304 F.R.D. 125
E.D.N.Y2015Background
- Sibley sued Choice Hotels and Ratan Defendants for injuries allegedly caused by bed-bug bites at a Huntington Station hotel; action filed Jan 29, 2014.
- Ratan Defendants were served but failed to answer; Clerk entered default on March 4, 2014; Sibley moved for default judgment; Ratan Defendants then moved to vacate the default.
- Magistrate Judge Lindsay recommended vacating the default and denying default judgment; Sibley objected and the district judge reviewed the R&R de novo where contested.
- Choice Hotels timely answered and later filed an Amended Answer with six affirmative defenses; Sibley moved to strike Choice’s affirmative defenses and numerous responses that plead lack of knowledge.
- The Court adopted Judge Lindsay’s R&R: vacated the Ratan Defendants’ default, denied Sibley’s default-judgment motion, and resolved Sibley’s motions to strike against Choice Hotels in part.
- The Court required Choice Hotels to file a second amended answer: it struck Choice’s responses to Complaint ¶¶3 and 28 as admissions, struck ¶10 with leave to replead, denied striking the affirmative defenses, and ordered counsel to cure any Def. Rule 8(b) defects in other knowledge-denial responses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Clerk’s entry of default against Ratan Defendants should be vacated | Default was willful and vacating prejudices Sibley; default judgment appropriate | Default was not willful; defendants acted promptly once counsel retained and have meritorious defenses; vacatur favored | Vacatur granted; default judgment denied — factors (willfulness, prejudice, meritorious defense) weigh against default judgment |
| Whether Twombly/Iqbal plausibility standard applies to affirmative defenses (motion to strike) | Choice’s boilerplate defenses should be stricken for failing to meet Twombly/Iqbal | Twombly/Iqbal applies to claims under Rule 8(a)(2), not to affirmative defenses under Rule 8(c); notice pleading suffices | Motion to strike affirmative defenses denied; Twombly/Iqbal does not apply to affirmative defenses; boilerplate defenses give fair notice |
| Whether Choice’s responses pleading lack of knowledge should be stricken or deemed admissions | Multiple knowledge-denial responses are improper and should be stricken or treated as admissions | Many denials are appropriate given Choice’s alleged lack of involvement before franchisor date; some factual items are public or discoverable | Motion granted in part: responses to ¶¶3 and 28 stricken and deemed admitted; ¶10 stricken with leave to replead; other knowledge-denials largely upheld but counsel must cure any Rule 8(b) defects |
| Whether the Ratan Defendants’ letter to Magistrate Lindsay should be struck | The letter was an improper opposition and should be stricken | The letter should be considered as opposition to Sibley’s default-judgment motion | Motion to strike the letter denied; the Court declined to strike the Ratan Defendants’ letter |
Key Cases Cited
- Walker v. Vaughan, 216 F. Supp. 2d 290 (S.D.N.Y. 2002) (standard for adoption of magistrate judge R&R absent objections)
- Pecarsky v. Galaxiworld.com Ltd., 249 F.3d 167 (2d Cir. 2001) (three-factor test for vacating default: willfulness, meritorious defense, prejudice)
- Enron Oil Corp. v. Diakuhara, 10 F.3d 90 (2d Cir. 1993) (defaults disfavored; resolve doubt in favor of vacatur)
- Am. Alliance Ins. Co. v. Eagle Ins. Co., 92 F.3d 57 (2d Cir. 1996) (evidence of bad faith/willfulness standard)
- Meehan v. Snow, 652 F.2d 274 (2d Cir. 1981) (default judgment is an extreme sanction and a weapon of last resort)
- Sony Corp. v. Elm State Elecs., Inc., 800 F.2d 317 (2d Cir. 1986) (district courts regularly deny technically valid motions for default)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard for claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (further elaboration of Twombly standard)