FLOWERS v. REMINGTON LODGING AND HOSPITALITY, LLC

Filing 7

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE GERALD J. PAPPERT ON 7/17/17. 7/17/17 ENTERED AND COPIES EMAILED TO COUNSEL.(jaa, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FRANK FLOWERS,
Plaintiff,

CIVIL ACTION
NO. 17-1087

v.
REMINGTON LODGING AND
HOSPITALITY, LLC,
Defendant.
PAPPERT, J.

July 17, 2017
MEMORANDUM

Frank Flowers sued Remington Lodging and Hospitality, LLC, a hotel
management company, for wrongful termination under Title VII of the Civil Rights Act
of 1964. When Flowers served Remington’s agent with the Complaint on March 21,
2017, the agent mistakenly assumed it was part of an unrelated lawsuit between
Flowers and the owner of a hotel Remington managed, not Remington itself. As a
result of this and other errors, Remington failed to respond to the Complaint and on
May 23, 2017, the Clerk of Court entered default. Remington now moves to set aside
the entry of default.1 For the reasons stated below, the Court grants the motion.
I.
Flowers worked as the Director of Food and Beverage for an Embassy Suites
Hotel in Philadelphia. (Compl. ¶¶ 13 & 19.) The Hotel is managed by Remington and
owned by Ashford Philly LP. (Def.’s Mot., at 2, ECF No. 4-1.) In July of 2016, Flowers
sued Ashford and others in the Philadelphia County Court of Common Pleas to recover
Remington styles its motion as one to set aside default judgment. (ECF No. 4.) While the
Clerk of Court has entered default, the Court has not entered default judgment against Remington.
The Court will therefore treat the motion as one to set aside the entry of default.
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for injuries he allegedly suffered in a March 2015 fall at the Hotel. See (Compl. ¶ 21–
22); (Def.’s Mem., at 2). Remington was not named as a defendant in that lawsuit, but
received a copy of the Complaint, which it delivered to Ashford. (Def.’s Mem., at 2.)
That suit remains pending. See generally Docket, Flowers v. Ashford Philly LP, et al.,
No. 160700805 (Phila. Ct. Comm. Pleas 2016).
On March 10, 2017, Flowers sued Remington in federal court for wrongful
termination. (Compl. ¶ 2.) On March 21, Flowers properly served a supervisor at the
Hotel with the Complaint. (Def.’s Mem., at 2.) The supervisor emailed a copy of the
Complaint to Remington’s paralegal, Brandon Stewart, who mistakenly believed the
Complaint was related to Flowers’s already-pending lawsuit against Ashford. (Id.)
Stewart thus forwarded the Complaint to Ashford, which responded that it had not
been named in the Complaint. Stewart nevertheless failed to recognize that further
action was required from Remington. (Stewart Decl. ¶ 10, ECF No. 4-2.) As a result
Remington never responded to the Complaint.
On May 23, 2017, Flowers filed a Request for Entry of Default, and the Clerk of
Court entered default the same day. See (ECF No. 3); (Def.’s Mem., at 3). Three days
later, Remington moved to set aside the entry of default. See (ECF No. 4). Flowers has
not responded to Remington’s motion.
II.
Federal Rule of Civil Procedure 55(c) permits the court to set aside the entry of
default “for good cause.” FED. R. CIV. P. 55(c). “That determination is made in the
sound discretion of the court.” Dizzley v. Friends Rehab. Program, Inc., 202 F.R.D. 146,
147 (E.D. Pa. 2001) (citing U.S. v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194–95

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(3d Cir. 1984)). Whether good cause exists depends on three factors: (1) whether the
plaintiff will be prejudiced if the default is set aside; (2) whether the defendant has a
meritorious defense; and (3) whether “the default was a product of the defendant’s
culpable or inexcusable conduct.” Id. (citation omitted). In evaluating these factors, all
doubts are to be resolved in favor of the defaulting party. See Maaco Enters., Inc. v.
Beckstead, No. 02-853, 2002 WL 31757608, at *2 (E.D. Pa. Dec. 9, 2002); see also
Dizzley, 202 F.R.D. at 147 (noting that “the entry of a default is not favored”).
III.
Remington contends that Flowers will not be prejudiced if the entry of default is
set aside, that it has at least one meritorious defense to Flowers’s action against him
and that its failure to respond to the Complaint was not the result of willful bad-faith
conduct. (Def.’s Mot., at 3.)
A.
Setting aside the entry of default will not prejudice Flowers. Prejudice exists
when setting aside an entry of default would impair a plaintiff’s ability to pursue his
claim. See Feliciano v. Reliant Tooling Co., Ltd., 691 F.2d 653, 656–57 (3d Cir. 1982).
The “loss of available evidence, the increased potential for fraud or collusion, and the
plaintiff’s substantial reliance on the default” support a finding of prejudice. Choice
Hotels Int’l, Inc. v. Pennave Assocs. Inc., 192 F.R.D. 171, 174 (E.D. Pa. 2000). Being
forced to “litigate an action on the merits rather than proceed by default does not,”
however, “constitute prejudice.” Id.
Flowers has not responded to Remington’s motion to set aside the entry of
default and therefore has not shown the loss of any available evidence since the entry of

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default against Remington. And given the relatively short time between entry of
default and the Court’s decision on this motion, it is doubtful that any available
evidence will ultimately be lost. Cf. Braverman Kaskey, P.C. v. Toidze, 599 F. App’x
448, 453 (3d Cir. 2015) (finding potential for prejudice against plaintiff given that the
case had been pending for six years). Nor does the record suggest an increased
potential for fraud or substantial reliance on the default. Granting Remington’s motion
to set aside the entry of default will merely require Flowers to litigate his claim on the
merits.
B.
Remington has a meritorious defense. To establish a meritorious defense, a
defendant must state a defense that, if substantiated, would constitute a complete
defense to the action. See Tozer v. Charles A. Krause Milling Co., 189 F.2d 242, 244 (3d
Cir. 1951). “[A] ‘meritorious defense’ can be a defense of any variety—whether a
dispute of material fact[;] . . . an affirmative defense; the contention of failure to state a
claim; or lack of subject matter jurisdiction . . . .” Collura v. Ford, 2016 WL 409228, at
*12 & nn.10–11 (E.D. Pa. Feb. 3, 2016) (emphasis added). In its proposed answer
Remington asserts, among other affirmative defenses, that Flowers has failed to state a
claim upon which relief can be granted. See (ECF No. 4-2, at 5). This factor therefore
weighs in favor of granting Remington’s motion to set aside the entry of default.
C.
Finally, the entry of default was not the result of Remington’s culpable or
inexcusable conduct. A defendant’s conduct is culpable where he or she “act[s] willfully
or in bad faith.” Feliciano, 691 F.2d at 657. This requires “more than mere negligence.”

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Hritz v. Woma Corp., 732 F.2d 1178, 1183 (3d Cir. 1984). Willful or bad-faith conduct
can be established when a defendant purposefully declines to fulfill their responsibility
to file a response with the Court. See, e.g., Wells v. Rockefeller, 728 F.2d 209, 214 (3d
Cir. 1984). When a defendant “demonstrate[s] negligence that had a dilatory result,
but . . . does not demonstrate dilatory intent or bad faith,” the entry of default was not
the result of inexcusable conduct by the defendant. Dizzley, 202 F.R.D. at 148.
When Stewart received Flowers’s Complaint in this case, he mistakenly believed
the Complaint related to the already-pending case between Flowers and Ashford Philly,
LP. See (Stewart Decl. ¶ 9). Despite Ashford’s explanation to the contrary, Stewart
failed to take any further action, and Remington therefore failed to respond. See (id.
¶¶ 6–11). Nothing in the record supports the conclusion that this error was the result of
deliberate misconduct or bad faith. Remington’s failure appears instead to be
attributable to Stewart’s mere negligence. Remington filed its motion to set aside the
entry of default and attached its proposed answer to the Complaint three days after the
default was entered, suggesting unintentional neglect of Flowers’s Complaint as well as
a willingness to comply with the applicable procedures and deadlines going forward.
An appropriate order follows.

BY THE COURT:

/s/ Gerald J. Pappert
GERALD J. PAPPERT, J.

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