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Paradise v. Commonwealth Financial Systems, Inc.

United States District Court, M.D. Pennsylvania

September 22, 2014

ALEXANDRA PARADISE Plaintiff,
v.
COMMONWEALTH FINANCIAL SYSTEMS, INC. Defendant,
v.
FIDELITY DEPOSIT & DISCOUNT BANK, Garnishee.

MEMORANDUM

MATTHEW W. BRANN, District Judge.

Before the Court are Defendant Commonwealth Financial Systems, Inc.'s ("Defendant") Motion to Vacate Default Judgment (ECF No. 25) and third-party Garnishee Fidelity Deposit & Discount Bank's Motion for Interpleader (ECF No. 33). As elaborated below, the Defendant's Motion is denied because it failed to demonstrate that it has a meritorious defense to Plaintiff's claims and that it was not derelict in its duty to litigate. The Motion for Interpleader is denied without prejudice.

I. BACKGROUND

Plaintiff Alexandra Paradise ("Plaintiff" or "Paradise") filed a Complaint (ECF No. 1) on January 1, 2013, alleging inter alia violations of the Telephone Consumer Protection Act, 47 U.S.C. ยง 227 ("TCPA") for debt collection phone calls that Defendant placed to Plaintiff's phone number. Plaintiff was not the intended recipient of the calls.

Defendant accepted service of Plaintiff's Complaint via electronic mail to Matthew Healey ("Healy"), its compliance officer, on January 3, 2014. Pl.'s Br. Opp'n 1, July 22, 2014, ECF No. 36 [hereinafter Pl.'s Br.]. The Parties then engaged in informal discovery and an email exchange, in which Defendant made a settlement offer. After Plaintiff rejected the settlement offer, Healey wrote: "[t]hen proceed with judgment." Pl.'s Br., Ex. C.

Plaintiff filed an Amended Complaint on January 24, 2013 (ECF No. 5). The Defendant did not respond. Plaintiff then filed a Request for Entry of Default (ECF No. 8) and certificate of service, and the Clerk entered Default on March 21, 2013 (ECF No. 9). The Court held a hearing on October 1, 2013 to assess damages, which it fixed at $63, 000 (ECF Nos. 19, 20) and subsequently entered Default Judgment in favor of the Plaintiff on October 21, 2013(ECF No. 21).

Despite eleven months of silence after its initial communications in this case, Defendant then filed the Motion to Vacate Default Judgment that is now before the Court (ECF No. 25). Defendant seeks to vacate the Default Judgment and litigate the case.

II. DISCUSSION

A. Motion to Set Aside Default Standard

Federal Rule of Civil Procedure 55(c) allows a court to "set aside an entry of default for good cause, and... set aside a default judgment under Rule 60(b)." FED. R. CIV. P. 55(c). Rule 60(b) grants courts broad authority to provide relief from judgment for reasons including: 1) mistake, inadvertence, surprise, or excusable neglect;... or (6) any other reason that justified relief." FED. R. CIV. P. 60(b).

Default judgments and "default [are] generally disfavored and [courts] have long indicated [the] strong preference that cases be decided on the merits." Ruhle v. Hous. Auth. of City of Pittsburgh , 54 Fed.Appx. 61, 62 n.1 (3d Cir. 2002); see also Lai v. Garrubbo, Capece, D'Arcangelo, P.C., 233 Fed.Appx. 201, 201 (3d Cir. 2007); Harad v. Aetna Cas. & Sur. Co. , 839 F.2d 979, 982 (3d Cir. 1988). "If there is any doubt as to whether the default should be set aside, the court should err on the side of setting aside the default and reaching the merits of the case." Accu-Weather, Inc. v. Reuters Ltd. , 779 F.Supp. 801, 802 (M.D. Pa. 1991) (McClure, J.) (citing Zawadski de Bueno v. Bueno Castro , 822 F.2d 416, 420 (3d Cir. 1987)). Where default judgment has been granted, however, courts do consider motions to set aside the judgment less liberally than to set aside a mere entry of default. See, e.g., Schartner v. Copeland , 59 F.R.D. 653, 656 (M.D. Pa. 1973) aff'd, 487 F.2d 1395 (3d Cir. 1973).

The Court has discretion in determining whether there is a reason justifying relief, and evaluates a number of factors to that end including: "(1) whether the plaintiff will be prejudiced; (2) whether the defendant has a meritorious defense; (3) whether the default was the result of the defendant's culpable conduct." U.S. v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984).[1] The Defendant bears the burden to demonstrate sufficient good cause. See, e.g., Grow Tunneling Corp. v. Conduit & Found. Co., Inc., 96-cv-3127, 1996 WL 411658, * 2 (E.D. Pa. July 16, 1966).

B. Merits

1. Defendant Does Not Offer A Facially ...


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