United States District Court, D. Vermont
ENTRY ORDER GRANTING DEFENDANTS' MOTION TO SET
ASIDE ENTRY OF DEFAULT AND DENYING AS MOOT PLAINTIFF'S
CROSS-MOTION FOR DEFAULT JUDGMENT (Docs. 9 &
CHRISTINA REISS, CHIEF JUDGE UNITED STATES DISTRICT COURT
Donald Connolly brings this action against Defendants Philip
Alderman, Alderman Motor Car, LLC, and Alderman's
Automobile Corporation (collectively,
"Defendants"), alleging Defendants violated the
Vermont Fair Employment Practices Act ("VFEPA") by
allowing him to be subjected to sexual harassment (Count I);
violated the VFEPA by unlawfully retaliating against him
(Count II); negligently supervised, trained, and retained
employees (Count III); and intentionally inflicted emotional
distress on him (Count IV). On July 11, 2017, Plaintiff filed
for and obtained a Clerk's entry of default as to all
Defendants. Pending before the court are Defendants'
motion to set aside the entry of default (Doc. 9) and
Plaintiffs cross-motion for a default judgment (Doc. 11). On
October 17, 2017, after a hearing on the motions, the court
took the matter under advisement.
is represented by John D. Stasny, Esq. Defendants are
represented by F. David Harlow, Esq. and Elizabeth K.
Factual Background and Procedural History.
asserts sexual harassment, unlawful retaliation, and hostile
employment environment claims arising out of his three-year
employment at Defendants' automotive dealerships in
Vermont. Plaintiff contends that he was "subjected to
regular, graphic descriptions of [a co-worker's] sexual
interests and preferred sexual acts; sexual questions about
[Plaintiff]; stories about other employees' sex acts;
aggressive sexual advances and demands; and other sexual
harassment." (Doc. 1 at 1, ¶ 1.)
filed a complaint with the Equal Employment Opportunity
Commission ("EEOC") and in the proceedings before
the EEOC, Defendants retained Littler Mendelson P.C. to
represent them. On May 4, 2017, Plaintiff filed the Complaint
and his counsel sent waivers of the service of summons to
Defendants through Littler Mendelson P.C, who forwarded the
waivers to Defendants. On June 5, 2017, Defendant Alderman
signed a waiver of service on behalf of Defendant
Alderman's Automobile Corporation and returned it to
Plaintiffs counsel. Two days later, Plaintiffs counsel mailed
Defendant Alderman a letter asking Defendant Alderman to
forward the waivers to his attorney if he was represented,
and requesting that he sign and return waivers of service for
himself personally and on behalf of Defendant Alderman Motor
Car, LLC by June 16, 2017.
Alderman called Plaintiffs attorney upon receipt of the
letter in the mistaken belief that Plaintiffs attorney was
retained by Defendants' insurance company to represent
him. He communicated to Plaintiffs attorney his belief that
the allegations set forth in the Complaint were false. After
discovering that he was speaking with Plaintiffs attorney,
Defendant Alderman credibly represents that he believed that
his only obligation was to sign and return the waivers of
Answer was due on July 5, 2017, but they neither filed an
Answer nor requested an extension of time to do so. On July
11, 2017, Plaintiff sought and obtained a clerk's entry
of default as to all Defendants. Plaintiffs counsel sent
Defendant Alderman a copy of Plaintiff s motion for entry of
default on July 11, 2017. On July 19, 2017, Defendants
retained counsel who filed a notice of appearance on
Defendants' behalf and who attempted to obtain consent
from Plaintiffs counsel to set aside the entry of default and
allow Defendants time to respond to the Complaint. Two days
later, on July 21, 2017, Defendants' counsel filed the
motion to set aside the entry of default when consent was not
forthcoming. (Doc. 9.) On August 4, 2017, Plaintiff filed his
cross-motion for a default judgment. (Doc. 11.) In his
cross-motion, Plaintiff concedes that he does not seek a sum
Conclusions of Law and Analysis.
seek to vacate the entry of default pursuant to Federal Rule
of Civil Procedure 55(c). Although Plaintiff concedes that he
has not suffered significant prejudice, he contends
Defendants' default was willful and they lack meritorious
defenses to his VFEPA claims. Defendants counter that their
failure to answer in a timely manner was inadvertent, de
minimis, and that they have meritorious defenses to
"court may set aside an entry of default for good
cause[.]" Fed.R.Civ.P. 55(c). In determining whether
good cause exists, the Second Circuit has directed courts to
examine three factors: "(1) whether the default was
willful; (2) whether setting aside the default would
prejudice the adversary; and (3) whether a meritorious
defense is presented." Enron Oil Corp. v.
Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). Because there
is a "strong preference for resolving disputes on the
merits[, ]" New York v. Green, 420 F.3d 99, 104
(2d Cir. 2005) (internal quotation marks omitted), the Rule
55(c) standard is "lenient[.]" Meehan v.
Snow, 652 F.2d274, 277 (2d Cir. 1981). Accordingly,
"when doubt exists as to whether a default should be
granted or vacated, the doubt should be resolved in favor of
the defaulting party." Enron Oil Corp., 10 F.3d
establish a claim under VFEPA for sexual harassment and a
hostile employment environment, a plaintiff must first
"prove that the harassment was sufficiently severe or
pervasive to alter the conditions of the victim's
employment and create an abusive working environment."
Perry v. Ethan Allen, Inc., 115 F.3d 143, 149 (2d
Cir. 1997) (internal quotation marks omitted). "Second,
the plaintiff must show that a specific basis exists for
imputing the conduct that created the hostile environment to
the employer." Id. "[A]n employer will be
liable if the plaintiff demonstrates that the employer either
provided no reasonable avenue for complaint or knew of the
harassment but did nothing about it." Id.
(internal quotation marks omitted).
establish a prima facie case of retaliatory discrimination
under VFEPA, a plaintiff must show that "(1) she engaged
in a protected activity; (2) her employer was aware of that
activity; (3) she suffered adverse employment decisions; and
(4) there was a causal connection between the protected
activity and the adverse employment action."
Robertson v. Mylan Labs., Inc., 2004 VT 15, ¶
42, 176 Vt. 356, 376, 848 A.2d 310, 327-28. Once a plaintiff
establishes a prime facie case of retaliation, an employer
must "articulate some legitimate, nondiscriminatory
reason" for the adverse employment action. Hodgdon
v. Mt. Mansfield Co., 624 A.2d 1122, 1127 (Vt. 1992)
(quoting McDonnell Douglas Corp. v. Green, 411 U.S.
792, 802 (1973)).
all three factors support setting aside the clerk's entry
of default. Willfulness may be found where there is
"evidence of bad faith, " or the default arose
"from egregious or deliberate conduct." Am.
All. Ins. Co. v. Eagle Ins. Co.,92 F.3d 60, 61 (2d Cir.
1996). Defendants' conduct in this case was not willful
because willfulness "requires 'something more than
mere negligence, ' such as 'egregious or deliberate
conduct, ' although 'the degree of negligence in
precipitating a default is a relevant factor to be
considered.'" Green, 420 F.3d at 108.
"Under the lenient standard of Rule 55(c), the [c]ourt
must resolve any doubt about defendants' willfulness in
favor of the defendants." Flanagan v. Modern
Concrete Corp., 2008 WL 2559377, at *3 (E.D.N.Y. June
23, 2008). In this case, although there was negligence, there
is no evidence of bad faith and Plaintiff makes no claim to
the contrary. See Am. All. Ins. Co., 92 F.3d at 61
(concluding defendant's failure to answer due to a filing
mistake by a clerk, "though grossly negligent, . . . was
not willful, deliberate, or evidence of bad ...