MATYEV et al v. KAPUSTIN et al
Filing
44
OPINION. Signed by Judge Noel L. Hillman on 2/2/2017. (tf, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CHINGIZ MATYEV, et al.,
1:16-cv-00530-NLH-AMD
Plaintiffs,
OPINION
v.
SERGEY KAPUSTIN, IRINA
KAPUSTINA, MICHAEL GOLOVERYA,
VLADIMIR SHTEYN, IGOR
ZADOROZHNIY, ISKANDER
IBRAGIMOV, TRT INTERNATIONAL,
LTD., OLEG MITNIK, G AUTO
SALES, INC., GLOBAL AUTO,
INC., EFFECT AUTO SALES,
INC., SK IMPORTS, INC.,
GLOBAL CARGO OY, AUCTION AUTO
USA, INC., ATC LOGISTIC OY,
et al.,
Defendants.
APPEARANCES:
ANNA V. BROWN
MARIA TEMKIN
BROWN LEGAL CONSULTING, LLC
1076 Ocean Avenue
SEA BRIGHT, NJ 07760
On behalf of Plaintiffs
IRINA KAPUSTINA
137 GRASSHOPPER DRIVE
WARMINSTER, PA 18974
Pro Se Defendant
MICHAEL GOLOVERYA
137 GRASSHOPPER DRIVE
WARMINSTER, PA 18974
Pro Se Defendant
VLADIMIR SHTEYN
3325 WOODLAND CIRCLE
HUNTINGDON VALLEY, PA 19006
Pro Se Defendant
HILLMAN, District Judge
This case is a companion to Akishev v. Kapustin, Civil
Action No. 13-7152 (NLH/AMD), and both cases concern a “baitand-switch” fraudulent scheme masterminded and operated by
defendant, Sergey Kapustin, and allegedly assisted by other
defendants, through deceptive online advertising aimed at luring
international customers to wire funds for automobile purchases
and then switching to higher prices, misrepresenting mileage,
condition and location and ownership of these vehicles,
extorting more funds, and failing to deliver the paid-forvehicles.
Presently before the Court are the motions of three
individual Defendants to vacate the Clerk’s entry of default
against them.
For the reasons expressed below, Defendants’
motions will be granted.
BACKGROUND & DISCUSSION
On January 29, 2016, Plaintiffs filed their Complaint
against numerous Defendants, including Irina Kapustina, Michael
Goloverya, and Vladimir Shteyn. 1
Complaint on April 8, 2016.
Plaintiffs filed an Amended
Summonses were returned as executed
1
The Court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1331 (actions arising under the laws of
the United States) and 18 U.S.C. § 1964(c) (jurisdiction over
civil RICO actions). The Court also has supplemental
jurisdiction over state law claims under 28 U.S.C. § 1367.
2
on these three Defendants on June 20, 2016.
Defendants’ Answers
were due on July 11, 2016, but Defendants failed to file their
Answers or otherwise appear in the matter.
On July 22, 2016,
Plaintiffs asked the Clerk to enter default against Kapustina,
Goloverya, and Shteyn, and the Clerk entered default on July 25,
2016.
On July 29, 2016, Kapustina and Goloverya, appearing pro
se, filed motions to set aside default, and at the same time
filed their Answers to Plaintiffs’ Amended Complaint.
On August
10, 2016, Shteyn, also appearing pro se, filed a motion to set
aside default, along with his Answer and cross-claims against
other Defendants.
Plaintiffs have opposed these motions, and
have asked for attorneys’ fees and costs for having to do so.
Federal Rule of Civil Procedure 55(c) provides, “The court
may set aside an entry of default for good cause.”
P. 55(c).
Fed. R. Civ.
A decision to set aside the entry of default
pursuant to Fed. R. Civ. P. 55(c) is left primarily to the
discretion of the district court.
U.S. v. $55,518.05 in U.S.
Currency, 728 F.2d 192, 194 (3d Cir. 1984) (citation omitted).
The Third Circuit does not favor entry of defaults or default
judgments, and “doubtful cases” should “be resolved in favor of
the party moving to set aside the default judgment so that cases
may be decided on their merits.”
Id. (quotations and citations
omitted).
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In determining whether to set aside default, the district
court must consider three factors: “(1) whether plaintiff will
be prejudiced if default is not granted; (2) whether defendant
has a meritorious defense; and, (3) whether defendant's delay
was the result of culpable misconduct.”
Id. (citations
omitted).
This Court finds that all three factors weigh in favor of
vacating the Clerk’s entry of default against Kapustina,
Goloverya, and Shteyn.
First, Plaintiffs will not be prejudiced
if default is vacated.
Even though Plaintiffs contend that
these Defendants willfully ignored proper service, and that only
notice via email of the Clerk’s entry of default spurred them
into action, the four week delay from Defendants’ deadline to
file their Answers and their appearance in the case had a de
minimus effect on the progression of the matter at that time. 2
Second, Defendants, through their Answers, have presented
meritorious defenses to Plaintiffs’ claims, including challenges
to the propriety of Plaintiffs’ service of process.
No. 27, 29, 30.)
(See Docket
Third, when reviewing Defendants’ explanations
2
Instead, Plaintiffs’ opposition to Defendants’ motions has
delayed the case’s progression. If Plaintiffs had not opposed
Defendants’ motions to vacate default, the discovery process
would have commenced as to these Defendants as of July 29, 2016
and August 10, 2016. Because of the defaults and the pending
motions, discovery has not begun.
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for why they did not answer the Amended Complaint within the
time frame provided under the Rules, their explanations include
assertions from all of these Defendants that they never received
personal service of the Amended Complaint and they first learned
of the case against them by way of email from Plaintiff’s
counsel.
Instead of ignoring counsel’s email on July 22, 2016,
they expeditiously prepared their motions and filed their
Answers.
Defendants’ conduct, especially considering their pro
se status, does not constitute “culpable misconduct.”
Finally, if the Court were to deny Defendants’ motions and
entertain motions by Plaintiffs for the entry of default
judgment against these Defendants, which would be the next step
in the defaulting defendant process, the same factors would
support the denial of those motions.
Thus, as directed by the
Third Circuit, this case must move forward with Defendants’
participation so that it will be decided on the merits.
Defendants’ motions to vacate default are granted, and
Plaintiffs’ request for attorneys’ fees and costs is denied.
An appropriate Order will be entered.
Date:
February 2, 2017
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
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