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Bibb County School District v. Dallemand

United States District Court, M.D. Georgia, Macon Division

June 13, 2019

BIBB COUNTY SCHOOL DISTRICT Plaintiff,
v.
ROMAIN DALLEMAND, et al., Defendants.

          ORDER

          MARC T. TREADWELL, JUDGE UNITED STATES DISTRICT COURT.

         Plaintiff Bibb County School District (“BCSD”) has moved for default judgment as to its claims against Defendants Harold Knowles and Knowles & Randolph, P.A. (the “Knowles Defendants”). Doc. 343. In response, the Knowles Defendants have moved to set aside the Clerk's entry of default, attaching to their motion a proposed answer to BCSD's second amended complaint. Docs. 345; 345-1; 353.[1] For the following reasons, BCSD's motion is DENIED and the Knowles Defendants' motion is GRANTED.

         I. BACKGROUND

         This is a complex civil matter that has been pending since December 2016. Stays have been entered because of parallel criminal proceedings. The facts of this case are well laid out in the Court's previous Order denying the Knowles Defendants' motion to dismiss. Doc. 331. In a nutshell, BCSD, in its 549-paragraph second amended complaint, alleges that the Defendants engaged in multiple schemes to defraud BCSD. See generally Doc. 162. Relevant for purposes of ruling on the parties' motions, the Order denying the motion to dismiss was entered on April 8, 2019 at 6:10 p.m. Doc. 331. Pursuant to Federal Rule of Civil Procedure 12(a)(4), when a court denies a Rule 12(b)(6) motion, “the responsive pleading must be served within 14 days after notice of the court's action.” The Knowles Defendants did not file their answer within fourteen days of having notice of the Court's denial of their motion. Consequently, BCSD filed an application with the Clerk for entry of default against the Knowles Defendants, which the Clerk granted on April 24, 2019. Docs. 340; 341. The following day, the Knowles Defendants moved to set aside the entry of default and attached a proposed answer. Docs. 345; 345-1.

         The Knowles Defendants do not contest that they did not timely file their answer. Instead, their counsel, rather, his legal assistant, steps up to take the fall for the delay in filing. See generally Doc. 345. According to defense counsel, his legal assistant left work early on April 8, 2019 to be with her ill daughter who had recently been released from the hospital. Id. at 3. Though she “returned to the office fulltime on April 10, 2019, ” when the Knowles Defendants had 12 days to file their answer, the legal assistant “got behind on calendaring in this case, and others.” Id. at 4. In her affidavit, [2]the legal assistant states that between April 10 and April 17, she drove her daughter to the doctor's appointments for wound dressing. Doc. 353-5 ¶ 11. She also states that on April 9 and 10, she worked on producing discovery responses as well as prepared for the April 10 status conference, which included producing “over 4717 bate stamp documents.” Id. ¶ 13. In short, the Knowles Defendants did not timely file their answer because their counsel's legal assistant was preoccupied with other issues and failed to place the due date on the “tickler system.” Id. ¶ 12. The Knowles Defendants say this even though their brief seems to establish that they would not have filed a timely answer even had the legal assistant “calendared” something. That is because their lawyer thought he had 30, rather than 14, days to file the Knowles Defendants' answer. Doc. 353 at 4.

         II. DISCUSSION

         A. Standard

         At a party's request, and following the Clerk's entry of default, the Court may enter a default judgment against a defendant who has failed to plead or otherwise defend claims. Fed.R.Civ.P. 55(a), 55(b)(2). Entry of default judgment is committed to the discretion of the Court. Hamm v. Dekalb Cty., 774 F.2d 1567, 1576 (11th Cir. 1985) (citations omitted). “The [C]ourt may set aside an entry of default for good cause, ” and the Court may also deny a motion for default judgment and grant a request to file an untimely answer for good cause. Fed.R.Civ.P. 55(c); see Perez v. Wells Fargo, N.A., 774 F.3d 1329, 1338 (11th Cir. 2014) (“Perez was entitled to have her motion to file an out-of-time answer to the counterclaim considered under our ‘good cause' standard applicable to setting aside a default rather than under the ‘more rigorous,' ‘excusable neglect' standard.”) (citation omitted). The defaulting party bears the burden of establishing good cause. African Methodist Episcopal Church, Inc. v. Ward, 185 F.3d 1201, 1202 (11th Cir. 1999).

         “Good cause is a mutable standard, varying from situation to situation, ” but factors for courts to consider include the following: (1) whether the default was culpable or willful; (2) whether setting the default aside would prejudice the adversary; (3) whether the defaulting party presents a meritorious defense; and (4) whether the defaulting party acted promptly to correct the default. Compania Interamericana Export-Import, S.A. v. Compania Dominicana de Aviacion, 88 F.3d 948, 951 (11th Cir. 1996) (quotation marks and citations omitted). Courts should not find that good cause exists if the defaulting party “demonstrates an intentional or willful disregard of the judicial proceedings.” Perez, 774 F.3d at 1337 n.7. In light of the Eleventh Circuit's “strong policy of determining cases on their merits, ” however, default judgments “are generally disfavored.” Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1244-45 (11th Cir. 2015) (quotation marks and citation omitted).

         B. Analysis

         BCSD makes several arguments why the Knowles Defendants have failed to establish good cause. First, it argues that the Knowles Defendants' blaming their counsel's legal assistant for their failure to timely file an answer is not a plausible excuse because (1) there is nothing in the record to suggest that the attorneys took action to ensure that the answer was timely filed; and (2) the timeline of events shows the legal assistant was working full time during 12 of the 14 days of the response period. Doc. 367 at 2-3. BCSD also points out that defense counsel's admitted ignorance of the Federal Rules of Civil Procedure-thinking he had 30 days to file an answer instead of 14-is not a sufficient excuse to set aside the default. Id. at 3 n.4. It is difficult to find fault with these arguments. Certainly, defense counsel cannot hide behind his legal assistant and skirt his legal obligations to his client. His clients retained him to be their counsel, not his legal assistant.[3] Nor is it acceptable that defense counsel lacks familiarity with the rules governing practice in federal court, though, as evidenced in the Court's previous orders (for example, see Docs. 329 (defense counsel not knowing that a counterclaim cannot relate back under Rule 15 to the date BCSD filed its initial complaint); 336 (defense counsel not moving for a protective order under Rule 26 regarding his client's deposition notice)), reminding defense counsel of his need to be familiar with federal procedure is an exercise in futility.

         Notwithstanding the poor excuses provided by defense counsel, the Court finds good cause under the “more forgiving Rule 55(c) standard as opposed to the more exacting Rule 6(b)(1)(B) standard” for “excusable neglect.”[4] Perez, 774 F.3d at 1339. It is clear from the record that the Knowles Defendants' failure to timely file their answer was not “willful or contumacious.” Id.; Compania, 88 F.3d at 951-52 (noting that a default is willful when the litigant displays “either an intentional or reckless disregard for the judicial proceedings” by failing to obey a court order when “given ample opportunity to comply”). The day after the Clerk entered default, the Knowles Defendants moved to set aside that entry and attached a proposed answer. That prompt action to cure the default demonstrates that the delay was not willful. Compare Annon Consulting, Inc. v. BioNitrogen Holdings Corp., 650 Fed.Appx. 729, 732 (11th Cir. 2016) (noting that the default was willful when defendant knew of “clerk's initial entry of default and still failed to file a responsive pleading”), with Auto Owners Ins. Co. v. Sapp, 2017 WL 6210317, at *2 (M.D. Ga. Jan. 10, 2017) (finding that the default was not willful when “both parties acted promptly to cure”). Moreover, the record shows that leading up to the deadline to file their answer, the Knowles Defendants actively participated in discovery. See Doc. 336 at 1 (ordering the Knowles Defendants to provide complete responses to BCSD's written discovery requests by April 15, 2019). The record also shows that only the Knowles Defendants' counsel and his legal assistant were responsible for the untimely filed response; there is no evidence to suggest that the Knowles Defendants themselves were responsible.[5] See Perez, 774 F.3d at 1338 (considering whether the party or the party's attorney was responsible for the failure to timely answer). Again, to be clear, the Court is not condoning defense counsel's lack of familiarity with federal rules or his attempt to use his legal assistant as the scapegoat. But, applying the more liberal Rule 55(c)'s standard, the Court rejects BCSD's argument of no good cause based on the excuses provided.

         BCSD also contends that the Knowles Defendants have failed to present a meritorious defense. Docs. 348 at 7; 367 at 4. To show a meritorious defense, “a defendant need only show a ‘hint of a suggestion.'” Buonocore v. Credit One Bank, N.A., 2014 WL 6620623, at *2 (citing Moldwood Corp. v. Stutts, 410 F.2d 351, 352 (5th Cir. 1969)[6]). A defaulting party's mere “bald assertions” that it had a meritorious defense is not sufficient. Sherrard v. Macy's Sys. & Tech. Inc., 724 Fed.Appx. 736, 739 (11th Cir. 2018); see Wehrs v. Wells, 688 F.3d 886, 890-91 (7th Cir. 2012) (noting that conclusory general denial or bare legal conclusions fail to establish a meritorious defense for the purpose of setting aside a default judgment); see also Jenkens & Gilchrist v. Groia & Co., 542 F.3d 114, 120-22 (5th Cir. 2008) (noting that litigants must present “specific facts that would constitute a defense” to establish a meritorious defense for the purpose of setting aside a default judgment).

         While the Knowles Defendants claim they “have meritorious defenses as evidenced by the pleadings in support of its motion to dismiss and the proposed answer filed with the instant motion, ” many of the defenses they reference, i.e., contractual defenses and issues of standing, are either without merit or inapplicable to the case with respect to the Knowles Defendants. Doc. 353 at 6. In addition, other than their “bald assertions, ” including their conclusory statement that they deny “knowledge of the alleged conspiratorial conduct of Cliff[a]rd Whitby and other defendants, ” the Knowles Defendants provide no specifics for the Court to determine whether they have any meritorious defense. See Id. The Knowles Defendants also cite no authority on this factor. Nevertheless, a meritorious defense is just one factor a court may evaluate when determining whether good cause exists to set aside the clerk's entry ...


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