LDC, Inc. v. Snapology Jewelry, LLC

Filing 12

MEMORANDUM AND ORDER granting 8 Motion to Set Aside Default and staying the matter pending the outcome of the Motion to Dismiss currently before the U.S. District Court for the Western District of MI. So Ordered by Chief Judge William E. Smith on 2/3/2017. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
LDC, Inc.,
)
)
Plaintiff,
)
)
v.
)
)
SNAPOLOGY JEWELRY, LLC,
)
)
Defendant.
)
___________________________________)

C.A. No. 16-463 S

MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
Before the Court is Defendant’s Motion to Vacate the Entry
of

Default.

(ECF

No.

8.)

For

the

reasons

set

forth

below,

Defendant’s Motion is GRANTED.
I. Analysis
Plaintiff (LDC, Inc.) filed its Complaint on August 16,
2016, requesting various forms of relief related to Defendant’s
(Snapology

Jewelry,

LLC)

alleged

breach

of

contract.

(See

Complaint, ECF No. 1.) Defendant did not submit an answer or
otherwise

reply

to

that

Complaint.

On

November

23,

2016,

Plaintiff submitted a Motion for Entry of Default (ECF No. 6),
and on December 14, 2016, default entered. (Clerk’s Entry of
Default dated 12/14/2016.)
On December 27, 2016, Defendant requested that the Court

vacate the Entry of Default. (Motion to Vacate the Entry of
Default, ECF No. 8.) Defendant bears the burden of showing there
is

“good

cause”

to

grant

its

Motion.

McKinnon

v.

Kwong

Wah

Rest., 83 F.3d 498, 502 (1st Cir. 1996) (quoting Fed. R. Civ. P.
55(c)).

The

Court

may

look

determining whether there is

into

all

relevant

“good cause”

factors

in

as “[t]here is no

mechanical formula.” Indigo Am., Inc. v. Big Impressions, LLC,
597 F.3d 1, 3 (1st Cir. 2010). The three factors “typically
considered are (1) whether the default was willful; (2) whether
setting it aside would prejudice the adversary; and (3) whether
a meritorious defense is presented.” Id.
Taking

the

considerations

factors
favor

in

reverse

Defendant’s

order,

position.

the

last

two

Defendant

has

included in its motion evidence of a meritorious defense. (See
Def.’s Mot. to Vacate 9, ECF No. 8-1, and accompanying affidavit
and exhibits.) Additionally, there is no evidence that setting
aside the judgment would prejudice Plaintiff. For example, there
is

no

evidence

of

a

“loss

of

evidence”

or

“increased

difficulties of discovery.” Fed. Deposit Ins. Corp. v. Francisco
Inv. Corp., 873 F.2d 474, 479 (1st Cir. 1989). Moreover, as both
parties

have

dispute

are

pointed
currently

out,
being

issues

related

litigated

in

to
the

this

contract

United

States

District Court for the Western District of Michigan. (See Def.’s
Mot. to Vacate Ex. 14, ECF No. 8-16; Pl.’s Obj. Ex. 14, ECF No.
9-16.) Therefore, regardless of default in this case, litigation
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on this matter will likely continue.
As to the “willfulness” consideration of the “good cause”
analysis, the parties dispute how Defendant’s default should be
characterized.

Plaintiff

claims

that

Defendant’s

conduct

was

willful because Defendant made a tactical decision to ignore the
Complaint. (Pl.’s Obj. 10, ECF No. 9-1.) Defendant responds by
arguing that Plaintiff’s service of process was faulty. (Def.’s
Reply 2, ECF No. 10.) Defendant also points out (and Plaintiff
acknowledges) that Defendant has been actively litigating issues
related to this contract dispute in the United States District
Court for the Western District of Michigan. (See Def.’s Mot. to
Vacate Ex. 14, ECF No. 8-16; Pl.’s Obj. Ex. 14, ECF No. 9-16.)
The Court need not resolve this particular disagreement as
to willfulness. Given the Court’s previous analysis of the other
relevant factors of a “good cause” analysis, and in light of
Defendant’s prompt response to the entry of default, the Court
finds that Defendant has established good cause for the Court to
vacate the entry of default.
II. Conclusion
Defendant’s Motion to Vacate (ECF No. 8) is GRANTED. This
case is STAYED pending the outcome of the Motion to Dismiss
currently

before

the

United

States

District

Court

for

the

Western District of Michigan. (See Pl.’s Obj. Ex. 14, ECF No. 916.)

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IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: February 3, 2017

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