Bennet v. Sai Living Hudson, Inc.
5:10-cv-02676
| N.D. Ohio | May 24, 2011Background
- Plaintiffs Bennet and Pochatek filed a sex discrimination and retaliation complaint in state court against Sai Living Hudson, Panoramic Ace, Panoramic Fortune, and Steele; the case was removed to federal court.
- Steele was not initially served; he appeared later after the Court ordered service.
- Default was entered against Steele on March 17, 2011 for failing to answer within 21 days of service.
- Steele submitted two letters to the Court; the first was construed as an answer and then stricken due to default.
- The Court later construed the second letter as a motion to vacate the default and scheduled briefing, ultimately recommending granting the motion.
- If adopted, Steele would be required to answer within 14 days of the order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Steele's default should be set aside for good cause | Steele's default was culpable and prejudicial to plaintiffs | Steele lacked proper service; he did not respond due to misidentification in served documents | Yes; motion to vacate granted |
| Whether Steele has a meritorious defense to the claims | Steele's actions affected termination decisions; allegations against him could proceed | Steele's defense would absolve him if proven at trial | Yes; meritorious defense shown |
| Whether plaintiffs would be prejudiced by vacating the default | Delay could prejudice plaintiffs by hindering discovery | Delay alone is not sufficient prejudice; no demonstrated prejudice shown | No prejudice to plaintiffs found |
Key Cases Cited
- Burrell v. Henderson, 434 F.3d 826 (6th Cir. 2006) (factors for good cause under Rule 55(c))
- U. Coin Meter Co., Inc. v. Seaboard Coastline R.R., 705 F.2d 839 (6th Cir. 1983) (prejudice must be more than delay to justify denial of relief)
- Thompson v. Am. Home Assurance Co., 95 F.3d 429 (6th Cir. 1996) (test for a meritorious defense)
- United States v. $22,050.00 U.S. Currency, 595 F.3d 318 (6th Cir. 2010) (merits of defense irrelevant to likelihood of success)
- INVST Fin. Grp., Inc. v. Chem-Nuclear Sys., Inc., 815 F.2d 391 (6th Cir. 1987) (meritorious defense can exist even if unlikely to prevail)
- O.J. Distributing, Inc. v. Hornell Brewing Co., Inc., 340 F.3d 345 (6th Cir. 2003) (two factors show abuse of discretion if meritorious defense and no prejudice)
- Shepard Claims Serv., Inc. v. William Darrah & Assocs., 796 F.2d 190 (6th Cir. 1986) (reckless disregard supports culpable conduct)