Golden Grove, Inc. v. Ware

Filing 22

ORDER denying 12 Motion for Entry of Default; granting 19 Motion for relief from order; and granting 20 Motion to set aside plaintiff's motion for default judgment. Plaintiff is ordered to file an answer defendant's counterclaims. The parties are reminded to comply with all court deadlines and rules and that failure to do so may result, in the Court's discretion, in sanctions against the offending party. Signed by US District Judge Terrence W. Boyle on 3/23/2017. Certified copy sent via US Mail to defendant National Fumigation, c/o Brad Ware at 2221 Asheford Place Lane, Charleston, SC 29414. (Stouch, L.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
NO. 7:16-CV-64-BO
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GOLDEN GROVE, INC.,
Plaintiff,
v.

NATIONAL FUMIGATION, LLC
D/B/A BRADLEY WARE "AKA"
R. BRAD WARE D/B/A NATIONAL
FUMIGATION,
Defendant.

ORDER

This matter comes before the Court on plaintiffs' motion for entry of default, [DE 12],
defendant's motion for relief from order [DE 19], and defendant's motion to set aside plaintiffs
motion of default judgment. [DE 20]. For the reasons discussed below, plaintiffs motion for
entry of default is denied and defendant's motions are granted.
BACKGROUND
Plaintiff filed an amended complaint with this Court on May 27, 2016. Plaintiffs second
amended complaint stated that defendant is operating as an LLC. [DE 7]. The South Carolina
Secretary of State accepted service of the summons and amended complaint on behalf of
National Fumigation, LLC, on June 9, 2016. [DE 8]. Plaintiff filed an affidavit of service
indicating that the summons and amended complaint were served personally on defendant by a
private process server on July 8, 2016. [DE 11].
Defendant failed to file an answer to plaintiffs complaint by the deadline on August 1,
2016. As a result of defendant's failure to answer, on August 8, 2016, plaintiff filed a motion for
entry of default. [DE 12]. Plaintiff avers that his motion for entry of default was mailed to

defendant at three different addresses: the address at which defendant was served with process,
the address on file with the South Carolina Secretary of State, and the address included in
defendant's answer and counterclaim. [DE 21at6]. Defendant was given until September 1,
2016 to respond to that motion. On August 9, a day after the motion for entry of default was
filed, defendant filed an answer and counterclaim, [DE 14], but did not file a response to
plaintiffs motion for entry of default.
Plaintiff then moved, with consent from defendant, for an extension of time to file an
answer to defendant's counterclaim. The Court granted this motion and gave plaintiff until
September 19, 2016 to answer, but plaintiff did not file an answer with the Court.
The Court entered an order directing defendant to retain counsel as it appeared he was
operating as an LLC and corporations, including LLCs, cannot represent themselves in federal
district court. [DE 18]. Defendant was directed to retain counsel and respond to plaintiffs
motion for entry of default. Id.
Defendant then filed a motion for relief, stating that he is not an LLC and that retaining
counsel would put his family in financial jeopardy. [DE 19]. Defendant also filed a response
opposing plaintiffs motion for default. [DE 20]. Plaintiff replied, arguing that default should be
entered because defendant has attempted to evade service, that it is unclear how defendant is
organized because he has represented himself as an LLC in some places and as a sole
proprietorship in others, and because he has acted in bad faith and in a dilatory manner. [DE 21].
DISCUSSION
The Court first addresses defendant's motion for relief from the order directing him to
retain counsel. Defendant avers that he is not operating as an LLC, but as a sole proprietorship
and cannot retain counsel. Plaintiff, in reply, admitted that it has been unable to determine

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whether defendant is a legally constituted LLC because there is no official record of such
company with the South Carolina Secretary of State. However, plaintiff argues that defendant
has acted deceptively and purported to act as an LLC in some circumstances and as a sole
proprietorship in others depending on what would be more beneficial. Plaintiff argues that,
though definitive proof of defendant's status could not be ascertained, the circumstances indicate
that defendant is likely an LLC, or at least should be treated as such because of his
representations. In support, plaintiff submitted a Certificate of Liability Insurance received from
the Pest Control Department at Clemson University in South Carolina, upon which defendant
apparently applied for and was issued liability insurance to engage in fumigating products or
merchandise to be shipped overseas under the name "Bradley S. Ware, National Fumigation
LLC." [DE 21-2].
The Court is unable to find that defendant is a legally constituted LLC, and will accept
his representations that he can adequately represent himself in this matter. Therefore, the Court
will grant defendant's motion for relief from the Court's January 23, 2017 order and will allow
the defendant to proceed in this matter pro se.
The Court now turns to plaintiffs motion for entry of default. As an initial matter, default
judgments are not favored by the law, and any doubts will usually be resolved in favor of the
defaulting party. There is a general policy that whenever there is doubt whether a default should
be entered, the court ought to allow the case to be tried on the merits. Colleton Preparatory

Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413, 417 (4th Cir. 2010) (the courts of appeals
have "repeatedly expressed a strong preference that, as a general matter, defaults be avoided and
that claims and defenses be disposed of on their merits."); see also In Tozer v. Charles A. Krause

Mill. Co., 189 F.2d 242 (3d Cir. 1951) (in a contract action for breach of an implied warranty, the

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court held that matters involving large sums of money should not be determined by default
judgments if it reasonably can be avoided and any doubt should be resolved in favor of a petition
to set aside the judgment so that cases may be decided on the merits).
In this matter, although not timely, defendant did eventually file an answer and
counterclaim with the Court. Additionally, it does not appear that there will be prejudice to the
plaintiff to allow the case to move forward so as to be decided on the merits. For these reasons,
and in an abundance of caution in consideration of defendant's prose status and in considering
the large sum of money at stake in this matter, this Court will deny plaintiffs motion for entry of
default and will allow the case to proceed to an adjudication of the merits of plaintiffs claims.
CONCLUSION
For the foregoing reasons, defendant's motion to for relief from order [DE 19] and
motion to set aside plaintiffs motion of default judgment are GRANTED. [DE 20]. Plaintiffs'
motion for entry of default [DE 12] is DENIED. Plaintiff is ordered to file an answer defendant's
counterclaims. The parties are reminded to comply with all court deadlines and rules and that
failure to do so may result, in the Court's discretion, in sanctions against the offending party. The
Clerk is DIRECTED to serve a copy of this order on plaintiff by U.S. Mail at the address of
record.

SO ORDERED, this _dJday of March, 2017.

~,.~w.117*
TRRENCE W. BOYLE
UNITED STATES DISTRICT JUDGE

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