Woodson v. Loram Maintenance of Way Inc.

Filing 25

ORDER that Loram's motion to vacate the Clerk's entry of default 18 is granted, and plaintiff's motion for a default judgment 12 is denied as moot. Loram is directed to file and serve its response to plaintiff's complaint within 20 days of entry of this order. Plaintiff's motion for appointment of counsel 23 is denied. Signed by Hon. David G. Larimer on 8/12/11. (EMA)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
_______________________________________________
JOSEPH WOODSON,

Plaintiff,
DECISION AND ORDER
10-CV-6263L
v.
LORAM MAINTENANCE OF WAY INC.,

Defendant.
________________________________________________
INTRODUCTION
On May 13, 2010, plaintiff Joseph Woodson (“plaintiff”) commenced this action against
defendant Loram Maintenance of Way, Inc. (“Loram”), alleging race-based discrimination and
retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., and
the New York Human Rights Law, N.Y. Exec. Law §290 et seq. (Dkt. #1). Loram was served with
process via certified mail at its Minnesota facility on or about January 26, 2011 (Dkt. #8, #9), but
failed to appear, answer or move to dismiss the complaint. Upon plaintiff’s request, the Clerk’s
entry of default was granted on April 21, 2011 (Dkt. #11). On June 8, 2011 (Dkt. #12), plaintiff
moved for default judgment against defendant.
On June 23, 2011, defendant mailed correspondence to the Court, arguing that Loram has
meritorious defenses to the action, and requesting an opportunity to oppose the plaintiff’s motion
for default judgment. The Court determined that the letter should be treated as a cross motion to
vacate the Clerk’s entry of default and directed that it be filed as such (Dkt. #15), and Loram
thereafter formally moved to set aside the entry of default (Dkt. #18).

For the reasons set forth below, the plaintiff’s motion for a default judgment (Dkt. #12) is
denied, Loram’s cross motion to vacate the entry of default (Dkt. #18) is granted, and Loram is
granted an extension of time to file its answer.

DISCUSSION
The procedure for setting aside of an entry of default for good cause is set forth in Rule 55(c)
of the Federal Rules of Civil Procedure. In assessing a motion pursuant to Fed. R. Civ. Proc. 55(c),
“a court must evaluate: (1) the willfulness of the default; (2) the prejudice to the adversary if the
default is set aside; and (3) whether the defendant can present a meritorious defense.” Gillard v.
Clement, 2008 U.S. Dist. LEXIS 100015 at *3 (W.D.N.Y. 2008), quoting Holford USA Ltd., Inc. v.
Harvey, 169 F.R.D. 41, 44 (S.D.N.Y. 1996). The Court’s discretion to deny such motions is “narrow
in light of the ‘strong policies favoring the resolution of genuine disputes on their merits,’ and the
admonition that ‘doubts are to be resolved in favor of trial on the merits.” Id., 169 F.R.D. 41 at 44,
quoting Traguth v. Zuck, 710 F.2d 90, 94 (2d Cir. 1983).
Loram asserts that its failure to timely answer the complaint was not willful, but was simply
the result of a good faith belief that plaintiff’s attempt to serve Loram via certified mail was, as a
matter of law, defective. Loram cites a host of applicable federal and state case law, as well as
commentary on the relevant procedural rules, in support of this conclusion. (Dkt. #18-1 at 6-7).
There is also no evidence that plaintiff would be prejudiced by granting Loram an additional
opportunity to respond to the complaint, given that this matter is still in its fledgling stages.
With regard to the meritorious defense component, the Second Circuit has held that only a
“low threshold of adequacy” need be shown, Meehan v. Snow, 652 F.2d 274, 277 (2d Cir. 1981),
“measured not by whether there is a likelihood that [the defense] will carry the day, but whether the
evidence submitted, if proven at trial, would constitute a complete defense.” Enron Oil Corp. v.
Diakuhara, 10 F.3d 90, 98 (2d Cir. 1993). Loram’s defenses, including a binding arbitration
agreement which forecloses plaintiff from pursuing an action in this Court and plaintiff’s election
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of remedies through the New York State Division of Human Rights, are meritorious on their face,
and either would provide a complete defense, resulting in the dismissal of this action in its entirety.
These defenses meet and exceed the “low threshold” required to vacate an entry of default.
Loram’s motion to vacate the entry of default is therefore granted.

CONCLUSION
Loram’s motion to vacate the Clerk’s entry of default (Dkt. #18) is granted, and plaintiff’s
motion for a default judgment (Dkt. #12) is denied as moot.. Loram is directed to file and serve its
response to plaintiff’s complaint within twenty (20) days of entry of this order.
Plaintiff’s motion for appointment of counsel (Dkt. #23) is denied.
IT IS SO ORDERED.

_______________________________________
DAVID G. LARIMER
United States District Judge
Dated: Rochester, New York
August 12, 2011.

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