United States District Court, W.D. Kentucky, Paducah Division
MEMORANDUM OPINION AND ORDER
B. RUSSELL, SENIOR JUDGE
matter is before the Court on Defendants Billy Vandergriff,
Reidland Custom Title and Flooring, LLC, Reidland Tile and
Flooring, LLC, BBV Properties, LLC, and Show Tyme Power
Sports, LLC's Motion to Reconsider. [DN 41]. Plaintiffs
Christopher Dodson and Joseph Dillon have not responded and
the deadline to do so has passed. This matter is ripe for
adjudication. For the reasons set forth herein,
Defendants' Motion to Reconsider, [DN 41], is GRANTED.
Christopher Dodson and Joseph Dillon filed a Complaint
against Tony Crouch, Billy Vandergriff, and a variety of
other corporate defendants alleging conversion,
fraud/fraudulent misrepresentation, conspiracy, unjust
enrichment, breach of contract, and punitive damages. [DN 1].
On May 31, 2019, Plaintiffs filed a Motion for Entry of
Default against Defendants Reidland Custom Title and
Flooring, LLC, Reidland Title and Flooring, LLC, BBV
Properties, LLC, Show Tyme Power Sports, LLC, and SEMO
Raceway, LLC. [DN 20]. The Court granted Plaintiffs'
motion on the grounds that more than twenty-one days had
elapsed since service, and Defendants had failed to plead or
otherwise defend the action. [DN 40]. Shortly thereafter,
Defendants filed a Motion to Reconsider requesting the Court
set aside the entry of default pursuant to Federal Rule of
Civil Procedure 55(c) or Rule 60(b). [DN 41].
courts have a “policy of favoring trials on the
merits.” Shepard Claim Service, Inc. v. William Darrah
& Assoc., 796 F.2d 190, 192 (6th Cir. 1986). Therefore,
an entry of default may be set aside “upon a showing of
‘good cause.'” United States v. $ 22, 050.00
United States Currency, 595 F.3d 318, 324 (6th Cir. 2010)
(citing Fed.R.Civ.P. 55(c)). A district court has discretion
to set aside an entry of default, but is guided by three
factors: (1) whether the plaintiff will be prejudiced; (2)
whether the defendant has a meritorious defense; and (3)
whether “culpable conduct of the defendant led to the
default.” Shepard, 796 F.2d at 192 (collecting cases).
setting aside the entry of default will not prejudice
Plaintiffs. “Mere delay in satisfying a plaintiff's
claim, if it should succeed at trial, is not sufficient
prejudice to require denial of a motion to set aside a
default judgment.” United Coin Meter Co., Inc v.
Seaboard Coastline RR., 705 F.2d 839, 845 (6th Cir. 1983).
Plaintiffs failed to demonstrate any way in which setting
aside the entry of default would be detrimental to their
claims. Moreover, given the current procedural posture of
this case, the Court believes that Plaintiffs would not be
prejudiced by setting aside the entry of default.
this Court finds that Defendants have a meritorious defense.
A defense is meritorious if “there is some possibility
that the outcome of the suit after a full trial will be
contrary to the result achieved by the default.”
Burrell v. Henderson, 434 F.3d 826, 834 (6th Cir. 2006)
(quoting Williams v. Meyer, 346 F.3d 607, 614 (6th Cir.
2003)). “[T]he test is not whether the defendant will
win at trial, but rather whether the facts alleged by the
defendant would constitute a meritorious defense if
true.” In re Park Nursing Ctr., Inc., 766 F.2d 261, 264
(6th Cir. 1985). “If a defense is ‘good at
law,' regardless of the likelihood of success, it will be
considered meritorious.” Burrell, 434 F.3d at 834
(citing Williams, 346 F.3d at 614). Here, Defendants offer
three potential defenses to Plaintiffs' allegations: (1)
whether a corporate entity can be held civilly responsible
for the alleged criminal conduct of a member; (2) whether
there is overlap between the damages sought and the
restitution ordered in the criminal proceedings; and (3)
whether Plaintiffs can prove sufficient proof of any
additional damages. [DN 41 at 231]. Thus, the Court is
satisfied that Defendants have raised a meritorious defense
to Plaintiffs' claims.
Defendants do not appear to be culpable in failing to timely
answer Plaintiffs' Complaint. To “be treated as
culpable, the conduct of a defendant must display either an
intent to thwart judicial proceedings or a reckless disregard
for the effect of its conduct on those proceedings.”
Invst Fin. Grp, Inc. v. Chem-Nuclear Sys., Inc., 815 F.2d
391, 399 (6th Cir. 1987). Defendants argue that the entry of
default occurred due to an unintentional error of
Defendants' counsel who “entered the case
midstream” and focused his attention on “pressing
discovery and scheduling issues.” [DN 41 at 229]. The
Court has no reason to suspect that Defendants acted to delay
the proceeding either for some unlawful purpose or to gain
some advantage. The Court also is satisfied that the impact
of Defendants' delay on the judicial proceedings is, or
will be, minimal.
reasons set forth herein, IT IS HEREBY ORDERED:
Defendants' Motion to Reconsider is GRANTED, [DN 41], and