MARC T. TREADWELL, District Judge.
The Defendants move for default judgment as to their counterclaims against the Plaintiffs. Doc. 16. In response, the Plaintiffs oppose the motion and move for leave to answer the Defendants' counterclaims. Doc. 18. For the reasons discussed below, the Defendants' motion for default judgment (Doc. 16) is
The Plaintiffs claimed in their original complaint that the Defendants violated their rights under the Fair Labor Standards Act by (1) failing to pay overtime wages owed to the Plaintiffs for their work for the Defendants' hotel, and (2) retaliating against the Plaintiffs for opposing the Defendants' unlawful conduct in terminating their employment. See generally Doc. 1. The Plaintiffs moved for leave to amend their complaint to add claims for breach of contract and quantum meruit, alleging that the Defendants failed to pay the Plaintiffs the full amount owed for construction work. See generally Doc. 10-1. The Defendants did not object to the motion, and the Court granted it in a text order. Docs. 11; 12. The Defendants then moved for leave to file an amended answer and counterclaim, and the Court granted the motion in another text order. Docs. 13; 14.
In their amended answer and counterclaim, the Defendants brought claims against the Plaintiffs for "trespass to personalty" and conversion. Docs. 13-1 ¶¶ 11-20; 15 ¶¶ 11-20. The Defendants moved to add the counterclaim on July 12, 2017. Doc. 13. On July 17, the Court granted the motion, and the Defendants filed the amended answer and counterclaim on the same day. Docs. 14; 15. On September 6, the Defendants moved for default judgment as to their counterclaims because the Plaintiffs failed to respond to the counterclaims. Doc. 16. In response, the Plaintiffs "acknowledge that they mistakenly failed to timely file their Answer to Defendants' counterclaims due to a clerical error," but they argue that the "inadvertent error does not warrant such drastic measure as default judgment." Doc. 18 at 1-2. The Plaintiffs also seek leave to file an answer to the counterclaims. Id. The Plaintiffs attached their proposed answer to their response. Doc. 18-1.
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 against the defendant.
The Court finds that there is good cause to deny the motion for default judgment and grant the Plaintiffs leave to answer. The Defendants argue in their reply that they would be prejudiced by denial of the motion because they have not conducted discovery on the counterclaims and, under the then-operative discovery deadline of November 13, 2017, "there would be no way to complete discovery by the existing deadline." Doc. 21 at 2-3. But since the Defendants filed their reply, the Court has granted the parties' joint motion to extend discovery to February 12, 2018 Doc. 22. Accordingly, the Defendants should now have sufficient time to conduct discovery on the counterclaims, and the Court finds that the Defendants will not be prejudiced. Although the Plaintiffs are "culpable" to the extent that they are responsible for failing to answer the counterclaim, the Court finds nothing to indicate that the default was "willful." Id. The Plaintiffs deny the Defendants' factual allegations underpinning the counterclaims and therefore "present[] a meritorious defense." Doc. 18-1 ¶¶ 11-20; Compania Interamericana Export-Import, 88 F.3d at 951; see also Domineck v. One Stop Auto Shop, Inc., 302 F.R.D. 695, 699 (N.D. Ga. 2014) ("To be clear, a meritorious defense is one that is `"good at law" without reference to the likelihood of success.'" (quoting Shepard Claims Serv., Inc. v. William Darrah & Assocs., 796 F.2d 190, 192-93 (6th Cir. 1986))). Finally, the Plaintiffs moved for leave to file an answer to the Defendants' counterclaims on September 20, two weeks after the Defendants moved for default judgment; the Court finds that this constitutes acting "promptly to correct the default." Doc. 18; Compania Interamericana Export-Import, 88 F.3d at 951. Accordingly, good cause exists to deny the motion for default judgment.
For the reasons discussed above, the Defendants' motion for default judgment (Doc. 16) is