Iantosca v. Elie Tahari, Ltd.

Background

Elie Tahari Ltd. moved to vacate a default judgment entered on December 12, 2019. The opinion states that the company had repeatedly filed papers late, requested last-minute extensions, or failed to submit documents, and that its filings routinely did not meet the court’s expected standards. The case had later been reassigned to Judge Mary Kay Vyskocil.

Standard for setting aside the default judgment

The court explained that Federal Rules of Civil Procedure 55(c) and 60(b) allow a court to set aside a default or default judgment for “good cause.” The Second Circuit’s three relevant considerations are whether the default was willful, whether setting it aside would prejudice the opposing party, and whether the defendant has presented a meritorious defense. Because the default here was administrative only, the court stated that the standard was more forgiving.

Elie Tahari Ltd. attributed its repeated failures to inadvertence and excusable neglect. The court found that the failures were negligent but did not rise to the level of willfulness, given the limited period during which the case had been before Judge Vyskocil. Mark Iantosca did not claim that setting aside the judgment would prejudice him and consented to the request. The court also found that Elie Tahari Ltd. had presented the minimum showing of a meritorious defense—meaning evidence that, if proven at trial, would constitute a complete defense.

Request to file a late dismissal motion

Elie Tahari Ltd. also asked for permission to file a motion to dismiss. Its counsel allegedly realized on November 22, 2019, that the motion had not been filed by the July 10, 2019 deadline in the Civil Case Management Plan. Iantosca objected. The company had previously sought the same relief from Judge Rakoff, who entered the default judgment after that request was not granted.

Judge Vyskocil stated that the preference for resolving disputes on their merits supported vacating the default judgment, but rejected the request to file a motion to dismiss eight months late, after discovery had closed and summary-judgment briefing had occurred. The court described that request as unpersuasive and abusive.

Ruling

The court ordered that the motion to vacate the default judgment was granted in part and denied in part. The request to vacate the default judgment was granted. The request to file an untimely motion to dismiss was denied.

The court also addressed Iantosca’s pending motion for summary judgment, to which no opposition had been filed. Elie Tahari Ltd. was permitted to file a brief opposing that motion by June 2, 2020. The court stated that this would be the company’s final opportunity and that no further extensions would be granted without a showing of good cause. If no opposition were filed by that date, the court stated that Iantosca’s summary-judgment motion would be treated as unopposed.