United States District Court, W.D. Pennsylvania
UNITED STATES OF AMERICA ex rel., DIANA SALVATORE AND DIANA M. SALVATORE, Plaintiffs,
MICHAEL FLEMING, TAYLOR MANAGEMENT, INC., and DIXIE REALTY, INC. d/b/a/ BUY-SELL REAL ESTATE, Defendant.
MEMORANDUM OPINION AND ORDER
CYNTHIA REED EDDY, Magistrate Judge.
Before the Court is Defendant Dixie Realty, Inc., d/b/a/BUY-Sell's ("Dixie Realty") Motion to Set Aside Entry of Default, as well as Defendant Michael Fleming's Motion to Set Aside the Default entered Against Defendant Dixie Realty. EFC Nos. 45 and 51. For the reasons explained below, both Motions are GRANTED.
I. FACTUAL AND PROCEDURAL BACKGROUND
This action was filed under seal pursuant to the False Claims Act, 31 U.S.C. § 3730(b)(4)(B) on September 15, 2011. ECF No. 2. Plaintiff alleges that Defendants, through joint action, falsely claimed and obtained rent subsidies from the United States Department of Housing and Urban Developing while participating in the Section 8 Tenant-Based Housing Choice Voucher Program.
The Complaint was unsealed on May 20, 2014, upon notice by the United States of America that it had declined to intervene in this action. ECF No. 23. Plaintiff filed notice of the Summons and Proof of Service on Dixie Realty and Michael Fleming on July 14, 2014. ECF No.26. The Proof of Service as to Dixie Realty represents that the summons and complaint were served on "John Petrick (Office Manager)" on behalf of Dixie Realty. ECF No. 26-1. On August 21, 2014, Defendant Fleming filed a Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6), 12(b)(7) and 12(d). ECF No. 30. In response, Plaintiff Diana M. Salvatore filed the First Amended Complaint on September 11, 2014. ECF No. 33. No responsive pleading was filed by Dixie Realty to either complaint.
On October 21, 2014, Plaintiff filed a Request to Enter Default against Defendant Dixie Realty pursuant to Federal Rule of Procedure 55(a). ECF No. 40. Default was entered by the Clerk of Court on October 22, 2014. ECF No. 41. On October 24, 2014, counsel for Dixie Realty entered their Notices of Appearance. ECF Nos. 43 and 44. Dixie Realty's Motion to set Aside Default was filed on October 31, 2014. ECF 45. On November 17, 2014, Plaintiff responded to Dixie Realty's Motion to Set Aside Default. ECF Nos. 49 and 50. Defendant Fleming's Motion to Set Aside Default against Defendant Dixie Realty was also filed on November 17, 2014. ECF No. 51. On November 24, 2014, Dixie Realty replied to Plaintiff's Opposition to its Motion to Set Aside Entry of Default. ECF No. 54. On December 9, 2014, Plaintiff responded to Fleming's motion. ECF Nos. 55 and 56. Accordingly, the matter has been fully briefed and is ripe for disposition.
Standard of Review
The entry of default, the granting of default, and the setting aside of default are provided for in Federal Rule of Civil Procedure 55. This rule states in relevant part:
(a) Entering a Default. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.
(b) Entering a Default Judgment.
(1) By the Clerk. If the plaintiff's claim is for a sum certain or a sum that can be made certain by computation, the clerk-on the plaintiffs request, with an affidavit showing the amount due-must enter judgment for that amount and costs against a defendant who has been defaulted for not appearing....
(2) By the Court. In all other cases, the party must apply to the court for a default judgment.... If the party against whom a default judgment is sought has appeared personally or by a representative, that party or its representative must be served with written notice of the application at least 7 days before the hearing....
(c) Setting Aside a Default or a Default Judgment. The court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b).
Fed.R.Civ.P. 55. "In general, the entry of default and default judgment are disfavored because they prevent a plaintiff's claims from being decided on the merits." Thompson v. Mattleman, Greenberg, Shmerelson, Weinroth & Miller, 1995 WL 321898, at *3 (E.D.Pa. May 26, 1995) ( citing Medunic v. Lederer, 533 F.2d 891, 893-94 (3d Cir.1976)); accord United States v. $55, 518.05 in U.S. ...