move to vacate the default judgment. Id. at 2-3.
Six weeks later, defendant moved to vacate the default judgment by Order to Show Cause. Plaintiff's counsel apparently misread these papers and failed to appear--an ironic turn of events, given their present resistance to defendant's claims of neglect--and the Court vacated the judgment on February 22, 1991. The Court is now asked to vacate that vacatur itself, thus reinstating the original default judgment.
Applying the three-part test, I decline to reinstate the default judgment because there is no evidence that BCA's default was willful. It is true that both BCA's general and local counsel failed to file a timely answer and apparently also failed, at least initially, to determine the plaintiff's method of service. The defendant suggests that it was thus confused as to the amount of time it had to respond.
Most troublesome is BCA's delay in waiting six weeks before moving to set aside the default. One would, and should, expect more prompt action from attorneys whose client had just been defaulted for more than $ 100,000.00. BCA does not account for this delinquency nor even acknowledge that it should have acted with more urgency. This is a glaring omission. When plaintiff characterizes BCA's conduct on this score as "remarkable," it does not overstate the case.
Nevertheless, while BCA's actions are to be condemned as inattentive and negligent, the Court is not prepared to call the default "willful." BCA certainly did not act with dispatch at any stage of this case. When deciding whether to hold a defendant in default, however, the standard the Court must apply is not carelessness, but willfulness. I am not prepared to say that BCA committed a willful default, particularly given the admonition that "all doubts should be resolved in favor of those seeking relief under Rules 55(c) and 60(b)." Davis, supra, at 915 (citations omitted).
The second prong of the test, the existence of a meritorious defense, also works in BCA's favor. While the plaintiff has sued BCA for failure to pay, BCA alleges that BWS breached the contract by delivering the bicycle frames late and by delivering defective goods. The defendant's evidence includes letters expressing BCA's dissatisfaction with the frames, and pleas for replacement parts. Order to Show Cause, Exhibits E and F. These records are dated months before BWS initiated its suit. Id. while it cannot now be said that the plaintiff actually breached the contract, defendant has made a sufficient showing of a meritorious defense to justify further proceedings. No other conclusion is possible considering that "a defendant seeking to vacate a default judgment need not conclusively establish the validity of the defense(s) asserted. . . ." Davis, supra, at 916.
As for the third prong of the test, plaintiff does not contend that it would be substantially prejudiced if the default judgment remained vacated, nor do I detect any reason why BWS could make such a claim. Some delay, to be sure, has resulted from the Court vacating the default judgment. But the delay caused by reopening a judgment does not itself constitute prejudice. Id. Rather. it must be shown that delay will "result in the loss of evidence, create increased difficulties of discovery, or provide greater opportunity for fraud and collusion." Id. (citing C. Wright, A. Miller and M. Kane, 10 Federal Practice and Procedure: Civil, § 2699, at 536-37 (1983)); see also Kumar v. Ford, 111 F.R.D. 34, 39 (S.D.N.Y. 1986). Plaintiff has made no such claim here. Accordingly, BWS has failed to show that it would be prejudiced.
Because the defendant's default was not clearly willful, the defendant has a potentially meritorious defense and there is no prejudice to the plaintiff, the motion to vacate the vacatur of default judgment is denied. But because BCA's negligence was the cause of the entry of default in this case, BCA must bear the costs incurred because of the default. See, e.g., Pro Tect Management Corp. v. Worley, No. 89 Civ. 3026, 1991 WL 190582, at *4 (S.D.N.Y. Sept. 18, 1991); Kumar, supra, at 39; Roundball Enterprises, Inc. v. Richardson, 99 F.R.D. 174, 177 (S.D.N.Y. 1983); see also F.R.Civ.P. 60(b) (authorizing relief "upon such terms as are just.").
Defendant has moved to transfer this case to the Eastern District of Pennsylvania. Under 28 U.S.C. § 1404, the Court has the power to transfer the case if it would be in the interest of justice.
While plaintiff's choice of venue is usually accorded substantial weight in assessing a defendant's motion to transfer, it is given less weight when the facts giving rise to the litigation bear little connection to the chosen forum. E.g., Arrow Electronics, Inc. v. Ducommun Inc., 724 F. Supp. 264, 265 (S.D.N.Y. 1989); Nieves v. American Airlines, 700 F. Supp. 769, 772 (S.D.N.Y. 1988). Such is the situation in the case at bar.
The most significant factor to be considered by a court contemplating transfer is the convenience of the party and nonparty witnesses. Nieves, supra, at 772. The contract at issue in this case was negotiated at BCA's headquarters in Bethlehem, Pennsylvania. The bicycle parts delivered by BWS are now housed at BCA's warehouse in Pennsylvania. The essential witnesses either reside in Pennsylvania or at BWS headquarters in Mexico. Given these facts, it would be more convenient and less costly for the case to be tried in Pennsylvania. Defendant's motion to transfer is therefore granted.
For the reasons stated above, defendant's motion to dismiss for lack of jurisdiction and improper venue is denied. Plaintiff's motion to vacate the vacatur of default is also denied, although plaintiff's motion for attorney's fees is granted. Defendant's motion to transfer the case to the Eastern District of Pennsylvania is granted. Plaintiff is directed to submit an affidavit, documentation, and statement of attorney's fees within twenty-one (21) days of the date of this order. When the Court determines the appropriate amount of those fees, the Clerk of the Court will be directed to dismiss the case and transfer it to the Eastern District of Pennsylvania.
It is SO ORDERED.
Dated: New York, New York,
January 27, 1992
CHARLES S. HAIGHT, JR.