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Spruk v. Mississippi Lime Co.

United States District Court, E.D. Missouri, Eastern Division

August 28, 2017

GEORGE SPRUK, Plaintiff,



         This diversity matter is before the Court on defendant Mississippi Lime Company's Motion to Set Aside Clerk's Default and for Leave to File a Responsive Pleading Out of Time. The motion is accompanied by an affidavit. Plaintiff George Spruk opposes the motion. Defendant's reply is supported by an additional affidavit and documents. For the following reasons, the Motion will be granted, and the Clerk's Entry of Default previously entered in this matter will be vacated.


         This action was filed on June 16, 2017 by plaintiff George Spruk against Mississippi Lime Company (“defendant” or “MLC”). Plaintiff alleges that he sustained significant physical injuries on August 15, 2014 when he drove a tanker truck to defendant's St. Genevieve, Missouri facility, and was struck by a train car after he exited the tanker truck. Plaintiff contends that his injury was the direct result of MLC's negligence in that (1) its employee operating the train failed to keep a careful lookout; (2) it failed to train and/or supervise its employee operating the train car; (3) it failed to inform plaintiff how and where to proceed for the loading of his tanker; (4) it failed to warn plaintiff of the active railroad track in close proximity to where truck drivers such as plaintiff load lime; and/or (5) it designed its loading facility so that it was unsafe for visiting drivers on the premises for the loading of lime. Complaint, ¶ 14(a)-(e).

         MLC's registered agent was served with summons and complaint on June 23, 2017, so MLC's response was due by July 14, 2017. MLC did not respond timely to the complaint. On July 24, 2017, plaintiff filed a motion for entry of clerk's default under Rule 55(a), Federal Rules of Civil Procedure, and for default judgment under Rule 55(b)(2). A Clerk's Entry of Default under Rule 55(a) was entered July 28, 2018 (Doc. 7), and the case was transferred to the undersigned.

         On August 4, 2017, MLC filed the instant motion to set aside the entry of default. MLC asserts that the entry of default should be set aside because (1) the Clerk exceeded the authority to enter default under Rule 55(a) because plaintiff's motion for entry of default was not accompanied by an affidavit as required by the Rule; and (2) MLC's failure to respond was unintentional, it has a meritorious defense, and plaintiff would not be prejudiced if the default were excused.

         Legal Standard

         An entry of default under Rule 55(a) will not be set aside automatically. Rule 55(c), Fed. R. Civ. P., provides that a court may set aside an entry of default for good cause. The Eighth Circuit has instructed that when “examining whether good cause exists, a district court should weigh ‘whether the conduct of the defaulting party was blameworthy or culpable, whether the defaulting party has a meritorious defense, and whether the other party would be prejudiced if the default were excused.'” Stephenson v. El-Batrawi, 524 F.3d 907, 912 (8th Cir. 2008) (quoting Johnson v. Dayton Elec. Mfg. Co., 140 F.3d 781, 784 (8th Cir. 1998)).

         In applying this analysis, the Eighth Circuit “focus[es] heavily on the blameworthiness of the defaulting party.” Johnson, 140 F.3d at 784. In so doing, Eighth Circuit “cases have consistently sought to distinguish between contumacious or intentional delay or disregard for deadlines and procedural rules, and a ‘marginal failure' to meet pleading or other deadlines. We have rarely, if ever, excused the former.” Id. (citing cases). In contrast, the Eighth Circuit “has often granted Rule 55(c) and Rule 60(b) relief for marginal failures when there were meritorious defenses and an absence of prejudice.” Id. (citing cases).

         “Whether a meritorious defense exists is determined by examining whether the proffered evidence would permit a finding for the defaulting party.” Stephenson, 524 F.3d at 914 (internal quotation marks and quoted case omitted). “The underlying concern is whether there is some possibility that the outcome after a full trial will be contrary to the result achieved by the default.” Id. (internal quotation marks, punctuation and quoted case omitted). With respect to the issue of prejudice, “delay alone, or the fact the defaulting party would be permitted to defend on the merits, are insufficient grounds to establish the requisite prejudice to the plaintiff.” Id. at 915. “Setting aside a default must prejudice plaintiff in a more concrete way, such as loss of evidence, increased difficulties in discovery, or greater opportunities for fraud and collusion.” Id. (internal quotation marks and quoted case omitted).

         The Court is mindful of the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits rather than resolution of cases through default judgment. See United States ex rel. Time Equip. Rental & Sales, Inc. v. Harre, 983 F.2d 128, 130 (8th Cir. 1993). “The entry of a default judgment should be a ‘rare judicial act.'” Comiskey v. JFTJ Corp., 989 F.2d 1007, 1009 (8th Cir. 1993) (quoted case omitted).


         Defendant's motion to set aside the Clerk's Entry of Default and its reply memorandum are accompanied by two affidavits of defendant's Vice President of Finance, Mr. Henken, and an affidavit of one of MLC's attorneys, Mr. Daniel Godar of Armstrong Teasdale LLP. Taken together, the affidavits and the exhibits thereto establish that shortly after the complaint was filed in this case on June 16, 2017, Mr. Henken was contacted by several law firms who notified him of the suit and offered to represent MLC. Mr. Henken contacted Mr. Godar by telephone to discuss the suit, and Mr. Godar advised Mr. Henken to notify MLC's insurance company that suit had been filed.

         On June 19, 2017, Mr. Godar received an email from MLC's registered agent, The Corporation Company (“TCC”), confirming that plaintiff filed the complaint. The same day, Mr. Godar was included on an email from MLC's insurance broker to MLC's insurance company, regarding the claim plaintiff had filed before the lawsuit was filed. Based on the timing and subject of the email, Mr. Godar believed ...

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