United States District Court, D. New Jersey
OPINION AND ORDER
B. CLARK, III United States Magistrate Judge.
MATTER comes before the Court on a motion by
Defendant EIC Associates, Inc. (“EIC” or
“Defendant”) to set aside default [ECF No. 13].
Plaintiff Vincent Nelson (“Plaintiff”) opposes
Defendant's motion [ECF No. 15]. For the reasons set
forth below, Defendant's motion [ECF No. 13] is
filed a Complaint against EIC on December 14, 2017 alleging
one cause of action for negligence pursuant to 33 U.S.C.
§ 905(b). Compl. ¶¶ 11-17, ECF No. 1. After
EIC failed to file a timely response to the Complaint, the
Clerk of the Court entered default against EIC [ECF No. 5].
Approximately two months after the entry of default, EIC
filed a Motion to Set Aside the Entry of Default [ECF No.
13], and Plaintiff filed his Brief in Opposition [ECF No.
motion, Defendant contends that this Court should vacate the
entry of default and grant EIC permission to file its Answer.
ECF No. 13-5 at 4. Defendant puts forth four contentions to
support its arguments. First, Defendant contends that
Plaintiff will not suffer any prejudice if the default
against EIC is vacated because there has been no loss of
evidence nor any hindrance to Plaintiff's ability to
proceed with his claims. Id. at 5. Second, Defendant
argues that its “open and obvious” defense is
facially meritorious which would heavily favor vacating the
entry of default in this matter. Id. at 5. Third,
Defendant contends that default was not caused by any
culpable conduct by EIC. Id. at 7. Rather, Defendant
asserts, inter alia, that its delay was the result
of simple oversight by other parties. Id. Lastly,
Defendant argues that alternative sanctions should not be
imposed because EIC has not acted willfully or in bad faith.
Id. at 11.
response, Plaintiff does not refute all Defendant's
contentions, nor does Plaintiff address all factors a court
must consider when deciding whether to set aside default.
Rather, Plaintiff argues that his “right to have his
claim adjudicated quickly, to make up for his pecuniary
losses, as an individual, is a significant right, and the
delays caused by defendant ignoring plaintiff do prejudice
the plaintiff.” Pl.'s Br. in Opp'n, ECF No. 15
at 5. Based on this contention, Plaintiff argues that
Defendant's motion should be denied.
to enter default judgment and vacate default are both
governed by Rule 55 of the Federal Rules of Civil Procedure.
See Fed. R. Civ. P. 55(a)-(c). Rule 55(c) provides
that “[t]he court may set aside an entry of default for
good cause.” Fed.R.Civ.P. 55(c). The decision to vacate
a default is left to the sound discretion of the district
court. Harad v. Aetna Cas. & Sur. Co., 839 F.2d
979, 982 (3d Cir. 1988). When deciding whether to vacate
default, a court must consider three factors: (1) whether the
plaintiff will be prejudiced if the default is lifted; (2)
whether the defendant has a meritorious defense; and (3)
whether culpable conduct of the defendant led to the default.
See Feliciano v. Reliant Tooling Co., 691 F.2d 653,
656 (3d Cir. 1982); see also United States v. $55, 518.05
in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984).
is a distinction between a default standing alone and a
default judgment . . .. Less substantial grounds may be
adequate for setting aside a default than would be required
for opening a judgment.” Feliciano, 691 F.2d
at 656. Where there is a close case, the Third Circuit has
instructed that it “should be resolved in favor of
setting aside the default and reaching a decision on the
merits.” Gross v. Stereo Component Sys., Inc.,
700 F.2d 120, 122 (3d Cir. 1983) (citing Farnese v.
Bagnasco, 687 F.2d 761, 764 (3d Cir. 1982)).
all three factors weigh in favor of vacating entry of default
against EIC. In regards to the first factor,
“[p]rejudice to the plaintiff exists where a defendant
is judgment-proof or where ‘there has been a loss of
available evidence, increased potential for fraud or
collusion, or substantial reliance upon the
judgment.'” 1199 SEIU United Healthcare Workers
E. v. Amboy Care Ctr., No. 15-309, 2015 WL 3649031, at
*3 (D.N.J. 2015) (quoting Julaj v. Tau Assoc. LLC,
2013 WL 4731751, at *4 (D.N.J. 2013)). Furthermore, courts in
this jurisdiction have held that “the inconvenience and
expense to a plaintiff of having to litigate on the merits do
not rise to the level of prejudice required to satisfy this
element.” Julaj, 2013 WL 4731751, at *4;
see also Best Sign Sys., Inc. v. Chapman, No.
09-5244, 2010 WL 3025166, at *2 (D.N.J. 2010) (noting that
the plaintiff's expense and inconvenience of delay was
not a sufficient level of prejudice to justify the entry of
argues that vacating the entry of default will prejudice him
because he has a right to have his claims adjudicated quickly
to make up for his pecuniary losses. Pl.'s Br. in
Opp'n at 5. EIC argues that Plaintiff will not be
prejudiced because there has been no loss of evidence nor any
hindrance to Plaintiff's ability to proceed with his
claims. ECF No. 13-5 at 5. Here, Plaintiff's argument is
solely based on his anticipated inconvenience of having to
litigate the case on the merits if the entry of default is
vacated. Inconvenience alone, however, does not rise to the
level of prejudice required to justify an entry of default
judgment. See Julaj, 2013 WL 4731751, at *4.
Accordingly, this factor weighs in favor of Defendant.
respect to the second factor, “[a] meritorious defense
is one that ‘if established at trial, would constitute
a complete defense.'” Id. at *3 (quoting
$55, 518.05 in U.S. Currency, 728 F.2d at 195). On a
motion to vacate entry of default, the court “need not
decide the legal issue at this time; it is sufficient that
[EIC's] proffered defense is not “facially
unmeritorious.” Emcasco Ins. Co. v. Sambrick,
834 F.2d 71, 74 (3d Cir. 1987). Here, Plaintiff seeks damages
pursuant to 33 U.S.C. § 905(b) for Defendant's
alleged negligence that caused Plaintiff to sustain serious
personal injuries. Compl. ¶¶ 11-17. Specifically,
Plaintiff alleges that he suffered injuries after falling
through an open manhole which was left open by Defendant.
Id. EIC contends that it is entitled to the
“open and obvious” condition defense because the
“hatches are by their very nature designed to be open
at certain times and that such condition was, at the very
least, open and obvious.” ECF No. 13-5 at 5. Without
delving into the merits of this case, it appears that EIC has
proffered a facially meritorious defense. Accordingly, the
Court finds that EIC has adequately presented a meritorious
defense against Plaintiff's allegations at this stage of
final factor “requires the Court to determine whether
the default is the result of culpable conduct or merely
“excusable neglect” on the part of [EIC].”
Julaj, 2013 WL 4731751, at *3. “[C]ulpable
conduct means actions taken willfully or in bad faith.”
Gross, 700 F.2d at 123- 24. Here, EIC's
proffered that its delay in filing a response to the
Complaint was due to “simple administrative oversight
by other parties, in that there appears to have been
substantial miscommunication between EIC's insurance
broker and the relevant insurance carriers(s).” ECF No.
13-5 at 7. EIC has proffered a reason for its delay and
nothing in the record indicates that EIC's delay in
answering the Complaint was willful or in bad faith.
Accordingly, the Court finds that the entry of default
against EIC was not the result of culpable conduct.
three factors weigh in favor of vacating the entry of default
against EIC, the Court grants ...