2:22-cv-00451
E.D. La.Aug 29, 2025Background
- Mallick G & M, LLC and Bayou Mallick, LLC (the "Mallick entities") brought claims against Agility Restorations, LLC, with Agility filing counterclaims in response.
- The Mallick entities’ counsel withdrew, leaving them unrepresented as LLCs, which cannot proceed pro se in federal court.
- The court ordered the Mallick entities to obtain counsel within 45 days, warning of sanctions (mainly, dismissal of their claims).
- When the Mallick entities did not obtain counsel within the time period, the court dismissed their claims without prejudice and struck their answers to Agility’s counterclaims, leading to a default.
- The Mallick entities later retained new counsel and moved to set aside the default, vacate the order dismissing their claims, and restore their pleadings.
- Agility opposed this motion, seeking entry of default judgment against the Mallick entities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default should be set aside for Mallick entities under Rule 55(c) | Newly retained counsel, no willfulness, meritorious defenses, and minimal prejudice to Agility | Default should stand due to Mallick entities' failure to comply with the court's order | Default set aside; good cause found |
| Whether Mallick entities' claims should be reinstated | Dismissal was unjust as LLCs acted promptly upon retaining counsel | Claims were properly dismissed due to noncompliance | Order of dismissal vacated; claims reinstated |
| Whether Mallick’s answers to Agility’s counterclaims should be restored | Striking answers was not clearly warned and answers were timely filed | Answers should remain stricken as a procedural sanction | Answers restored to the record |
| Whether Agility is entitled to default judgment | Not appropriate given meritorious defenses and lack of bad faith | Default judgment is proper due to procedural default | Motion for default judgment denied as moot |
Key Cases Cited
- Dierschke v. O’Cheskey, 975 F.2d 181 (5th Cir. 1992) (sets forth standard for setting aside default for good cause)
- Lacy v. Sitel Corp., 227 F.3d 290 (5th Cir. 2000) (addresses the factors to consider in setting aside entry of default)
- Amberg v. Fed. Deposit Ins. Corp., 934 F.2d 681 (5th Cir. 1991) (emphasizes preference for cases to be resolved on their merits, not by default)