VIRGINIA M. HERNANDEZ COVINGTON, District Judge.
This matter comes before the Court pursuant to Defendants Grille 54 — Sheldon, LLC and James Dallas Owens' Motion to Vacate Default (Doc. # 12), filed on June 9, 2015. Plaintiff Grille 54, LLC filed a response in opposition to Defendants' Motion on June 18, 2015. For the reasons stated below, this Court grants Defendants' Motion.
On April 23, 2015, Plaintiff initiated this trademark action. (Doc. # 1). Plaintiff executed service on both Defendants on May 11, 2015. (Doc. ## 5-6). Defendants failed to timely file a response to Plaintiff's Complaint, and as a result, Plaintiff applied to the Clerk of the Court for entry of default against both Defendants. (Doc. # 7).
On June 3, 2015, the Clerk entered default against both Defendants. (Doc. ## 8-9). The next day, a Notice of Appearance was filed on behalf of Defendants. (Doc. # 10). Thereafter, on June 9, 2015, Defendants filed the present Motion. (Doc. # 12). On June 18, 2015, Plaintiff filed a response in opposition to Defendants' Motion (Doc. # 14), as well as a Motion for Default Judgment against both Defendants (Doc. # 15).
Rule 55(c) of the Federal Rules of Civil Procedure provides that "The Court may set aside an entry of default for good cause. . . ." Fed. R. Civ. P. 55(c). The Eleventh Circuit has explained that "defaults are seen with disfavor because of the strong policy of determining cases on their merits."
In determining whether good cause is shown for setting aside a Clerk's entry of default, courts generally evaluate the following factors: (1) whether the default is culpable or willful; (2) whether setting aside default would prejudice the adversary; and (3) whether the defaulting party presents a meritorious defense.
However, these factors are not exclusive, and courts have examined other factors including "whether the public interest was implicated, whether there was significant financial loss to the defaulting party, and whether the defaulting party acted promptly to correct the default."
Upon review of the Motion, the Court finds that Defendants have established good cause for this Court to set aside the Clerk's entry of default entered against them.
Defendants contend that their failure to timely respond to Plaintiff's Complaint was neither culpable nor willful. (Doc. # 12 at 4). According to Defendants, counsel for both Plaintiff and Defendants had ongoing conversations regarding either an extension of time to respond to the Complaint or a stay of this litigation so that the parties could continue to negotiate a potential sale of the restaurants in question. (
Furthermore, Defendants' counsel asserts that throughout the interactions amongst counsel, he was under the mistaken impression that the Complaint was not served on Defendants until May 21, 2015 — not May 11, 2015. (
In its response, Plaintiff argues, amongst other things, that Defendants "do not and cannot challenge service of process," and according to Defendants' counsel's affidavit, he was aware of this action prior to service and upon service "in mid to late May of 2015." (Doc. # 14 at 4). Thus, Plaintiff provides that this "information is sufficient to apprise the Defendants of their duty to respond to the Complaint in a timely manner." (
Upon consideration of the parties' various arguments, this Court is not persuaded by Plaintiff's assertion that Defendants' Motion should be denied as "Defendants have not demonstrated good cause and have instead misrepresented the facts of default to this Court." (
Defendants contend that setting aside the default would not result in prejudice to Plaintiff. (Doc. # 12 at 8). To that end, Defendants provide that although setting aside the default results in "additional delay and expense," such delay and expense "would not be sufficient to defeat the presumption that cases be tried upon their merits." (
In response, Plaintiff argues that setting aside the default would result in prejudice as (1) Defendants have not presented a meritorious defense and (2) Defendants' continued use of the relevant marks "despite the termination of their lease to do so will cause prejudice to Plaintiff . . . because of the continued harm caused by Defendants' use of the mark on inferior quality goods." (Doc. # 14 at 10).
Upon consideration, this Court finds that Plaintiff will not suffer undue prejudice if the Clerk's entry of default is set aside. Plaintiff merely secured a Clerk's default, as opposed to a final default judgment, and the passage of time between the entry of Clerk's default and Defendants' Motion, six days, does not warrant the drastic penalty of forever depriving Defendants of their ability to defend against this action.
Defendants present several defenses with respect to the claims at issue in this action. (Doc. # 12 at 6). Regarding the trademark claims, Defendants assert that "those claims are barred by the doctrines of laches and estoppel," and argue that applicable statutes of limitations may likewise bar Plaintiff's claims. (
Plaintiff alleges that Defendants' legal defenses are not stated with sufficient specificity and are inapplicable to the present case. (Doc. # 14 at 8). Plaintiff also argues that Defendants make "bald denial[s] of the allegations of the Complaint, unsupported by any factual allegation." (
"To establish a meritorious defense, the moving party must make an affirmative showing of a defense that is likely to be successful."
Here, Defendants have done more than generally allege that they have meritorious defenses. Rather, Defendants have explained Plaintiff's allegations and the elements of Plaintiff's asserted claims, and stated specific facts, which they believe make their contentions more meritorious than Plaintiff's claims.
At this time, the Court declines to determine whether Defendants' asserted defenses have merit. Instead, the Court's review at this juncture is limited to an inquiry of whether Defendants' allegations are entirely devoid of merit. Upon consideration, the Court concludes that Defendants have colorable arguments to satisfy this factor.
Courts can consider any relevant factor besides the three enumerated above in an effort to determine whether the circumstances warrant the finding of good cause to set aside the Clerk's entry of default.
Accordingly, it is