DAVIS v. UNIVERSITY OF NORTH CAROLINA AT GREENSBORO

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

AUTUMN DAVIS, )

)

Plaintiff, )

)

v. ) 1:19CV661

)

UNIVERSITY OF NORTH CAROLINA )

AT GREENSBORO, et al., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

OSTEEN, JR., District Judge

Presently before the court is a Motion to Set Aside Entry

of Default filed by Defendant Raleigh School of Nurse Anesthesia

(“RSNA”). (Doc. 26.) Plaintiff Autumn Davis (“Plaintiff”)

responded in opposition. (Doc. 37.) RSNA replied. (Doc. 40.) For

the reasons set forth herein, this court will grant RSNA’s

Motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

On July 2, 2019, Plaintiff filed a complaint in this court

asserting multiple claims against Defendants University of North

Carolina at Greensboro (“UNCG”), the Board of Governors of the

University of North Carolina (“Board”), and RSNA. (Doc. 1.)1 UNCG

and the Board waived service. (Docs. 5, 6.)

On August 21, 2019, Plaintiff filed an Affidavit of Service

by Mail averring that RSNA had been served on August 15, 2019.

(Doc. 7.) The Affidavit asserts that the complaint and summons

were served on RSNA’s registered agent, Walter Rogers, at “3900

Barrett Drive” in Raleigh, North Carolina, “via certified mail

as evidenced by the attached print out and signed returned

receipt.” (Id. at 1.) The signed returned receipt shows that the

certified mail was signed for by “Robert Stephens.” (Id. at 2.)

The print out shows that the certified mail was delivered to a

location in Greensboro, North Carolina. (Id. at 4.)

While Defendants UNCG and the Board filed a motion to

dismiss the complaint and subsequently an answer, (Docs. 8, 15),

RSNA failed to file an answer or have an attorney make an

appearance on its behalf.

Thus, on May 5, 2021, Plaintiff filed a Motion for Entry of

Default Final Judgment against RSNA. (Doc. 18.) The next day,

the Clerk of Court issued an Entry of Default against RSNA

stating that because “Defendant Raleigh School of Nurse

1 All citations in this Memorandum Opinion and Order to

documents filed with the court refer to the page numbers located

at the bottom right-hand corner of the documents as they appear

on CM/ECF.

Anesthesia has failed to plead or otherwise defend the action

. . . [it] is subject to default as provided by Rule 55 of the

Federal Rules of Civil Procedure.” (Doc. 19.)

On June 10, 2021, a Notice of Appearance was filed by an

attorney on RSNA’s behalf, (Doc. 24), along with a Motion to Set

Aside Entry of Default pursuant to Federal Rule of Civil

Procedure 55(c), (Doc. 26). RSNA also filed a brief, (Doc. 27),

and a Declaration of Jonathan W. Blank, MD, (Doc. 28).

II. STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 55(c), this court

“may set aside an entry of default for good cause[.]” Fed. R.

Civ. P. 55(c). In determining whether good cause exists for

setting aside an entry of default, the Fourth Circuit has set

forth six factors to consider: (1) “whether the moving party has

a meritorious defense”; (2) “whether it acts with reasonable

promptness”; (3) “the personal responsibility of the defaulting

party”; (4) “the prejudice to the party”; (5) “whether there is

a history of dilatory action”; and, (6) “the availability of

sanctions less drastic.” Payne ex rel. Estate of Calzada v.

Brake, 439 F.3d 198, 204–05 (4th Cir. 2006) (citations omitted).

This court also notes that an “extensive line of decisions”

has held that “Rules 55(c) and 60(b) are to be liberally

construed in order to provide relief from the onerous

consequences of defaults and default judgments.”2 Tolson v.

Hodge, 411 F.2d 123, 130 (4th Cir. 1969) (citations omitted).

The Fourth Circuit has “repeatedly expressed a strong preference

that, as a general matter, defaults be avoided and that claims

and defenses be disposed of on their merits.” Colleton

Preparatory Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413,

417 (4th Cir. 2010) (citations omitted).

III. ANALYSIS

This court concludes that good cause exists to set aside

the entry of default because five of the six factors weigh in

RSNA’s favor. The only factor weighing in Plaintiff’s favor is

personal responsibility of the defaulting party, infra Part

III.C, which in the aggregate is outweighed by the other five

factors. Each factor is addressed in turn.

2 Although [courts] have analyzed Rule 55(c) and Rule 60(b)

motions using the same factors, the burden on a movant

seeking relief under the two rules is not the same. . . .

Rule 60(b) motions request relief from judgment, which

implicates an interest in “finality and repose,” a

situation that is not present when default has been entered

under Rule 55(a) and no judgment has been rendered.

Therefore, while an analysis under each rule employs

similar factors, Rule 60(b)’s “excusable neglect” standard

is a more onerous standard than Rule 55(c)’s “good cause”

standard, which is more forgiving of defaulting parties

because it does not implicate any interest in finality.

Colleton Preparatory Acad., Inc. v. Hoover Universal, Inc., 616

F.3d 413, 420 (4th Cir. 2010) (internal citations omitted).

A. Whether Defendant has a Meritorious Defense

“In determining whether there is a meritorious defense for

purposes of setting aside a default, ‘all that is necessary to

establish the existence of a meritorious defense is a

presentation or proffer of evidence, which, if believed, would

permit either the Court or the jury to find for the defaulting

party[.]’” Carter v. City of High Point, No. 1:17CV148, 2017 WL

4043751, at *3 (M.D.N.C. Sept. 12, 2017) (quoting United States

v. Moradi, 673 F.2d 725, 727 (4th Cir. 1982)) (internal

quotation marks omitted). The defaulting party “need not prove

his meritorious defense by a preponderance of the evidence[.]” J

& J Sports Prods., Inc. v. Argueta, No. 1:12cv1329, 2013 WL

5960859, at *2 (M.D.N.C. Nov. 7, 2013). Rather, the “underlying

concern is . . . whether there is some possibility that the

outcome . . . after a full trial will be contrary to the result

achieved by the default.” Augusta Fiberglass Coatings, Inc. v.

Fodor Contracting Corp., 843 F.2d 808, 812 (4th Cir. 1988)

(internal quotation marks omitted) (alterations in original)

(quoting 10 C. Wright, A. Miller & M. Kane, Federal Practice and

Procedure § 2697, p. 531 (2d ed. 1983)). “Any doubts should be

resolved in favor of the movant for relief.” J & J Sports

Prods., 2013 WL 5960859, at *2 (citation omitted).

Here, RSNA argues that it “has a meritorious defense

against all claims for lack of jurisdiction, insufficient

process, and insufficient service of process.” (Br. in Supp. of

Mot. to Set Aside Entry of Default (“RSNA’s Br.”) (Doc. 27) at

6.) RSNA acknowledges that service may be affected via “mailing

a copy of the summons and of the complaint, registered or

certified mail, return receipt requested, addressed to the

officer, director, or agent.” (Id. (referencing Fed. R. Civ. P.

4(e)(1), (h)(1)(A), and N.C. R. Civ. P. 4(j)(6)).) However, RSNA

maintains that Plaintiff failed to execute this process because

(1) “Plaintiff attempted service on the RSNA at a vacated office

and did not include the correct address, which required a suite

number[,]” and (2) “[t]he individual who signed the return

receipt was not authorized to accept service on behalf of RSNA.”

(Id. (citing Decl. of Jonathan W. Blank, MD (“Blank Decl.”)

(Doc. 28) ¶¶ 6, 8).)

Plaintiff insists she properly served RSNA and thus argues

that RSNA’s proffered defense is not meritorious. (Pl.’s Opp’n

to Def. RSNA’s Mot. to Set Aside Default J. (“Pl.’s Opp’n Br.”)

(Doc. 37) at 4-5.) As evidence of proper service, Plaintiff

points to an exhibit attached to Dr. Blank’s Declaration. (Id.)

The exhibit is an email from Dr. Blank to Plaintiff’s counsel

that was sent on August 29, 2019, (Ex. 3 (“Email”) (Doc. 28-3)),

more than a week after Plaintiff’s counsel had already filed an

affidavit averring that service had occurred, (Aff. of Service

by Mail (Doc. 7)). In the email, Dr. Blank acknowledges that he

was “president of the Board of Directors of the Raleigh nurse

anesthesia school,” and that “[t]here was a statement of

complaint sent by mail, which has been forwarded to me and for

which I signed receipt o[n] Tuesday 27 August 2019.” (Email

(Doc. 28-3) at 2.)

In this attempt to pivot to Dr. Blank’s email acknowledging

that he signed receipt for the complaint, Plaintiff simply

ignores the patent shortcomings in her service documents — most

prominently, that although Plaintiff’s counsel avers that

service was received by Walter Rogers, RSNA’s then-registered

agent, the signed return receipt Plaintiff filed shows a “Robert

Stephens” as signing for delivery. (Aff. of Service by Mail

(Doc. 7).) RSNA claims, and Plaintiff has not argued otherwise,

that “Mr. Stephens has no connection or affiliation with RSNA.”

(Blank Decl. (Doc. 28) ¶ 8.) Plaintiff’s silence on this issue

seems to be a practical concession that her service documents

are defective.

Plaintiff’s attempt to rehabilitate the legitimacy of her

service on RSNA is insufficient to undermine the existence of

RSNA’s meritorious service of process defense because, at this

juncture, RSNA need not prove that its proffered meritorious

defense is more likely than not. J & J Sports Prods., 2013 WL

5960859, at *2. Rather, RSNA must merely tender a colorable

defense that has “some possibility” of ultimate success.

Augusta, 843 F.2d at 812. RSNA has met that low bar, and thus

this factor weighs in favor of setting aside the entry of

default.3

B. Whether Defendant Acted with Reasonable Promptness

“As to the second factor, whether a party has taken

reasonably prompt action to set aside an entry of default ‘must

be gauged in light of the facts and circumstances of each

occasion.’” Superior Performers, Inc. v. Thornton, No. 1:20-cv-

00123, 2020 WL 6060978, at *3 (M.D.N.C. Oct. 14, 2020) (quoting

Moradi, 673 F.2d at 727).

Here, Plaintiff does not appear to contest that RSNA acted

with reasonable promptness to set aside the entry of default.

Therefore, this court is inclined to accept RSNA’s assertions

that it acted reasonably promptly. (RSNA’s Br. (Doc. 27) at 10-

12.) RSNA claims that due to Plaintiff improperly serving the

motion for entry of default on the wrong address, RSNA was not

3 Because this court finds that RSNA has a meritorious

service of process defense, it need not comment on whether

RSNA’s other would-be defenses — such as that on Eleventh

Amendment grounds, (RSNA’s Br. (Doc. 27) at 6-7), — also have

merit.

notified about the matter until co-defendants’ counsel sent a

letter notifying RSNA of the default “as a matter of

professional courtesy.” (Id. at 11; Blank Decl. (Doc. 28) ¶¶ 17-

18; Ex. 5 (Doc. 28-5).) This letter was received on May 23,

2021, (Blank Decl. (Doc. 28) ¶ 19), about two and a half weeks

after the entry of default had been issued, (Doc. 19). The day

after receiving the letter, RSNA emailed Plaintiff’s counsel and

expressed concern about not being notified that an entry of

default was pending. (Ex. 6 (Doc. 28-6).) Plaintiff’s counsel

did not respond. (Blank Decl. (Doc. 28) ¶ 21.) Two days later,

RSNA engaged counsel. (Id. ¶ 22.) RSNA’s counsel then filed the

instant Motion to Set Aside Entry of Default on June 10, 2021.

(Doc. 26.) This was just over a month after the default had been

entered and within three weeks of RSNA learning of it.

Given these circumstances, and that Plaintiff has not

argued otherwise, this court concludes that RSNA acted

reasonably promptly to set aside the entry of default.

Therefore, this factor weighs in favor of setting the default

aside.

C. Personal Responsibility of the Defaulting Party

“[I]n determining the responsibility of the party for the

default, the Fourth Circuit focuses on the source of the

default.” Superior Performers, 2020 WL 6060978, at *3. “[W]here

the party’s own action or inaction [as opposed to the conduct of

its attorney] is the source of the default, this factor weighs

against setting aside entry of default,” id. (citation omitted),

and that “party must adequately defend its conduct in order to

show excusable neglect,” Carter, 2017 WL 4043751, at *3

(internal quotation marks omitted) (quoting Augusta, 843 F.2d at

811 (discussing factor in context of relief from default

judgment under Rule 60(b))).

RSNA defends its conduct, pointing to Dr. Blank’s August

29, 2019 email to Plaintiff’s counsel as evidence of responsible

behavior. (RSNA’s Br. (Doc. 27) at 9-10.) In that email, Dr.

Blank explains that “the Raleigh nurse anesthesia program has

been subsumed into University of North Carolina-Greensboro’s

School of Nursing,” and asks whether in light of that, he, as

RSNA’s Board President, needs to do anything. (Email (Doc. 28-3)

at 2-3.) Plaintiff’s counsel never responded. (Blank Decl.

(Doc. 28) ¶ 13.) “Having not heard from Plaintiff’s counsel and

lacking other direction, Dr. Blank thought RSNA need not respond

to the complaint.” (RSNA’s Br. (Doc. 27) at 10; accord Blank

Decl. (Doc. 28) ¶¶ 14-15.) RSNA argues that Dr. Blank’s actions

here show that “RSNA acted responsibly” because it had tried to

“understand what action would be needed, if any, to address the

complaint.” (RSNA’s Br. (Doc. 27) at 10.)

This court disagrees. While Dr. Blank’s confusion was

seemingly sincere — and perhaps understandable given the recent

subsuming of RSNA into UNC-G and that he had received the

complaint from UNC-G personnel, (Blank Decl. (Doc. 28) ¶¶ 4, 9),

— he nevertheless acted irresponsibly by not independently

confirming that there was nothing further required of RSNA. It

was unreasonable to simply assume that the lack of response from

opposing counsel somehow meant that no action was required. At a

minimum, Dr. Blank should have done something to verify this

incorrect assumption. His failure to do so means RSNA bears

personal responsibility for the default, and thus this factor

weighs against setting the default entry aside. But importantly,

that this factor weighs in that direction “does not require

denying [RSNA]’s motion to vacate the entry of default[,]”

Carter, 2017 WL 4043751, at *4, especially where, as here, all

other factors weigh in RSNA’s favor.

D. Prejudice to the Plaintiff

“In the context of a motion to set aside an entry of

default . . . delay in and of itself does not constitute

prejudice to the opposing party.” Colleton, 616 F.3d at 418

(citation omitted). “[N]o prejudice accrues from ‘los[ing] a

quick [default-based] victory[.]’” United States v. Manriques,

Nos. 1:10CR440-1, 1:13CV444, 2013 WL 5592191, at *5 (M.D.N.C.

Oct. 10, 2013) (alterations in original) (quoting Augusta, 843

F.2d at 812), report and recommendation adopted, No. 1:10CR440-1

(M.D.N.C. Dec. 31, 2013). Rather, prejudice accrues when

evidentiary issues arise, like that of “[a] missing witness in

the case whose testimony was made unavailable by the delay,

. . . any records made unavailable by the delay, . . . [or] any

evidence for the plaintiff which could have been presented

earlier, the presentation of which was prevented by the delay.”

Lolatchy v. Arthur Murray, Inc., 816 F.2d 951, 952 (4th Cir.

1987).

Here, Plaintiff does not argue that she is prejudiced on

any evidentiary grounds, instead arguing more generally that she

is prejudiced by RSNA’s delay. (Pl.’s Opp’n Br. (Doc. 37) at 7

(stressing the prejudice caused by RSNA letting the case “sit

for nearly twenty-two months” given that “cases already take

considerable time to be resolved through the court system”).)

For purposes of setting aside a default entry, delay alone is

not cognizable prejudice, Colleton, 616 F.3d at 417, and,

therefore, this factor weighs in RSNA’s favor.

E. History of Dilatory Action

“As to the fifth factor, the Fourth Circuit generally

examines a party’s ‘history of dilatory action’ apart from the

delay causing the default itself.” Superior Performers, 2020 WL

6060978, at *3 (citation omitted). Plaintiff argues that Dr.

Blank’s declaration and RSNA’s North Carolina Secretary of State

filings contain conflicting statements, which “demonstrates a

history of RSNA’s dilatory attention to the details of attending

to its affairs and this case.” (Pl.’s Opp’n Br. (Doc. 37) at 6-

7.)

For three reasons, this court disagrees that these

statements establish that RSNA has a history of dilatory action.

First, it is far from clear that the statements Plaintiff

identifies actually conflict with one another. Second, even if

they do conflict, Plaintiff has failed to explain how that

constitutes “dilatory action,” as opposed to mere carelessness.

Third, even if the statements conflict and constitute dilatory

action, Plaintiff has not explained how such dilatory action is

separate and “apart from the delay causing the default itself.”

Superior Performers, 2020 WL 6060978, at *3 (citation omitted).

Therefore, this factor weighs in favor of setting aside the

default entry.

F. Availability of Sanctions Less Drastic

RSNA argues that sanctions less drastic than entry of

default are available. (RSNA’s Br. (Doc. 27) at 13.) This has

not been disputed by Plaintiff, (see Doc. 40 at 3), and “[a]s

such, the sixth factor weighs in favor of setting aside entry of

default.” Superior Performers, 2020 WL 6060978, at *3.

Iv. CONCLUSION

Finding that, on balance, the applicable factors weigh in

favor of setting aside the entry of default, IT IS HEREBY ORDERED

that the Motion to Set Aside Entry of Default, (Doc. 26), is

GRANTED .

IT IS FURTHER ORDERED that Defendant RSNA shall answer or

otherwise respond to the Complaint, (Doc. 1), within ten (10)

days of the entry of this Memorandum Opinion and Order.

IT IS FURTHER ORDERED that Defendant RSNA shall prepare to

immediately join in discovery consistent with the Scheduling

Order. (See Doc. 43 FT 4.)

This the 12th day of January, 2022.

*

Lb Ak L. Maher.

‘United States District Ju

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