MARK FALK, Magistrate Judge.
Pending before the Court is Plaintiff Suzanne Caruso's motion for the entry of default judgment against Defendant Joseph Occhiogrosso, as well as Occhiogrosso's cross-motion to vacate default and to stay the case. (CM/ECF Nos. 22, 32.) The motions are decided on the papers submitted. See Fed.R.Civ.P. 78(b). For the reasons stated below, Occhiogrosso's motion to vacate default is granted. Plaintiff's motion for the entry of default judgment is denied. The motion to stay is also denied.
This case arises out of the parties association with Viridian Network, LLC ("Viridian"). Viridian is an alternative supplier of electricity for select deregulated states and public utilities. (See Compl. ¶ 8.) Viridian utilizes a multi-level marketing sales strategy. It contracts with independent salespeople ("Associates") who enroll customers and other salespeople. (Compl. ¶ 13.) Viridian Associates earn commissions for each customer they personally switch to Viridian. (Compl. ¶ 16.) Associates also earn commissions for customers that are brought in by Associates whom they have recruited into the network of Viridian Associates. (Id.)
Plaintiff was an Associate with Viridian from November 2009 to early July 2010. (See Compl. ¶¶ 58, 220.) During this time, she recruited Occhiogrosso into her network of Viridian Associates. (Compl. ¶ 68.) Plaintiff alleges that prior to her termination, Occhiogrosso and several other Associates and Viridian employees tortiously interfered with her contractual relationship with Viridian by removing Occhiogrosso from her network of Associates. (See Compl. ¶¶ 222-277.) On March 24, 2011, Plaintiff initiated an arbitration proceeding against Viridian relating to these claims. (See Def.'s Br. 4.) An arbitrator entered an award in favor of Viridian. Thereafter, Plaintiff appealed the arbitration award to the New York Supreme Court, where it was vacated in its entirety. Viridian appealed the state court's decision to the New York Appellate Division, where it remains pending.
On April 5, 2011, Plaintiff initiated this litigation, alleging that Occhiogrosso-as well as several other Viridian Associates and employees-tortiously interfered with her contractual relationship with Viridian. (See Compl. ¶¶ 222-277.) On July 18, 2011, Defendant Occhiogrosso filed a notice of appearance and "declaration of intent to move to compel arbitration." (See Def.'s Br. 4.) Later that day, Plaintiff filed a request for default against Occhiogrosso, which the Clerk entered on July 19, 2011. (Id. at 5.)
More than a month after default was entered, on September 9, 2011, Occhiogrosso filed a motion to vacate default and compel arbitration. (Hocking Certif. ¶ 4.) On April 30, 2012, District Judge Cavanaugh entered an Order directing the parties to apprise the Court of the status of the Viridian arbitration within 45 days. (CM/ECF No. 15.) On June 6, 2012, the parties filed a joint statement stating, in part, that the motion to compel arbitration was moot, but that the parties could not agree on whether the default entered against Occhiogrosso should be vacated. (See CM/ECF No. 16; Hocking Certif. ¶¶ 5-6.) On December 22, 2012, Plaintiff filed a motion for default judgment. (Hocking Certif. ¶ 19.) On February 5, 2013, Occhiogrosso filed a cross-motion to vacate default and stay this litigation pending resolution of Viridian's appeal of the New York Supreme Court's ruling vacating the arbitration award.
A. Defendant Occhiogrosso's Motion to Vacate Default
The decision to set aside an entry of default rests within the court's discretion. See Fed.R.Civ.P. 55(c); Tozer v. Charles A. Krause Milling Co. , 189 F.2d 242, 244 (3d Cir. 1951). Courts generally disfavor entry of default judgment. See Tozer , 189 F.2d at 245. All doubts are resolved in favor of setting aside default so that cases may be decided on the merits. See Livingston Metal Powder, Inc. v. N.L.R.B. , 669 F.2d 133, 136 (3d Cir. 1982); Medunic v. Lederer , 533 F.2d 891, 893-94 (3d Cir. 1976).
Courts consider three factors in determining whether to vacate the entry of default: (1) whether the defendant has a meritorious defense; (2) whether the plaintiff will be prejudiced if default is not granted; (3) whether the defendant's delay in defending was the result of culpable misconduct. See, e.g., Farnese v. Bagnasco , 687 F.2d 761 (3d Cir. 1982); United States v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 194-95 (3d Cir. 1984).
The first factor is whether the defendant has a meritorious defense. See $55, 518.05 in U.S. Currency, 728 F.2d at 195. There would be no point in setting aside default and proceeding with this litigation if Occhiogrosso could not demonstrate a possibility of winning. See id. Here, Occhiogrosso has denied that he committed any of the acts that provide the foundation of Plaintiff's various claims. (See Affidavit of Joseph Occhiogrosso ("Occhiogrosso Aff.") ¶ 6.) Defendant Occhiogrosso has also denied that Plaintiff received any less compensation as a result of his alleged removal from her network of Viridian Associates. (See Occhiogrosso Aff. ¶ 7.) Occhiogrosso does not need to spell out his entire defense in order to set aside the default. The Court is satisfied that a sufficient showing of a plausible defense has been made. This factor weighs in favor of vacating default.
Second, Plaintiff would not suffer any prejudice from proceeding with the merits of the case. Plaintiff generically asserts that vacating default would prolong the case and cost more money. However, courts have consistently held that minimal delay in the resolution of the case and increased financial costs associated with additional litigation rarely constitute sufficient prejudice to avoid setting aside a default. See, e.g., Feliciano v. Reliant Tooling Co. , 691 F.2d 651, 656-57 (3d Cir. 1982); Tozer , 189 F.2d at 246. Furthermore, Plaintiff has not established that its ability to pursue this claim has been hindered since the entry of default. There has been no loss of available evidence and no substantial reliance on the default. See Feliciano , 691 F.2d at 657. This factor weighs in favor of vacating default.
Third, Occhiogrosso has established that his delay in defending the case was not the result of culpable misconduct. In the context of setting aside a default, culpable misconduct means actions taken willfully or in bad faith. See, e.g., Gross, 700 F.2d at 124; Feliciano , 691 F.2d at 657. Nothing in the record indicates that Occhiogrosso's delay in defending was willful or in bad faith. As the deadline for filing a responsive pleading approached, Occhiogrosso requested that Plaintiff agree to extend this deadline because counsel had just been retained. (See Def.'s Br. 4.) Plaintiff declined to consent. (See id.) Occhiogrosso then filed a notice of appearance and, perhaps hoping to avoid default, a "declaration of intent to move to compel arbitration." Plaintiff requested a default that same day. Occhiogrosso's attorney has represented that his delay in filing his first Motion to Vacate Default was the ...