Liu v. Rajacic
- Lorna Schofield
- 1:22-cv-00379
- U.S. District Court · Southern District of New York
- 3
In Liu v. Rajacic, Judge Schofield vacated defaults, granted mediation, and set deadlines for disclosures, amendment, and a motion to dismiss.
The order affected Liu, Michelle Rajacic, Defendant 142 East 33rd Street Realty Corp., and the other defendants whose certificates of default were set aside and vacated. It also set obligations and deadlines for Liu, Rajacic, and 142 East.
What happened
In Liu v. Rajacic, certificates of default had been entered against the defendants, and Liu later sought a default judgment. Defendant 142 East 33rd Street Realty Corp. moved to vacate the default, while counsel for Michelle Rajacic made an oral request to do the same.
The court found that the defendants intended to participate but had faced confusion and difficulties obtaining counsel. It also found that they had potentially valid defenses and that Liu would not be harmed by setting aside the defaults at this early stage. The court also addressed mediation, disclosures, a possible amended complaint, and briefing for 142 East’s planned motion to dismiss.
Judge Schofield ordered that the certificates of default be set aside and vacated. She granted Liu’s and Rajacic’s request for referral to mediation, ordered Liu and Rajacic to exchange specified materials, set deadlines for any amended complaint and the motion-to-dismiss briefing, and stayed other discovery while that motion and mediation were pending.
The detailed version
- Liu v. Rajacic · No. 1:22-cv-00379
- Lorna Schofield
- July 21, 2022
Background
The Clerk of Court entered certificates of default against the defendants on March 7 and March 16, 2022. Liu then filed a motion for default judgment and supporting papers. The court issued an order requiring the defendants to explain why default judgment should not be entered.
Defendant 142 East 33rd Street Realty Corp. filed a motion to vacate the default. At a July 20 show-cause hearing, counsel for Defendant Michelle Rajacic made an oral motion to set aside the default.
Rulings on Default
Under Federal Rule of Civil Procedure 55(c), a court may set aside an entry of default for good cause. The court considers whether the default was willful, whether setting it aside would prejudice the opposing party, and whether the defendant has a meritorious defense, meaning a potentially valid defense.
The court found good cause. It found that the defendants intended to participate in the case but did not timely obtain representation because of confusion and difficulties relating to retaining counsel. The court also found that the defendants presented meritorious defenses and that Liu would not be prejudiced at this early stage.
The court therefore ordered that the certificates of default be set aside and vacated. The opinion does not state that the court ruled on Liu’s motion for default judgment itself.
Other Case-Management Orders
The court granted Liu’s and Rajacic’s oral application for referral to the court’s mediation program and stated that a separate referral order would issue.
By July 26, 2022, Rajacic and Liu were ordered to exchange initial disclosures, including any surveillance video depicting the events described in the complaint and text messages exchanged between them. Liu was permitted to file an amended complaint by August 3, 2022.
The court set a briefing schedule for 142 East’s motion to dismiss: 142 East’s motion and memorandum by August 26, Liu’s opposition by September 16, and any reply by September 28. The filings were subject to page limits and the court’s Individual Rules.
Except for the required exchange of materials, discovery was stayed while 142 East’s motion to dismiss and mediation between Rajacic and Liu were pending.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.