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Baker & Murakami Produce Co. LLLP v. Weng Farms Inc.

United States District Court, S.D. Georgia, Savannah Division

July 16, 2019

BAKER & MURAKAMI PRODUCE COMPANY LLLP, an Idaho limited liability limited partnership; and J.F. PALMER AND SONS PRODUCE, INC., a Texas corporation; Plaintiffs,
v.
WENG FARMS INC., a Texas corporation; LIYA WENG, an individual also known as Lea Weng; WILLIAM R. FOSTER, individual; and HILLCREST FARM, a business entity; Defendants.

          ORDER

          WILLIAM T. MOORE, JR., UNITED STATES DISTRICT COURT JUDGE

         Before the Court is Defendant Liya Weng's Motion to Set Aside Default. (Doc. 33.) For the following reasons, the Court finds that Defendant Weng has failed to show good cause, as required by Federal Rule of Civil Procedure 55 (c), to set aside the default. Accordingly, Defendant's motion is DENIED.

         BACKGROUND

         This case arises under the Perishable Agricultural Commodities Act of 1930, 7 U.S.C. § 499 ("PACA"). In 1984, Congress amended PACA "to establish a nonsegregated statutory trust under which a produce dealer holds its produce-related assets as a fiduciary until full payment is made to the produce seller." Frio Inc. S.A. v. Sunfruit, Inc., 918 F.2d 154, 156 (11th Cir. 1990). As a result, a trust beneficiary may now bring an action in federal court "to enforce payment from the trust." 7 U.S.C. § 499e(c}(5).

         In this case, Plaintiffs contend that they shipped produce to Defendant Weng Farms and have not yet received payment for that shipment valued at $302, 078.25. (Doc. 1 at 3.) According to Plaintiffs, Defendant Weng Farms has never disputed that it owes money for the shipment. (Doc. 5, Attach. 1 at 4-5.) Rather, Plaintiffs contend that Defendant Weng Farms has provided other excuses for its failure to pay for the shipment-lack of payment from their own customers, internal issues, etc. (Id.) Plaintiffs requested a preliminary injunction to prevent Defendants from dissipating assets in the PACA trust until Plaintiffs received full payment for their shipment. (Doc. 5.) On January 11, 2019, this Court entered a preliminary injunction enjoining Defendant Weng Farms from dissipating any PACA trust assets. (Doc. 24.)

         In the meantime, Plaintiffs were actively trying to serve Defendant Liya Weng. (Doc. 12; Doc. 15.) On February 1, 2019, Plaintiffs filed an affidavit of service purporting to properly serve Defendant Liya Weng. (Doc. 28.) Based on the date of service, Defendant Weng was required to file a responsive pleading in this case by February 20, 2019. (Id.) Defendant Weng failed to comply with the filing deadline and on February 27, 2019, Plaintiffs filed a Motion For Clerk's Entry of Default against Defendant Liya Weng. (Doc. 31.) Because Defendant Weng had failed to file a responsive pleading, the Clerk entered default as requested. (Doc. 32.) On March 13, 2019, Defendant Weng filed a Motion to Set Aside Default. (Doc. 33.) This motion is now ripe for review.

         ANALYSIS

         I. STANDARD OF REVIEW

         Under Rule 55 (c), the Court may set aside a default for "good cause." Fed, R. Civ. P. 55(c). The decision to set aside an entry of default is within the discretion of the court. Robinson v. United States, 734 F.2d 735, 739 (11th Cir. 1984). However, although good cause "is not susceptible to a precise formula, [] some general guidelines are commonly applied." Compania Interamericana Export-Import, S.A. v. Compania Dominicana de Aviacion, 88 F.3d 948, 951 (11th Cir. 1996). In determining whether "good cause" exists, courts focus on three factors:" (1) whether the default was culpable or willful; (2) whether setting it aside would prejudice the non-defaulting party; and (3) whether the party in default has a meritorious defense." Ritts v. Dealers Alliance Credit Corp., 989 F.Supp. 1475, 1490 (N.D.Ga. 1997). Courts have also considered "whether the defaulting party acted promptly to correct the default." Compania Interamericana, 88 F.3d at 951. Further, "[u]nderlying consideration of the appropriateness of setting aside a default is the fact that defaults are not favored in federal court and trials on the merits are the preferred method for resolving disputes." Ritts, 989 F.Supp. at 1480. "However, if a party willfully defaults by displaying either an intentional or reckless disregard for the judicial proceedings, the court need make no other findings in denying relief." Compania Interamericana, 88 F.3d at 951-952.

         II. DISCUSSION

         In her motion, Defendant Weng requests that this Court find good cause to set aside the default in this case. (Doc. 33.) Defendant contends that this Court should set aside the default because her failure to appear in this action was initially the result of her belief that she was improperly served and the failure of her attorney to locate local counsel. (Id. at 3-5.} After a careful review of Defendant's motion and the parties' respective arguments, the Court finds that Defendant Weng has failed to establish good cause to warrant setting aside default in this case.

         First, the Court finds that Defendant Weng's failure to respond to this suit was willful. A defendant acts willfully by "displaying either an intentional or reckless disregard for the judicial proceedings." Compania Interamericana, 88 F.3d at 951-52. In this case, Defendant Weng likely knew about the existence of this case for several months before she was required to file a responsive pleading (See Doc. 36, Attach. 1 at 1-8), knew that Defendants were attempting to serve her (Id.), and still failed to file a timely responsive pleading after knowledge that she had an obligation to respond by February 20, 2019 (Doc. 33 at 2-3).

         Even if this Court were to ignore Defendant Weng's attempts at avoiding service, Defendant knew by at least February 17, 2019 that she was obligated to provide a responsive pleading in this case. (Id. at 2.) As an excuse for her failure to comply with the filing deadline, Defendant Weng weakly argues that her counsel was unable to obtain local counsel to properly file a timely response. (Id. at 3.) On its face, Defendant Weng's excuse fails to convince this Court that Defendant made any reasonable effort to file a responsive pleading in this case. It is not difficult to obtain local counsel and Defendant had ample time from the time that she had actual notice of service until the response deadline to file a response or request for an extension. A failure to obtain local counsel in that time frame, given that Defendant likely had notice of the case for months, is no excuse.

         Additionally, the Court is unconvinced by Defendant's excuse for failing to properly file a responsive pleading in this case in light of the fact that it took Defendant 14 days after default was entered in this case to request that the Court set aside default. (See Doc. 32; Doc. 3 3.) From the time that Defendant claims she had notice of service, February 17, 2019, to the time that Defendant filed any response in this case, March 13, 2019, is inexcusable and ...


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