Cornerstone Consulting Organization, LLC v. Exro Technologies Inc.

Summary

The United States District Court for the Northern District of Ohio considers Plaintiff Cornerstone Consulting Organization, LLC’s motion for entry of default and default judgment against Exro Technologies Inc. The court applies Federal Rule of Civil Procedure 55(c) and concludes that Exro demonstrated good cause to set aside the default based on its asserted meritorious defenses, lack of prejudice to Cornerstone, and absence of willful conduct. The motion for default and default judgment is denied as moot, Exro’s motion for leave to file an answer is granted, and Exro is ordered to answer within seven days.

Holdings

1. Because Exro was served with the complaint and failed to plead or otherwise defend by the deadline, Cornerstone was entitled to an entry of default under Federal Rule of Civil Procedure 55(a).
2. The entry of default should be set aside under Rule 55(c) because Exro presented meritorious defenses, Cornerstone would suffer no legally cognizable prejudice from the delay, and Exro's failure to answer was not shown to be willful or the result of culpable conduct.
3. Cornerstone's request for default judgment was procedurally improper because a party cannot move for default judgment until after the clerk has entered default; additionally, the clerk could enter default judgment only for a sum certain, and the requested amount including attorney fees was not a sum certain.

Questions Presented

1. Whether Exro's failure to answer required entry of default under Federal Rule of Civil Procedure 55(a).
2. Whether Exro demonstrated good cause under Federal Rule of Civil Procedure 55(c) to set aside the entry of default and file an answer out of time.
3. Whether Cornerstone was entitled to entry of default judgment before entry of default and whether its requested amount was a sum certain under Rule 55(b)(1).

Disposition

other