Rico Sun Tours, Inc. v. Capeles et al

Filing 62

ORDER granting 47 Motion to Set Aside Entry of Default; finding as moot 61 Motion to clarify. Answer due by 11/24/2014. No extensions. Signed by Judge Jay A. Garcia-Gregory on 11/13/2014. (CLM)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

RICO SUN TOURS, INC.,
Plaintiff,
v.
CIVIL NO. 14-1583(JAG)
EDGARD CAPELES VARGAS,
Defendant.

OPINION AND ORDER
Garcia-Gregory, D.J.
Before the Court is a Motion to Set Aside Entry of Default
filed by Union de Transporte y Ramas Anexas, Inc (“UTRA” or
“Defendant”). (Docket No. 47). For the reasons stated below, the
Motion is hereby GRANTED.
BACKGROUND
On

July

30,

2014,

Rico

Sun

Tours,

Inc.

(“RST”

or

“Plaintiff”) filed the present suit against several defendants,
including

UTRA.

(Docket

No.

1).

On

August

6,

2014,

German

Vazquez, a co-defendant in this suit and also UTRA’s President,
was

duly

served

with

a

copy

of

the

Complaint

and

Summons.

enter

default

(Docket No. 7-8).
On
against

September
UTRA

8,

claiming

2014,
that

Plaintiff
it

had

moved

not

to

appeared

or

filed

a

Civil No. 14-1583 (JAG)

2

responsive pleading within the 21 days afforded. (Docket No.
22).

On

October

13,

2014,

relying

on

the

Proof

of

Service

attached to Plaintiff’s motion, (Docket No. 22; Ex. 1), this
Court

granted

(Docket

No.

the

motion

40).

Upon

and

the

representative appeared and

entered

entry

of

default

against

UTRA.

default,

UTRA’s

legal

moved to set aside the entry of

default on October 27, 2014 and asked the Court for time to
answer the Complaint. (Docket No. 47). Plaintiff filed a timely
opposition to UTRA’s Motion on November 3, 2014. (Docket No.
55).
Plaintiff claims that Mr. Vazquez was served both in his
individual

capacity

and

as

the

person

designated

by

law

to

accept service of process on behalf of UTRA. (Docket No. 55). On
the other hand, Defendant argues that Mr. Vazquez was not served
with a separate Summons directed to UTRA, but rather with a copy
of

the

Complaint

and

Summons

addressing

Mr.

Vazquez

in

his

personal capacity. (Docket No. 47).
DISCUSSION
Fed. R. Civ. P. 55(c) provides that courts may set aside an
entry of default for “good cause.” This standard of “good cause”
has been consistently considered to be a “liberal” and “mutable
standard, varying from situation to situation[,] . . . but not
so elastic as to be devoid of substance.” Coon v. Grenier, 867
F.2d 73, 76 (1st Cir. 1989). While the “good cause” lacks a

Civil No. 14-1583 (JAG)
precise

definition,

3

“some

general

guidelines

are

commonly

applied.” Compania Interamericana Exp.-Imp., S.A. v. Compania
Dominicana

de

Aviacion,

88

F.3d

948,

951

(11th

Cir.

1996)

(citing Coon, 867 F.2d at 76)).
Among the several factors that courts have considered in
determining whether to set aside an entry of default are: “(1)
whether the default was willful; (2) whether setting it aside
would prejudice the adversary; and (3) whether a meritorious
defense is presented.” Indigo Am., Inc. v. Big Impressions, LLC,
597

F.3d

1,

3

(1st

Cir.

2010)

(citations

omitted).

These

factors, however, are neither exclusive nor dispositive. Other
factors often considered are: “(4) the nature of the defendant's
explanation for the default; (5) the good faith of the parties;
(6) the amount of money involved; (7) the timing of the motion
to set aside the entry of default.” Id. (citation omitted).
Moreover, whenever an entry of default has been entered
without an accompanying default judgment, such as in this case,
the standard is particularly generous in favor of the party
seeking

relief

Weiner,

103

from

F.R.D.

the
177,

entry
179

of

(D.

default.
Maine

See

Phillips

1984)(explaining

v.
the

liberality of the “good cause” standard in light of the fact
that “mere entry of default” is a clerical act and “does not
represent

a

final

judgment.”);

see

also

Colleton

Preparatory

Academy, Inc. v. Hoover Universal, Inc., 616 F.3d 413, 418 (4th

Civil No. 14-1583 (JAG)
Cir.

2010).

Finally,

4
it

is

well

established

that

entry

of

defaults are generally disfavored because they clash with the
courts’

preference

and

“philosophy

that

actions

should

ordinarily be resolved on their merits.” Coon, 867 F.2d at 76.
In this case, Defendant contends that it was not properly
served

and

provides

a

sworn

statement

to

those

effects.

Plaintiff, on the other hand, has provided the Court with a copy
of the Proof of Service suggesting that UTRA was served properly
through

Mr.

Vazquez.

Nonetheless,

“a

district

court

should

resolve doubts in favor of a party seeking relief from the entry
of a default.” Leshore v. County of Worcester, 945 F.2d 471, 472
(1st

Cir.

1991).

justification,

Consequently,

UTRA

has

met

in

the

light

liberal

of

the

reasonable

standard

of

“good

cause.”
Furthermore, there is no evidence in the record suggesting
that

UTRA’s

default

was

willful

or

made

in

bad

faith.

In

addition, Plaintiff cannot seriously argue that setting aside
the entry of default would cause unfair prejudice so early in
the case. See Coon, 867 F.2d at 76 (citation omitted) (“Early in
the case, as when a default has been entered but no judgment
proven,

a

prejudice

liberal

approach

to

nonmovant

the

is

least

or

to

likely

to

discommode

cause

unfair

the

court's

calendar.”). Finally, Defendant acted promptly to correct the
default by retaining counsel and filing the present motion on

Civil No. 14-1583 (JAG)

5

October 27, 2014. See, e.g., Compania Interamericana, 88 F.3d at
951-952 (considering the party’s response to correct its default
as one of the factors to be considered under Fed. R. Civ. P.
55(c)).
In

conclusion,

the

Court

finds

that,

in

light

of

the

circumstances of this case, the entry of default is too harsh
and shall accordingly set it aside.

This decision is consistent

with the stated and well established preference of resolving
disputes

on

defaulting

a

their
party

merits
is

a

and

the

drastic

commonly

sanction

held

reserved

view

that

for

rare

occasions. See Stewart v. Astrue, 552 F.3d 26, 28 (1st Cir.
2009).
CONCLUSION
For

the

reasons

stated

above,

the

Court

hereby

GRANTS

Defendant’s Motion to Set Aside the Entry of Default, (Docket
No. 47). Defendant shall file an Answer to the Complaint by
Monday, November 24, 2014.

IT IS SO ORDERED.
In San Juan, Puerto Rico, this 13th day of November, 2014.

S/ Jay A. Garcia-Gregory
JAY A. GARCIA-GREGORY
United States District Judge