Gerasymenko v. Symbion Power Services U.S., Inc.
- Subramanian
- 1:23-cv-05612
- U.S. District Court · Southern District of New York
- 2
In Gerasymenko v. Symbion Power, Judge Subramanian granted the Chelsea Defendants’ motion to set aside their default.
The ruling directly affects R.W. Chelsea Holdings Ltd. and R.W. Chelsea Energie Ltd., whose Clerk’s Certificate of Default was set aside. It also affects Liubym Gerasymenko because the case will proceed against those defendants rather than remaining subject to that default.
What happened
In Gerasymenko v. Symbion Power Services U.S., Inc., two defendants called the Chelsea Defendants were served with the complaint, but a clerk later entered a default against them after they did not appear. They appeared for the first time and asked the court to set aside that default, saying they had not been properly served and did not know about the lawsuit.
The court considered whether the defendants’ failure to appear was willful, whether they had potentially valid defenses, and whether setting aside the default would unfairly harm the plaintiff. The court found that all three considerations favored the Chelsea Defendants, noting their prompt response after learning about the case, their possible service and personal-jurisdiction defenses, and the lack of specific prejudice to the plaintiff from the delay.
Judge Subramanian granted the motion to set aside the Clerk’s Certificate of Default. The Chelsea Defendants must answer, move to dismiss, or otherwise respond to the complaint by October 11, 2023, and the clerk was directed to terminate the motion docket entry.
The detailed version
- Gerasymenko v. Symbion Power Services U.S., Inc. · No. 1:23-cv-05612
- Subramanian
- Sept. 18, 2023
Background
Liubym Gerasymenko filed the complaint on June 30, 2023. According to proofs of service filed with the court, R.W. Chelsea Holdings Ltd. and R.W. Chelsea Energie Ltd. (collectively, the “Chelsea Defendants”) were served on July 19, 2023. After they did not appear, the clerk entered a Certificate of Default against them on August 28, 2023.
The Chelsea Defendants appeared on September 15, 2023, and asked the court to set aside the Clerk’s Certificate of Default. They argued that service had not been properly completed and that they did not have notice of the lawsuit.
Legal standard
Federal Rule of Civil Procedure 55(c) allows a court to set aside an entry of default for “good cause.” The court applied three factors identified by the U.S. Court of Appeals for the Second Circuit: whether the default was willful, whether the defaulting party has a potentially valid defense, and whether setting aside the default would prejudice the party that did not default.
Court’s analysis
The court found that all three factors favored setting aside the default. First, the Chelsea Defendants said they were previously unaware of the complaint and promptly hired counsel after learning about the lawsuit. The court treated this conduct as not showing the kind of intentional or seriously improper failure to respond that would make the default willful.
Second, the court found that the Chelsea Defendants had identified potentially valid defenses, including improper service and the court’s lack of personal jurisdiction over them. Third, although the default process had caused some delay, the court stated that delay alone was not enough to establish prejudice. The court found no evidence that the delay would cause the loss of evidence, create a greater opportunity for fraud or collusion, or otherwise cause specific prejudice, particularly because the case had been pending for less than three months.
Ruling and next steps
The court found good cause and granted the Chelsea Defendants’ motion to set aside the Clerk’s Certificate of Default. The defendants were ordered to answer, move to dismiss, or otherwise respond to the complaint by October 11, 2023. The court stated that no extensions of that deadline would be granted and directed the clerk to terminate Docket No. 41.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.