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Cobb v. Equifax Information Services

United States District Court, S.D. West Virginia, Charleston Division

December 3, 2018

RONALD COBB, et al., Plaintiffs,
v.
EQUIFAX INFORMATION SERVICES, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          JOSEPH R. GOODWIN UNITED STATES DISTRICT JUDGE

         I. Introduction

         Pending before the court is a Motion to Set Aside Default [ECF No. 35] filed by Defendant Synchrony Bank (“Synchrony”). The plaintiffs did not file a response opposing this motion, and the time to file a response has now passed. For the reasons discussed below and no objection appearing, this motion is GRANTED, and the entry of default is SET ASIDE.

         II. Background

         The plaintiffs commenced this civil action by filing a complaint in the Circuit Court of Kanawha County, West Virginia on May 28, 2018. The civil action was subsequently removed to this court on June 4, 2018 by Defendant Trans Union, LLC on the basis of federal question jurisdiction because the plaintiffs assert claims against the defendants, including Synchrony, under the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.

         The plaintiffs filed a Motion for Default Judgment [ECF No. 17] against Synchrony on July 5, 2018. The court found that the plaintiffs' Motion was procedurally improper but, in the interest of expediency, ordered the Clerk to treat the Motion as an application to the Clerk for a Rule 55(a) entry of default as to Synchrony. The Clerk entered default against Synchrony on August 7, 2018. On October 15, 2018, Synchrony filed its Motion to Set Aside Default [ECF No. 35], arguing that good cause exists to set aside the entry of default because service of process on Synchrony was improper.

         III. Legal Standard

         Rule 55(c) of the Federal Rules of Civil Procedure states that a court “may set aside entry of default for good cause.” In assessing a motion to set aside an entry of default, a district court is to consider (1) whether the moving party has a meritorious defense to the action; (2) whether the moving party acted with reasonable promptness; (3) the personal responsibility of the defaulting party; (4) any unfair prejudice to the non-moving party; (5) whether there is a history of dilatory action; and (6) the availability of sanctions less drastic. Colleton Preparatory Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413, 417 (4th Cir. 2010); Payne ex rel. Estate of Calzada v. Brake, 439 F.3d 198, 204-05 (4th Cir. 2006).

         The Fourth Circuit has “repeatedly expressed a strong preference that, as a general matter, defaults be avoided and that claims and defenses be disposed of on their merits.” Colleton, 616 F.3d at 417. Notably, the “good cause” standard for setting aside an entry of default pursuant to Rule 55(c) is less onerous than the “excusable neglect” standard for setting aside a default judgment pursuant to Rule 60(b). Id. at 420.

         IV. Discussion

         Synchrony has failed to specifically address any of the Payne factors in its Motion to Set Aside Default. Instead, Synchrony's sole argument in support of its Motion is that good cause exists because service of process on Synchrony was improper. However, the Fourth Circuit “has not yet explicitly adopted a per se rule to that effect.” Turpin v. Wellpoint Cos., No. 3:10CV850-HEH, 2011 WL 1086482, at *2 n.6 (E.D. Va. Mar. 23, 2011) (declining to decide whether the Fourth Circuit would endorse this “blanket rule” and applying the multi-factor approach where the defendant argued that the court must set aside an entry of default if service is improper). Nonetheless, as in Turpin, the court need not decide whether an entry of default must be set aside where service is improper because the multi-factor approach favors setting aside the Clerk's entry of default in this case.

         a. Meritorious Defense

          The first Payne factor, whether the moving party has presented a meritorious defense, weighs against setting aside the entry of default. To find a meritorious defense, “the defaulting party must proffer evidence which, if believed, would permit the factfinder to find for the defaulting party after a trial on the merits, or would establish a valid counterclaim.” Burton v. TJX Cos., No. 3:07-CV-760, 2008 WL 1944033, at *3 (E.D. Va. May 1, 2008) (citing Augusta Fiberglass Coatings, Inc. v. Fodor Contracting Corp., 843 F.2d 808, 812 (4th Cir. 1988)). There must be facts to support the defense, not just conclusory statements. Id.

         Here, Synchrony has failed to articulate a meritorious defense. Its Motion merely states that service was improper and that it desires to defend this civil action on the merits. At best, Synchrony has only alleged in a conclusory fashion that it has a meritorious defense. Likewise, no evidence in the record suggests that Synchrony has a meritorious ...


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