Opinion
5:03-CV-1095 (FJS/GJD)
April 5, 2004
LAMONT R. BIRDEN, Syracuse, New York, for Plaintiff Pro Se
GARY H. COLLISON, ESQ., SUGARMAN, WALLACE, MANHEIM SCHOENWALD, LLP, Syracuse, New York, for Defendants Schanno Transportation, Inc., Bill Grojean, and Jim Kwakenat
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
In March, 2001, Plaintiff, a truck driver, entered into a contract to lease a truck from Defendant Schanno Transportation, Inc. In June, 2001, Plaintiff injured himself falling off the truck and began to collect disability insurance for his injuries. In December, 2001, Plaintiff attempted to return to work. Defendant Schanno informed him that, although he could return to work, he would have to agree to a drug test. Plaintiff failed the drug test. Plaintiff then brought this action claiming breach of contract and race and disability discrimination. As a basis for his breach of contract and discrimination claims, he contends that Defendants denied him substance-abuse counseling in violation of the lease contract. Further, he contends that Defendant Schanno discriminated against him based on race and disability by not permitting him to return to work.
Plaintiff's complaint does not specify the nature of the insurance that he collected, but it does specify that it was related to the disability. In addition, Plaintiff's complaint does not clearly state whether he had a contractual or an employment relationship with Defendant Schanno.
Defendant Kwakenat was the Director of Safety for Schanno Transportation. Plaintiff contends that Defendant Grojean owns Schanno Transportation, Inc.
Plaintiff filed a diversity complaint in this Court on September 5, 2003, seeking $500,000.00 in damages. Defendants initially failed to answer. On February 3, 2003, upon Plaintiff's application, the Clerk of the Court entered default against Defendants. See Dkt. No. 12. On February 9, 2004, pursuant to Rule 55(b)(2), Plaintiff moved for a judgment of default against Defendants. See Dkt. No. 14. On February 10, 2004, Defendants filed an answer to the complaint. See Dkt. No. 13. On February 25, 2004, Defendants filed a motion to vacate the entry of default against them. See Dkt. No. 16.
Defendants apparently mistook the Clerk's "entry of default" for a "judgment of default" and submitted a motion seeking to vacate the entry of default in lieu of opposition to Plaintiff's motion for a default judgment. Since it is obvious that Defendants intended to oppose Plaintiff's motion, the Court has treated Defendants' motion as opposition to Plaintiff's motion for a default judgment.
II. DISCUSSION
Rule 55 of the Federal Rules of Civil Procedure permits the Clerk to enter a defendant's default when he has "failed to plead or otherwise defend . . ." an action. Fed.R.Civ.P. 55(1). Once the Clerk has entered default against a defendant in an action, the plaintiff must then apply to the court for a judgment of default. See Fed.R.Civ.P. 55(b)(2). Rule 60(b)(1) of the Federal Rules of Civil Procedure permits a court to relieve a party from an entry of default or judgment of default on the grounds of "mistake, inadvertence, surprise, or excusable neglect." See Fed.R.Civ.P. 60(b).Courts in this Circuit have established several criteria to determine whether to grant a defendant's motion for relief from a judgment of default under Rule 60(b)(1), including whether the defendant defaulted willfully, whether the defendant has a meritorious defense, and whether an order vacating a judgment of default will result in prejudice to the non-defaulting party. See Gucci Am., Inc. v. Gold Ctr. Jewelry, 158 F.3d 631, 634 (2d Cir. 1998) (quotation omitted). Before rejecting a defendant's claim of excusable neglect, courts should look for "`bad faith, or at least something more than mere negligence'" on the part of the defendant. Id. (quotation omitted).
Defendants contend that, after Plaintiff stopped working for Defendant Schanno, but before he commenced this action, Defendant Schanno ceased many of its active trucking operations and relocated from Minnesota to South Sioux City, Nebraska. However, Plaintiff directed the Court to send process to the old location in Minnesota. Although the individual in Minnesota who acknowledged service, Mr. Krell, forwarded the complaint to the new headquarters in Nebraska, Defendants by then had too little time to secure New York counsel and file their answer within the twenty-day period.
According to Plaintiff, Defendants admitted that Mr. Krell received and acknowledged service for them, and they may not therefore claim ignorance of the substance of Plaintiff's claim or the time limit for answering the complaint. Plaintiff contends further that Defendants have not set forth an adequate factual basis for the claim of excusable neglect; for instance, Defendants did not present any affidavits detailing the handling of the summons and complaint before it arrived in Nebraska.
Plaintiff has not shown any evidence that Defendants acted in bad faith. Moreover, Defendants filed an answer within several weeks of receiving service, and Plaintiff has not shown how vacating the entry of default would prejudice his case, particularly at this early stage. Finally, Defendants have raised several potentially meritorious defenses, including an assertion that the contract at issue had a cancel-at-will provision and the affirmative defense that the Northern District is an improper venue. Accordingly, the Court denies Plaintiff's motion for entry of a default judgment.
Defendants also submitted an objection to the entry of a money judgment against them. Since the Court has denied Plaintiff's motion for entry of a default judgment, Defendants' objection to the entry of a money judgment is moot.
III. CONCLUSION
After carefully considering the file in this matter and the parties' submissions, as well as the applicable law, and for the reasons stated herein, the Court herebyORDERS that Plaintiff's motion for entry of default judgment is DENIED as to all Defendants; and the Court further
ORDERS that Plaintiff's motion to vacate the entry of default is DENIED as moot.
IT IS SO ORDERED.