United States District Court, D. Kansas
MEMORANDUM AND ORDER
W. Lungstrum, United States District Judge.
product liability action by plaintiff Federal Insurance
Company as subrogee presently comes before the Court on the
motion by defendant TAT Technologies, Ltd.
(“TAT”) to set aside the Clerk's entry of
default (Doc. # 32). For the reasons set forth below, the
motion is granted, and TAT may respond to
the complaint on or before October 18, 2017.
filed this action against TAT and two other defendants on
November 3, 2016. On June 30, 2017, plaintiff moved for a
default judgment against TAT, based on plaintiff's
alleged service of process on TAT on January 30, 2017, by
international mail. By Memorandum and Order of July 7, 2017,
the Court denied the motion for three independent reasons:
first, plaintiff had not obtained entry of default from the
Clerk pursuant to Fed.R.Civ.P. 55(a); second, there was not
yet any basis for judgment against all three defendants, who
could be jointly liable; and third, plaintiff had not
demonstrated effected service on TAT. Plaintiff then set
about addressing those three impediments cited by the Court:
on August 18, 2017, plaintiff filed a proof of service on TAT
under the Hague Convention, which service occurred on April
30, 2017; on August 21, 2017, plaintiff applied for and
obtained a Clerk's entry of default based on that proof
of service; and on August 31, 2017, plaintiff and the other
two defendants filed a stipulation of dismissal (without
prejudice) of the claims against those defendants. On August
24, 2017, TAT filed the instant motion, by which it asks the
Court to set aside the entry of default and to grant it 20
days in which to respond to plaintiff's complaint.
may set aside an entry of default for “good
cause.” See Fed. R. Civ. P. 55(c). In deciding
whether to set aside an entry of default, a district court
considers whether the default was willful, whether setting it
aside would prejudice the opposing party, and whether a
meritorious defense is presented, although the court need not
consider all of those factors and may consider other factors
as well. See Guttman v. Silverberg, 167 F.App'x
1, 4 (10th Cir. 2005) (unpub. op.) (citing Dierschke v.
O'Cheskey, 975 F.2d 181, 183 (5th Cir. 1992));
see also Hunt v. Ford Motor Co., 65 F.3d 178, 1995
WL 523646, at *3 (10th Cir. Aug. 29, 1995) (unpub. op.)
(citing Dierschke in applying same factors);
School-Link Tech., Inc. v. Applied Resources, Inc.,
471 F.Supp.2d 1101, 1119 (D. Kan. 2007) (Lungstrum, J.)
(citing Hunt in applying same factors). “The
good cause standard for setting aside an entry of default
poses a lesser standard for the defaulting party than the
excusable neglect which must be shown for relief from a
default judgment.” See School-Link, 471
F.Supp.2d at 1119 (citing Dennis Garberg & Assocs.,
Inc. v. Pack-Tech Int'l Corp., 115 F.3d 767, 775 n.6
(10th Cir. 1997)).
Court concludes in its discretion, based on a consideration
of these factors, that the Clerk's entry of default
should be set aside. First, with respect to TAT's
culpability, plaintiff cites its various attempts to send the
summons and complaint to TAT in Israel, but as the Court
previously concluded, plaintiff has not shown that it
effected proper service by those efforts. Plaintiff now
relies on service through the Hague Convention. TAT does not
directly challenge the propriety of that service, although it
notes that the plaintiff's proof of service does not make
clear who signed for the receipt on behalf of TAT. TAT has
also provided an affidavit stating that those documents were
not routed properly to the responsible people at TAT. Based
on these facts, the Court is not persuaded that TAT acted
willfully or is especially culpable in failing to respond to
plaintiff has not alleged any prejudice that it would suffer
from the delay in the litigation of its claims against TAT.
Moreover, as TAT notes, plaintiff delayed prosecuting its
suit against TAT, as plaintiff did not obtain service on TAT
until April 30, 2017, nearly five months after suit was
filed, and plaintiff itself did not receive notice of that
service until the end of July.
TAT has at least identified possible defenses based on the
statute of limitations and a lack of personal jurisdiction.
and perhaps most importantly, there is a strong preference
for the disposition of litigation on the merits. See
Gulley v. Orr, 905 F.2d 1383, 1386 (10th Cir. 1990)
(given that preference and the lack of prejudice, district
court did not abuse its discretion in denying a motion for
default judgment). This litigation remains in the earliest
stages, and plaintiff has not identified any prejudice here.
Thus, the Court concludes that plaintiff's claims against
TAT should be decided on their merits, and accordingly, it
sets aside the entry of default and grants TAT 20 days in
which to respond to the complaint.
THEREFORE ORDERED BY THE COURT THAT the motion by defendant
TAT Technologies, Ltd. to set aside the Clerk's entry of
default (Doc. # 32) is hereby granted.
Defendant may ...