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March 3, 2003


The opinion of the court was delivered by: I. Leo Glasser, United States District Judge



Defendant Lushena Books ("Lushena") moves pursuant to Federal Rule of Civil Procedure 60 for an order vacating a default judgment entered against it on or about July 28, 2002. No such judgment is noted on the docket, but a default under Rule 55 was entered on July 28, 1999, and it is this entry to which Lushena refers. Plaintiff Gumbs & Thomas Publishers, Inc. ("Gumbs & Thomas") opposes the motion on the grounds that Lushena willfully ignored service of the complaint and entry of default for more than three years, that Lushena presents no meritorious defense, and that plaintiff will suffer substantial hardship caused by the likelihood of inadvertent or intentional destruction of evidence in the intervening years since the Complaint was filed.

Lushena's motion is denied for the reasons stated below.


Gumbs & Thomas is the publisher of the book Kwanzaa: Everything You Always Wanted to Know But Didn't Know Where to Ask ("Kwanzaa"). After sending cease and desist letters, Gumbs & Thomas filed the complaint in this action on June 24, 1999, claiming that Lushena and others had violated the copyright of Kwanzaa by reproducing and selling infringing copies. According to the sworn affidavit of the process server, service of summons and complaint was effected on July 16, 1999, by personal service upon Luther Warner, the manager for Lushena. at its offices in Chicago, Illinois. (See Gorrin Aff., Ex. A.)

Warner states that he called counsel for plaintiff and asked for proof of the allegations in the complaint. (Warner Aff., ¶ 8.) Warner did not hear back from plaintiff's counsel subsequent to that phone call. (Id.) Warner only later learned that Gumbs & Thomas entered a default and "filed the second action." (Id., ¶ 9.) According to counsel at oral argument. Gumbs & Thomas filed a separate infringement action in 2002 related to two other works.

On or around July 16, 1999, Jeffery Gorrin, Esq., the attorney for Gumbs & Thomas. spoke with Warner. (Gorrin Aff., ¶ 7.) According to Gorrin. Warner stated that the only copies of Kwanzaa were part of a print run shared by Gumbs & Thomas and Lushena. to which Gorrin replied that the infringing copies were from another print run and could be distinguished by certain physical characteristics, such as the cover's moray pattern and typeface. (Id.) Gorrin urged Warner to retain an attorney and to file an answer, and offered no assurances that Lushena need not take further action.*fn1 (Id.) Robert Gumbs. the President of Gumbs & Thomas, states that he spoke with Warner once regarding the case, but merely told Warner to speak with Gumbs & Thomas's attorney.

After the default was entered. Gorrin served a copy of the default entry on Lushena. (Id. ¶ 9.) On November 28, 2000, Warner again called him, and Gorrin explained that a default had been entered and that if the default persisted. a judgment would eventually be entered against Lushena. (Id., ¶ 10.) Gorrin states that Warner expressed disdain for the legal process and challenged Gorrin to collect on any judgment. (Id.)


I. Standard for Vacating Defaults

Rule 55(c) permits a court to set aside an entry of default "for good cause shown." Fed. R. Civ. P. 55(c). Three criteria are analyzed to determine whether to set aside an entry of default: whether the default was willful. whether the moving party has presented a meritorious defense. and whether setting aside the default would prejudice the party who secured the entry of default. Marziliano v. Heckler, 728 F.2d 151, 156 (2d Cir. 1984). The district court must consider and balance all three factors. Commercial Bank of Kuwait v. Rafidain Bank, 15 F.3d 238, 243 (2d Cir. 1994).

By comparison, if a judgment is entered after default. then it may be set aside "in accordance with Rule 60(b)." Fed.R.Civ.P. 55(c). Rule 60(b) provides numerous circumstances in which a court may relieve a party from judgment. including mistake, inadvertence, surprise, or excusable neglect (Rule 60(b)(1)); fraud, misrepresentation, or other misconduct of an adverse party (Rule 60(b)(3)); or any other reason justifying relief from the judgment (Rule 60(b)(6). Relief from a default judgment is entrusted to the sound discretion of the Court. and depends upon the circumstances of the case and the credibility and good faith of the parties. See Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). The Second Circuit has repeatedly indicated that "the preference is for the District Court to reach judgments on the merits and not by way of default judgments." Shah v. N.Y. State Dep't of Civil Serv., 168 F.3d 610, 615 (2d Cir. 1999) (citations omitted); accord Cody v. Mello, 59 F.3d 13, 15 (2d Cir. 1995). Accordingly, the courts resolve doubts in the movant's favor so that the case may be resolved, if possible, on the merits. Enron Oil, 10 F.3d at 95-96. Equitable factors that may tip the balance in favor of vacating a default judgment include whether the defaulting party was pro se and if substantial sums of money or significant rights are at stake. Id. at 97.

Although the standards for Rule 55(c) and 60(b) motions are comparable, a "motion to vacate a default is subject to a less rigorous standard than applies to a Rule 60(b) motion to vacate a default judgment." American Airlines Ins. Co., Ltd v. Eagle Ins. Co., 92 F.3d 57, 59 (2d Cir. 1996); accord Shepard Claims Service, Inc. v. William Darrah & Assocs., 796 F.2d 190, 193 (6th Cir. 1986) ("In practice a somewhat more lenient standard is applied to Rule 55(c) motions where there has only been an entry of default than to Rule 60(b) motions where judgment has been entered."); Chrysler Credit Corp. v. Macino, 710 F.2d 363, 368 (7th ...

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