Summary
In Parakkavetty v. Indus International, Inc., 2003 WL 22060749 (N.D. Tex. Sept. 2, 2003) (Fitzwater, J.) (order), the court granted a motion that in part sought to extend the discovery deadline for four months.
Summary of this case from Assistmed, Inc. v. Conceptual Health Solutions, Inc.Opinion
Civil Action No. 3:02-CV-1461-D
December 2, 2003
MEMORANDUM OPINION AND ORDER
Plaintiff-counterdefendant Biju Parakkavetty ("Parakkavetty") has filed an October 3, 2003 motion for jury trial and October 15, 2003 motions to set aside entry of default and for leave to file late answer to counterclaim and affirmative defenses. For the reasons that follow, the court grants the motions.
Also pending before the court is defendant's September 2, 2003 motion for summary judgment, which the court will decide in due course.
I
Parakkavetty sues defendant Indus International, Inc. ("Indus") to recover on state-law claims and under 42 U.S.C. § 1981 for discrimination. Indus filed on July 23, 2003 a counterclaim for attorney's fees and expenses pursuant to a provision of a written employment agreement between Parakkavetty and Indus. This section states that "[i]n the event of a dispute hereunder, the prevailing party shall be entitled to recover attorneys' fees and costs as awarded by a court." D. Counterclaim ¶ 11 (quoting § 12 of employment agreement). Parakkavetty did not file a timely reply to the counterclaim, and the clerk of court entered a default on October 9, 2003 under Fed.R.Civ.P. 55(a). Parakkavetty moves under Rule 55(c) to set aside the entry of default.
II
The court turns first to Parakkavetty's motion for jury trial. Parakkavetty moves under Rule 38(b) or, alternatively, under Rule 39(b) for a jury trial. Because a Rule 38(b) demand would now be untimely — which Parakkavetty concedes, see P. Mot. at 1 — the court will address his alternative request under Rule 39(b).
The decision to grant an untimely request for a jury trial is discretionary with the district court. Fredieu v. Rowan Cos., 738 F.2d 651, 653-54 (5th Cir. 1984). A district court "should grant a jury trial in the absence of strong and compelling reasons to the contrary." Lewis v. Thigpen, 767 F.2d 252, 257 (5th Cir. 1985) (quoting Swofford v. BW, Inc., 336 F.2d 406, 409 (5th Cir. 1964)). The following factors guide the court in considering whether to grant or deny the motion: (1) whether the case involves issues that are best tried to a jury; (2) whether granting the motion would disrupt the court's schedule or that of the adverse party; (3) the degree of prejudice to the adverse party; (4) the length of delay in having requested a jury trial; and (5) the reason for the movant's tardiness. Daniel Int'l Corp. v. Fischbach Moore, Inc. 916 F.2d 1061, 1064 (5th Cir. 1990).
Having considered the factors, the court grants Parakkavetty's motion. The first factor favors granting a jury trial. Parakkavetty's state-law claims, and his § 1981 action, are within the comprehension of a jury and are of the sort usually tried to a jury.
Second, although trial is set for the April 5, 2004 two-week docket, granting Parakkavetty's request will not disrupt the court's schedule. The court does not separately establish "jury" and "nonjury" dockets. It is a simple process in a populated area, as is the Dallas division of this court, to summon jurors for a regular trial docket like the one in question. This factor favors granting the motion. Indus' contention that granting a jury trial will disrupt its schedule, see D. Br. at 8, is itself conclusory and is based on the same conclusory assertion concerning prejudice that the court rejects in its consideration of the third factor.
The court concludes, third, that Indus has failed to show that allowing a jury trial will result in sufficient prejudice to warrant denying the request. Indus asserts that it has litigated this case in reliance on the premise that it will be tried to the court. Its contention that it "has developed both its discovery and trial preparation strategies in light of this [nonjury] posture," id. at 7, is conclusory and thus fails to demonstrate prejudice. Indus also maintains that the fact that the case involves a bench trial is crucial to its pending summary judgment motion because the standard for granting the motion is more lenient. This contention is misplaced. As the Fifth Circuit noted recently in Illinois Central Railroad Co. v. Mayeux, 301 F.3d 359 (5th Cir. 2002), "[a]lthough prior panels of this court have entertained the idea of applying a more lenient [summary judgment] standard in nonjury trials, this circuit has not actually adopted such a standard." Id. at 362 n. 1.
The fourth factor — the length of delay in having requested a jury trial — and the fifth factor — the reason for the movant's tardiness — weigh against granting a jury trial. Parakkavetty waited 16 months before seeking a jury trial, and his failure to demand a jury was based on the mistaken belief that a jury request had been made in state court before removal.
Considering all the factors together in view of the Seventh Amendment fundamental right of trial by jury, and in the absence of strong and compelling reasons to the contrary, the court in its discretion grants Parakkavetty's alternative motion for jury trial under Rule 39(b).
III
The court now considers Parakkavetty's motions to set aside entry of default and for leave to file late answer to counterclaim and affirmative defenses. Parakkavetty argues first that he did not default. He maintains second that his failure to file a reply is due to oversight and mistake and that he has a meritorious defense.The court need only address the second contention because it may assume, without deciding, that Parakkavetty defaulted. Under Rule 55(c) a court may set aside entry of default "[f]or good cause shown." The term "`good cause' is not susceptible of precise definition, and no fixed, rigid standard can anticipate all of the situations that may occasion the failure of a party to answer a complaint timely." In re Dierschke, 975 F.2d 181, 183 (5th Cir. 1992). In deciding whether to set aside a default, the court considers such factors as whether the default was the result of excusable neglect, whether setting aside the default would prejudice the adversary, and whether a meritorious defense is presented. See CJC Holdings Inc. v. Wright Lato, Inc., 979 F.2d 60, 64 (5th Cir. 1992). "These factors are not `talismanic,' and we will consider others. The ultimate inquiry remains whether the defendant shows `good cause' to set aside the default. The district court need not consider all of these factors." Id. (citations omitted).
CJC Holdings actually states that the first factor is "whether the default was willful," CJC Holdings, 979 F.2d at 64, but it "suggest [s] that district courts should use the less subjective excusable neglect standard in the future[,]" id.
Parakkavetty has shown that his default was the result of excusable neglect. His counsel viewed the attorney's fee counterclaim as a form of defense rather than as an independent cause of action, and he considered the employment agreement that contains the attorney's fee clause to be inapposite since Parakkavetty is not suing under the agreement. In fact, the counterclaim is a form of fee-shifting claim in which Indus essentially maintains that, because Parakkavetty's causes of action lack merit and Indus will prevail on them at trial, Indus is entitled to recover its fees in defending this suit.
The court finds that setting aside the default will not prejudice Indus. The mere fact that setting aside the default will delay Indus' recovery or require that it litigate the counterclaim is insufficient. See United States v. One Parcel of Real Prop., 763 F.2d 181, 183 (5th Cir. 1985).
Finally, Parakkavetty has presented a meritorious defense. The premise of Indus' counterclaim is that Parakkavetty's lawsuit lacks merit and that Indus is therefore contractually entitled to recover its attorney's fees. Parakkavetty has demonstrated that he has a meritorious defense that Indus is not entitled to prevail on Parakkavetty's claims against it, and that even if Indus is entitled to prevail, his claims against Indus are not disputes under the employment agreement and the attorney's fee clause of that agreement does not entitle Indus to relief even if Parakkavetty loses this lawsuit.
The court is not now addressing the merits of Indus' summary judgment motion or suggesting a view concerning that motion.
* * *
The court grants Parakkavetty's October 3, 2003 motion for jury trial and October 15, 2003 motions to set aside entry of default and for leave to file late answer to counterclaim and affirmative defenses. No later than December 17, 2003 Parakkavetty must file his reply to Indus' counterclaim.
The pleading in response to a counterclaim is a "reply," not an "answer." See Rule 7(a). Although Parakkavetty filed with his motion the answer that he intends to file if given leave to do so, the court directs that he file a "reply," as contemplated by Rule 7(a).
SO ORDERED.