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Meer-Weiss v. Kroger Co.

United States District Court, E.D. Wisconsin

December 11, 2019

SHARON A. VANDER MEER-WEISS, Plaintiff,
v.
KROGER COMPANY, Defendant.

          DECISION AND ORDER GRANTING MOTION TO SET ASIDE DEFAULT AND MOTION FOR LEAVE TO ANSWER, FILE A MOTION, OR OTHERWISE PLEAD

          NANCY JOSEPH, UNITED STATES MAGISTRATE JUDGE.

         On April 19, 2019, the Clerk of Court entered default against Kroger Company in favor of Sharon A. Vander Meer-Weiss. The Kroger Co. now appears, arguing the wrong entity was name as a defendant in this action, and moves to set aside the default and for leave to answer, file a motion, or otherwise plead. For the reasons further explained below, the defendant's motion is granted.

         BACKGROUND

         On June 29, 2018, Sharon A. Vander Meer-Weiss filed a complaint against her former employer, Kroger Company. (Docket # 1.) Vander Meer-Weiss alleged that she was terminated from her employment due to her age and disability, in violation of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621 to 634, the Americans with Disabilities Act (“ADA”), 42 U.S.C.§§ 12112 to 12117, and the Wisconsin Fair Employment Act (“WFEA”). After screening her complaint, I found that she failed to state a claim under the ADEA and that she could not proceed on her WFEA claim. I granted Vander Meer-Weiss leave to file an amended complaint. (Docket # 4.) Vander Meer-Weiss filed an amended complaint, proceeding solely on her ADA claim. (Docket # 5.) Upon screening the amended complaint, I ordered the United States Marshals service to serve the amended complaint upon the defendant. (Docket # 6.)

         A return of service form was docketed indicating that “Kroger Company” was served care of its registered agent, CT Corporation Service Company on October 22, 2018. (Docket # 10.) After approximately five months with no activity, I issued an order stating that Vander Meer-Weiss must either move for default judgment, or the action would be dismissed for failure to prosecute. (Docket # 11.) Vander Meer-Weiss subsequently moved for default, and the clerk entered default on April 19, 2019. (Docket # 12.) On April 22, 2019, I issued an order stating that Vander Meer-Weiss' request for the entry of default was insufficient for the entry of default judgment because she did not comply with Fed.R.Civ.P. 55(b). (Docket # 13.) Vander Meer-Weiss filed an amended motion for default judgment, requesting back pay in the amount of $45, 593.60, future pay in the amount of $376, 147.20, punitive damages in the amount of $1.5 million, and compensatory damages in the amount of $1.5 million. (Docket # 14.)

         An evidentiary hearing on Vander Meer-Weiss' motion was scheduled and postponed several times. (Docket # 16, Docket # 19, Docket # 21.) On September 4, 2019, Vander Meer-Weiss was warned that she would receive no further adjournments of the evidentiary hearing and the hearing was scheduled for October 10, 2019. (Docket # 21.) On September 26, 2019, the Court received a letter from Rosalyn Darinski, who stated that she received a subpoena to appear at Vander Meer-Weiss' evidentiary hearing but had no knowledge of the case. (Docket # 22.) On October 9, 2019, counsel for “The Kroger Co.” entered an appearance in this case and moved to postpone the evidentiary hearing to allow the defendant an opportunity to review the case and respond accordingly. (Docket # 26.) On October 10, 2019, both counsel for The Kroger Co. and Vander Meer-Weiss appeared at the hearing. (Docket # 30.) I granted The Kroger Co.'s motion to stay the evidentiary hearing and allowed it an opportunity to file a responsive pleading. (Id.) Presently before me is The Kroger Co.'s motion to set aside the default and for leave to answer, file a motion, or otherwise plead. (Docket # 31.) Vander-Meer Weiss opposes the motion. (Docket # 39)

         ANALYSIS

         1. Motion to Set Aside Default

         A party seeking to vacate an entry of default prior to the entry of final judgment must show: (1) good cause for the default; (2) quick action to correct it; and (3) a meritorious defense to the complaint. Fed.R.Civ.P. 55(c); Cracco v. Vitran Exp., Inc., 559 F.3d 625, 630 (7th Cir. 2009). While the same test applies for motions seeking relief from default judgment under both Rule 55(c) and Rule 60(b), the test “is more liberally applied in the Rule 55(c) context.” United States v. Di Mucci, 879 F.2d 1488, 1495 (7th Cir. 1989). The Seventh Circuit has a well-established policy favoring trial on the merits over default judgment. Cracco, 559 F.3d at 631. Kroger argues that it meets all of the requirements for setting aside the entry of default. I will address each element in turn.

         1.1 Good Cause

         The Kroger Co. must first show good cause to set aside the default. In Sims v. EGA Prod., Inc., 475 F.3d 865, 868 (7th Cir. 2007), the Seventh Circuit stated that Rule 55(c) requires “‘good cause' for the judicial action, not ‘good cause' for the defendant's error; as used in this Rule, the phrase is not a synonym for ‘excusable neglect.'” Two years later, however, the Seventh Circuit in Cracco found that a defendant seeking to set aside a default under Rule 55(c) had to show “good cause for the late submission of its answer.” 559 F.3d at 631. In Cracco, the court determined that because the defendant did not willfully ignore the pending litigation and failed to respond to the summons and complaint through inadvertence, it established good cause. Id. “Reading these decisions together, the court first looks to the defendant's excuse for the default, then looks to whether there is ‘good cause' for judicial action to set aside a default, such as when a default judgment would yield an unjust award of damages.” See United States f/u/b/o Venture Elec. Contractors, Inc. v. Liberty Mut. Ins. Co., No. 17-CV-1473, 2018 WL 4120175, at *6 (E.D. Wis. Aug. 29, 2018).

         The Kroger Co. argues that Vander Meer-Weiss worked for Roundy's Supermarkets, Inc. (Declaration of Jessica Offenbacher ¶ 3, Docket # 33), a wholly owned subsidiary of The Kroger Co. (Declaration of Dorothy Roberts (“Roberts Decl.”) ¶ 3, Docket # 34). The Kroger Co. asserts that there is no separate legal entity called “Kroger Company, ” as Vander Meer-Weiss named in her complaint. (Roberts Decl. ¶ 3.) It argues that the U.S. Marshals Service served the wrong agent for service of process when it served “Kroger Company” c/o CT Corporation Service Company. (Def.'s Br. at 4, Docket # 32.) Thus, The Kroger Co. contends that it was never served with a Summons or Complaint in this matter. (Roberts Decl. ¶ 6.)

         Vander Meer-Weiss argues that because The Kroger Co. was aware of her EEOC claim and did not dispute her claim for unemployment benefits, it should have known about her lawsuit. (Pl.'s Br. at 2, Docket # 39.) While Vander Meer-Weiss asserts that “Kroger Company” was served with her complaint (Docket # 39 at 2), she does not counter defendant's assertion that “The Kroger Co.” was never served with her complaint. The Kroger Co. clearly had notice of Vander Meer-Weiss' discrimination claim-Vander Meer-Weiss filed an EEOC charge and “The Kroger Co.” was copied on Vander Meer-Weiss' right to sue letter. (Docket # 39-1 at 4.) But there is a difference between knowing someone has a potential lawsuit and actually being served with a lawsuit. For all The Kroger Co. knew, Vander Meer-Weiss chose not to pursue her claim any further. And the fact that The Kroger Co. did not contest her unemployment benefits has no bearing on its notice of this lawsuit.

         Thus, I find that The Kroger Co. has demonstrated “good cause” for setting aside the default. The Kroger Co. was not willfully ignoring the pending litigation; rather, Vander Meer-Weiss named the wrong entity ...


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