United States District Court, S.D. Florida
MERCINA SOUFFRANT, As Personal Representative of The ESTATE OF HENOLD SOUFFRANT, Plaintiff,
TOYOTA MOTOR SALES, U.S.A., INC., et al., Defendants.
ORDER ON MOTION TO SET ASIDE CLERK'S DEFAULT AS
TO TOYOTA TECHNICAL CENTER, USA
G. TORRES United States Magistrate Judge
matter is before the Court on Toyota Motor Engineering and
Manufacturing North America, Inc.'s (“TEMA”),
Toyota Motor North America, Inc.'s (“TMNA”)
(collectively, “Defendants”) motion to set aside
the clerk's default against Toyota Technical Center, USA.
[D.E. 20]. Mercina Souffrant
(“Plaintiff”) responded to Defendants' motion
on November 30, 2017 [D.E. 23] to which Defendants replied on
December 7, 2017. [D.E. 25]. Therefore, Defendants'
motion is now ripe for disposition. After careful
consideration of the motion, response, reply, relevant
authority, and the reasons discussed below, Defendants'
motion is GRANTED.
party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must
enter the party's default. Fed.R.Civ.P. 55(a). Following
a clerk's entry of default, a party must then petition
the court for a default judgment. Id. at (b)(1). A
default may, however, be set aside for “good
cause.” Id. at (c). “‘Good
cause' is a mutable standard, varying from situation to
situation.” Compania Interamericana Export-Import,
S.A. v. Compania Dominicana, 88 F.3d 948, 951 (11th Cir.
1996). In determining whether a party demonstrates good cause
to set aside a default, courts consider the following
factors: (1) whether the default was culpable or willful; (2)
whether setting it aside would prejudice the adversary; (3)
whether the defaulting party presents a meritorious defense;
(4) whether there is a threat of significant financial loss
to the defaulting party; and (5) whether the defaulting party
acted promptly to correct the default. Id.
“Whatever factors are employed, the imperative is that
they be regarded simply as a means of identifying
circumstances which warrant the finding of ‘good
cause' to set aside a default.” Dierschke v.
O'Cheskey, 975 F.2d 181, 184 (5th Cir. 1992).
argue that the clerk's entry of default - entered on
November 14, 2017 [D.E. 17] against Toyota Technical Center,
USA (“TTC”) - is improper because (1) TTC is
undeniably an unincorporated division of TEMA and cannot be
sued as a matter of law, (2) a default judgment cannot be
entered against a non-legal entity, and (3) even if the Court
considered TTC an independent entity, the Court lacks
personal jurisdiction over TTC because of insufficient
service of process. See, e.g., Wilson v.
EverBank, N.A., 77 F.Supp.3d 1202, 1216 (S.D. Fla. 2015)
(“A corporate division is not a separate legal entity
that is capable of being sued.”) (citing In re
Checking Account Overdraft Litig., 883 F.Supp.2d 1244,
1249-50 (S.D. Fla. 2012) (dismissing unincorporated division
as improper entity to be sued); see also W. Beef, Inc. v.
Compton Inv. Co., 611 F.2d 587, 591 (5th Cir. 1980)).
Finally, Defendants conclude that - even if all three of the
aforementioned arguments are unpersuasive - the clerk's
default should be vacated because Defendants have
demonstrated good cause in acting swiftly and with due
opposes Defendants' motion because Defendants rely on
self-serving arguments that TTC is not a legal entity that
can be sued. Plaintiff believes that TTC had a duty to file a
motion to dismiss or an answer to the complaint, and
supplement the record with evidence that it cannot be held
liable for its alleged wrongdoing. Plaintiff also argues that
the Court has personal jurisdiction over TTC and - even if it
did not - TTC has allegedly waived its personal jurisdiction
defense by failing to advance this argument in a motion to
dismiss. Furthermore, Plaintiff believes that there is no
good cause to set aside the clerk's default because TTC
willfully refused to respond to Plaintiff's complaint.
Because there was no confusion, mistake, or unintentional
oversight to blame on the lack of a response from TTC,
Plaintiff concludes that all pertinent factors support a
finding that there is no good cause to set aside the
full consideration of the arguments presented, Defendants
have demonstrated good cause to set aside the clerk's
entry of default. First, there is no evidence in the record
that TTC's failure to respond to Plaintiff's
complaint was a result of any willful or reckless behavior.
Second, vacating the clerk's default would not prejudice
Plaintiff because this case remains in its
infancy. [D.E. 1] Third, Defendants raise several
persuasive arguments to suggest (1) that TTC is merely a
subdivision of Toyota, (2) that service of process was not
properly effectuated, and (3) that an entry of default is
impermissible given the relationship of TTC with its parent
Defendants acted promptly to set aside the clerk's
default when they filed their motion seven days later. When
coupling the weight of the aforementioned factors with the
facts of this case, “courts generally have found it
appropriate for trial judges to exercise their discretion in
favor of setting aside defaults so that cases may be decided
on their merits.” Singh v. Hopkins Meat Packing,
Inc., 2008 WL 4922071, at *2 (M.D. Fla. Nov. 13, 2008)
(citation omitted). In other words, default judgments are
generally viewed with disfavor “because of the strong
policy of determining cases on their merits.”
Florida Physician's Ins. Co., Inc. v. Ehlers, 8
F.3d 780, 783 (11th Cir. 1993). Given this policy, the lack
of any demonstrable prejudice to Plaintiff, and the
meritorious arguments raised with respect to TTC, we find
good cause to set aside the clerk's entry of default.
Therefore, Defendants' motion to set aside the
clerk's default is GRANTED.
Plaintiff's request that TTC be ordered to file an answer
to Plaintiff's complaint, Plaintiff has not adequately
demonstrated that TTC is a legal entity that can be sued. By
Plaintiff's own allegations, she alleges that TTC is a
subdivision of Toyota. Yet, a subdivision of a
corporation is not a separate legal entity - meaning it
cannot be sued as a matter of law. See, e.g.,
Montoya v. PNC Bank, N.A., 2014 WL 4248208, at *4
(S.D. Fla. Aug. 27, 2014) (“PNC Mortgage must be
dismissed from this case because it is not an entity that
legally exists. It therefore cannot be sued.”) (citing
W. Beef Inc., 611 F.2d at 591)); see also
Stotter & Co. v. Amstar Corp., 579 F.2d 13, 18 (3d
Cir. 1978) (“A division of a corporation is not a
separate entity but is the corporation itself.”).
Because Plaintiff has failed to demonstrate at this
preliminary stage that TTC is a legal entity that can be
sued, we have no basis to find that TTC should be ordered to
file an answer to Plaintiff's complaint. TTC shall
respond in accordance with the Federal Rules of Civil
foregoing reasons, it is hereby ORDERED and
ADJUDGED that Defendants' motion to set aside
the clerk's default is GRANTED. [D.E.