United States District Court, D. South Carolina, Greenville Division
CARIBBEAN INDUSTRIAL PRODUCTS, LLC and STONE HARPER, Plaintiffs,
ALLEN FILTRATION, LLC, Defendant.
ORDER GRANTING MOTION TO SET ASIDE DEFAULT
GEIGER LEWIS UNITED STATE DISTRICT JUDGE
a declaratory judgment action in which Plaintiff asks this
Court to declare there is no valid contract concerning
Defendant building an oil processing plant for Plaintiff. The
matter is before the Court on the motion of Defendant Allen
Filtration, LLC (Defendant) to set aside the default judgment
entered in favor of Plaintiffs Caribbean Industrial Products,
LLC (CIP) and Stone Harper (Harper) (collectively,
Plaintiffs) pursuant to Rule 60(b)(1) of the Federal Rules of
Civil Procedure. The Court has jurisdiction over the matter
under 28 U.S.C. § 1332. Having carefully considered the
motion, the response, the reply, the record, and the
applicable law, the Court will grant Defendant's motion.
procedural facts set forth here are uncontested. Plaintiffs
filed this action on October 19, 2016. Prior to the
commencement of this matter, on August 19, 2016, Jerry
Nichols (Nichols), President of Defendant, suffered a stroke.
Consequently, from August 2016 until February 2017, Nichols
was unable to drive and required assistance with reading
documents. Additionally, the stroke affected Nichols'
memory and speech, and he was unable to keep up with his
workload. Subsequent to Nichols' stroke, Defendant sent
letters to Plaintiffs threatening suit for an alleged breach
Plaintiffs filed the Complaint in this case, but before they
served it, Plaintiffs' counsel spoke via telephone with
John Hammons (Hammons), counsel for Defendant in Missouri.
During that conversation, Hammons advised he knew the
Complaint had been filed in this Court. Plaintiffs'
counsel, however, does not recall Hammons offering to accept
service or that ever being discussed.
December 21, 2016, Plaintiffs served Roy Chung (Chung),
Vice-President of Defendant, with the Summons and Complaint.
Plaintiffs filed an Affidavit of Service, attesting they
served Chung on that day. Chung states he is unable to recall
being served or signing for the Summons and Complaint, but
avers if he did receive them, he would have put them unread
on Nichols' desk. On December 22, 2016, Defendant closed
for the holidays and reopened on January 3, 2017.
Defendant's deadline to respond to the Complaint was
January 11, 2017.
January 17, 2017, this Court ordered Plaintiffs to file a
status report addressing Defendant's failure to respond
to the Complaint by the January 11, 2017, deadline.
Plaintiffs responded by advising the Court they had failed to
receive an answer or a request for extension and would file a
request for entry of default. Plaintiffs filed their request
for entry of default on January 30, 2017, and the Clerk of
Court entered default on January 31, 2017.
filed their request for entry of a default judgment on April
18, 2017, and the Court entered default judgment on April 20,
2017, at which time the Clerk of Court mailed a copy of the
default judgment to Defendant's registered agent.
Defendant then filed its motion to set aside the default
judgment on May 31, 2017, to which Plaintiffs filed a
response and Defendant filed a reply. The Court, having been
fully briefed on the relevant issues, is now prepared to
discuss the merits of the motion.
CONTENTIONS OF THE PARTIES
Defendant's motion, it claims its motion is timely in
that it filed the motion on May 31, 2017, well within the
one-year time limit established by Rule 60. Defendant also
contends it has a meritorious defense of breach of contract
against CIP and a meritorious defense of quantum meruit
against Harper. Further, given the early stage of this
lawsuit, Defendant urges Plaintiffs will suffer no prejudice
if the declaratory judgment is set aside. Finally, Defendant
maintains excusable neglect constitutes a ground for relief
in this case. Defendant points to Nichols' stroke and his
inability to conduct his normal office activities in support
of this position and also notes the office closing for the
holidays as an additional ground for excusable neglect.
Defendant argues it bears no responsibility for its default
due to circumstances purportedly beyond its control.
maintains the Court should not grant Defendant's motion.
DISCUSSION AND ANALYSIS
obtain relief from a judgment under Rule 60(b), a moving
party must show that his motion is timely, that he has a
meritorious defense to the action, and that the opposing
party would not be unfairly prejudiced by having the judgment
set aside.” Park Corp. v. Lexington Ins. Co.,
812 F.2d 894, 896 (4th Cir. 1987). “If the moving party
makes such a showing, he must then satisfy one or more ...