Company vacates entry of default in FMLA suit

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Where a change in a company’s legal department resulted in it failing to timely respond to a complaint alleging it violated the Family and Medical Leave Act, but the company acted the same day it was apprised of the entry of default, its motion to vacate entry of default was granted.

Background

On May 22, 2023, Joshua Head filed a complaint against his prior employer, Modine Manufacturing Company. Plaintiff claimed that Modine violated the Family and Medical Leave Act, or FMLA, when it denied plaintiff’s request for leave on the basis that he lacked sufficient months of service to qualify for FMLA’s protections.

Modine did not answer or otherwise respond to the complaint within 21 days after being served with the summons and complaint, i.e., by June 23, 2023, as required. On Aug. 1, 2023, plaintiff filed a motion for entry of default against Modine. The next day (August 2), the clerk entered entry of default against Modine.

On Aug. 7, 2023, the court entered an oral order, noting that the clerk’s entry of default had been entered against Modine, and directing plaintiff to file any motion for default judgment within 30 days. Two days later, plaintiff filed a motion for default judgment against Modine. The next day (August 10), counsel for Modine entered notices of appearance, and the day after (August 11), Modine filed a motion to set aside the default.

Analysis

A court should 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.”

Diligence

Modine has acted with reasonable promptness and diligence in seeking to set aside the default. Modine’s counsel filed a motion to set aside the default a mere nine days after the clerk entered default against Modine, and a mere two days after plaintiff moved for default judgment.

Moreover, the undisputed evidence is that Modine actually discovered this suit against it on August 9, and that day engaged counsel, who entered their appearance the following day and moved to set aside the default two days later. The Fourth Circuit and courts within the circuit have found that defendants acted reasonably promptly when they have sought to vacate entry of default after similar delays.

Prejudice

In this context, “delay in and of itself does not constitute prejudice to the opposing party,” and “the issue is one of prejudice to the adversary, not merely the existence of delay.” Plaintiff does not argue that the delay caused by Modine’s default would prejudice it in any of these ways.

Again, there was a nine-day delay after default was entered until Modine moved to set aside the default, and a 40-day delay between when the answer should have been filed and when default was entered. The record does not demonstrate that plaintiff has been prejudiced on account of this modest delay in timely response.

Alternatives

Fourth, plaintiff’s position is that “no less severe sanctions are available given that Defendant is already liable for paying Plaintiff’s attorney’s fees under the FMLA.” The court disagrees. Modine is not liable yet for any attorney’s fees. No judgment has been entered. The case is at its most preliminary stage, and no dispositive motions have been filed, much less ruled upon. In addition, no lesser sanctions have been attempted and failed. Indeed, the court concludes that lesser sanctions are unwarranted in this case based on the record before the court at this time.

Responsibility

Fifth, the delay and failure to timely respond was occasioned by a change in Modine’s legal department. However, once Modine was apprised of the filing, it acted the same day. And, in light of the Fourth Circuit’s “strong preference that, as a general matter, defaults be avoided,” this factor is of limited significance in this case and weighs only slightly against vacating entry of default.

Meritorious defense

Modine has not offered merely a legal conclusion that it is not liable under the FMLA, but further stated that it terminated plaintiff for a nondiscriminatory and nonretaliatory reason, namely, “violation of the Company’s attendance policy.” Moreover, Modine has articulated numerous defenses it anticipates raising as to the damages plaintiff seek.

Defendant’s motion to vacate entry of default granted. Plaintiff’s motion for entry of default judgment denied as moot.

Head v. Modine Manufacturing Company, Case No. 6:23-cv-00029, Aug. 17, 2023. WDVA at Lynchburg (Moon). VLW 023-3-482. 8 pp.