Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.



August 5, 1982

ADMIRAL HOME APPLIANCES, A Division Of Magic Chef, Inc., Plaintiff

The opinion of the court was delivered by: BIUNNO


 BIUNNO, Senior District Judge.

 The single count complaint in this case was filed April 26, 1982. Jurisdiction is based on diversity of citizenship, 28 USC ยง 1332, with plaintiff having dual citizenship in Delaware (where it is incorporated) and Tennessee (where it has its principal place of business). Defendant is a New Jersey corporation with its principal place of business in the same State. The amount in controversy is alleged to exceed $10,000.

 The complaint alleges that defendant sent plaintiff an order, dated September 22, 1981, for the purchase of 356 Admiral clothes washing machines, Model W18B2, and 356 Admiral electric clothes driers, Model DE 18B2, to be shipped "ASAP" (as soon as possible), in carload lots, with freight charges prepaid. The order was accepted September 28, 1981.

 On November 28, 1981, before delivery, defendant repudiated the purchase order, and plaintiff sues for monetary damages.

 The return of service shows that summons and complaint were served May 14, 1982 on defendant at its Hackensack, NJ offices. On June 9, 1982, more than 20 days having elapsed, and no answer or other defense having been served or filed, a request for default was filed and default was duly entered on the docket sheet, F.R.Civ.P. 55(a).

 On June 28, 1982, a notice of motion was filed returnable July 26, 1982, for an order vacating the default and allowing answer to be filed. Because the notice was not accompanied by proof of service or a brief, or statement in lieu of brief, the Clerk did not calendar the motion for July 26 and notified defendant's attorney of the defect by form letter of June 29, 1982.

 On July 12, 1982, defendant filed an affidavit that on June 24, 1982 the original notice of motion was delivered to New Jersey Lawyer's Service which in turn hand delivered the papers to plaintiff's attorneys on June 26, 1982. On the same date, defendant's attorney filed an affidavit in lieu of brief, asserting that defendant has denied the allegations of the complaint and has a meritorious defense.

 The affidavit of defendant's attorney, filed with the original motion, says that that the summons and complaint were served on the defendant; that due to confusion in defendant's office, and the nature of the issues, and by mistake and inadvertence, the papers were left in abeyance; that thereafter defendant realized that the matter could not be resolved and sent the paper to its attorneys.

 Although no date is given, it is plain from that affidavit that the lawyers did not receive the papers from the client until after the default had been entered, as the affidavit recites that upon receipt of the papers the lawyer "immediately" contacted plaintiff's lawyer to obtain consent to vacate the default, which consent was refused.

 The affidavit also says there is a meritorious defense in that the sales order was cancelled and thus there is no obligation to the plaintiff.

 The affidavit is hearsay. No facts have been presented by any person having personal knowledge to explain the inactivity between the date of service, May 14, 1982, and the date the papers were sent to the lawyer. The date they were sent is not given, but it had to have been sometime between June 9, 1982 when the default was entered, and June 28, 1982 when the notice of motion was filed. Nor has any factual showing been made by a person having personal knowledge, of the existence of a meritorious defense. All that is said is that the order was cancelled, but that is precisely the breach relied on by the complaint to state a claim. Cancellation is an element of the claim, not a defense.

 In response, plaintiff has filed affidavits of its general counsel in Atlanta, and of its attorney of record. The first shows that formal demand was made by his letter of February 18, 1982, which proposed an amount for which the claim could be resolved. Defendant's president then phoned to say that he would not pay the claim, and was told that suit would then be filed. About two weeks after service of process, defendant's president phoned Atlanta again with various threats against the attorney of record and his firm. Counsel declined to discuss the matter as it was then in suit and said he should get a lawyer. Defendant's president replied that he had been in court more than counsel had and knew how to handle such suits.

 The other affidavit shows that on May 17, 1982, the first business day after service of process, the attorney of record received three phone calls from defendant's president claiming that the suit was without foundation and threatening malicious prosecution suits. The attorney told him to get a lawyer and have him communicate. No further word was received after May 17, 1982, and the first word from a lawyer for defendant was on June 16, 1982.

 Defendant's president has submitted a reply affidavit. He denies none of the details set out in the plaintiff's affidavits. He also says he was told to talk to plaintiff's vice-president or credit manager to try to resolve the dispute and that he would allow "sufficient time" to resolve the dispute. He says he made such efforts and was awaiting responses in early June, 1982 and not having an affirmative response, turned the papers over to his lawyer.

 This reply affidavit will not do to show excusable neglect. It is inconsistent with the moving affidavit, which asserts that the delay was due to "confusion in defendant's office, and the nature of the issues between the parties, and by mistake and inadvertence." The moving affidavit makes no mention of the now conceded conversations with general counsel and the attorney of record, or of any assurance that time would be extended to allow an attempt to resolve the matter. The reply affidavit fails to give any details of the efforts made after May 17th, although it is known that on May 28, 1982 a call was made to general counsel, and defendant was then told to get a lawyer, as he had been told on May 17, 1982.

 The moving affidavit and the reply affidavit taken together, in light of the undenied facts shown by the answering affidavits, falls far short of the requisite showing. The court is satisfied that if there were any mention of an extension of time, it was in conjunction with the urging that defendant hire a lawyer and have him contact the attorney of record.

 Whatever the court experience of defendant's president may be, the fact is that since defendant is a corporation it can appear only through a member of the bar of this court. Defendant was on notice by the summons that failure to answer within 20 days could result in a default judgment. Had he hired a lawyer, even after the call to Atlanta on May 28th, two weeks after service, the lawyer could have obtained an ex parte order for a 15 day extension by request to the court clerk under the rules of this court.

 Other fact matters mentioned during argument but not presented as part of the record, cannot be considered. Nor will it do to mention undisclosed defenses especially when no draft of answer, setting out all defenses, is submitted with the motion itself.

 Defendant knew, from the demand letter of February 18th that the claim was not for an insignificant amount. His attitude, in his calls to general counsel and the attorney of record, shows an arrogance and disregard of the consequences, not mistake, inadvertence or excusable neglect.

 Under the circumstances shown by the record in this case, good cause has not been established for setting aside the default, pursuant to F.R.Civ. P. 55(c) or 60(b), and the motion is denied.

 Since the damages are unliquidated, default judgment can only be entered by the court under F.R.Civ.P. 55 (b)(2).

 Plaintiff will be required to serve defendant's attorney with its proofs for the entry of default judgment, and to bring the application on for a regular motion day, on notice in the usual way noting the changes in the General Rules of this District to take effect in the Fall. The defendant will be allowed to serve and file papers in response in accordance with those rules, limited to the question of damages. The motion will be decided under Rule 78, without oral argument, unless the court finds it necessary to conduct a hearing or order a reference, pursuant to F.R.Civ.P. 55(b)(2), in which case the parties will be notified accordingly.

 SO ORDERED. [EDITOR'S NOTE: The following court-provided text does not appear at this cite in 585 F. Supp.]



 No. 83-5226

 ADMIRAL HOME APPLIANCES, a Division of MAGIC CHEF, INC., a Delaware corporationa v. TENAVISION, INC., a New Jersey corporation, Appellant (D.C. Civil No. 82-1279 - Newark)

 Appeal from the United States District Court for the District of New Jersey

 Argued February 28, 1984

 Before SEITZ, Chief Judge, GARTH, Circuit Judge, and DIAMOND, District Judge.*

 (Opinion Filed May 23, 1984)

 Kingsley A. Jarvis, Esquire, (Argued), Suite 707, One Montgomery Plaza, Norristown, Pa., 19401 Attorney for Appellant

 Steven D. Fleissig, Esquire, (Argued), Kalb, Friedman and Siegelbaum, 7 Becker Farm Road, Roseland, New Jersey 07068, Attorney for Appellee


 This is an appeal from an order of the district court in a diversity action granting plaintiff a default judgment against defendant.

 A complaint alleging breach of contract and a summons were served on defendant on May 14, 1982. On June 9, 1982, a default was entered by the clerk pursuant to Fed. R. Civ. P. 559a) because of the defendant's failure to appear.

 On June 28, 1982, defendant filed a notice of a motion to vacate the default and to allow an answer to be filed. After affidavits were filed, the district court held a hearing and denied the motion in a memorandum and order entered August 5, 1982. Thereafter, plaintiff moved for a default judgment on notice. Defendant did not appear and a monetary judgment was entered. This appeal followed.

 Defendant first argues that the district court erred in not setting aside the default and the default judgment on grounds of inadequate notice. This argument is frivolous. Rule 55(a) does not require notice to the defaulting party before the clerk can enter a default. Defendant was given ample notice on the face of plaintiff's summons, which Defendant's president concededly received, that a default could be entered if no answer was filed within 20 days.

 The only notice requirement concerns the entry of a default judgment rather than a default. Rule 55(b)(2) requires that written notice of application for a default judgment must be served on the party in default at least 3 days in advance of the hearing date. Here, however, plaintiff met that requirement by mailing to defendant on Januyary 24, 1983, written notice of an application for a default judgment to be heard on February 14, 1983. We conclude that there was no infirmity in the notice given defendant.

 Defendant's second assignment of error is that the district judge abused his discretion by not vacating the default on the grounds of defendant's excusable neglect, and because plaintiff and its counsel misrepresented to defendant's prsident, a lay person, the time available before he needed to enter a defense in this matter.

 A fair reading of the district court's August 5, 1982 memorandum denying defendant's motion to vacate the default is that the district court found that defendant failed to show excusable neglect, inadvertence or mistake, and that he was not misled by plaintiff's counsel. The defendant's conduct need only be something more than mere negligence to be sufficiently culpable for this court to uphold the district judge's refusal to set aside the default. Hritz v. Woma Corp., 732 F.2d 1178, slip op. at 9 (3d Cir. 1984). The record showed that defendant's president had notice of the pending action but chose to harass plaintiff and its counsel rather than obtain legal advice, although plaintiff's counsel repeatedly advised him to do so. These conversations took place on May 17 and 28, after the suit was filed and well before the date defendant's answer would have been due. The district court correctly found neither neglect, inadvertence nor mistake, but rather a knowing refusal by defendant to appear in this action and present its defenses in court.

 Defendant's president also maintained in an affidavit that he had been misled by plaintiff and its counsel into believing that he would be given time to attempt to resolve the dispute bfore he would have to file an answer. The district judge found this affidavit inconsistent with a prior affidavit which did not mention any misleading statements by plaintiff. He also found that the affidavit failed to show what, if anything, defendant's prsident was attempting to do to resolve the dispute, and that it did not controvert the affidavits of plaintiff's counsel that repeated advice was given defendant's president to obtain legal counsel. On the basis of these findings, the district judge did not abuse his discretion by holding that this affidavit failed to show that defendant's default was the result of its president having been misled by plaintiffs.

 Our prior cases make it clear that the party in default must show that the default was not caused by his own culpable conduct in order to have it set aside. Defendant has not made such a showing. The findings made by the district judge in his August 5, 1982 opinion are sufficient for this court to know the basis for his refusal to vacate the default. Farnese v. Bagnasco, 687 F.2d 761, 765-66 (3rd Cir. 1982). We conclude that the district judge was well within his discretion in refusing to vacate the default entered by the clerk on June 9, 1982. On appeal defendant has not attacked the default judgment entered on February 15, 1983. It follows that the district court's February 15, 1983 order entering a default judgment in plaintiffs' favor will be affirmed.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.