, an
“opposition to a motion for default may be treated as a motion to set aside entry of
default.” United Coin Meter Co. v. Seaboard Coastline RR, 705 F.2d 839, 844 (6th Cir.
1983).
1

-2-

requirement by articulating a defense that is “‘good at law,’ regardless of
whether the defense is actually likely to succeed on the merits.” Id. at 326.
Plaintiffs contend that are likely to be prejudiced by having to proceed
on the merits and take discovery, six years after their complaint was initially
filed. Much of this delay, however, is attributable to Plaintiffs’ initial failure to
properly serve the summons and complaint and subsequent lack of
diligence in prosecuting this case. See ECF Nos. 25, 26, 31, 34. Once the
first default judgment was vacated, Plaintiffs waited six months to serve the
complaint, and several more months to seek a clerk’s entry of default. In
light of this procedural history, the court is hard pressed to find that
Plaintiffs would be prejudiced by setting aside the entry of default.
As for the culpability of Defendant, the record does not reflect a
“willful” failure to appear. Defendant asserts that it was not properly served
with the summons and complaint. The affidavit of the process server
indicates that a “John Doe” was personally served at Defendant’s business
address. ECF No. 38-1. Because the name and title of the person
accepting service have not been provided, the court is unable to discern
whether service was proper. See Fed. R. Civ. P. 4(h); M.C.R. 2.105(D).
Although Plaintiffs suggest that Defendant “hid” from this suit, they provide
no evidence that Defendant has attempted to evade service. Because it is
-3-

unclear whether service was proper, the court cannot conclude that
Defendant’s failure to respond to the complaint was willful. 2 See O.J.
Distrib., Inc. v. Hornell Brewing Co., 340 F.3d 345, 353-55 (6th Cir. 2003)
(“[I]f service of process was not proper, the court must set aside an entry of
default,” without considering the three United Coin Meter factors).
Weighing the United Coin Meter factors, the court finds that
Defendant has established good cause to set aside the default pursuant to
Rule 55(c). Accordingly, IT IS HEREBY ORDERED that Plaintiffs’ motion
for default judgment (ECF No. 42) is DENIED and the clerk’s entry of
default (ECF No. 41) is SET ASIDE.
Dated: October 19, 2020
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
October 19, 2020, by electronic and/or ordinary mail,
s/Brianna Sauve
Deputy Clerk

The record does not reflect whether Plaintiffs sought a waiver of service under
Rule 4(d), which provides that “[a]n individual, corporation, or association that is subject
to service under Rule 4(e), (f), or (h) has a duty to avoid unnecessary expenses of
serving the summons.”
2

-4-