Edgewater Technical Associates, LLC v. Adanta, Inc. (TV2), 3:20-cv-00403

Edgewater Technical Associates, LLC (Plaintiff) sued Adanta, Inc. (Defendant) for breach of a subcontract, alleging unpaid invoices totaling $94,790 and seeking fees and interest.
Plaintiff sought and obtained a clerk's entry of default after Adanta failed to respond; Plaintiff then moved for default judgment.
Adanta moved to set aside the default under Fed. R. Civ. P. 55(c), asserting good cause: improper service, lack of personal jurisdiction, improper venue, and failure of a contractual condition precedent.
Adanta’s president, Kimberly Patz, declared she was not personally served at the Napa address where papers were left; she stated the subcontract and performance arose from New Mexico and Adanta lacks Tennessee contacts.
Plaintiff’s process server declared he contacted a woman at the Napa house, who refused service, so he left the summons and complaint on the front porch; the parties’ declarations conflict.
The magistrate judge recommended denying the default-judgment motion and granting the motion to set aside, citing serious jurisdictional concerns, a strong showing of meritorious defenses, minimal prejudice to Plaintiff, and unclear culpability for the default.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether to set aside the entry of default under Rule 55(c)	Enter default judgment; defendant failed to respond	Good cause to set aside: minimal prejudice, meritorious defenses, no culpable conduct	Default should be set aside; default-judgment motion denied
Was service of process proper?	Process server served Patz at 80 Portofino Way and left papers when refused	Patz was not personally served; address belonged to relatives; she never received personal service	Conflicting evidence; court did not conclusively credit service and found culpability unclear
Does the court have personal jurisdiction over Adanta?	Adanta had an Oak Ridge office and sent payments to Tennessee	Subcontract was executed elsewhere; work and events occurred in New Mexico; Adanta lacks Tennessee contacts	Court had serious concerns about exercising personal jurisdiction; jurisdictional showing by Plaintiff was inadequate
Would reopening the case prejudice Plaintiff?	Reopening risks loss of evidence, asset dissipation, and rewards evasion of service	Plaintiff has not shown future prejudice from reopening; delay alone insufficient	Prejudice was minimal and did not justify denying relief from default

Dassault Systemes, SA v. Childress, 663 F.3d 832 (6th Cir. 2011) (defines default-judgment concept and discusses meritorious-defense standard)
United Coin Meter Co. v. Seaboard Coastline R.R., 705 F.2d 839 (6th Cir. 1983) (establishes three-factor good-cause test to set aside default)
Waifersong, Ltd. v. Classic Music Vending, 976 F.2d 290 (6th Cir. 1992) (clarifies when a default judgment is final)
United States v. $22,050.00 U.S. Currency, 595 F.3d 318 (6th Cir. 2010) (explains the meritorious-defense inquiry for setting aside defaults)
Berthelsen v. Kane, 907 F.2d 617 (6th Cir. 1990) (permits setting aside default even where evasion alleged when other factors favor defendant)
King v. Taylor, 694 F.3d 650 (6th Cir. 2012) (federal courts cannot adjudicate without personal jurisdiction)
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (U.S. 1999) (federal courts are powerless to proceed in absence of personal jurisdiction)
Mich. Nat'l Bank v. Quality Dinette, Inc., 888 F.2d 462 (6th Cir. 1989) (plaintiff bears burden of establishing personal jurisdiction)