Opinion
1:22-cv-183-KAC-CHS
07-25-2023
WILLIAM REED, Plaintiff, v. KIRAN TRANSPORT, LLC and NATHAN BLAKE, Defendants.
REPORT AND RECOMMENDATION
CHRISTOPHER H. STEGER, UNITED STATES MAGISTRATE JUDGE
This matter is before the Court upon the parties' Joint Motion to Set Aside Entry of Default (the "Joint Motion") [Doc. 24] filed by Plaintiff William Reed and Defendant Kiran Transport, LLC ("Kiran"). This motion has been referred by the District Court to this Court for a report and recommendation pursuant to 28 U.S.C. § 636(b) [Doc. 25]. For the reasons stated herein, it is RECOMMENDED that the Joint Motion be GRANTED.
Kiran is an interstate motor carrier and, as such, is required under federal regulations to register a process agent, called a BOC-3 agent, for service of process purposes in the event it is named as a defendant in a civil action.The Clerk of Court entered default against Kiran [Doc. 19, Clerk's Entry of Default], after Kiran failed to timely respond to the complaint and to the District Court's show cause order as to why a default should not be entered [Doc. 12, Show Cause Order]. However, both Plaintiff and Defendant Kiran aver that the summons and complaint intended for Kiran was inadvertently served upon the wrong BOC-3 process agentand, therefore, Kiran never received the summons and complaint. [The Joint Motion at Page ID # 87-88, ¶¶ 7-11]. Defendant Nathan Blake has not filed a response to the Joint Motion and, therefore, has waived his objections, if any, to it. E.D. TN L. R. 7.2.
A BOC-3 process agent is a "representative upon whom court papers may be served in any proceeding brought against a motor carrier, broker, or freight carrier." United States Department of Transportation, Federal Motor Carrier Safety Administration, "What is a Process Agent?", https://www.fmcsa.dot.gov/registration/process-agents (last visited 6/29/23). Every motor carrier must designate a BOC-3 process agent with the Federal Motor Carrier Safety Administration. Id., see also 49 C.F.R. Part 366.
Kiran had changed BOC-3 process agents one month before Plaintiff had attempted to serve it. [Doc. 24, Joint Motion at Page ID # 87, ¶ 7].
Federal Rule of Civil Procedure 55(c) provides that "[t]he court may set aside an entry of default for good cause[.]" Whether good cause exists to set aside an entry of default is evaluated on the basis of three factors:
(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.Courser v. Allard, 969 F.3d 604, 624 (6th Cir. 2020) (citing Burrell v. Henderson, 434 F.3d 826, 831 (6th Cir. 2006)). Plaintiff and Kiran agree that good cause exists to set aside the default. [See Joint Motion at Page ID # 88, ¶ 13]. More specifically, they agree that Kiran is not culpable for the default, and Plaintiff states that setting it aside will not prejudice Plaintiff. [Id.]. As to the meritorious defense, Kiran need not show that it is likely to succeed on the merits; it need only show that "there is some possibility that the outcome of the suit after a full trial will be contrary to the result achieved by the default." United States v. $22,050.00 U.S. Currency, 595 F.3d 318, 326 (6th Cir. 2010) (citing Burrell, 434 F.3d at 834). Plaintiff reluctantly concedes that Kiran meets this standard. [Joint Motion at Page ID # 88, ¶ 13]. In addition, the Sixth Circuit has expressed a strong preference for resolving cases on the merits and has been "extremely forgiving to the defaulting party" when discussing motions to set aside entry of a default. $22,050.00 U.S. Currency, 595 F.3d at 322 (citing, e.g., O.J. Distrib., Inc. v. Hornell Brewing Co., 340 F.3d 345, 353 (6th Cir. 2003) (stating that the district court has “considerable latitude” to grant relief from a default).
Accordingly, for all the reasons discussed, the Court finds that good cause exists pursuant to Rule 55(c), and it is RECOMMENDED that the default entered against Defendant Kiran Transport, LLC be SET ASIDE.