United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER CONDITIONALLY GRANTING DEFENDANTS' MOTION TO SET ASIDE CLERK'S ENTRY OF DEFAULT [#15] UPON PAYMENT OF FEES TO PLAINTIFF'S COUNSEL; DENYING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT [#10] AS MOOT; AND REQUIRING RESPONSE TO COMPLAINT
GERSHWIN A. DRAIN, District Judge.
Presently before the Court are Plaintiff Dawn Guyot's ("Guyot") Motion for Default Judgment, and Bryan Ramsey ("Ramsey"); BMR Security Solutions, LLC ("BMR Security"), and BMR Lawn Care, LLC's ("BMR Lawn") (collectively "Defendants") Motion to Set Aside Clerk's Entry of Default. See Dkt. Nos. 10, 15. Plaintiff filed the Complaint in this action on September 11, 2014. See Dkt. No. 1. In the Complaint, Plaintiff alleges that the Defendants knowingly engaged in a pattern and practice of unlawful conduct. See id. According to Plaintiff, this resulted in the unlawful denial of Plaintiff's wages, pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and the Michigan Workforce Opportunity Wage Act ("MWOWA"), Mich. Comp. Laws. § 408.411 et seq. See id.
On October 17, 2014 a Clerk's Entry of Default was entered against all Defendants. See Dkt. Nos. 7-9. Plaintiff filed a Motion for Default Judgment on November 26, 2014. See Dkt. No. 10. On January 26, 2015, the Defendants filed a motion to Set Aside the Clerk's Entry of Default. See Dkt. No. 15. Plaintiff filed a Response to the Defendants' Motion on January 26, 2015. See Dkt. No. 19. Defendants failed to file a Reply in accordance with the Court's Local Rules. See E.D. Mich. L.R. 7.1(e)(2)(c).
After reviewing the Motions and the briefing by the Parties the Court concludes that oral argument will not aid in the resolution of this matter. Accordingly, the Court will resolve the pending Motions on the briefs and cancel the hearing scheduled for March 9, 2015 at 2:00 p.m. See E.D. Mich. L.R. 7.1(f)(2). For the following reasons, the Court will conditionally GRANT Defendants' Motion to Set Aside Clerk's Entry of Default [#15], and DENY Plaintiff's Motion for Default Judgment [#10] as moot.
II. FACTUAL BACKGROUND
According to the Complaint, Plaintiff, Guyot, is an adult who worked for Defendants Ramsey and BMR Security from approximately April of 2012 to April of 2014. Plaintiff asserts that she worked from 15 to 60 hours per month for an approximate total of 662 hours. While working, Plaintiff asserts that her duties included preparing logs, invoices, scheduling, and payroll. Plaintiff asserts that she terminated her employment with Defendants Ramsey and BMR Security in April of 2014 due in part to Defendants Ramsey and BMR Security's refusal to compensate her for all hours spent working.
Plaintiff also asserts that she worked with Defendants Ramsey and BMR Lawn for about three days beginning on or about April 18, 2014. While working for Defendant BMR Lawn, Plaintiff asserts that she assisted with various lawn care and landscaping tasks for a total of approximately 24 hours. While working with Defendants Ramsey and BMR Lawn, Plaintiff asserts that she was never paid any wages for her work. Plaintiff asserts that she also terminated her employment with Defendants Ramsey and BMR Lawn in April 2014 due to Defendants Ramsey and BMR Lawn's refusal to compensate her for all hours spent working.
Defendant Ramsey is the sole owner of both Defendants BMR Security and BMR Lawn and is also employed as a full-time police officer with Brownstown Township, Michigan. Defendant Ramsey says that Defendant BMR Security was organized on March 5, 2012 while Defendant BMR Lawn was organized on February 25 2014. According to Defendant Ramsey, neither Defendants BMR Security nor BMR Lawn had any significant gross sales in any year of operation, and in no year had gross sales of $500, 000 or more.
Defendant Ramsey asserts that he was involved in an intimate relationship and lived with Plaintiff at all times relevant in the Complaint. Defendant Ramsey asserts he was not personally served with the Complaint at his residence, which is also the registered office for both Defendants BMR Security and BMR Lawn. Defendant Ramsey asserts that he filed an action against Plaintiff seeking return of personal property after their separation in May of 2014. According to Defendant Ramsey, both Parties were represented by counsel in that action, and he agreed to voluntarily dismiss the action with prejudice in the hope that Plaintiff would dismiss this action. Defendant Ramsey has stated that he did receive the Complaint in this case and the Motion for Default Judgment dated November 26, 2014.
III. LAW & ANALYSIS
A. LEGAL STANDARD
Federal Rule of Civil Procedure 55(c) allows for an entry of default to be set aside for good cause. See Fed.R.Civ.P. 55(c). "In determining whether good cause' exists, courts consider: (1) whether culpable conduct of the defendant led to the default; (2) whether the defendant has a meritorious defense; and (3) whether the plaintiff will be prejudiced." Mertik Maxitrol Gmbh & Co. Kg v. Honeywell Technologies Sarl, 10-12257, 2011 WL 3714634, at *2 (E.D. Mich. Aug. 24, 2011) (citing United States v. $22, 050.00 U.S. Currency, 595 F.3d 318, 324 (6th Cir. 2010)).
The decision to set aside an entry of default is within the discretion of this Court. See Shepard Claims Serv., Inc. v. William Darrah & Assocs., 796 F.2d 190, 193 (6th Cir. 1986). Federal courts strongly favor trials on the merits. See Berthelsen v. Kane, 907 F.2d 617, 620 (6th Cir. 1990). The Sixth Circuit applies a "somewhat more lenient standard" to "Rule 55(c) motions where there has only been an entry of default, " as opposed "to Rule 60(b) motions where judgment has been entered." Shepard Claims Serv., 796 F.2d at 193. However, even in Rule 60(b) cases, where a more stringent standard applies, the Sixth Circuit has stated that "[a]ny doubt should be resolved in favor of the petition to set ...