United States District Court, D. South Carolina, Greenville Division
Advanced Commercial Credit International ACI Limited, a Virginia Corporation d/b/a ACI Capital Partners, Plaintiff,
CitiSculpt, LLC, a North Carolina Limited Liability Company; CitiSculpt SC, LLC, a South Carolina Limited Liability Company; CS-10 South Academy St., LLC, a South Carolina Limited Liability Company; 10 Academy Street, LLC, a North Carolina Limited Liability Company; Eastern Federal Corporation, a North Carolina Corporation; EFC Management Company, Inc., a North Carolina Corporation; EFC Dynasty Investments, LLC, a North Carolina Limited Liability Company; A10 Capital, LLC, a Delaware Limited Liability Company; A10 REIT, LLC, a Delaware Limited Liability Company; and A10 Revolving Asset Financing II, LLC, a Delaware Limited Liability Company, Defendants.
OPINION AND ORDER
C. Coggins Jr. United States District Judge.
matter is before the Court on Plaintiff's Motion for
Entry of Default, ECF No. 45, and Defendant CitiSculpt,
LLC's Motion to Set Aside Entry of Default, ECF No. 49.
The Motions have been fully briefed and are ripe for
28, 2017, Plaintiff filed an Amended Complaint in the
underlying action. ECF No. 41. Defendant CitiSculpt, LLC
(“CitiSculpt”) was served electronically with the
Amended Complaint a short time later on June 28, 2017. ECF
No. 44-1. Pursuant to Federal Rule of Civil Procedure
15(a)(1)(3), Defendant CitiSculpt was required to file a
responsive pleading within fourteen (14) days. Defendant
CitiSculpt failed to plead or otherwise respond by the July
12, 2017 deadline.
18, 2017, Plaintiff filed a Motion for Entry of Default as to
Defendant CitiSculpt. The next day, Defendant CitiSculpt
filed an Answer in response to the Amended Complaint. ECF No.
46. On July 24, 2017, Defendant CitiSculpt filed a Memorandum
in Opposition to Plaintiff's Motion for Entry of Default
or Alternatively, Motion to Set Aside Entry of Default. ECF
No. 49. To date, the Clerk has not entered default in this
where default has not been formally entered, a defendant must
petition the Court for relief from default if the defendant
has failed to answer or otherwise respond within the
prescribed time limit.” Glenn v. Commc'n
Workers of Am., No. 8:04-cv-23071-GRA-BHH, 2007 WL
2022186, at *3 (D.S.C. July 11, 2007) (citations omitted).
“The Court, therefore, must consider whether the de
facto default in this case should be excused pursuant to
Rule 55(c) of the Federal Rules of Civil Procedure.”
Rule of Civil Procedure 55(c) provides that “[t]he
court may set aside an entry of default for good
cause.” “Generally speaking, ‘a default
should be set aside where the moving party acts with
reasonable promptness and alleges a meritorious
defense.'” Colleton Preparatory Acad., Inc. v.
Beazer E., Inc., 223 F.R.D. 401, 405 (D.S.C. 2004)
(quoting Consol. Masonry & Fireproofing, Inc. v.
Wagman Constr. Corp., 383 F.2d 249, 251 (4th Cir.
1967)). “[A]ll that is necessary to establish the
existence of a ‘meritorious defense' is a
presentation or proffer of evidence, which if believed, would
permit either the Court or the jury to find for the
defaulting party.” United States v. Moradi,
673 F.2d 725, 727 (4th Cir. 1982). However, the Court must
also consider “the personal responsibility of the
party, the prejudice to the party, whether there is a history
of dilatory action, and the availability of sanctions less
drastic.” Lolatchy v. Arthur Murray, Inc., 816
F.2d 951, 953 (4th Cir. 1987). “All of these factors
should be applied more leniently when the action is one under
Rule 55 as opposed to one under Rule 60, and the court should
always keep an eye toward the preference for meritorious
resolutions of disputes.” Colleton Preparatory
Acad., Inc., 223 F.R.D. at 406.
on the facts and factors set forth above, the Court finds
that Defendant CitiSculpt has demonstrated good cause to set
aside the de facto entry of default. First,
Defendant CitiSculpt has established the existence of a
meritorious defense as it has filed an Answer, ECF No. 46,
and an Affidavit of its General Counsel outlining the factual
predicate for the defenses asserted in the Answer, ECF No.
48-1. Second, the Court finds that Plaintiff will not be
prejudiced by setting aside the de facto default,
and Plaintiff acknowledges that “[t]he only prejudice
that [it] can perceive . . . would be the consequence of
requiring Plaintiff to litigate against CitiSculpt on
positions that [it believes] are without merit.” ECF
No. 55 at 6. Third, the Court finds that, while Defendant
CitiSculpt did not file a response to an earlier Motion to
Dismiss, ECF No. 19 at 4, it has not engaged in a
history of dilatory action. See, e.g., Pinpoint
IT Servs., LLC v. Atlas IT Exp. Corp., 812 F.Supp.2d
710, 727 (E.D. Va. 2011) (“[I]f the dilatory action is
solely the fault of the attorney and the defendant is
blameless, the Court will favor setting aside
default.”). Fourth, there are far less drastic
sanctions available to Plaintiff in comparison to granting
its Motion for Default Judgment. See Colleton Preparatory
Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413, 418
(4th Cir. 2010) (noting that a motion for an award of
attorney's fees and costs to a plaintiff in opposing the
motion to set aside an entry of default or default judgment
could be appropriate). Finally, in regards to the personal
responsibility of the defaulting party, Defendant
CitiSculpt's counsel claims that he “misread Rule
15 and calendared CitiSculpt's answer due in 21 days
instead of 14.” ECF No. 48 at 4. Defendant CitiSculpt
further notes that it filed an Answer within one day of the
receipt of Plaintiff's Motion for Entry of Default.
See ECF No. 46. The Court finds that Defendant
CitiSculpt acted with reasonable diligence in seeking to set
aside the default.
foregoing reasons, Defendant CitiSculpt's Motion to Set
Aside Entry of Default, ECF No. 49, is
GRANTED and Plaintiff's Motion ...