RECOM CORP. v. MILLER BROTHERS, A DIVISION OF WAMPOLE-MILLER, INC.

Filing 67

OPINION & ORDER denying 50 Motion for Default Judgment; and that the Clerks entry of default as to Recom AG is VACATED. Signed by Judge Stanley R. Chesler on 4/13/17. (sr, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
____________________________________
:
Hon. Stanley R. Chesler
RECOM CORP.,
:
Civil Action No. 16-3320
:
Petitioner,
:
:
v.
:
:
OPINION & ORDER
MILLER BROTHERS, A
:
DIVISION OF WAMPOLE-MILLER, INC.,:
:
Respondent.
:
____________________________________:
CHESLER, U.S.D.J.
This matter comes before the Court on the motion for default judgment against
counterclaim Respondent Recom AG by counterclaim Petitioner Miller Brothers (“Miller”). For
the reasons that follow, the motion will be denied.
Miller asserted a counterclaim against both Recom Corp. and Recom AG. In the Opinion
and Order dated December 6, 2016, this Court entered a Judgment against Recom Corp. Recom
AG had not appeared in the action; Miller then requested an entry of default by Recom AG and
now moves for default judgment. Recom AG has now appeared in the action and opposes the
motion.
Recom AG opposes the motion on three grounds: 1) Miller never properly served the
counterclaim on Recom AG; 2) this Court lacks personal jurisdiction over Recom AG; and 3)
Third Circuit law counsels against an entry of default judgment under these circumstances.
A review of the submissions indicates that, at a minimum, Recom AG has a colorable
defense that this Court lacks personal jurisdiction over it. Recom AG contends that it has no

contacts whatever with New Jersey. While Miller disputes this, it is clear that this is indeed a
litigable defense, and a material issue that must be resolved by litigating the case.
As the Third Circuit has stated:
[T]his court does not favor entry of defaults or default judgments. We require
doubtful cases to be resolved in favor of the party moving to set aside the default
judgment so that cases may be decided on their merits.
United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194-195 (3d Cir. 1984). The Third
Circuit has also stated:
Three factors control whether a default judgment should be granted: (1) prejudice
to the plaintiff if default is denied, (2) whether the defendant appears to have a
litigable defense, and (3) whether defendant's delay is due to culpable conduct.
Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000).
There are thus a number of reasons to deny the motion for default judgment and to vacate
the Clerk’s entry of default. Recom AG may not be subject to this Court’s jurisdiction. The
Third Circuit resolves questionable cases in favor of the party moving to set aside the default
judgment so that cases may be decided on the merits. Moreover, Miller is not prejudiced by
denying default judgment, Recom AG appears to have a litigable defense, and the delay is not
due to culpable conduct. The motion for default judgment will be denied.
For these reasons,
IT IS on this 13th day of April, 2017,
ORDERED that Miller’s motion for default judgment (Docket Entry No. 50) is
DENIED; and it is further

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ORDERED that the Clerk’s entry of default as to Recom AG is VACATED.
/s Stanley R. Chesler
STANLEY R. CHESLER. U.S.D.J.

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