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Stierwalt v. Best Logistics Group, Inc.

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

January 3, 2020

WILLIAM STIERWALT, et al., Plaintiffs,
v.
BEST LOGISTICS GROUP, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          THOMAS E. JOHNSTON, CHIEF JUDGE

         Before the Court is Defendants Best Logistics Group, Inc., H&W Holdings, LLC d/b/a Best Specialized, and Best Services Group, Inc.'s (collectively “Defendants”) Motion to Set Aside Default and for Leave to File Answer. (ECF No. 18.) Also pending are Plaintiffs William Stierwalt and Amy Stierwalt's (collectively “Plaintiffs”) Motion for Default Judgment Against Best Logistics Group, Inc., (ECF No. 8); Motion for Default Judgment Against Best Services Group, Inc., (ECF No. 9); and Motion for Default Judgment Against H&W Holdings, LLC d/b/a Best Specialized, (ECF No. 10). For the reasons discussed more fully below, the Court GRANTS Defendants' Motion to Set Aside Default, (ECF No. 18), and DENIES Plaintiffs' motions for default, (ECF Nos. 8, 9, 10).

         I. BACKGROUND

         Plaintiffs filed this personal injury action alleging Plaintiff William Stierwalt was working as a tollbooth operator when a truck operated by Defendants' employee struck the booth occupied by Plaintiff. (ECF No. 1 at 4, ¶ 22.) Plaintiff alleges he sustained various injuries as a result, and his wife, Plaintiff Amy Stierwalt, alleges a claim for loss of consortium. (Id. at 5-6, ¶¶ 26- 30.)

         On August 20, 2019, Plaintiffs filed six motions requesting an entry of default by the Clerk and this Court against Defendants Best Logistics Group, Inc., H&W Holdings, LLC d/b/a Best Specialized, and Best Services Group, Inc. (ECF Nos. 8, 9, 10, 11, 12, 13.) In response to these requests and affidavits, the Clerk of this Court entered default against all Defendants on August 27, 2019, pursuant to Federal Rule of Civil Procedure 55(a). (ECF No. 16.) Defendants filed the current Motion to Set Aside Default on August 28, 2019. (ECF No. 18.) Plaintiffs responded on September 4, 2019, (ECF No. 21), and Defendants filed their Reply on September 11, 2019, (ECF No. 23). As such, the motion is fully briefed and ripe for adjudication.

         II. LEGAL STANDARD

         Under Federal Rule of Civil Procedure 55, a court may, “for good cause shown, ” set aside an entry of default. Rule 55(a) initially provides that when a party shows by affidavit that an opposing party has failed to plead or otherwise defend itself in litigation, the clerk of court must enter default against the defending party. Pursuant to Rule 55(c), however, district courts have the discretion to set aside an order of default for good cause. 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 Preparatory Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413, 417 (4th Cir. 2010) (citations omitted); see also Tolson v. Hodge, 411 F.2d 123, 130 (4th Cir. 1969) (providing that “any doubts about whether relief should be granted should be resolved in favor of setting aside the default so that the case may be heard on the merits”).

         Further, the Fourth Circuit has established that district courts should consider the following factors when deciding motions to set aside default pursuant to Rule 55(c): “whether the moving party has a meritorious defense, whether it acts with reasonable promptness, the personal responsibility of the defaulting party, the prejudice to the party, whether there is a history of dilatory action, and the availability of sanctions less drastic.” Payne ex rel. Estate of Calzada v. Brake, 439 F.3d 198, 204-05 (4th Cir. 2006).

         II. DISCUSSION

         Defendants ask the Court to set aside the Clerk's Entry of Default entered against them on August 27, 2019. (ECF No. 16.) Defendants assert that their failure to file a timely response was the result of a misunderstanding between Defendants' counsel, their insurer, and the Defendants themselves.[1] (ECF No. 19 at 2.) Defendants advise that their insurer and Plaintiffs were engaged in discussions over a possible resolution before this case was filed, and, because these discussions were ongoing, Defendants did not advise their insurer or their counsel of the service of the Summons and Complaint. (Id.) Plaintiffs oppose Defendants' Motion and argue Defendants “purposely decided not to file an answer in an effort to delay responsibility” and “intentionally ignored Plaintiffs and rely on unsupported claims of ‘misunderstanding,' ‘miscommunication,' and ‘meritorious defense.'” (ECF No. 22 at 12, 14.) The Court will briefly address the relevant factors to consider under Federal Rule of Civil Procedure 55(c).

         A. Meritorious Defense

         Under this factor, “the moving party does not have to prove conclusively that he would prevail, only that there is sufficient evidence to permit a court to find in his favor.” Wainwright's Vacations, LLC v. Pan Am. Airways Corp., 130 F.Supp.2d 712, 718 (D. Md. 2001). Even if a defense is tenuous, this factor should weigh in favor of granting a motion to set aside the default. See Rasmussen v. Am. Nat. Red Cross, 155 F.R.D. 549, 552 (S.D. W.Va. 1994).

         This action alleges Defendants' employee collided with a tollbooth occupied by Plaintiff William Stierwalt causing injury. (ECF No. 1 at 4, ¶ 22.) Specifically, Plaintiffs allege negligence claims resulting from this accident. (ECF No. 1.) Defendants assert in the motion's supporting memorandum of law that they can produce evidence that their employee did not act recklessly, willfully, wantonly and maliciously; that some of the named Defendants did not employ the driver; and anticipate having a defense to some of Plaintiffs' claims for damages. (ECF No. 23 at 7-8.) Plaintiffs rely solely on the video footage of the accident to argue “there is no defense” to Defendants' actions. (ECF No. 22 at 11-12.) However, if Defendants prove the veracity of their initial claims, this Court or a jury may find in their favor. Cf. Rasmussen, 155 F.R.D. at 552 (“[A]lthough Defendant has neither presented nor proffered evidence supporting its defense . . . those denials, if believed by the finder of fact, would permit a verdict for the Defendant.”). Thus, the Court finds that at this early stage in the litigation, Defendants have adequately presented a meritorious defense that weighs in favor of setting aside the default.

         B. ...


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