Panhandle Cleaning & Restoration, Inc. v. Vannest et al
Filing
22
MEMORANDUM OPINION AND ORDER DENYING 5 Request for Entry of Default against Defendants Ronald W. Vannest, Charles W. Wyckoff, and Shan Golec and Motion for Default Judgment. Signed by Senior Judge Frederick P. Stamp, Jr on 4/18/12. (cc)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
PANHANDLE CLEANING & RESTORATION, INC.,
Plaintiff,
v.
Civil Action No. 5:11CV178
(STAMP)
RONALD W. VANNEST, CHARLES W. WYCKOFF
and SHAHN GOLEC,
Defendants.
MEMORANDUM OPINION AND ORDER
DENYING REQUEST FOR ENTRY OF DEFAULT
AGAINST DEFENDANTS RONALD W. VANNEST,
CHARLES W. WYCKOFF, AND SHAHN GOLEC
AND MOTION FOR DEFAULT JUDGMENT
I.
Background
On November 15, 2011, Panhandle Cleaning & Restoration, Inc.
(“Panhandle”) filed a complaint in the Circuit Court of Ohio
County, West Virginia alleging that the defendants are engaging in
conduct that directly violates a non-compete covenant contained in
their employment agreements.
The non-compete covenant at issue
prohibits the defendants from working in competition with Panhandle
or soliciting Panhandle clients for two years and within a fifty
mile radius of Panhandle’s business address. The plaintiff alleges
that the defendants are currently operating a company that is
engaged in the same line of business as Panhandle, specifically,
providing contracting services for the construction, restoration,
and remodeling of residential and/or commercial structures.
plaintiff
further
alleges
that
the
defendants
have
The
been
impermissibly contacting Panhandle clients and have attempted to
solicit at least three of Panhandle’s current employees.
The case
was removed to this Court on December 12, 2011.
On January 3, 2012, the plaintiff filed a request for entry of
default against defendants Ronald W. Vannest, Charles W. Wyckoff,
and Shahn Golec and motion for default judgment.
In support of
this request, Panhandle argues that the defendants failed to file
an answer or responsive pleading by the December 19, 2011 deadline.
Attached to the request for entry of default is the affidavit of
attorney Ronald M. Musser.
Also on January 3, 2012, the defendants filed an answer and
counterclaim, as well as a memorandum of law in opposition to
plaintiff’s request for entry of default and motion for default
judgment.
In their response in opposition, the defendants argue
that their counsel negligently failed to file the answer because he
mistakenly believed that the answer had been filed by his staff on
December 12, 2011.
The defendants also argue that given the
circumstances of this case, entry of default or default judgment
would be inappropriate.
The plaintiff did not file a reply in
support of its request for default and motion for default judgment.
For the reasons set forth below, this Court finds that the request
for entry of default and motion for default judgment must be
denied.
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II.
Applicable Law
To obtain a default judgment, a party must first seek an entry
of default under Federal Rule of Civil Procedure 55(a). Under Rule
55(a), an entry of default is appropriate “[w]hen a party against
whom a judgment for affirmative relief is sought has failed to
plead or otherwise defend . . . .”
Fed. R. Civ. P. 55(a).
Once
default is entered by the clerk, the party may seek a default
judgment under Rule 55(b)(1) or (2), depending on the nature of the
relief sought.
If the plaintiff’s claim is for “a sum certain” or
a “sum that can be made certain by computation,” the plaintiff may
seek entry of default judgment from the clerk under Rule 55(b)(1).
However, in cases in which the plaintiff seeks a form of relief
other than liquidated damages, Rule 55(b)(2) requires plaintiff to
seek an entry of default judgment from the court.
It is well-established in the United States Court of Appeals
for the Fourth Circuit that default judgments are to be granted
sparingly.
951,
954
See, e.g., Lolatchy v. Arthur Murray, Inc., 816 F.2d
(4th
Cir.
1987).
“[T]rial
judges
are
vested
with
discretion, which must be liberally exercised, in entering such
judgments and in providing relief therefrom.”
United States v.
Moradi, 673 F.2d 725, 727 (4th Cir. 1982).
III.
Discussion
In its request for entry of default and motion for default
judgment, Panhandle argues that pursuant to Rules 12 and 81 of the
3
Federal Rules of Civil Procedure, the defendants’ answers or
responsive pleadings were required to be served no later than
December 19, 2011.
The affidavit of Ronald Musser states that
Panhandle effected service of the summons and complaint upon the
defendants via the Secretary of State of West Virginia (Musser Aff.
¶ 4) and that executed return receipts were delivered to the
plaintiff’s counsel identifying the following delivery dates upon
the defendants: November 25, 2011 as to Shahn Golec and Charles W.
Wyckoff; and November 28, 2011 as to Ronald W. Vannest (Musser Aff.
¶ 5).
In their response in opposition, the defendants highlight the
fact that their answer was filed on January 3, 2012 -- immediately
upon receipt of the plaintiff’s request for entry of default and
motion for default judgment.
The defendants contend that because
they have taken action to defend the claims against them, the
plaintiff’s request for default should be denied under Rule 55(a)
of the Federal Rules of Civil Procedure.
This Court finds that neither an entry of default nor default
judgment is appropriate in this action.
Under the law of the
Fourth Circuit, a defaulting party should be granted relief if it
acts reasonably promptly to set aside the default and alleges a
meritorious defense.
Moradi, 673 F.2d at 727; Cent. Operating Co.
v. Util. Workers of Am., 491 F.2d 245, 252 (4th Cir. 1974); Consol.
Masonry & Fireproofing, Inc. v. Wagman Constr. Corp., 383 F.2d 249,
4
251 (4th Cir. 1967).
“Whether a party has taken ‘reasonably
prompt’ action . . . must be gauged in light of the facts and
circumstances of each occasion.
Further, all that is necessary to
establish
a
the
existence
of
‘meritorious
defense’
is
a
presentation or proffer of evidence, which, if believed, would
permit either the Court or the jury to find for the defaulting
party.”
Moradi, 673 F.2d at 727.
As the defendants state, default should not be entered under
Rule 55(a) when a party has shown an intention to actively defend
against the suit.
See Johnson v. Warner, No. 7:05CV00219, 2009 WL
586730, at *4 (W.D. Va. Mar. 6, 2009).
Additionally, this Court
agrees that “strong public policy favors resolving disputes on the
merits and not by default judgment.”
Id. (quoting Pecarsky v.
Galaxiworld.com Ltd., 249 F.3d 167, 172 (2d Cir. 2001)).
Because
the defendants have belatedly filed their answer and indicated
their intent to diligently defend against the suit, this Court
finds that the plaintiff’s request for entry of default and motion
for default judgment must be denied.
IV.
Conclusion
For the reasons stated above, the plaintiff’s request for
entry of default against defendants Ronald W. Vannest, Charles W.
Wyckoff, and Shahn Golec and motion for default judgment (ECF No.
5) is DENIED.
IT IS SO ORDERED.
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The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
April 18, 2012
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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