United States District Court, N.D. Ohio, Eastern Division
MEMORANDUM OPINION AND ORDER
HONORABLE SARA LIOI UNITED STATES DISTRICT JUDGE
the Court is the motion of defendants Elite Security
Consultants LLC (“ESC”) and Timothy Boyle
“defendants”) to set aside the clerk's entry of
default and for leave to file their answer. (Doc. No. 25
[“Mot.”].) Plaintiffs filed a brief in opposition
(Doc. No. 27 [“Opp'n”]) and defendants filed
a reply (Doc. No. 28 [“Reply”]). For the reasons
set forth herein, defendants' motion is granted.
17, 2019, plaintiff Heidi Roby and nine others
(“plaintiffs”) commenced this action under the
Fair Labor Standards Act, 29 U.S.C. § 201, et
seq. (“FLSA”), seeking to recover, inter
alia, back overtime pay. (Doc. No. 1.) On October 22,
2019, the Court issued an order for plaintiffs to show cause
by October 30, 2019 why the case should not be dismissed for
want of prosecution. (See Doc. No. 13.)
October 23, 2019, without first seeking an entry of default
by the Clerk as required by Fed.R.Civ.P. 55(a), plaintiffs
filed a motion for default judgment under Rule
55(b). (Doc. No. 14.) The next day, plaintiffs
belatedly applied to the clerk for entry of default against
defendants ESC and Boyle, attesting by affidavit that they
had each been served on September 11, 2019. (See
Doc. No. 15.) The clerk noted the default of these two
defendants on November 4, 2019. (See Doc. No. 19.)
The docket contains a notation that the entry of default was
mailed to ESC and to Boyle on that same day.
November 15, 2019, an attorney appeared for ESC and Boyle.
The instant motion to set aside the default was filed on
November 19, 2019. Having been fully briefed, it is ripe for
Civ. P. 55(c) provides that “[t]he court may set aside
an entry of default for good cause, and it may set aside a
default judgment under Rule 60(b).” The rule
distinguishes between an entry of default and a
judgment of default.
aside an entry of default, there must only be
“good cause.” Three equitable factors are
considered in determining whether good cause has been shown:
“(1) whether culpable conduct of the defendant led to
the default, (2) whether the defendant has a meritorious
defense, and (3) whether the plaintiff will be
prejudiced.” Burrell v. Henderson, 434 F.3d
826, 831-32 (6th Cir. 2006) (quoting Waifersong, Ltd. v.
Classic Music Vending, 976 F.2d 290, 292 (6th Cir. 1992)
(further citation omitted)). Balancing the three equitable
factors is required and, in “consider[ing] the first
factor, defendant's culpability, [the court does so] in
the general context of determining whether a petitioner is
deserving of equitable relief.” Waifersong,
976 F.2d at 292. “When a defendant seeks relief from a
default that has been entered by the clerk upon a
plaintiff's request, the district court enjoys
considerable latitude under the ‘good cause shown'
here seek equitable relief under Rule 55 from the entry of
default against each of them, as well as leave under
Fed.R.Civ.P. 6 to file untimely responses to plaintiffs'
complaint. (Mot. at 107-09.) Although Boyle now acknowledges
that service was signed for on September 11, 2019 by a former
employee, he attests in a sworn affidavit that the employee,
who left the company on September 20, 2019, never provided
him with copies of the summonses and complaint or told him
about the lawsuit. (Doc. No. 25-2, Affidavit of Timothy Boyle
[“Boyle Aff.”], ¶¶ 4- 5.) Boyle claims he
only learned of the lawsuit when he received the entry of
default by regular mail, at which time he diligently sought
the services of an attorney. Plaintiffs do not refute this
with any sworn testimony or evidence in
opposition; therefore, the Court takes Boyle's
attestation as true for purposes of this motion.
be treated as culpable, the conduct of a defendant must
display either an intent to thwart judicial proceedings or a
reckless disregard for the effect of its conduct on those
proceedings.” Shepard Claims Serv., Inc. v. Wm.
Darrah & Assocs., 796 F.2d 190, 194 (6th Cir. 1986).
Plaintiffs do not allege that this standard was met or that
Boyle himself was somehow responsible for the signing
employee's failure to report service of the lawsuit to
him. Therefore, this Court finds no culpable conduct on the
part of ESC and/or Boyle.
second element to be considered is prejudice to the
plaintiffs if the default is set aside. “[D]elay alone
is not a sufficient basis for establishing prejudice.”
INVST Fin. Grp., Inc. v. Chem-Nuclear Sys., Inc.,
815 F.2d 391, 398 (6th Cir. 1987) (citations omitted).
“To establish prejudice, the plaintiff must show that
the delay will result in the loss of evidence, increased
difficulties in discovery, or greater opportunities for fraud
and collusion.” Berthelsen v. Kane, 907 F.2d
617, 621 (6th Cir. 1990) (citing INVST Fin. Grp.,
815 F.2d at 398). Plaintiffs do not argue that they will be
prejudiced in any way, and the Court perceives no prejudice.
This case was filed barely five (5) months ago and no
defendant has yet filed a responsive pleading.
the Court considers the third element-meritorious defense.
“In determining whether a defaulted defendant has a
meritorious defense, likelihood of success is not the
measure. Rather, if any defense relied upon states a defense
good at law, then a meritorious defense has been
advanced.” United Coin Meter Co. v. Seaboard
Coastline RR, 705 F.2d 839, 845 (6th Cir. 1983)
(internal citations and quotation marks omitted). Here, the
proposed answer lists several affirmative defenses, including
certain statutory bars and exemptions, which meet this
standard of a “meritorious defense.”