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Gil Grove v. Rizzi 1857 S.P.A

March 12, 2013

RIZZI 1857 S.P.A.,

The opinion of the court was delivered by: Gene E.K. Pratter United States District Judge


Plaintiff Gil Grove filed a three-count complaint against Rizzi 1857 S.P.A. in May 2004 after his left hand was mangled in a machine manufactured by the defendant. In his complaint, Mr. Grove brings claims for strict product liability, breach of warranty, and negligence against Rizzi. After several years in which Rizzi, an Italian company allegedly in dire financial straits, has failed to defend itself, Mr. Grove now moves for an entry of default judgment. For the reasons set forth below, the Court will grant Mr. Grove's motion in part as to liability, deny the motion in part as to damages, and set a jury trial to determine the amount of Mr. Grove's damages.

I. Factual and Procedural Background

At the time this litigation commenced, Rizzi was a foreign corporation based in Italy, while Mr. Grove resided in Pennsylvania. Rizzi manufactured and sold a smoothing and drying machine to Garden State Tanning, Inc., Mr. Grove's employer. On August 7, 2002, Mr. Grove was at work when his left hand was caught in the machine's rollers. Mr. Grove suffered a "degloving" injury, in which his skin was torn away and his fingers were partially amputated. Following this gruesome injury, Mr. Grove has undergone surgeries, physical therapy, and other medical treatments, and his claimed losses include permanent disfigurement, an inability to work, loss of earning capacity, and continuing pain and suffering.

Mr. Grove has faced numerous delays and difficulties pursuing his claims against Rizzi. After seeking to extend its time to respond to Mr. Grove's complaint on multiple occasions, Rizzi finally retained counsel and answered the complaint nearly a year after this suit began. However, Rizzi's efforts in the case essentially ended by 2006. On May 2, 2006, Rizzi's counsel sought permission to withdraw, explaining that Rizzi had voluntarily liquidated itself under Italian law and thereafter decided (despite its corporate status) to forgo having counsel represent it in this matter. The Court subsequently granted counsel's motion to withdraw.

Since 2006, Rizzi has continually failed to defend itself in this case. It neglected to send a representative to a scheduled status conference in May 2007, and it has repeatedly ignored the Court's orders to obtain counsel. In February 2008, the Court explicitly warned Rizzi that a default might be entered against it if it did not obtain licensed counsel.

On March 25, 2008, the Court authorized the Clerk of the Court to enter default against Rizzi. The case was subsequently stayed to determine how Rizzi's apparent bankruptcy--or the equivalent status under Italian law--affected the suit. Mr. Grove's counsel eventually submitted a series of status reports, including one noting that Rizzi had failed to file an 11 U.S.C. § 1515 petition for recognition of its Italian bankruptcy. Given this failure, the Court lifted the stay on May 23, 2012. Mr. Grove subsequently moved for default judgment. On June 22, 2012, Mr. Grove's counsel served Rizzi with written notice of his application for default judgment.*fn1

Having held a hearing on the motion, the Court will now resolve this matter as to Rizzi's liability.

II. Legal Standard

Once the Clerk of Court has entered a default, a party must apply to the Court for entry of a default judgment. See Fed. R. Civ. P. 55(b)(2). Before entering such a judgment, the Court must consider "(i) whether the plaintiff will be prejudiced if the default is denied[;] (ii) whether the defendant has a meritorious defense; and (iii) whether the default was the product of [the] defendant's culpable conduct." E. Elec. Corp. of N.J. v. Shoemaker Constr. Co., 657 F. Supp. 2d 545, 551 (E.D. Pa. 2009) (citations and quotations omitted). Many courts also consider a fourth factor, "the effectiveness of alternative sanctions." Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 73 (3d Cir. 1987).

When a default judgment is entered, the factual allegations of the complaint are treated as if they have been proven true. E. Elec., 657 F. Supp. 2d at 552. However, this does not extend to any factual allegations regarding damages. Id. "A party's default does not suggest that the party has admitted the amount of damages that the moving party seeks." Id. (citing Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990)). Therefore, a court may grant a motion for default judgment as to liability and then allow a plaintiff to establish her damages through a jury trial. See 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure, § 2688 at 68 (3d ed. 1998) ("[A] jury trial may be appropriate with regard to the amount of the recovery" on a default judgment.).

III. Discussion

A. Prejudice to the Plaintiff

Prejudice to the plaintiff favors the entry of a default judgment if the denial of such relief "would result in the loss of evidence or impair the plaintiff's ability to effectively pursue his or her claim." Carroll v. Stettler, No. 10-2262, 2012 U.S. Dist. LEXIS 113660, at *9-10 (E.D. Pa. Aug. 10, 2012). Minimal delays in litigation will not satisfy this requirement. Id. at *10. However, considerable delays--including ones that "can stretch on indefinitely"--do impair a plaintiff's ability to effectively pursue her claim. Id. at *11. There also may be sufficient prejudice where lack of a judgment ...

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