The opinion of the court was delivered by: Joyner, District Judge.
This is an employment discrimination action brought by the
plaintiff, Daniel M. Kauffman ("Kauffman") alleging the
defendant, California Acrylic Industries, Inc. d/b/a Cal Spas
("Cal Spas") discriminated against him on the basis of his
affliction with Crohn's disease in violation of the Americans
With Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq. Before
the court is Cal Spas' motion to set aside the default
judgment. For the following reasons, Cal Spas' motion will be
The defendant, Cal Spas is a California corporation with a
principal place of business in Pomona, California and retail
facilities in Chadds Ford, Pennsylvania and Ontario,
California. Cal Spas employed Kauffman at its Chadds Ford
facility from 1993 to 1995. On December 30, 1995 Kauffman was
fired. He alleges Cal Spas fired him because of his Crohn's
On June 5, 1997 Kauffman filed the complaint in federal
court. He sent the summons and the complaint to Cal Spas'
Chadds Ford facility on September 15, 1997. All case-related
material was forwarded to Cal Spas' office responsible for
overseeing litigation. An employee at this office, however,
filed away the material without notifying her superiors.
Consequently, Cal Spas did not enter an appearance or answer
the complaint. Cal Spas also failed to respond to Kauffman's
subsequent motion for default judgment. On December 11, 1997
the court granted the motion and scheduled a hearing to
determine damages. Cal Spas did not respond to the default
On January 6, 1998 the damages hearing was conducted after
Kauffman's counsel twice telephoned Cal Spas' Chadds Ford
office. On this same day the superiors at Cal Spas'
"litigation" office first became aware of the Kauffman
litigation. Their response was to notify Cal Spas' insurance
carrier and request coverage.
On August 29, 1998 Cal Spas fired the employee who misfiled
the case-related material on grounds unrelated to the Kauffman
litigation. But Cal Spas failed to discover the misfiled
material. Cal Spas, therefore, did not know that this employee
misfiled the Kauffman litigation material and still was unaware
that its insurance carrier was not providing a defense. Cal
Spas became aware when Kauffman requested a levy on properties
at Cal Spas' Chadds Ford facility on October 9, 1998.
Cal Spas' Chief Administrative Officer, Lee Wendt ("Wendt")
contacted Kauffman's counsel on October 23, 1998 and told him
to hold off on a sheriff sale because within a week a check
would be sent to satisfy the judgment. The check was not sent
and Kauffman's counsel telphoned Wendt. Wendt told Kauffman's
counsel to be patient and wait for the completion of a trade
show in which Cal Spas was taking part. After Cal Spas'
president refused to approve of the check, Cal Spas retained
Philadelphia counsel. On November 12, 1998 Cal Spas filed the
Federal Rule of Civil Procedure 55(c) provides that "[f]or
good cause shown the court may set aside an entry of default,
and if a judgment by default has been entered, may likewise set
it aside in accordance with Rule 60(b)." In either situation,
see Feliciano v. Reliant Tooling Co. Ltd., 691 F.2d 653, 657
(3d Cir. 1982) (noting that court should apply same factors in
both setting aside default entry and opening default judgment),
the court must consider the following factors: 1) whether
lifting the default would prejudice the plaintiff; 2) whether
the defendant has a meritorious defense; 3) whether the
defendant's conduct is excusable or culpable; and 4) the
possibility of effective alternative sanctions. See Emcasco
Ins. Co. v. Sambrick, 834 F.2d 71, 73 (3d Cir. 1987). Default
judgments, however, are greatly disfavored by the courts "and
in a close case, doubts should be resolved in favor of setting
aside the default and reaching the merits." Zawadski De Bueno
v. Bueno Castro, 822 F.2d 416, 420 (3d Cir. 1987).
Cal Spas argues that all four factors weigh in favor of
opening the default judgment. Kauffman argues that Cal Spas'
inexcusable and culpable conduct outweighs all other factors.
The U.S. Court of Appeals for the Third Circuit provides little
guidance as to how to balance the four factors. See Grow
Tunneling Corp. v. Conduit & Foundation Co., Inc., Civ.A. No.
96-3127, 1996 WL 411658, at *3 (E.D.Pa. July 16, 1996). The
court in Scottsdale Ins. Co. v. Littlepage, CIV.A. No. 92-2734,
1993 WL 275162 at *5-6 (E.D.Pa. July 16, 1993), ...