Saidnia v. Nimbus Mining LLC

Background

Tiffany Saidnia sued Nimbus Mining LLC, Remy Jacobson, Greg Bachrach, and Jean-Marc Jacobson. The court had previously denied a motion to dismiss the amended complaint and directed the defendants to answer. Greg Bachrach filed an answer, but Remy Jacobson and Jean-Marc Jacobson did not answer by the extended December 7, 2023 deadline.

Their prior counsel moved to withdraw shortly before the deadline. The court later granted that request. Saidnia then requested a Clerk’s Certificate of Default, which the Clerk entered on December 22, 2023. A certificate of default is a formal entry recognizing that a party failed to respond on time. Saidnia subsequently moved for default judgment, which would have allowed her to seek judgment without a normal defense from those defendants. Remy Jacobson and Jean-Marc Jacobson moved to vacate, or remove, the certificate of default.

Legal standard

Because no default judgment had yet been entered, the court applied Federal Rule of Civil Procedure 55(c)’s “good cause” standard. The court considered whether the failure to answer was willful, whether removing the default would prejudice Saidnia, and whether the defendants had a meritorious defense. A meritorious defense at this stage means facts that, if proven at trial, could completely defeat a claim; the defendants did not have to prove that the defense would ultimately succeed.

The Second Circuit generally favors resolving disputes on their merits rather than by default. The court therefore resolved doubts in favor of the defendants seeking relief.

Court’s analysis

Willfulness. The court found that the defendants did not deliberately choose to default. They had actively defended the case by filing a motion to dismiss and participating in settlement discussions. They said they mistakenly believed prior counsel would seek more time to respond and that the answer deadline would be paused while prior counsel’s withdrawal was pending. The court credited those explanations. It also emphasized that current counsel acted quickly after learning about the default and sought to address it promptly.

Prejudice. Saidnia argued that delay would let the defendants take advantage of changes in Bitcoin’s value. The court rejected that argument as speculative and insufficient. It noted that Saidnia’s amended complaint sought 30.39129 Bitcoins and that, if she ultimately prevailed and received damages rather than the Bitcoins themselves, the calculation might depend on the value at the time of the alleged breach. The court concluded that the claimed delay did not establish the required prejudice.

Meritorious defense. The defendants’ proposed answer contained twenty-eight affirmative defenses that the court found potentially viable. As to Saidnia’s second claim, concerning an alleged promise involving 30.39129 Bitcoins, the defendants denied the allegations and argued that they were not parties to the alleged promise and did not direct the promisor to make it. They also argued that no enforceable contract existed because there was no consideration. The court found that, if proven at trial, these positions could completely defeat that claim.

Disposition

The court concluded that Remy Jacobson and Jean-Marc Jacobson had established good cause under Rule 55(c). It granted their motion to vacate the Clerk’s Certificate of Default and denied Saidnia’s motion for default judgment. The Clerk was directed to terminate the two pending motions. The opinion did not decide liability or the merits of Saidnia’s underlying claims.