Shope v. Frontier Communications Corporation et al

Filing 32

ORDER granting 20 Motion to Set Aside Default. Court DIRECTS Defendant Hewitt Management Co., LLC to pay a sanction of $500.00. Upon payment of the sanction, the Court DIRECTS the Clerk to set aside the entry of default. Signed by Magistrate Judge Dennis Howell on 03/10/2015. (klb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
BRYSON CITY DIVISION
2:14cv29
GEORGE W. SHOPE,

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)
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Plaintiff,
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v.
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FRONTIER COMMUNICATIONS
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CORPORATIONS, et al.,
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Defendants.
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___________________________________ )

ORDER

Pending before the Court is the Motion to Set Aside Default [# 20].
Defendant Hewett Management Company, LLC (“Hewett”) moves the Court to set
aside the entry of default. Upon a review of the record and the relevant legal
authority, the Court GRANTS the motion [# 20].
I.

Background

Plaintiff brought this action on July 15, 2014, against a number of
defendants. Plaintiff then filed an Amended Complaint on November 5, 2014.
Hewett failed to file a timely response to the Amended Complaint, and Plaintiff
moved for the entry of default. On January 20, 2015, the Clerk entered default
against Defendant Hewett. Defendant Hewett now moves to set aside the entry of

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default.
II.

Analysis

Where the clerk enters default against a defendant for failing to plead or
defend, the court may set aside the clerk’s entry of default for good cause shown
under Rule 55 of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 55(c). In
contrast, where a default judgment has been entered against a defendant, the
defendant must seek relief pursuant to Rule 60(b). Although courts often utilize
the same factors when determining whether to set aside the entry of default under
Rule 55(c) and whether to set aside the entry of a default judgment under Rule
60(b), the burden on the movant seeking relief is different. Colleton v. Preparatory
Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413, 420 (4th Cir. 2010). A party
seeking relief under Rule 55 bears a less onerous burden to set aside a default than
a party seeking relief pursuant to Rule 60. Id.
In determining whether a defendant has shown the good cause for setting
aside the entry of default under Rule 55, the United States Court of Appeals for the
Fourth Circuit has set forth a number of factors for the Court to consider. Id. at
417. As the Fourth Circuit explained in Payne ex rel. Estate of Calzado v. Brake,
439 F.3d 198, 204 (4th Cir. 2006):

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When deciding whether to set aside an entry of default, a district court
should consider whether the moving party has a meritorious defense,
whether it acts with reasonable promptness, the personal
responsibility of the defending party, the prejudice to the party,
whether there is a history of dilatory action, and the availability of
sanctions less drastic.
See also Colleton, 616 F.3d at 417. Mere delay of the legal proceedings resulting
from a defendant’s default does not in and of itself constitute prejudice. Colleton,
616 F.3d at 418. Moreover, the fact that a plaintiff will have to prove a
defendant’s liability rather than rely on the entry of default does not constitute
prejudice to a plaintiff. Id. at 419. Finally, in considering the various factors for
setting aside the entry of default, the Court must always keep in mind the strong
preference in this Circuit for avoiding defaults and disposing of claims on the
merits. Id. at 417.
Upon consideration of the relevant factors, and considering the strong
preference for disposing of claims on the merits, the Court finds that Defendant
Hewitt has shown good cause for setting aside the entry of default. Defendant
Hewitt promptly moved to set aside the entry of default in this case. This case is
still in the early stages; the Court has yet to even enter a Pretrial Order. In
addition, Plaintiff will suffer no prejudice from setting aside the default and
resolving any claims against Defendant Hewitt on the merits. Defendant Hewitt
has also set forth several meritorious defenses, including that it is not the proper
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defendant in this action. Finally, there is no history of dilatory action by
Defendant Hewitt.
Although Defendant Hewitt bears some responsibility for its failure to
respond to the Amended Complaint in a timely manner, the harsh sanction of
default is unwarranted in this case. Rather, the Court finds that a less drastic
sanction is appropriate. Accordingly, the Court DIRECTS Defendant Hewitt to
pay a sanction of $500.00 into the registry of the Court. Upon the payment of the
sanction, the Court DIRECTS the Clerk to set aside the entry of default.1
III.

Conclusion

The Court GRANTS the Motion to Set Aside Default [# 20]. The Court
DIRECTS Defendant Hewitt Management Co., LLC to pay a sanction of $500.00
into the registry of the Court. Upon the payment of the sanction, the Court
DIRECTS the Clerk to set aside the entry of default. Upon the setting aside of the
default by the Clerk, Defendant Hewitt Management Co., LLC shall have ten (10)
days to file an Answer or otherwise respond to the Amended Complaint.

1
To the extent that Plaintiff moves the Court to add Defendant Hewitt Associates, LLC as a party to this
action in its Response to Motion to Set Aside Default, such motion is not properly before this Court as a party may
not include a motion in a response brief. LCvR 7.1(C)(2).

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Signed: March 10, 2015

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