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Aughnay v. Starr

United States District Court, N.D. Georgia, Atlanta Division

December 31, 2019

ANITA CAROLE AUGHNAY, Plaintiff,
v.
JOHN AYERS STARR and FIRST PARTY ADMINISTRATOR, LLC, Defendants.

          OPINION AND ORDER

          CLARENCE COOPER SENIOR UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff's Application for Entry of Default Judgment [Doc. No. 8] and Defendants' Motion to Set Aside Entry of Default [Doc. No. 9]. For the reasons stated herein, the Court GRANTS the Motion to Set Aside Default [Doc. No. 9] and DENIES as moot Plaintiff's Application for Entry of Default Judgment [Doc. No. 8].

         I. BACKGROUND

         A. Factual Allegations

         Plaintiff Anita Carole Aughnay (“Plaintiff” or “Ms. Aughnay”) and Defendant John Ayers Starr (“Mr. Starr”) were previously involved in a romantic relationship. During the relationship, Mr. Starr and his company, Defendant First Party Administrator, LLC, received a total of $430, 500.00 from Ms. Aughnay. These funds are the focus of this case.

         On the first occasion that Ms. Aughnay provided money that is at issue in this litigation, Mr. Starr executed a promissory note in favor of Ms. Aughnay in the original amount of $170, 000.00. Subsequent to that transaction, there were a series of eight additional transfers of funds from Ms. Aughnay to Defendants in the total principal amount of $260, 500.00. Ms. Aughnay contends that the additional transactions were oral loans, whereas Defendants contend that the additional transactions were gifts that Ms. Aughnay made during a time when Mr. Starr was caring for Ms. Aughnay after she suffered a debilitating, spinal cord injury. Mr. Starr complained to Ms. Aughnay that his business was suffering due to the amount of time he was spending caring for Ms. Aughnay, and Mr. Starr maintains that Ms. Aughnay gifted him the funds as an expression of her gratitude for the time he was dedicating to her care. Ms. Aughnay claims she gave him the $260, 500.00 under duress and that she would not have made these additional loans had Mr. Starr not exerted control and influence over her. Mr. Starr and Ms. Aughnay are no longer a couple, and this case arises from their dispute regarding whether these transactions were loans or gifts.

         B. Procedural History

         On June 7, 2019, Ms. Aughnay commenced this action against Defendants alleging claims for declaratory judgment, breach of contract based on the promissory note, and breach of contract based on the oral loans. (Doc. No. 1.) Plaintiff alternatively brings claims for rescission, unjust enrichment, money had and received, and promissory estoppel. (Id.) These alternatively-pled claims all relate to the oral loans. (Id.) Plaintiff finally alleges a separate claim for costs, expenses, and attorneys' fees. (Id.)

         Plaintiff served the Summonses and Verified Complaint upon Defendants on June 11, 2019, making their responsive pleadings due no later than July 2, 2019. (Doc. Nos. 5, 6.) No responsive pleadings having been filed, Plaintiff moved the Clerk for entry of default against Defendants on July 3, 2019. (Doc. No. 7.) The Clerk entered default on July 3, 2019, and Plaintiff moved for entry of default judgment immediately thereafter. (Doc. No. 8.)

         On July 15, 2019, Defendants filed a Motion to Set Aside Entry of Default and Response in Opposition to Plaintiff's Application for Default Judgment. (Doc. No. 9.) All matters have been fully briefed and are ripe for resolution by the Court.

         II. STANDARD OF REVIEW

         Federal Rule of Civil Procedure 55 provides “[t]he court may set aside an entry of default for good cause . . . .” Fed.R.Civ.P. 55(c). The defaulting party bears the burden of establishing good cause. Sherrard v. Macy's Sys. and Tech. Inc., 724 Fed.Appx. 736, 738 (11th Cir. 2018). Good cause is a mutable standard that varies from case to case. Id. Courts generally consider several factors in determining whether “good cause” has been shown, including whether the default was culpable or willful, whether the defaulting party acted promptly to correct the default, whether setting aside the default would prejudice the defaulting party's adversary, and whether the defaulting party presents a meritorious defense. Compania Interamericana Exp.-Imp., S.A. v. Compania Dominicana De Aviacion, 88 F.3d 948, 951 (11th Cir. 1996) (internal citations omitted); see also Rasmussen v. W.E. Hutton & Co., 68 F.R.D. 231, 233 (N.D.Ga. 1975). “[I]f 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, 88 F.3d at 951-52 (citation omitted).

         The Eleventh Circuit views default with disfavor and strongly prefers to determine cases on their merits. Sherrard, 724 Fed.Appx. at 738 (citation omitted); Fla. Physician's Ins. Co. v. Ehlers, 8 F.3d 780, 783 (11th Cir. 1993). A motion made pursuant to Rule 55(c) is addressed to the sound discretion of the trial court. See McGrady v. D'Andrea Elec., Inc., 434 F.2d 1000, 1001 (5th Cir. 1970).

         III. ...


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