Gold'n Plump Farms Limited Partnership, LLP v. Wenda America, Inc.
MEMORANDUM OPINION AND ORDER denying plaintiff's 78 Motion for Default Judgment; granting Defendant's 95 Motion for Leave to File Its Answer to the Second Amended (Written Opinion). Signed by Judge John R. Tunheim on January 10, 2014. (DML)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
GOLD’N PLUMP FARMS LIMITED
Civil No. 12-3198 (JRT/LIB)
MIDWEST WAREHOUSE &
DISTRIBUTION SYSTEM, INC.,
GOLD’N PLUMP POULTRY, INC.,
Fourth Party Plaintiff,
MIDWEST WAREHOUSE &
DISTRIBUTION SYSTEM, INC.,
Fourth Party Defendant.
Lauren E. Lonergan, BRIGGS & MORGAN, PA, 80 South Eighth Street,
Suite 2200, Minneapolis, MN 55402, for plaintiff.
Brian D. Steffes, FISHER BREN & SHERIDAN, LLP, 920 Second
Avenue South, Suite 975, Minneapolis, MN 55402 and Thomas L. Garrity,
LAW OFFICES OF JEFFRETY A. MAGNUS, 5201 Eden Avenue,
Suite 340, Edina, MN 55436, for defendant.
This case arises from the alleged accidental shipment of an unapproved processing
ingredient to a poultry company, which resulted in the United States Department of
Agriculture requiring the company to destroy some of its poultry. Wenda America, Inc.
(“Wenda”) shipped the unapproved ingredient to Gold’n Plump Poultry, Inc. (“GNP
Poultry”), who processed some poultry with the ingredient before sending the poultry to
its corporate affiliate, plaintiff Gold’n Plump Farms Limited Partnership, LLP (“GNP
Farms”), for sale to the public. The mistake in shipping allegedly occurred at Wenda’s
distribution center, Midwest Warehouse & Distribution System, Inc. (“Midwest”).
GNP Farms now moves for entry of default judgment against Midwest. Midwest
brings a motion for leave to file an answer to GNP Farms’ Second Amended Complaint.
Because Midwest has established that there is good cause to set aside any entry of
default, the Court will deny GNP Farms’ motion. Additionally, the Court will allow
Midwest to file an answer to the Second Amended Complaint.
GNP Farms and GNP Poultry commenced this action against Wenda in Stearns
County District Court. (Not. of Removal ¶ 1, Dec. 28, 2012, Docket No. 1.) The
complaint alleged breach of contract, breach of various warranties, and negligence
associated with the erroneous ingredient shipment. (Not. of Removal, Ex. 1.) Wenda
removed the action to federal court on December 28, 2012. (See Not. of Removal.)
On January 3, 2013, GNP Farms, as the sole plaintiff, filed an amended complaint
against Wenda alleging breach of contract based on a third party beneficiary theory and
the same breach of warranties and negligence claims brought in the original complaint.
(First Am. Compl., Jan. 3, 2013, Docket No. 4.) Wenda then filed a third party complaint
against GNP Poultry bringing claims for breach of contract and alleging that GNP
Poultry was grossly negligent in processing poultry with the erroneously shipped
ingredient. (Third Party Compl., Jan. 17, 2013, Docket No. 7.)
During a July 10, 2013 deposition of Edward Borkowski, the president of
Midwest, GNP Farms learned that a Midwest employee made certain errors in preparing
the shipment at issue. (Aff. of Maren F. Grier, Ex. 4 at 19:21-20:24, Nov. 20, 2013,
Docket No. 81.) In light of this information, fourth party plaintiff GNP Poultry filed a
complaint against Midwest on September 16, 2013, bringing claims for negligence and
negligent misrepresentation based upon Midwest’s shipment of the unapproved
ingredient. (Fourth Party Compl. ¶¶ 55-66, Sept. 16, 2013, Docket No. 62.) Midwest
filed an answer on October 8, 2013. (Answer to Fourth Party Compl., Oct. 8, 2013,
Docket No. 73.)
Also on September 16, 2013, GNP Farms filed a Second Amended Complaint
(“SAC”) naming Wenda and Midwest as defendants, bringing a claim for negligence
against Midwest. (Second Am. Compl., Sept. 16, 2013, Docket No. 61.) GNP Farms
successfully served Midwest with the SAC on September 19, 2013. (Am. Summons,
Sept. 17, 2013, Docket No. 63; Summons Returned Executed, Oct. 4, 2013, Docket
No. 71.) Midwest’s answer to the SAC therefore was due October 10, 2013, but Midwest
did not file an answer by this day.
CORRESPONDENCE WITH MIDWEST
The parties dispute the reason for Midwest’s failure to file an answer and whether
Midwest was aware of the SAC. Therefore, the Court will describe the communications
between the attorneys before the instant motions were filed.
On October 16, 2013, counsel for GNP Farms emailed Thomas Garrity, one of the
attorneys representing Midwest who had begun working on Midwest’s file on
September 27, 2013, and inquired about expert reports. (Aff. of Thomas Garrity ¶ 1, Ex.
1, Dec. 3, 2013, Docket No. 91.) Counsel asked:
Mr. Garrity, do you anticipate putting in an expert report? Defendants’
reports were due on October 2, 2013. Is it your interpretation under the
current scheduling order that as a fourth-party defendant, your report would
be due November 1?
(Id., Ex. 1.) The Scheduling Order, entered into on March 28, 2013, provides that with
respect to expert reports:
The Plaintiffs’ disclosures shall be made on or before September 2, 2013.
The Defendant’s disclosures shall be made on or before October 2, 2013.
To the extent necessary, the Third-Party Defendant [GNP Poultry]’s
disclosures shall be made on or before November 1, 2013. All rebuttal
disclosures shall be made on or before November 29, 2013.
(Scheduling Order at 4, Mar. 28, 2013, Docket No. 23.) Garrity replied “I need to discuss
this file with Jeff. Today is the 16th -- I’m supposed to have an expert report in 15 days?
I don’t know that I can live with the Scheduling Order. I will have to get back to you.”
(Garrity Aff., Ex. 1.)
Counsel for GNP Farms again emailed Garrity on October 30, 2013, inquiring
whether Midwest planned to file a response to the SAC and about the status of Midwest’s
Rule 26 disclosures, which were past due, and requests for certain discovery made during
Borkowski’s July deposition. (Grier Aff., Ex. 1.) Garrity stated in response:
Please send me a copy of the Second Amended Complaint; I don’t recall
seeing a Second Amended Complaint directed against Midwest; the
pleadings in this case are a nightmare. According to the caption,
Midwest is a defendant in the original action? I am involved because
they are a fourth party defendant. Was there a motion to amend the
pleadings to join them as a defendant in a Second Amended Complaint?
Was I served with that motion? I don’t recall seeing that, either.
(Grier Aff., Ex. 2.) Garrity also promised to follow up regarding the Rule 26 disclosures
and outstanding discovery requests from Borkowski’s deposition. (Id.) Counsel for GNP
Farms then emailed a copy of the SAC to Garrity. (Id.) Garrity avers that the October 30
email “was the first time I knew a Second Amended Complaint had been served upon
Midwest.” (Garrity Aff. ¶ 6.)
Garrity then spoke with his boss, Jeff Magnus and told Magnus that he needed
help drafting an answer. (Garrity Aff. ¶ 8.) Garrity “thought Mr. Magnus had agreed to
interpose the Answer to the Second Amended Complaint and I took that task off my list
of things to worry about.” (Id.)
On November 5, 2013, counsel for GNP Farms e-mailed Garrity to notify him that
Wenda and GNP Farms/Poultry agreed to postpone all of the scheduled
depositions. . . . . If necessary they will be rescheduled to a later date.
Please note, however, that we still expect Midwest to promptly answer
the complaint, provide its Rule 26(a)(1) disclosures and provide the
information Midwest agreed to provide at its Rule 30(b)(6) deposition.
(Id., Ex. 3.)
MOTION FOR DEFAULT
On November 20, 2011, GNP Farms filed a motion for default judgment against
Midwest. (Mot. for Default J., Nov. 20, 2011, Docket No. 78.) Later Garrity attempted
to contact GNP Farms to ascertain whether they would acquiesce to a late-filed answer.
(Garrity Aff. ¶¶ 11-13.) Garrity also performed an investigation to determine why he had
not been aware of the SAC. (Id. ¶ 14.) Garrity discovered “that when the file was
forwarded to our office by e-mail, our office opened the e-mail but simply missed seeing
the Second Amended Complaint contained within all the other papers, including the
Fourth Party Complaint. We simply missed it.” (Id.)
On November 22, 2011, Midwest filed an answer to the SAC. (Answer, Nov. 22,
2013, Docket No. 85.) GNP Farms threatened to bring a motion to strike the answer for
failure to comply with Federal Rule of Civil Procedure 6, which requires permission from
the court to file an answer after the time for doing so has expired. (Decl. of Maren Grier,
Ex. 1, Dec. 16, 2013, Docket No. 94.) Midwest withdrew the answer, and now brings a
motion for leave to file its answer to the SAC. (Mot. for Leave to File Answer, Dec. 17,
2013, Docket No. 95.)1
After the present motions were filed GNP Farms and GNP Poultry settled with
(Stipulation for Partial Dismissal with Prejudice, Dec. 20, 2013, Docket
No. 105.) Accordingly the Court dismissed GNP Farms’ claims against Wenda, Wenda’s
Midwest has also moved to amend the scheduling order. (Mot. to Vacate or Amend
Scheduling Order, Dec. 20, 2013, Docket No. 100.) The Magistrate Judge has scheduled a
hearing on that motion for January 13, 2014. (Notice of Hearing, Dec. 20, 2013, Docket
claims against GNP Poultry, and GNP Poultry’s counterclaims against Wenda. (Order of
Partial Dismissal, Dec. 23, 2013, Docket No. 108.)
MOTION FOR DEFAULT
Federal Rule of Civil Procedure 55 provides that “[w]hen a party against whom a
judgment for affirmative relief is sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must enter the party’s default.” Fed.
R. Civ. P. 55(a). “A judgment of default may, thereafter, be entered on application to the
Court.” Semler v. Klang, 603 F. Supp. 2d 1211, 1218 (D. Minn. 2009); see also Fed. R.
Civ. P. 55(b). “The Federal Rules of Civil Procedure commit the entry of a default
judgment against a party to the sound discretion of the trial court.” FTC v. Packers
Brand Meats, Inc., 562 F.2d 9, 10 (8th Cir. 1977). There is a strong judicial policy
against default judgments and a “preference for adjudication on the merits.”
Oberstar v. FDIC, 987 F.2d 494, 504 (8th Cir. 1993).
Characterization of Motion
GNP Farms’ motion is one for a default judgment under Rule 55(b). But GNP
Farms did not move for, and the clerk has not made, an entry of default against Midwest
under Rule 55(a). “[E]ntry of default under Rule 55(a) must precede grant of a default
judgment under Rule 55(b).” Johnson v. Dayton Elec. Mfg. Co., 140 F.3d 781, 783
(8th Cir. 1998). Therefore a district court may not enter a default judgment against a
defendant unless an entry of default has been made. See Prince v. Caribou Coffee Co.,
Civ. No. 10-4429, 2011 WL 808366, at *1 (D. Minn. Jan. 27, 2011), report and
recommendation adopted by, 2011 WL 808352 (D. Minn. Feb. 28, 2011). Because GNP
Farms did not first seek the entry of default, its motion for default judgment is
procedurally improper. See United States ex rel. Sammarco v. Ludeman, Civ. No. 090880, 2010 WL 1335460, at *15 (D. Minn. Jan. 28, 2010) (“A motion for default
judgment is therefore procedurally improper where, as here, the movant has not yet
accomplished the first step: entry of default by the clerk.”).
GNP Farms argues that its motion can be treated as one for simultaneous entry of
default and entry of default judgment. As support for this proposition, GNP Farms cites
Johnson v. Dayton Electric Manufacturing Co., 140 F.3d 781 (8th Cir. 1998). In Johnson,
the plaintiff did not seek entry of default by the clerk before filing a motion for default
judgment. Id. at 783. After the district court granted the motion, the defendant filed a
motion to set aside the default judgment and “argued that the court’s order should be
considered an entry of default under Fed. R. Civ. P. 55(a) that may be set aside ‘[f]or
good cause shown’ under Rule 55(c).” Id. The district court concluded that its motion
should be considered an entry of default rather than an entry of default judgment, and the
Eighth Circuit agreed, explaining:
When a party ‘has failed to plead or otherwise defend’ against a pleading
listed in Rule 7(a), entry of default under Rule 55(a) must precede grant of
a default judgment under Rule 55(b). Thus, [plaintiff] was wrong to move
for a default judgment and was rather underhanded to make that motion
without notice to an attorney with whom he had been in contact for seven
months and to whom he had furnished a ‘courtesy’ copy of the complaint.
Id. (citations omitted). Additionally, the Eighth Circuit reasoned that proceeding directly
to entry of a default judgment without first entering a default would prejudice the ability
of the defendant to have the default set aside because “relief from a default judgment
requires a stronger showing of excuse than relief from a mere default order.” Id. (internal
quotation marks omitted).
Therefore, although Johnson potentially supports the
proposition that the Court may treat a premature motion for entry of default judgment as
one for the entry of default, Johnson does not confer upon the Court the ability to
consolidate the entry of default and the entry of default judgment in the manner
contemplated by GNP Farms.
When faced with similar procedural situations courts in this district, while noting
that entry of default judgment would be inappropriate in the absence of prior entry of
default, have gone on to consider whether, even if the Clerk had entered a default
judgment, good cause would justify setting aside any such default. See, e.g., Ludeman,
2010 WL 1335460, at *16 (“Although the Clerk of Court has not entered a default . . .
and entry of a default judgment would not be appropriate given the law in the Eighth
Circuit, Plaintiff has, arguably, presented evidence . . . that [defendant] did not respond to
the Amended Complaint within the time permitted by the Rules . . . . However, even if
the Clerk of Court did enter a default against [defendant], this Court would consider
whether good cause justifies setting aside any such default.”); Johnson v. Allied
Interstate, Inc., Civ. No. 02-910, 2002 WL 1906024, at *2 (D. Minn. Aug. 19, 2002)
(“Even if a default had been entered by the Clerk of Court after Johnson filed her motion
for default judgment, the Court would have ample grounds for vacating it.”). The Court
will adopt this approach with respect to GNP Farms’ motion because it allows Midwest
the opportunity to take advantage of the less stringent “good cause” standard for setting
aside an entry of default. See Puppe v. Ametek, Inc., Civ. No. 10-3888, 2012 WL
3870556, at *3 (D. Minn. Sept. 6, 2012) (“It is particularly appropriate to apply a less
stringent standard to cases where a defendant has made an appearance before a default
judgment since ‘there is a judicial preference for adjudication on the merits,’ and ‘it is
likely that a party who promptly attacks an entry of default, rather than waiting for a
grant of a default judgment, was guilty of an oversight and wishes to defend the case on
the merits.’” (emphasis in original) (quoting Johnson, 140 F.3d at 784)). Additionally
such an approach avoids the inefficiency created by denying the premature motion for
default judgment and requiring GNP Farms to obtain an entry of default before refiling
the motion only to have the Court find that good cause exists to set aside that default.
Under Rule 55, the Court “may set aside an entry of default for good cause.” Fed.
R. Civ. P. 55(c). In determining whether good cause exists, the Court weighs “whether
the conduct of the defaulting party was blameworthy or culpable, whether the defaulting
party has a meritorious defense, and whether the other party would be prejudiced if the
default were excused.” Johnson, 140 F.3d at 784.
Blameworthy or Culpable
In determining the blameworthiness or culpability of the defaulting party, the
Court “distinguish[es] between contumacious or intentional delay or disregard for
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deadlines and procedural rules, and a marginal failure to meet pleading or other
deadlines.” Id. (internal quotation marks omitted). Here, Midwest claims that its failure
to file the answer was caused by confusion due to the at times incomprehensible
collection of pleadings in this litigation and a miscommunication between Garrity and
Magnus regarding drafting of the answer.
The Court finds that the initial failure to respond to the SAC was not blameworthy
or culpable in light of the confusing pleadings. Garrity indicated that he failed to realize
the SAC was a separate pleading from the Fourth Party Complaint filed on the same day,
to which Midwest did interpose an answer. This type of confusion does not suggest an
intentional delay or disregard for deadlines. See United States ex rel. Shaver v. Lucas W.
Corp., 237 F.3d 932, 933 (8th Cir. 2001) (setting aside a default judgment when defendant
erroneously believed that the complaint at issue related to a contemporaneously filed
lawsuit between the same parties); Bigham v. Vogt Heating, Air Conditioning &
Plumbing, LLC, Civ. No. 11-2526, 2012 WL 1394533, at *2 (D. Minn. Apr. 23, 2012)
(finding failure to respond to the complaint reasonable where three days after receiving
the complaint at issue defendants received a notice of dismissal related to a different
dispute involving the same parties).
Additionally, once Garrity received notice on October 30 of the SAC and the need
for an answer, the failure to file an answer was a result of miscommunication. Garrity
submitted an affidavit indicating that:
Our failure to Answer the Second Amended Complaint was not a deliberate
disregard for the Rules. I failed to interpose an Answer to the Second
Amended Complaint due to an honest mistake. Once I become aware of
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the need to interpose an Answer, I discussed the situation with Jeff Magnus
and thought he was doing the Answer; he did not have that same
understanding and he thought I was doing the Answer.
(Garrity Aff. ¶ 15; see also Aff. of Jeffrey A. Magnus ¶¶ 7-8, Dec. 2, 2013, Docket
No. 86 (“The simple answer is that following the earlier discussions regarding the need to
interpose an Answer . . . there was a misunderstanding between myself and attorney
Thomas Garrity as to who would take responsibility for filing the Answer . . . .”).) The
contentions of Garrity and Magnus that the failure to file an answer was a mistake rather
than a willful and intentional violation of the Rules are supported by the fact that
Midwest did interpose a timely answer to the Fourth Party Complaint. Surely if Midwest
intended to avoid its obligation to be involved in this litigation and deliberately disregard
its obligation to timely respond to pleadings, it would not have filed a timely answer to
that complaint. Indeed, as soon as Garrity and Magnus realized their error (when GNP
Farms filed the motion for default judgment) they filed an answer to the SAC, suggesting
that their explanation for the delay is credible.
GNP Farms argues that Midwest’s failure to participate in this lawsuit extends
beyond its failure to answer the SAC and therefore demonstrates a pattern of deliberately
disregarding the Rules.
GNP Farms cites Midwest’s failure to comply with the
scheduling order in disclosing expert reports, general failure to “diligently participate in
this lawsuit,” filing an answer to the SAC without seeking leave of the Court, and failure
to provide Rule 26(a) disclosures, as evidence of its “scofflaw attitude” which justify the
entry of default. (Reply at 4, 6, Dec. 16, 2013, Docket No. 93.)
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With respect to the failure to comply with the scheduling order, the Court finds
that GNP Farms’ claim is exaggerated.
GNP Farms claims that Midwest has not
disclosed experts “and the deadline to do so has passed.” (Reply at 8.) As support GNP
Farms cites to the Scheduling Order which says nothing about when Midwest, a fourth
party defendant is required to submit expert reports. Instead, it appears that GNP Farms
assumed that the deadline for a third party defendant (who was actually a party to the
lawsuit when the Scheduling Order was filed) would also apply to Fourth Party
Defendants. (See Scheduling Order at 4.) Because the Scheduling Order did not clearly
set any deadline for Midwest’s disclosure of expert reports, the Court declines to find that
its failure to disclose such reports suggests blameworthiness or culpability.
The Court is similarly not persuaded by the contention that Midwest has
demonstrated culpability by failing to “diligently participate” in this lawsuit. Midwest
made its president available for a deposition early in the litigation, albeit pursuant to a
subpoena. Midwest timely responded to the Fourth Party Complaint, has been responsive
to the communications of opposing counsel, attended depositions, timely responded to
the present motion for default – including interposing an answer, has filed a motion to
amend the scheduling order, and otherwise seems engaged in the litigation.
The Court also finds that Midwest’s filing of a late answer without prior approval
of the Court does not demonstrate sufficient blameworthiness or culpability to warrant
the entry of default. As explained above, Midwest’s counsel did not realize their mutual
mistake in failing to file an answer until the motion for default was filed. Additionally,
upon the threat of a motion to strike, Midwest promptly filed an appropriate motion and
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withdrew its answer. These actions suggest that the late-filed answer was an act of
misguided diligence, rather than an effort to deliberately disobey the rules
Finally, although the Court is troubled by Midwest’s continued failure to file its
Rule 26(a) disclosures, this failure appears to be closely related to its failure to file an
answer to the SAC, and therefore does not appear to be fairly characterized as a separate
event for purposes of determining blameworthiness. In his October 31 email Garrity also
asked counsel for GNP Farms to clarify which aspects of the Rule 26 disclosures it
believed were missing stating “you’ve taken Midwest’s deposition and you have their
documents.” (Greir Aff., Ex. 2.) Due to Midwest’s prior involvement in the suit, it does
not appear that all of the information required by Rule 26 remained undisclosed at the
time the deadline for such disclosures passed. Additionally, the record does not reflect
that GNP Farms responded to this request for clarification. Accordingly, the Court finds
that the failure to file timely Rule 26 disclosures, although certainly careless, does not
reflect sufficient blameworthiness or culpability to warrant entry of default. See Johnson,
140 F.3d at 784 (“[T]he combined conduct of Dayton Electric’s in-house attorney and its
insurer was careless, risking precisely the adverse result rendered by the district court.
But it was not contumacious, it did not exhibit an intentional flouting or disregard of the
court and its procedures, and it only briefly delayed the litigation.”).
“Whether a meritorious defense exists is determined by examining whether the
proffered evidence would permit a finding for the defaulting party.” Stephenson v. El-
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Batrawi, 524 F.3d 907, 914 (8th Cir. 2008) (internal quotation marks omitted). The task
for the Court is not to resolve disputed facts, but rather to determine whether the
defendant has come forward with facts that, if true, would provide a defense. See
Johnson, 140 F.3d at 785 (explaining that the defendant need not show that he will
succeed on the merits or that the evidence is undisputed but rather that “the proffered
evidence would permit a finding for the default party” (internal quotation marks
Midwest argues that it has a meritorious defense because a jury could find that the
damages suffered by GNP Farms were caused by GNP Poultry’s failure to ascertain that
the wrong ingredient had been shipped and proceeding to process poultry with the wrong
ingredient. Midwest cites to the report of an expert retained by Wenda, who concluded
that “had GNP Poultry implemented and practiced its food safety program consistent with
industry standards and common sense, it would have identified the [erroneous ingredient]
before it was used . . . to process any food product.” (Mem. in Opp. to Mot. for Default J.
at 4, Dec. 2, 2013, Docket No. 87.) Midwest lays out a series of errors that GNP Poultry
made in using the wrong ingredient, which if a jury found to be true could reduce or
possibly eliminate Midwest’s liability for causing GNP Farms’ damages. (Id. at 4-7.)
GNP Farms argues that Midwest does not have a meritorious defense because
“even assuming for the sake of argument that GNP Poultry has caused some of the
damages, it is absolutely clear that Midwest Warehouse will not be excused from all
liability here.” (Reply at 7-8 (emphasis added).) But GNP Farms also seeks entry of
default judgment as to causation. Being responsible for causing less than the total
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damages sought by a plaintiff is certainly a meritorious defense to a claim of complete
liability. The important question for purposes of determining whether to set aside entry
of default is whether the outcome would be the same if default is entered or if litigation
proceeds on the merits. See Stephenson, 524 F.3d at 914 (“The underlying concern is
whether there is some possibility that the outcome after a full trial will be contrary to the
result achieved by the default.” (alterations and internal quotation marks omitted)).
Liability for causing all of GNP Farms’ damages is a very different outcome than liability
for causing some of those damages.
GNP Farms also argues that Midwest is not entitled to rely on the findings of
Wenda’s expert because that expert may have been opining only as to fault as between
Wenda and GNP Poultry, not Midwest and GNP Poultry.2 The Court notes that its task at
this stage is limited to determining whether the proffered evidence would permit a
finding for Midwest. See Johnson, 140 F.3d at 785. Wenda’s expert identified numerous
practices that GNP Poultry should have engaged in and that, if they had been engaged in
could have reduced or eliminated the damages suffered by GNP Farms. This is sufficient
for the Court to determine that “if true, Defendant’s claim presents a meritorious
defense.” Metcalf v. E.I. du Pont de Nemours & Co., Civ. No. 05-1035, 2006 WL
GNP Farms also takes issue with Midwest’s reliance upon the expert report of Wenda
because (a) Midwest did not disclose that expert and (b) “GNP Farms’ expert disagrees.” (Reply
at 8.) First, that Midwest has not disclosed this expert does not suggest that there is not a
meritorious defense. Indeed it would defeat the purpose of the inquiry if a plaintiff could prevail
on the meritorious defense question by saying, “Do not listen to defendant’s factual contentions
about the merits because they have not yet disclosed them in an answer.” The question for the
Court is whether, if the defendant answers and participates in litigation on the merits, does it
have a meritorious defense to the conduct alleged. Second, it is immaterial for purposes of
determining whether Midwest might have a meritorious defense that GNP Farms’ expert
disagrees with Wenda’s expert, as the Court is not required to resolve disputed facts at this stage.
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1877069, at *5 (D. Minn. July 6, 2006). Because Midwest has come forward intending to
defend the lawsuit on the merits, the Court finds that good cause exists to set aside any
default that could have been entered. See Am. States Ins. Corp. v. Tech. Surfacing, Inc.,
178 F.R.D. 518, 521 (D. Minn. 1998) (“[W]here a defendant appears and indicates a
desire to contest an action, a court may exercise its discretion to refuse to enter default, in
accordance with the policy of allowing cases to be tried on the merits.” (internal
quotation marks omitted)).
Finally, GNP Farms argues that it will be prejudiced because of its inability to
obtain timely discovery if the Court were to determine that any entry of default should be
set aside. The key piece of information GNP Farms contends it is missing is the name of
the Midwest employee who made the alleged shipping error. 3 GNP Farms contends that
it is prejudiced in its ability to depose this person because discovery closed on
December 31, 2013. (Reply at 6.) Additionally, GNP Farms argues generally that its
“ability to promptly and efficiently prosecute its case has been hindered.” (Id. at 8.)
With respect to the inability to obtain discovery, the Court concludes that GNP
Farms has not suffered prejudice sufficient to justify entry of default. When GNP Farms
filed the SAC, discovery was already under way and the deposition of Midwest’s
president had been completed. Therefore, this is not a situation where the plaintiff was
prejudiced by its inability to obtain any information about a defendant or its defenses due
At oral argument, counsel for GNP Farms indicated that Midwest has now provided the
name of the employee but has not yet produced his address.
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to a failure to file a timely response. Additionally, after the SAC was filed Midwest
continued to participate in depositions. GNP Farms’ complaint that it can no longer take
the deposition of Midwest employees because discovery has closed does not demonstrate
real prejudice stemming from Midwest’s failure to answer.
Rather, the prejudice
described by GNP Farms was due to the deadlines imposed by the scheduling order,
which GNP Farms could have moved to amend. Motions for default are not proper
substitutes for motions to amend a scheduling order. Certainly when a new defendant is
added to the litigation more than six months after a scheduling order has been entered, the
plaintiff would be well within its right to seek an appropriate extension of discovery
deadlines to accommodate the new addition to the litigation.
GNP Farms also contends that Midwest has not provided certain documents that
were promised during the deposition of Midwest’s president. Again, a motion for default
should not be used as a substitute for a motion to compel. The outstanding requests relate
back to a deposition that was taken prior to Midwest being added as a defendant in the
lawsuit. Therefore, the failure to obtain these documents is unrelated to Midwest’s
failure to file an answer to the SAC. Based on Midwest’s recent behavior, the Court
believes that Midwest will be an active participant in the litigation.4
With respect to GNP Farms’ ability to promptly and efficiently prosecute its case,
the Court concludes that any prejudice suffered has been de minimis. First, the SAC is
almost identical to the Fourth Party Complaint that Midwest did answer. The late-filed
The Court cautions Midwest, however, that should it fail, in the future, to comply with
any deadlines set by Court orders, the Federal Rules of Civil Procedure, or the Local Rules, the
Court will entertain requests for sanctions based on such a failure.
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answer to the SAC does not contain any new affirmative defenses or denials that were not
contained in the answer to the Fourth Party Complaint. Therefore, GNP Farms is on
notice of Midwest’s defenses and factual contentions. Furthermore, the manner in which
this case has been pled and litigated certainly suggests that GNP Farms, GNP Poultry,
and Wenda have done as much, if not more, to hinder that goal than Midwest. In sum,
because “[t]he entry of default judgment is not favored by the law and should be a rare
judicial act,” In re Jones Truck Lines, Inc., 63 F.3d 685, 688 (8th Cir. 1995) (internal
citations and quotation marks omitted), and GNP Farms has not demonstrated sufficient
prejudice to warrant the entry of default, the Court will deny GNP Farms’ motion.
MOTION FOR LEAVE TO FILE AN ANSWER
Federal Rule of Civil Procedure 6 provides that “[w]hen an act may or must be
done within a specified time, the court may, for good cause, extend the time . . . on
motion made after the time has expired if the party failed to act because of excusable
neglect.” Fed. R. Civ. P. 6(b)(1)(B). “Excusable neglect is an ‘elastic concept’ that
empowers courts to accept, ‘where appropriate, . . . late filings caused by inadvertence,
mistake, or carelessness, as well as by intervening circumstances beyond the party’s
control.’” Chorosevic v. MetLife Choices, 600 F.3d 934, 946 (8th Cir. 2010) (quoting
Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 392, 388 (1993)).
In determining whether neglect is excusable courts consider the possibility of prejudice to
the non-moving party, the length of the delay in filing and the impact of that delay on the
judicial proceedings, the reasons for the delay, and whether the late-filers acted in good
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faith. Id. Courts also consider whether the late-filer has a meritorious defense. Id. at
The Court has already determined that the prejudice suffered by GNP Farms in
allowing the litigation to proceed is minimal. Additionally, the Court has found that
Midwest acted inadvertently and carelessly rather than in bad faith and that Midwest has
a meritorious defense. Furthermore, the delay of several weeks in filing an answer does
not threaten to substantially delay the judicial proceedings. Therefore, the Court will
grant Midwest’s motion and allow it file an answer to the SAC.
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that:
Plaintiff’s Motion for Default Judgment [Docket No. 78] is DENIED.
Defendant’s Motion for Leave to File Its Answer to the Second Amended
Complaint [Docket No. 95] is GRANTED. Defendant’s answer must be filed within five
(5) days of the entry of this Order.
Defendant must serve its Rule 26(a) disclosures upon Plaintiff within five
(5) days of the entry of this Order.
DATED: January 10, 2014
at Minneapolis, Minnesota.
JOHN R. TUNHEIM
United States District Judge
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