THOMAS v. ALLEN LUND COMPANY, INC. et al
MEMORANDUM OPINION AND ORDER signed by MAG/JUDGE L. PATRICK AULD on 3/13/2018; that the Motion (Docket Entry 70 ) is GRANTED and the Entry of Default (Docket Entry 66 ) against Serna is hereby SET ASIDE. (Sheets, Jamie)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
WHITNEY NICOLE THOMAS,
Administrator of the Estate of
Kenneth N. Jefferson,
ALLEN LUND COMPANY, INC., et al.,
MEMORANDUM OPINION AND ORDER
This case comes before the Court on the “Motion to Set Aside
Entry of Default” (Docket Entry 70)1 (the “Motion”) filed by
defendant Daniel Santiago Serna (“Serna”).
For the reasons that
follow, the Court will grant the Motion and set aside the Entry of
Default (Docket Entry 66).2
This lawsuit arises from a July 2015 vehicular accident in
North Carolina that killed Kenneth N. Jefferson (“Jefferson”).
(See Docket Entry 1 (the “Complaint”) at 2; see also, e.g., Docket
Entry 7 (“EC Trucking’s Answer”), ¶ 6 (asserting as affirmative
For legibility purposes, this Order uses standardized
capitalization in all quotations.
2 The Entry of Default (and thus the decision whether to set
aside such entry) qualifies as a non-dispositive pretrial matter
subject to disposition by a magistrate judge under 28 U.S.C.
§ 636(b)(1)(A). See, e.g., Bailey v. United Airlines, 279 F.3d
194, 204 (3d Cir. 2002); L & M Cos., Inc. v. Biggers III Produce,
Inc., No. 3:08cv309, 2010 WL 1439411, at *8 & n.3 (W.D.N.C. Apr. 9,
2010). Accordingly, the undersigned United States Magistrate Judge
will enter an order rather than a recommendation on Serna’s Motion.
motorcyclists and passengers involved in the subject accident
should stop where they were stopped when the accident occurred, may
be responsible in whole or in part for this accident and the
resulting injuries, deaths and damages”).)3
On July 14, 2017,
Whitney Nicole Thomas, acting as administrator of Jefferson’s
estate, (the “Plaintiff”) initiated this negligence-based action
against Serna and five other defendants in the United States
District Court for the Southern District of Florida (the “Florida
(See generally Docket Entry 1.)
As relevant to the
Motion, the Complaint alleges that Serna negligently “drove [a]
tractor trailer off the roadway, striking and killing . . .
(Id., ¶ 12.)
It further alleges that Serna and Jacob
servant, or independent contractor for” EC Trucking Enterprises,
Inc. (“EC Trucking”) “and operating in the course and scope of this
employment” when the accident occurred. (Id., ¶ 24.) Finally, the
Complaint alleges that certain incidents in Serna’s past rendered
him an unfit driver.
(See, e.g., id., ¶¶ 30, 40.)
On August 3, 2017, EC Trucking answered the Complaint, denying
all allegations other than that “Serna had a duty to drive in a
3 Citations herein to Docket Entry pages utilize the CM/ECF
commercial motor vehicle safety laws” (id., ¶ 11).
Entry 7, ¶¶ 1-3.)
In addition, EC Trucking’s Answer raised
responsibility for the accident and/or that “third persons over
whom [EC Trucking] had no control” bore such responsibility. (Id.,
¶¶ 4-8.) Two weeks later, Plaintiff served the Complaint on Serna.
(See Docket Entry 60 at 1 (indicating service on August 18, 2017).)
The summons instructed Serna to serve his response to the Complaint
on Plaintiff’s attorney, “David J. Ventura” of “Crumley Roberts,
LLP,” within 21 days of receiving the summons.
(Id. at 2.)
compliance with this instruction, Serna promptly sent his response
to “David J. Ventura” at “Crumley Roberts.”
(Docket Entry 73-2
(the “Response”) at 1, 3.)4
According to the English translation Plaintiff provided of
Response asks Ventura “to guide [him] through this process,” as he
lacks appropriate resources to hire a lawyer and “[is] alone in
(Id. at 3.)
The Response further indicates that
Serna “will actively participate in this lawsuit because the truth
has been hidden and the true responsible party is Mr. Jacob
Salazar,” although EC Trucking and “Commonwealth Dairy LLC” also
4 Plaintiff’s counsel received the Response prior to Monday,
September 4, 2017 (i.e., Labor Day, a federal postal holiday).
(See Docket Entry 73-3 at 1.)
bear some responsibility for the accident.
denied acting negligently (see id. (“I was not negligent”)) and
disputed the Complaint’s assertion that incidents in his past
rendered him an unfit driver (see id. (“I was young and got into
trouble, but today I’m an adult.”)).
Serna’s Response concludes:
I really appreciate your help Mr. Ventura and
guidance. I am alone in this county and I do not know
how the system works nor do I have anyone to help me.
Have a good day Mr. Ventura.
Thanks a bunch.
Plaintiff’s counsel sent Serna’s Response to EC Trucking’s
counsel (see Docket Entry 73-3 at 1), who had previously indicated
to Plaintiff’s counsel that he “was retained to represent EC
Trucking . . . and Daniel Serna in this lawsuit” (Docket Entry 73-1
On September 4, 2017, EC Trucking’s counsel sent an email
to Plaintiff’s counsel, which stated, inter alia:
Thank you for sending me the proof of service on Mr.
Serna and his letter to you. It seems that he may not
want me to represent him.
While I try to get to the
bottom of that, may I request an extension of time to
respond to the lawsuit on his behalf?
(Docket Entry 73-3 at 1.)
On September 13, 2017, EC Trucking’s
counsel emailed Plaintiff’s counsel again, stating, in relevant
5 The Complaint names Commonwealth Dairy, LLC as a defendant.
(Docket Entry 1, ¶ 8.)
I just spoke with the carrier and it will be
retaining separate counsel to represent Mr. Serna. Given
that many of the law offices down here are not yet up and
running because of the hurricane, this may take a week or
two; I (and the carrier) appreciate your patience and
courtesy and you should be hearing from Mr. Serna’s
counsel in the near future.
(Docket Entry 73-4 at 1.)
Correspondence between Plaintiff’s
counsel and EC Trucking’s counsel on December 13, 2017, reveals
that “separate counsel (Jeff Johnson) was retained for Serna in [a
related federal] case” and participated in “the global settlement
(Docket Entry 73-5 at 2.)
However, no attorney
appeared on Serna’s behalf in this lawsuit prior to the Entry of
(See Docket Entries dated July 14, 2017, to Dec. 15,
In late August 2017, defendant Allen Lund Company, Inc.
(“ALC”) moved to transfer this action from the Florida Court to
(See Docket Entry 40.)
Over Plaintiff’s opposition,
the Florida Court granted ALC’s transfer request.
Entry 55 (the “Transfer Order”) at 1, 3.)
In so doing, the Florida
Court noted that Plaintiff’s “negligent selection and vicarious
liability . . . . claims against ALC and EC Trucking necessarily
require Plaintiff to establish that Mr. Serna committed a negligent
act that was foreseeable prior to establishing a claim against ALC
and EC Trucking.”
(Id. at 2.)6
The Florida Court further observed
6 By the time of the Transfer Order, only ALC, EC Trucking,
and Serna remained as defendants in this action.
Entries 41, 48.)
that Plaintiff’s negligence claim against Serna “revolves around
the motor vehicle accident that occurred in North Carolina,” and
that “[o]ne key witness and [d]efendant, Mr. Serna, is currently
incarcerated in North Carolina.”
(Id. at 2 & n.1.)
the Florida Court transferred the action to this Court on November
(See id. at 3.)
On November 16, 2017, the Court set this matter for a status
conference on December 18, 2017.
(See Docket Entry 59 at 1.)
the final business day before that status conference, Plaintiff
moved for default against Serna.
(See Docket Entry 65.) That same
day, the Clerk granted Plaintiff’s motion and entered default
(See Docket Entry 66 at 1.)
month later, a North Carolina lawyer appeared on Serna’s behalf
(see Docket Entry 69 at 1-2) and moved to set aside the default
(Docket Entry 70).
As an exhibit to the Motion, Serna’s counsel
filed a proposed answer, which denies that Serna acted negligently
or lacked fitness as a driver (see, e.g., Docket Entry 70-1, ¶¶ 1015, 30, 40) and asserts both “the contributory negligence of
Plaintiff’s decedent” as well as “the intervening, insulating, or
superseding negligence of all persons or entities outside of his
control as a bar to the claims made against [Serna] in this action”
(id. at 12).
Plaintiff opposes Serna’s Motion.
(See Docket Entry
Pursuant to Federal Rule of Civil Procedure 55, “the [C]ourt
may set aside an entry of default for good cause.”
Fed. R. Civ. P.
The “good cause” standard does not present a particularly
See, e.g., Ahanchian v. Xenon Pictures, Inc., 624 F.3d
1253, 1259 (9th Cir. 2010) (describing the “‘good cause’” standard
as “non-rigorous”); Coon v. Grenier, 867 F.2d 73, 76 (1st Cir.
Stark-Romero v. National R.R. Passenger Co., 275 F.R.D. 544, 547
(D.N.M. 2011) (“Showing good cause is not a particularly demanding
This fairly lenient standard makes sense, given
federal courts’ “strong preference that, as a general matter,
defaults be avoided and that claims and defenses be disposed of on
Universal, Inc., 616 F.3d 413, 417 (4th Cir. 2010).
In “deciding whether to set aside an entry of default,” the
Court considers six factors:
(i) “whether the moving party has a
promptness, [(iii)] the personal responsibility of the defaulting
party, [(iv)] the prejudice to the [opposing] party, [(v)] whether
there is a history of dilatory action, and [(vi)] the availability
of sanctions less drastic.”
Payne ex rel. Estate of Calzada v.
Brake, 439 F.3d 198, 204-05 (4th Cir. 2006).
Whether to set aside
a default remains within the Court’s discretion, see id. at 204;
nevertheless, “[g]enerally a default should be set aside where the
meritorious defense,” Consolidated Masonry & Fireproofing, Inc. v.
Wagman Constr. Corp., 383 F.2d 249, 251 (4th Cir. 1967).
Here, the first factor (i.e., a meritorious defense) supports
Among other defenses, Serna (through counsel)
asserts that Jefferson’s contributory negligence bars Plaintiff’s
(See Docket Entry 70-1 at 12.)
In this regard, Serna
contends that “the evidence appears to show without question that
[Jefferson] had stopped his motorcycle on the highway at the time
of the injury, and it is possible the [Jefferson] was in the right
of way at the time of the accident, barring recovery” under North
(Docket Entry 71 at 6.)
Serna further maintains
that Jefferson displayed contributory negligence by parking “on the
paved portion of the highway,” an action that North Carolina
forbids unless a vehicle “is disabled to such an extent that it is
impossible to avoid stopping and temporarily leaving the vehicle
upon the paved . . . portion of the highway.”
(internal quotation marks omitted).)
(Id. at 6-7
Finally, Serna asserts that
“[Jefferson] could be considered contributorily negligent under the
(Id. at 7.)
Notably, Plaintiff does not dispute the cognizability, as a
legal matter, of Serna’s proffered defenses.
(See Docket Entry 73
Instead, Plaintiff maintains that, as a factual matter,
Jefferson did not act with contributory negligence.
(contending that Serna’s “argument is futile . . . . [b]ecause
there was a detailed investigation, reconstruction and 562 page
report created by the North Carolina State Highway Patrol that
confirms by all accounts Plaintiff was well off of the main roadway
Jefferson acted with contributory negligence.
As an initial
matter, the Complaint lacks sufficient detail to ascertain exactly
where and why Jefferson parked his motorcycle.
Docket Entry 1.)
In addition, Plaintiff did not submit the
referenced Highway Patrol report in responding to the Motion.
(See Docket Entries 73-1 to 73-5.)
However, in opposing transfer
to this Court, Plaintiff submitted a newspaper article regarding
the underlying crash, which includes a picture showing three
wrecked motorcycles on the paved shoulder of Interstate 85, as well
as motorcycle debris in the grass area beside the paved portion of
(See Docket Entry 49-1 at 1.)
According to this
article, “[o]fficials said the six motorcycles were parked on the
side of the road due to mechanical issues with one of the bikes
when a tractor-trailer hit them.
further up on I-85.”
The truck then came to a stop
(Id. at 2.)
Given this record, Serna
satisfies the meritorious defense factor.
See, e.g., Armor v.
Michelin Tire Corp., No. 96-1724, 113 F.3d 1231 (table), 1997 WL
245217, at *2 (4th Cir. 1997) (“All that is necessary to establish
the existence of a meritorious defense is a presentation or proffer
of evidence, which, if believed, would permit the court to find for
the defaulting party.”); Augusta Fiberglass Coatings, Inc. v. Fodor
underlying concern is . . . whether there is some possibility that
the outcome . . . after a full trial will be contrary to the result
achieved by the default.” (ellipses in original; internal quotation
The second factor (i.e., acting with reasonable promptness)
also favors Serna.
To begin with, within a fortnight of receiving
service of process, Serna — an incarcerated, Spanish-speaking
defendant — responded to the Complaint by sending his Response to
Plaintiff’s counsel, as the summons (written in English) directed.
(See Docket Entries 60, 73-2, 73-3.)
This Response disputes the
Complaint’s primary allegations against Serna — that he acted with
negligence and that past conduct rendered him an unfit driver — and
(See Docket Entry 73-2 at 3.)
Serna’s Response also requests
guidance from Plaintiff’s counsel on how to proceed with the
lawsuit, in which Serna intends to “actively participate.”
From the correspondence that Plaintiff submitted in opposition to
the Motion, it does not appear that either Plaintiff’s counsel or
EC Trucking’s counsel (who also represented Serna in connection
with this case at some point) replied to Serna directly about his
assertions, request for guidance, or apparent failure to send a
copy of the Response to the Florida Court, as the summons also
directed (see Docket Entries dated Aug. 18, 2017, to Nov. 13, 2017;
see also Docket Entry 60 at 2).
(See Docket Entries 73-1 to 73-5.)
Moreover, Serna moved to set aside the default approximately
one month after its entry.
(See Docket Entries 66, 70.)
comfortably qualifies as acting with reasonable promptness.
e.g., Vick v. Wong, 263 F.R.D. 325, 330 (E.D. Va. 2009) (finding
reasonable promptness factor favored setting aside default where
the defendant sought relief “more than two months after default was
entered,” but “only a few weeks after” the plaintiff moved for
entry of default judgment); Wainwright’s Vacations, LLC v. Pan Am.
Airways Corp., 130 F. Supp. 2d 712, 718 (D. Md. 2001) (finding
reasonable promptness where “the default was entered on July 6th,
and [the party] moved to vacate it on August 8th”); see also
Lolatchy v. Arthur Murray, Inc., 816 F.2d 951, 953-54 (4th Cir.
1987) (reversing the denial of a motion to set aside default filed
approximately ten months after the entry of default).
factor thus favor setting aside the default.
The third factor (i.e., personal responsibility) counsels that
result as well. Prior to issuance of a correctly addressed summons
to Serna (see Docket Entry 27; see also Docket Entry 60 at 1), EC
retained to represent . . . Serna in this lawsuit” (Docket Entry
73-1 at 1).
In light of Serna’s Response, the third party who had
hired this counsel to jointly represent EC Trucking and Serna
indicated that “it will be retaining separate counsel to represent
(Docket Entry 73-4 at 1.)
Although such counsel
apparently appeared in a related case and participated in a “global
settlement conference” (Docket Entry 73-5 at 2), he, for reasons
unknown, failed to appear and answer in this case.
Nothing in the
record suggests that Serna knew of this failure prior to the Entry
of Default, as none of the parties served any of their filings on
Serna before Plaintiff moved for default.
(Compare, e.g., Docket
Entry 31 at 6, Docket Entry 39 at 13, Docket Entry 40 at 4, Docket
Entry 45 at 3, Docket Entry 49 at 21, Docket Entry 61 at 3,
and Docket Entry 64 at 3, with Docket Entry 65-3 at 2.)
even Plaintiff does not contend that Serna bears responsibility for
the entry of default.
(See Docket Entry 73 at 5 (arguing only that
Serna bears responsibility for the underlying accident).)
these circumstances, this factor supports Serna’s position.
The fourth factor (i.e., prejudice) likewise favors Serna.
“In the context of a motion to set aside an entry of default, . . .
delay in and of itself does not constitute prejudice to the
opposing party.” Colleton, 616 F.3d at 418; see also United States
v. Manriques, No. 1:10cr440, 2013 WL 5592191, at *5 (M.D.N.C. Oct.
10, 2013) (explaining “that no prejudice accrues from ‘los[ing] a
quick [default-based] victory’” (alterations in original) (quoting
Augusta Fiberglass, 843 F.2d at 812)), report and recommendation
adopted, slip op. (M.D.N.C. Dec. 31, 2013).
Without offering any
factual support, Plaintiff maintains that “[t]he difficulties with
discovery and the greater opportunity for fraud or collusion are
tantamount to prejudices that would affect Plaintiff’s ability to
achieve proper justice in this case.”
(Docket Entry 73 at 5.)
particularly given that discovery does not close until October 5,
2018 (see Text Order dated Dec. 18, 2017).7
Moreover, because Plaintiff asserts vicarious liability claims
against EC Trucking and ALC based on Serna’s alleged negligence,
Plaintiff must litigate the negligence claim against Serna “prior
to establishing a claim against ALC and EC Trucking.”
Entry 55 at 2.)
Thus, setting aside the default will introduce no
new issues into either the litigation process generally or the
discovery process specifically.
Finally, Plaintiff has known for
(see Docket Entries 73-2, 73-3) and that Jefferson’s contributory
negligence constitutes a pivotal issue in this litigation (see,
7 If, due to the passage of time since filing the Motion,
Serna now believes that he needs more time to complete discovery
(cf. Docket Entry 70 at 2 (agreeing “to be bound by the current
Scheduling Order”)), he should promptly move for such relief.
e.g., Docket Entry 40-1 at 6 (seeking transfer to North Carolina on
the grounds that this Court “is more familiar with . . . North
Carolina’s doctrine of contributory negligence”)), so setting aside
the default causes Plaintiff no unfair surprise.
prejudice factor supports the granting of relief from default.
The fifth factor (i.e., history of dilatory action) and sixth
factor (i.e., availability of lesser sanctions) similarly favor
Aside from the failure to officially answer the Complaint,
the record reveals no dilatory conduct by Serna. (To the contrary,
Plaintiff’s counsel upon receiving the Complaint.) In addition, as
both Plaintiff and Serna recognize, the Court could impose lesser
(See Docket Entry 70 at 2; Docket Entry 73 at 6.)8
These final two factors thus counsel against leaving the default in
8 In this regard, “Plaintiff requests that it be permitted to
submit its costs and attorneys’ fees related to obtaining the
default and defending against Defendant’s Motion to Set Aside and
that the Defendant be stricken of any defenses not plead prior to
the entry of default.” (Docket Entry 73 at 6.) The latter request
may seek (i) to strike any defense Serna did not officially plead
prior to the default, which would effectively nullify setting aside
the default, or (ii) to prevent Serna from raising any defense that
EC Trucking and ALC did not plead, a moot request given that those
defendants already raised the defenses that Serna intends to plead
(compare Docket Entry 7, and Docket Entry 39, with Docket Entry 701).
However interpreted, this request lacks merit.
As to the
former request for expense-shifting, in light of the considerations
addressed in connection with the personal responsibility factor,
the Court declines to order such alternative relief.
All six factors favor setting aside the default.
IT IS THEREFORE ORDERED that the Motion (Docket Entry 70) is
GRANTED and the Entry of Default (Docket Entry 66) against Serna
is hereby SET ASIDE.
This 13th day of March, 2018.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
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