Star Asia International, Inc. et al v. Old Dominion Footwear, Inc. et al

Filing 36

MEMORANDUM OPINION AND ORDER re: 27 MOTION to Vacate Default Judgment Pursuant to F.R.C.P. 60(b) filed by Malcolm K Sydnor. For the foregoing reasons, the Court concludes that Sydnor's default was willful. In light of t hat, and mindful of the importance of the willfulness factor to the vacatur analysis, the Court need not even examine the other factors in the analysis of whether to vacate entry of the default judgment. Instead, exercising its discretion, the Court declines to vacate the default judgment. See, e.g., Brien, 71 F.3d at 1078 ("[C]ourts should not set aside a default when it is found to be willful.")(citation omitted); Gesualdi v. Reid, No. 14-CV-4212 (ADS), 2017 W L 752157, at *10 (E.D.N.Y. Feb. 27, 2017) (denying a motion to vacate a default judgment based on a finding that the default was willful, without consideration of the meritorious defense and prejudice factors); SEC v. Breed, No. 01-CV-7798 (CSH ), 2004 WL 1824358, at *12 (S.D.N.Y. Aug. 13, 2004) ("Among the three criteria courts use to determine whether to vacate a default judgment under Rule 60(b)(1), willfulness is preeminent, and a willful default will not normally be set aside." (citations omitted)). Sydnor's motion is therefore DENIED. The Clerk of Court is directed to terminate Docket No. 27. (Signed by Judge Jesse M. Furman on 6/5/2019) (mro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
STAR ASIA INTERNATIONAL, INC.
:
AND STAR ASIA CUSTOMS, TRADE &
:
SECURITY, INC.,
:
:
Plaintiffs,
:
:
-v:
:
OLD DOMINION FOOTWEAR, INC.,
:
MALCOLM K. SYDNOR and BARRY L. GUTHRIE,
:
:
Defendants.
:
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18-CV-4741 (JMF)
MEMORANDUM OPINION
AND ORDER

JESSE M. FURMAN, United States District Judge:
On May 30, 2018, Plaintiffs Star Asia International, Inc. and Star Asia Customs, Trade &
Security, Inc. brought this breach of contract case against Defendants Old Dominion Footwear
Inc. (“Old Dominion”), Malcom K. Sydnor, and Barry L. Guthrie. Docket No. 1, ¶¶ 29-37. On
June 7, 2018, Sydnor’s wife properly accepted service on his behalf. See Docket No. 14; see
Fed. R. Civ. P. 4(e)(2)(B). 1 Pursuant to Rule 12(a) of the Federal Rules of Civil Procedure,
Sydnor then had twenty-one days — that is, until June 28, 2018 — to file a response. He failed
to do so. See Docket No. 14. On July 3, 2018, the Court ordered Plaintiffs to file any motion for
entry of default judgment by July 17, 2018, and ordered Defendants — including Sydnor — to
file any opposition by July 24, 2018. See Docket No. 18. Defendants were also ordered to
appear before the Court on August 15, 2018, to show cause why default judgment should not be
entered against them. See id. On July 16, 2018, Plaintiffs moved for entry of default judgment

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Old Dominion was also served on June 7, 2018. See Docket No. 14. Service on Guthrie
was unsuccessful. See Docket No. 15.

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against Old Dominion and Sydnor. See Docket Nos. 22-23. Eight days later, Sydnor’s counsel
filed a notice of appearance. See Docket No. 24. Nevertheless, Sydnor failed to file any
opposition to Plaintiffs’ motion and failed to attend the August 15th hearing. On August 16,
2018, therefore, the Court entered default judgment against Sydnor. See Docket No. 25. Sydnor
now moves to vacate the default judgment entered against him. See Docket No. 27. 2
The relevant standards are undisputed. Default judgments are disfavored. See, e.g.,
Prosperity Partners, Inc. v. Bonilla, 249 F. App’x 910, 912 (2d Cir. 2007); Enron Oil Corp. v.
Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). But “courts have an interest in expediting litigation
[and] abuses of process may be prevented by enforcing those defaults that arise from egregious
or deliberate conduct.” Am. All. Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 61 (2d Cir. 1996). The
question of whether to vacate a default judgment, once entered, is committed to the discretion of
the Court. See New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). In undertaking the relevant
inquiry, courts consider four factors: “(1) whether the default was willful, (2) whether the
defendant demonstrates the existence of a meritorious defense, and (3) whether and to what
extent, vacating the default will cause the non-defaulting party prejudice.” State St. Bank & Tr.
Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 166-67 (2d Cir. 2004) (citations omitted).
Among these four factors, willfulness — which requires “something more than mere
negligence,” such as “egregious or deliberate conduct,” Green, 420 F.3d at 108 — “carries the
most weight.” De Curtis v. Ferrandina, 529 F. App’x 85, 86 (2d Cir. 2013). Indeed, in general,
courts should not set aside a default that is found to be willful. SEC v. Risman, 7 F. App’x 30, 31
(2d Cir. 2001) (citing Brien v. Kullman Indus., Inc., 71 F.3d 1073, 1078 (2d Cir. 1995)).

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The Court entered default judgment against Old Dominion as well. See Docket No. 25.
It has not moved to vacate.

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Applying these standards here, the Court finds that Sydnor’s default was willful and that
vacatur would therefore be inappropriate. Notably, Sydnor does not contest that he received and
failed to respond to the Complaint. See Docket No. 30, ¶¶ 6-7, 16. Instead, invoking Plaintiffs’
failure to file proof of service with respect to the Court’s July 3rd Order, he claims that he was
unaware of the August 15th show cause hearing. See Docket No. 28 (“Def.’s Br.”), at 6-7, 11.
That argument, however, is unavailing for at least four reasons. First and foremost, the Court
was not even required to hold a hearing before entering default judgment; it could have entered
default judgment based on Plaintiffs’ application alone. See, e.g., Fustok v. ContiCommodity
Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989) (“[I]t was not necessary for the District Court to hold
a hearing, as long as it ensured that there was a basis for the damages specified in a default
judgment.”). Relatedly, it is not clear that Sydnor was legally entitled to notice of the August
15th hearing. Rule 55(b)(2) of the Federal Rules of Civil Procedure provides that a party who
has appeared in an action at the time of an application for default judgment must be served with
written notice of such application at least seven days before any hearing. But, “[b]y its terms,”
the Rule applies only to notice of the application itself and only to defendants who have already
appeared. Green, 420 F.3d at 105. In this case, Sydnor did not appear until after Plaintiffs had
already moved for entry of default and, accordingly, was not entitled to notice under the Rule.
See generally id. (finding no requirement to notify a defendant who had not clearly indicated an
intent to defend against the plaintiff’s claims).
Second, as a matter of fact, Sydnor concedes that, on or about July 24, 2018 — several
weeks before the hearing — he received a copy of Plaintiffs’ motion for default judgment, which
explicitly referenced and relied on “the reasons set forth in [Plaintiff’s attorney’s] affidavit.”
Def.’s Br. 6; see Docket No. 22. The affidavit, in turn, referenced the July 3rd Order — and, in

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fact, represented that Defendants were served with the July 3rd Order. See Docket No. 23, ¶¶
40-44. Sydnor’s failure to take issue with that representation or to claim unawareness of the July
3rd Order until this motion belies his claim of ignorance. And, at a minimum, he was
indisputably on notice of the fact that there was a July 3rd Order of the Court.
Third, and in any event, even a cursory review of the docket would have revealed the July
3rd Order to Sydnor’s counsel. It is a mere six entries before his notice of appearance and is the
longest docket entry on a docket with, at the time, only twenty-four total entries. Filing a notice
of appearance after an earlier docket entry does not excuse a failure to review prior entries. Cf.
Mennen Co. v. Gillete Co., 719 F.2d 568, 570 (2d Cir. 1983) (“[I]t is customarily the duty of trial
counsel to monitor the docket and to advise himself when the court enters an order against which
he wishes to protest.”); Themis Capital v. Dem. Rep. Congo, 09-CV-1652, 2014 WL 4379100, at
*5 (S.D.N.Y. Sept. 4, 2014) (“not fault[ing]” a firm for billing high hours to a client because
“new entrants to [a] case are required to get up to speed, and to learn relevant facts, law, and
strategy”); Friedman v. State Univ. of New York at Binghamton, No. 3:06-CV-0399, 2006 WL
2882980, at *3 (N.D.N.Y. Oct. 5, 2006) (“[A]ttorneys have a duty to be aware of entries on
the docket of their client’s cases and are on constructive notice of such entries.”). Moreover,
Paragraph 1(G) of the Court’s Individual Rules and Practices in Civil Cases provides that
counsel are “responsible for checking the docket sheet regularly, regardless of whether they
receive an ECF notification of case activity.”
Fourth, e-mail correspondence between the parties suggests that Sydnor’s attorney
deliberately chose to delay his response. On July 24, 2018, Sydnor’s counsel wrote to Plaintiffs’
counsel: “This firm was retained today by defendant Malcolm Sydnor in the above-referenced
matter. It appears that the plaintiffs have filed a request for the entry of default against Mr.

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Sydnor. Given our recent retention, would you consent to the withdrawal of the application for
default as against Mr. Sydnor and for an extension of time to file a responsive pleading?”
Docket No. 31-2, at 2. On August 1, 2018, he wrote again: “Please advise as to whether your
client agrees to withdrawal of the motion for the entry of default judgment and for an extension
of time to allow Malcolm Sydnor to file a responsive pleading. If we don’t receive a response by
tomorrow, we will have no choice but to file opposition to the pending application.” Id.
(emphasis added). But Sydnor filed no such opposition for another sixty-two days. And, as
noted, he failed to appear at the August 15th show cause hearing.
That failure to act and to appear — especially in light of Sydnor’s counsel’s written
acknowledgement that action was required (“we will have no choice but to file opposition to the
pending application”) — does not amount to due diligence. Nor does it amount to “excusable
neglect.” State St. Bank, 374 F.3d at 177 (“Where a party fails to act with diligence, he will be
unable to demonstrate that his conduct constituted ‘excusable neglect.’”). Viewed in isolation,
the failure to learn about the July 3rd Order and the August 15th show cause hearing might have
constituted administrative error. But, coupled with the delay of over two months between the
receipt of the motion for default judgment and the filing of the instant motion to vacate, that
failure sounds in strategy. That alone is reason enough to deny Sydnor’s motion to vacate. See,
e.g., Am. All. Ins. Co., 92 F.3d at 60 (refusing to vacate a judgment where the decision to default
was apparently strategic).
For the foregoing reasons, the Court concludes that Sydnor’s default was willful. In light
of that, and mindful of the importance of the willfulness factor to the vacatur analysis, the Court
need not even examine the other factors in the analysis of whether to vacate entry of the default
judgment. Instead, exercising its discretion, the Court declines to vacate the default judgment.

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See, e.g., Brien, 71 F.3d at 1078 (“[C]ourts should not set aside a default when it is found to be
willful.”) (citation omitted); Gesualdi v. Reid, No. 14-CV-4212 (ADS), 2017 WL 752157, at *10
(E.D.N.Y. Feb. 27, 2017) (denying a motion to vacate a default judgment based on a finding that
the default was willful, without consideration of the meritorious defense and prejudice factors);
SEC v. Breed, No. 01-CV-7798 (CSH), 2004 WL 1824358, at *12 (S.D.N.Y. Aug. 13, 2004)
(“Among the three criteria courts use to determine whether to vacate a default judgment under
Rule 60(b)(1), willfulness is preeminent, and a willful default will not normally be set aside.”
(citations omitted)). Sydnor’s motion is therefore DENIED. The Clerk of Court is directed to
terminate Docket No. 27.

SO ORDERED.
Dated: June 5, 2019
New York, New York

__________________________________
JESSE M. FURMAN
United States District Judge

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