X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SUMMARY ORDER Plaintiff the State University of New York (SUNY) commenced this action against defendants Triple O, LLC, James Scott, Romario McDowell, and Mandela Gadsden, alleging claims of trademark infringement, false designation of origin, palming off, dilution, and unfair competition. (Compl., Dkt. No. 1.) Defendants failed to timely answer the complaint, resulting in the Clerk of the Court entering default against them on December 16, 2019. (Dkt. No. 12.) On March 11, 2020, the court granted SUNY’s motion for default judgment, (Dkt. Nos. 20, 21), and, on October 22, 2020, the court granted SUNY’s unopposed motion for attorneys’ fees, (Dkt. No. 23), and ordered defendants to pay SUNY attorneys’ fees in the amount of $30,482 and costs in the amount of $728.06, (Dkt. Nos. 24, 25). Now pending is defendants’ motion to vacate the Clerk’s entry of default and default judgment pursuant to Fed. R. Civ. P. 55(c) and 60(b)(1) and (6). (Dkt. No. 27.) For the reasons that follow, defendants’ motion is denied. As relevant here, Fed. R. Civ. P. 60(b) authorizes a court to “grant a motion for relief from a judgment on the ground[s] of ‘[mistake, inadvertence, surprise, or] excusable neglect,’ Fed. R. Civ. P. 60(b)(1), or for ‘any other reason justifying relief from the operation of the judgment,’ Fed. R. Civ. P. 60(b)(6).” S.E.C. v. McNulty, 137 F.3d 732, 738 (2d Cir. 1998). Motions to vacate default judgments are “addressed to the sound discretion of the district court,” and such determination is to be guided by three principal factors: “(1) whether the default was willful, (2) whether the defendant demonstrates the existence of a meritorious defense, and (3) whether, and to what extent, vacating the default will cause the nondefaulting party prejudice.” Id. (citations omitted). These are the same factors to be considered when deciding a motion to set aside a default under Fed. R. Civ. P. 55(c), but “courts apply the factors more rigorously in the case of a default judgment because the concepts of finality and litigation repose are more deeply implicated in [that] action.” Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993) (citation omitted). The party seeking to vacate the default judgment “bear[s] the burden of demonstrating that their default was not willful, that they have meritorious defenses, and that no prejudice would result from reopening the judgment.” State Street Bank and Trust Co. v. Inversiones Errazuriz, Limitada, 230 F. Supp. 2d 313, 316 (S.D.N.Y. 2002) (citing Sony Corp. v. Elm State Electronics, Inc., 800 F.2d 317, 320 (2d Cir. 1986)). “This burden is not trivial: if the moving party fails to make even one of the three aforementioned showings, vacatur should be denied.” Id. (citation omitted). A. Rule 60(b)(1)1 Defendants argue that the default judgment should be vacated pursuant to Rule 60(b)(1) “because the default [w]as not willful but excusable, there [a]re meritorious defenses, and SUNY would not [b]e prejudiced.” (Dkt. No. 27, Attach. 1 at 5-10.) In response, SUNY argues that defendants willfully defaulted because the default “resulted from [defendants'] deliberate conduct”; defendants only sought to hire an attorney after attorneys’ fees and costs were imposed upon them, and any arguments to the contrary are contradicted by the record; defendants present no meritorious defense to SUNY’s claims; and SUNY would be prejudiced if the court vacated the default judgment. (Dkt. No. 28 at 8-15.) Assuming, without deciding, that SUNY would not be prejudiced if vacatur were granted, because the other two factors weigh in favor of SUNY, as explained below, defendants’ motion is denied. 1. Willfulness In advancing their argument that they did not willfully default, defendants contend that they “hired a lawyer who they knew and had worked with before,” “[t]hey reasonably believed and relied on the attorney to handle their defense,” and they “only realized that the attorney they hired was not, in fact, handling their defense, when they received a notice of default judgment in the mail.” (Dkt. No. 27, Attach. 1 at 6.) According to defendants, they did not receive court papers in the mail except for the notice of the default judgment. (Id. at 6-7.) Defendants also maintain that they “fully intended to appear through counsel and hired a lawyer to mount a defense,” their “former counsel had handled other matters for them in the past, and they trusted him,” and they “had no reason to believe that their former lawyer would drop the ball by failing to appear and answer SUNY’s [c]omplaint.” (Id. at 7, 9-10.) In opposition, SUNY argues that defendants have not provided any legitimate evidence of having hired counsel at any time prior to the filing of their current motion to vacate. (Dkt. No. 28 at 8.) SUNY also points to Scott’s letter dated January 2, 2020, wherein he stated that he “intend[ed] on being represented by a lawyer and request[ed] that the court give [him] more time so [he] can digest the information included in the documents served and seek the appropriate legal representation.” (Dkt. No. 14.) Indeed, this letter, filed about eight weeks after SUNY filed the complaint and about two weeks after the Clerk entered default against defendants, belies defendants’ assertion that they had hired counsel after being served with the complaint, and followed up with the alleged attorney throughout, (Dkt. No. 29 at 5-6). Further, to the extent defendants argue that “it was their lawyer’s choice, either willfully or unwil[l]fully, to ignore his duty to his clients,” (Dkt. No. 29 at 5-6), such argument is unavailing. Indeed, “[d]istrict courts in this Circuit…have held that attorney or client carelessness does not constitute excusable neglect.” Am. All. Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 61 n.1 (2d Cir. 1996) (citations omitted). “[W]here the attorney’s conduct has been found to be willful, the willfulness will be imputed to the party himself where he makes no showing that he has made any attempt to monitor counsel’s handling of the lawsuit.” McNulty, 137 F.3d at 740; see Dominguez v. United States, 583 F.2d 615, 618 (2d Cir. 1978) (“Unfortunately, appellant is bound by the inexcusable conduct of her counsel, since there is no particularized showing of exceptional circumstances explaining his gross negligence and no indication of diligent efforts by appellant to induce him to fulfill his duty.”). Lastly, as to defendants’ contention that they did not receive any court filings in the mail until the notice of default judgment, as explained by SUNY, (Dkt. No. 28 at 8-9), the record reflects that defendants were served with the complaint individually/personally, (Dkt. Nos. 7-10), and other notices and orders were served via regular mail to one or more of defendants at the same address as where the complaint was served, (see, e.g., Dkt. Nos. 15, 17, 18, 19, 24, 25).2 Defendants’ argument that “the pandemic has ravaged the United States Postal Service, so it is hard to believe that un-certified mail was delivered anywhere with any certainty,” (Dkt. No. 29 at 6), in support of their assertion that they received only the notice of the default judgment, is unpersuasive. Accordingly, defendants have failed to establish that their default was not willful. 2. Meritorious Defense Defendants’ contention that they have a meritorious defense is also unavailing. Defendants maintain that they stopped using the alleged infringed upon trademarks and that SUNY “cannot point to a single trademark that [d]efendants in fact used[] in violation of their promise to not use SUNY’s trademarks.” (Dkt. No. 27, Attach. 1 at 8.) They state that they “complied with the terms of the cease [and] desist, and the Entry of Default and Default Judgment should be vacated so that [d]efendants can assert its meritorious defenses against SUNY, namely, that [d]efendants never infringed on [SUNY's] trademark after [SUNY] sent [d]efendants a cease and desist letter.” (Id.) Defendants also argue that SUNY “does not, and cannot, allege that it has a trademark over the acronym, ‘UA.’” (Id. at 7.) In response, SUNY argues that defendants do not raise or explain any type of defense, and, to the extent defendants argue that they stopped using SUNY’s trademarks after SUNY sent a cease and desist letter, and that SUNY does not own the “UA” trademark, such arguments are incorrect and do not constitute a meritorious defense. (Dkt. No. 28 at 12-15.) The court agrees. Indeed, SUNY’s cease and desist letter was sent to defendants on May 15, 2019, (Dkt. No. 1, Attach. 9), but SUNY alleges that defendants continued to infringe thereafter. (Compl.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

GlobeSt. APARTMENTS Fall 2021

October 26, 2021 - October 27, 2021
Los Angeles, CA

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!


Register

GlobeSt. NET LEASE Fall 2021

October 28, 2021
Los Angeles, CA

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.


Register

China Law & Practice Awards 2021

November 04, 2021
Virtual

The annual China Law & Practice Awards is the jurisdiction's most prestigious legal awards ceremony that applauds China's elite.


Register

(NEW) EXPERIENCED LABOR AND EMPLOYMENT ATTORNEY WANTED FOR LIFESTYLE BOUTIQUE SENIOR ASSOCIATES TO PARTNER LEVEL WILL BE CONSIDERED (Atlanta, GA)

Atlanta, Georgia, United States

Our client, a boutique general practice law firm known for their cohesive culture and tech forward environment, is seeking to hire an experi...


Apply Now ›

Junior Real Estate Associate Needed for Premier Boutique - No Billable Requirements (Atlanta, GA)

Atlanta, Georgia, United States

Our client, a premier AV-rated boutique firm, is seeking to hire a commercial real estate with 1+ years of experience.   The hired...


Apply Now ›

Biotech or Chemistry IP Associate or Patent Agent/Technical Specialist

Washington D.C., District of Columbia, United States

Join our Biotechnology & Chemical Group and bring your current scientific expertise to bear on the legal problems and matters of our cli...


Apply Now ›

LEAHEY & JOHNSON PC

10/19/2021
NYLJ Web

Leahey & Johnson gives birthday tribute to Late founder, mentor and model Peter James Johnson


View Announcement ›

BLUME FORTE FRIED ZERRES & MOLINARI

10/18/2021
NJLJ Web

Blume Forte Fried Zerres & Molinari is pleased to welcome Richard T. Madurski to the firm as an associate


View Announcement ›

ABRAMS, FENSTERMAN, FENSTERMAN, EISMAN, FORMATO, FERRARA & WOLF LLP

09/28/2021
NYLJ Web

Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carone, LLP would like to announce that...


View Announcement ›