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American Credit Acceptance, LLC v. The Magic Auto Sales Corp.

United States District Court, S.D. Florida, Miami Division

August 20, 2019

AMERICAN CREDIT ACCEPTANCE, LLC, Plaintiff,
v.
THE MAGIC AUTO SALES CORP. f/k/a MONZON AUTO SALES INC., and DANILO MONZON, Defendants.

          ORDER DENYING MOTION TO SET ASIDE DEFAULT AND DEFAULT JUDGMENT AND ORDER DENYING MOTION FOR HEARING

         THIS CAUSE came before the Court upon Defendant Danilo Monzon's Motion to Set Aside Default or Default Judgment (D.E. 13), filed on June 26, 2019, and Plaintiff American Credit Acceptance, LLC s Motion to Set Hearing on Danilo Monzon's Motion to Set Aside Default Final Judgment (D.E. 16), on August 15. 2019.

         THE COURT has considered the motions, Plaintiffs Opposition to Set Aside Default, the pertinent portions of the record, and is otherwise fully advised in the premises.

         BACKGROUND

         On December 28, 2018, Plaintiff filed a 4-count complaint against Defendants Danilo Monzon and The Magic Auto Sales Corp. f/k/a Monzon Auto Sales, Inc., alleging breach of contract, fraud, aiding and abetting fraud, and negligent misrepresentation. Plaintiff perfected service of the complaint and the summons on both Defendants. After neither Defendant timely responded to the complaint, Plaintiff filed a motion for Clerk's Default against both Defendants. On March 7, 2019, the Clerk of Court entered default against both Defendants.

         Two months later, on May 9, 2019, Plaintiff filed a Motion for Default Judgment against both Defendants, supported by affidavits concerning the value of the judgment. Again, neither Defendant timely responded, and consequently the Court entered Default Final Judgment against both Defendants on May 31, 2019.

         Finally, on June 26, 2019, more than 3 weeks after the Court entered Default Final Judgment, Defendant Danilo Monzon ("Monzon") made his first appearance in the case by filing a Motion to Set Aside Default or Default Judgment (the "Motion"). Plaintiff timely filed an Opposition to the Motion, but Monzon did not file a reply in support of his Motion. Despite being situated procedurally similar to Monzon, Defendant The Magic Auto Sales Corp. f/k/a Monzon Auto Sales, Inc. still has not appeared in this matter, and accordingly, is not subject to this Order.

         LEGAL STANDARD

         "[A] party seeking to set aside a court's entry of default judgment 'must proceed under Federal Rule of Civil Procedure 60(b).'" Davila v. Alcami Grp., Inc., No. 12-23168-CIV-MORENO, 2013 WL 1934168, at *3 (S.D. Fla. May 9, 2013) (quoting J & M Assocs., Inc. v. Callahan, No. 07-0883-CG-C, 2011 WL 5553696 (S.D. Ala. Nov. 15, 2011)). Under Rule 60(b), the Court may set aside a default judgment on grounds of "mistake, inadvertence, surprise, or excusable neglect," or "any other reason that justifies relief." See Fed.R.Civ.P. 60(b)(1), (6). By its very nature, Rule 60(b) "seeks to strike a delicate balance between two countervailing impulses: the desire to preserve the finality of judgments and the 'incessant command of the court's conscience that justice be done in light of all the facts.'" Grant v. Pottinger-Gibson, No. 0:15-cv-61150-KMM, 2016 WL 867111, at *1 (S.D. Fla. Mar. 7, 2016), aff'd, 725 Fed.Appx. 772 (11th Cir. 2018) (quoting Aldana v. Del Monte Fresh Produce N.A., Inc., 741 F.3d 1349, 1355 (11th Cir. 2014)). "While Rule 60(b) generally requires liberal application in cases of default judgments, this policy does not apply in cases of willful misconduct, carelessness, or negligence." Id.

         To set aside a default judgment for mistake, inadvertence, or excusable neglect under Rule 60(b)(1), the defaulting party must show: (1) it had a meritorious defense that might have affected the outcome; (2) good reason existed for failure to respond to the complaint; and (3) granting the motion would not prejudice the opposing party. Davila, 2013 WL 1934168, at *3 (citing Rivas v. Denovus Corp., Ltd., No. 10-22070, 2010 WL 4102926 (S.D. Fla. Oct. 18, 2010)). "The moving party must establish a meritorious defense 'by a clear and definite recitation of the facts.'" Grant, 2016 WL 867111, at *2 (quoting Gibbs v. Air Canada, 810 F.2d 1529, 1538 (11th Cir. 1987)). Moreover, "[a] general denial of the plaintiffs claims contained in an answer or another pleading is not sufficient." Id. (quoting S.E.C. v. Simmons, 241 Fed.Appx. 660, 664 (11th Cir. 2007)). Rather, the moving party "must make an affirmative showing of a defense that is likely to be successful." Id. (quoting Solaroll Shade & Shutter Corp. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1133 (1 lth Cir. 1986)). But, importantly, "[n]either ignorance nor carelessness on the part of a litigant or his attorney provide grounds for relief under Rule 60(b)(1)." Id. (quoting Ben Sager Chemicals Int'l, Inc. v. E. Targosz & Co., 560 F.2d 805, 809 (7th Cir. 1977)).

         DISCUSSION

         The Court finds the Motion fails to make the requisite showings to set aside default judgment under Rule 60(b) because Monzon: (1) does not adequately assert any meritorious defenses that might affect the outcome of the case; (2) does not demonstrate that good reason existed for his failure to timely respond; and (3) does not explain why setting aside the default would not prejudice Plaintiff. The Court addresses each reason in turn.

         First, the Motion fails to show Monzon has a meritorious defense that might affect the outcome of this case. While Monzon asserts "there are meritorious defenses to this action" and he "request[s] an opportunity to present same" (D.E. 13 at ¶ 6), this single conclusory statement, by itself, does not rise to make an "affirmative showing of a defense that is likely to be successful." Grant, 2016 WL 867111, at *2 (quoting Solaroll Shade & Shutter Corp., 803 F.2d at 1133). Monzon attaches a proposed answer to his Motion, but the proposed answer-which totals less than one and one-half pages and simply denies knowledge of, or affirmatively denies all but five of Plaintiff s allegations (See D.E. 13-1)-fares no better. This is because the law requires that a party moving to set aside a default judgment establish a meritorious defense by a "clear and definite recitation of the facts." See Grant, 2016 WL 867111, at *2 (quoting Gibbs, 810 F.2d at 1538). And so, Monzon's general denials of Plaintiff s allegations are not sufficient to, and certainly do not, establish a meritorious defense. Id. (quoting Simmons, 241 Fed.Appx. at 664).

         Monzon's proposed answer is also noticeably deficient because it does not assert a single affirmative defense. (See generally D.E. 13-1.) And the closest Monzon comes to asserting any affirmative defense is the singular statement, found in his Motion, that he "has multiple witness wherein the Co Defendant is sole owner of the Company and bought out the Interest of DANILO MONZON." (D.E. 13 at ¶ 4.) But this assertion, without more, does not explain how any alleged "buy out" disclaims Monzon from all liability. Nor does this assertion discount Plaintiffs specific claim against Monzon in Count III for aiding and abetting fraud in conjunction with Defendant The Magic Auto Sales Corp. f/k/a Monzon Auto Sales, Inc.

         The Court also notes that despite the gaps in Monzon's request for relief-which Plaintiff highlights in its Opposition-Monzon did not file a reply that further explained or supplemented the arguments advanced in his Motion.[1] Put simply, the Motion and proposed answer fail entirely to "make an affirmative showing of a defense that is likely to be successful." ...


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