The opinion
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
Natalie Elaine Woods Bey and )
Clifton Boyd Woods Bey, )
)
Plaintiffs, )
)
vs. ) Civil Action No.: 1:21-01079-STA-jay
)
Ally Bank, Jeffrey Brown, CEO, Jennifer )
LaClair, CFO, Douglas Timmerman, PAF, )
David P. Shevsky, CRO, )
)
Defendants. )
REPORT AND RECOMMENDATION
Before the Magistrate Judge is Plaintiffs’ Motion for Clerk’s Entry of Default [D.E. 15].
Defendants have responded in opposition [D.E. 17]. After a review of the pleadings, the Magistrate
Judge recommends that Plaintiffs’ Motion be denied.
Plaintiffs filed their Complaint on May 24, 2021 and served their Complaint on Defendants
on June 17, 2021. On July 6, 2021, Defendants moved for additional time to respond to the
Complaint, which was granted [D.E. 8, 9]. On July 29, 2021, Defendants filed a Motion to Dismiss
and a Memorandum in Support of their motion. [D.E. 10 and 11]. Thereafter, Plaintiffs moved for
a clerk’s entry of default on August 16, 2021, which the Clerk denied the same day based on
Defendants’ July 29, 2021, pleading.
On August 30, 2021, Plaintiffs filed an objection to the Clerk’s Order and refiled their
Motion for Entry of Default. [D.E. 14, 15]. Defendants state that after Plaintiffs’ most recent filing
and further investigation, Defendants erred in not effectively serving the Motion to Dismiss on
Plaintiffs [D.E. 17 at 2]. These documents were timely electronically filed with the Court’s system
but not served by mail as required in this case. Defendants maintain that at the time of filing,
counsel was not aware the Plaintiffs were not registered to receive copies of filings electronically.
Defendants affirm that they have corrected their error, mailing a copy of the documents by certified
mail on September 10, 2021. Id. Defendants ask the Court to deny Plaintiffs’ motion for an entry
of default and grant Plaintiffs an additional 21 days to respond to the Motion to Dismiss [D.E. 17
at 4-5].
Defendants take the position that the Court should deny Plaintiffs’ Motion for Entry of
Default, despite the clerical error, in the interest of the law’s preference for a resolution of the case
on the merits. A denial of Plaintiffs’ Motion for Entry of Default will avoid unnecessary motion
practice. The Magistrate Judge agrees with Defendants that if a default were granted, Defendants
would have sufficient grounds to prevail on a motion to set aside the default. Plaintiffs would not
be prejudiced by the setting aside of the default, as there would only be a minor delay in advancing
the case, which is insufficient to constitute prejudice. See Hooker v. Hooker, No. CIV. 11-2252-
JTF-TMP, 2014 WL 4718193, at *4 (W.D. Tenn. July 9, 2014), report and recommendation
adopted, No. 2:11-CV-02252-JTF, 2014 WL 4716436 (W.D. Tenn. Sept. 22, 2014) (quoting
Krowtoh II LLC v. ExCelsius Int'l Ltd., 330 F. App'x 530, 535 (6th Cir.2009)). Second, Defendants
correctly argue that the Motion to Dismiss itself is evidence that they have a “meritorious defense”
as defined by the case law, which states that if “there is some possibility that the outcome of the
suit after a full trial will be contrary to the result achieved by the default,” then the defense is
meritorious. See United States v. $22,050.00 U.S. Currency, 595 F.3d 318, 326 (6th Cir.2010)
(holding that a defendant is not required to show that its defense is likely to succeed on the merits
or offer detailed factual allegations in support of the defense). Third, the Magistrate Judge agrees
with Defendants’ argument that their mistake in failing to serve their motion and memorandum by
mail does not rise to the level of culpability to sustain a default. “[M]ere negligence or failure to
act reasonably is not enough to sustain a default.” $22,050.00 U.S. Currency, 595 F.3d at 194. See
also Thompson v. Am. Home Assur. Co., 95 F.3d 429, 433 (6th Cir.1996).
In conclusion, Plaintiffs were not effectively served with a copy of Defendants’ Motion to
Dismiss and Memorandum in Support even though these documents were filed with the Court on
the deadline to respond to the Complaint. However, given that the mistake was a clerical error and
that the mistake in filing has now been remedied, the Magistrate Judge recommends that this Court
deny Plaintiffs’ Motion for Entry of Default. The Magistrate Judge further recommends that
Plaintiffs be given an extension of time of 21 days to respond to the Motion to Dismiss.
Respectfully Submitted this 28th day of September, 2021.
s/Jon A. York
UNITED STATES MAGISTRATE JUDGE
ANY OBJECTIONS OR EXCEPTIONS TO THIS REPORT AND RECOMMENDATION
MUST BE FILED WITHIN FOURTEEN (14) DAYS AFTER BEING SERVED WITH A
COPY OF THE REPORT AND RECOMMENDATION. 28 U.S.C. § 636(b)(1). FAILURE
TO FILE THEM WITHIN FOURTEEN (14) DAYS MAY CONSTITUTE A WAIVER OF
OBJECTIONS, EXCEPTIONS, AND ANY FURTHER APPEAL.