Kurapia Inc. v. Sod and Seed Inc.

Background

Kurapia Inc. sued Sod and Seed Inc. and George Bravos for trademark infringement. The defendants did not respond to the complaint, so the Clerk of Court entered default on October 9, 2024. Kurapia then moved for default judgment, which is a judgment based on a party’s failure to respond.

The defendants later moved to set aside the entry of default under Federal Rule of Civil Procedure 55(c). Kurapia did not timely oppose those motions, so the Court ordered Kurapia to explain why it should not grant the defendants’ motions and deny Kurapia’s request for default judgment.

Why the Court Set Aside the Default

The Court applied the three-factor good-cause test: whether the defendants engaged in blameworthy conduct that caused the default, whether they had a potentially valid defense, and whether setting aside the default would unfairly harm Kurapia.

On the first factor, Kurapia argued that the defendants willfully failed to respond and did not act promptly to fix the default. The defendants said they believed the parties had agreed to extend the response deadline and that they worked toward settlement after learning about the complaint. The Court said it did not need to resolve the parties’ correspondence because simple carelessness is not enough; Kurapia had not shown the bad faith required to treat the defendants’ conduct as disqualifying.

On the defense factor, the Court found that the defendants met the relatively low burden of alleging facts that, if true, could constitute a defense. George Bravos stated that he would argue that Kurapia had not alleged that he was individually responsible for trademark infringement, a statutory violation, or other tortious conduct. The parties also disputed whether Sod and Seed’s corporate status affected the potential claims against it. The Court said that issue would be better addressed through full briefing on a motion to dismiss.

Sod and Seed also intended to deny important allegations, including that it used the website www.KurapiaDelivery.com to market and sell groundcover plants. Although the Court described portions of Sod and Seed’s proposed answer as insufficient under the usual pleading standards, it found that the specific denials concerning the central allegations were enough to satisfy the limited requirement for setting aside default.

On prejudice, Kurapia argued that it would face additional costs and delay. The Court explained that delay alone is not enough; Kurapia had to show that its ability to pursue its claims would be hindered. Kurapia did not make that showing.

Ruling

The Court found good cause to set aside the entry of default and granted Defendants’ motions to set aside entry of default. Because the case did not present the extreme circumstances required for default judgment, the Court denied Kurapia’s application for default judgment.

The defendants were given ten days from the filing of the order to file responsive pleadings or motions to the complaint. The Court did not decide the merits of Kurapia’s trademark-infringement claims.