State Farm Fire & Casualty Company v. Bridging Partners Corporation
4:17-cv-10362
E.D. Mich.Oct 11, 2017Background
- State Farm (plaintiff/subrogee) sued Bridging Partners and others for water damage allegedly caused by a water supply line manufactured/distributed by Bridging Partners.
- Complaint filed in Michigan state court September 23, 2016; case removed to federal court by a co-defendant on February 3, 2017.
- Plaintiff submitted a proof of service alleging Bridging Partners was personally served in Taipei, Taiwan on January 5, 2017; affidavit by process server Wei Chi Wu and a witness statement were attached.
- Bridging Partners did not answer; clerk entered default on April 21, 2017, and Plaintiff moved for default judgment.
- Bridging Partners moved to set aside the entry of default, arguing insufficient/improper service and lack of notice; Plaintiff did not respond to that motion.
- The court found no evidence of prejudice to Plaintiff, that service was likely defective, and no culpable conduct by Bridging Partners, and thus set aside the default and denied the default-judgment motion as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default should be set aside under Fed. R. Civ. P. 55(c) | Default appropriate because Bridging Partners failed to answer after alleged service | Default should be set aside for good cause because service was improper and Bridging Partners lacked notice | Default set aside; motion for default judgment denied as moot |
| Whether service on a foreign corporation complied with Rule 4 | Proof of service (affidavit) showed personal service in Taiwan | Affidavit lacks compliance with Hague or Taiwan law; witnesses only attest to affidavit signing, not service; Bridging Partners had no actual notice until default | Service deemed unclear/defective; supports setting aside default |
| Whether plaintiff would be prejudiced by setting aside default | Prejudice from delay and need to litigate merits | No evidence of prejudice presented (Plaintiff did not oppose motion) | No prejudice found |
| Whether defendant acted culpably to cause default | Implicitly that Bridging Partners’ lack of response justified default | Bridging Partners showed no willful failure to appear; no culpable conduct | No culpable conduct; favors setting aside default |
Key Cases Cited
- United States v. $22,050.00 U.S. Currency, 595 F.3d 318 (6th Cir.) (sets out three-factor test for relieving default: prejudice, meritorious defense, culpability)
- Waifersong, Ltd. v. Classic Music Vending, 976 F.2d 290 (6th Cir.) (standards for setting aside default)
- Shepard Claims Serv., Inc. v. William Darrah & Assocs., 796 F.2d 190 (6th Cir.) (lenient standard when default has not become final judgment)
- United Coin Meter Co. v. Seaboard Coastline R.R., 705 F.2d 839 (6th Cir.) (favors trial on the merits; doubts resolved in favor of setting aside defaults)
- O.J. Distrib., Inc. v. Hornell Brewing Co., 340 F.3d 345 (6th Cir.) (due process requires proper service for personal jurisdiction; improper service mandates setting aside default)
- Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97 (U.S. Supreme Court) (service of process prerequisite to personal jurisdiction)