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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