UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

REAHNA BURGIN, )

) 

Plaintiff, )

) CAUSE NO. 2:16-CV-175-PPS-PRC

v. )

)

WINDSOR FASHIONS, INC., )

)

Defendant. )

OPINION AND ORDER

Reahna Burgin filed the complaint in this matter on May 18, 2016 alleging

discrimination based on race and sex in violation of Title VII of the Civil Rights Act of

1964 and retaliation. [DE 1.] Service of the summons and complaint was received by

Windsor Fashions, Inc.’s Registered Agent on June 6, 2016. [DE 5, 5-1.] Windsor

Fashions failed to appear, plead, or otherwise defend the lawsuit. Accordingly, Burgin

filed an application for clerk’s entry of default on August 17, 2016, DE 6, which the

Clerk of the Court entered on August 30, 2016, DE 7. Burgin then moved for default

judgment on October 14, 2016 seeking unpaid wages in the amount of $23,400.00,

compensatory damages in the amount of $300,000.00, attorneys fees and costs, and

prejudgment interest. [DE 10.]

On November 3, 2016, I ordered Burgin to file a dated copy of her 90-day right to

sue letter to confirm that this action was timely filed and directed the clerk to mail a

copy of my order to Windsor Fashions at the address at which it was served. [DE 11.] 

Windsor Fashions says that this was the first notice of this action that it received, which
was on or about November 11, 2016. [DE 16 at 1.] Windsor Fashions asserts that it

immediately contacted its attorney, who investigated the status of the case, entered her

appearance on November 11, 2016, and immediately filed the motion now pending

before me seeking to set aside the Clerk’s entry default pursuant to Federal Rule of Civil

Procedure 55(c). [DE 15, 16].

Windsor Fashions tells me it responded to Burgin’s charges before the EEOC,

which resulted in the EEOC’s dismissal of Burgin’s charges. [DE 16 at 1.] Windsor

Fashions also tells me that it calendared the deadline for Burgin to file a lawsuit and

when it did not receive a notification of any filing, Windsor Fashions assumed that

Burgin had opted not to file one. [Id.] Windsor Fashions explains that it is at a loss to

understand how it did not know that Burgin filed this action in May 2016, noting that it

has no records of it in its files and its Human Resources Department has no recollection

of receiving such a notice, despite the fact that it generally reacts promptly and with

urgency when it receives such notices. [Id. at 2.] Windsor Fashions surmises that the

summons either was not forwarded by its Registered Agent or was overlooked in the

company email. [Id.]

Federal Rule of Civil Procedure 55(c) governs relief from clerk’s entry of default. 

It provides that “[t] he court may set aside an entry of default for good cause, and it

may set aside a final default judgment under Rule 60(b).” FED. R. CIV. P. 55(C). The

Seventh Circuit adopted a three-prong test in considering motions to set aside the entry

of default that requires a defaulting party to demonstrate: (1) good cause for its default,

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(2) quick action to correct the entry of default, and (3) a meritorious defense to

plaintiff’s complaint. See e.g. Cracco v. Vitran Exp., Inc., 559 F.3d 625, 631 (7th Cir. 2009);

O’Brien v. R. J. O’Brien & Assocs., Inc., 998 F.2d 1394, 1401 (7th Cir. 1993). 

The above-stated standard for setting aside the entry of default and the standard

for vacating a default judgment are the same. See, e.g., United States v. DiMucci, 879 F.2d

1488, 1495 (7th Cir.1989). Importantly, however, the standard is applied in a more

stringent way when a default judgment has been entered. Id. This makes sense given

the text of Rule 55(c), which makes a distinction between entries of default on the one

hand, and default judgments on the other. Vacating a default judgment is more

difficult because Rule 60(b) and its respect for the “finality of judgments” comes into

play. Jones v. Phipps, 39 F.3d 158, 162 (7th Cir. 1994). Thus, in the context of a motion to

vacate a default judgment, a party must show “something more compelling than

ordinary lapses of diligence or simple neglect.” Id. In other words, to vacate a default

judgment, the defaulting party must surmount a “high hurdle.” Id. By contrast, when a

party is seeking to set aside a clerk’s entry of default, the test is “more liberally

applied.” Pretzel & Stouffer v. Imperial Adjusters, Inc., 28 F.3d 42, 45 (7th Cir. 1994).

Overlaying all of this is the general proposition that disposition on the merits of a

lawsuit is preferable to disposition by default. Cracco., 559 F.3d at 631. 

It’s important to keep in mind that Rule 55(c) requires “good cause” for the

judicial action. So the focus is not necessarily on whether there is “good cause” for the

defendant’s error. In other words, it is not a synonym for “excusable neglect.” Sims v.

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EGA Products, 475 F.3d 865, 868 (7th Cir. 2007). In any event, Windsor Fashions’ failure

to respond to the summons and complaint was through inadvertence. There is no

evidence that Windsor Fashions acted willfully when it failed to respond to Ms.

Burgin’s complaint. I will note, however, that Windsor Fashions should have taken

measures to ensure that service of process on its registered agent was forwarded to the

appropriate employee. Nevertheless, Windsor Fashions acted with dispatch once it

found out that it had been sued by filing its motion within four days, which

demonstrates quick action to correct the default.

Windsor Fashions also made a sufficient showing of a potential meritorious

defense. It attached its EEOC Statement of Position as an exhibit to its motion, DE 16-2,

that documents Burgin’s alleged history of tardiness, missing work shifts, bringing her

child to work, leaving work early without permission, and other misconduct, which

Windsor Fashions says was the reason for Burgin’s discipline and eventual termination

rather than the discriminatory purposes alleged by Burgin. [DE 16 at 2-3.] Whether any

of this is true will be for another day. But for now, given the lenient standards that the

Seventh Circuit has established for the application of Rule 55(c) and the fact that

Windsor Fashions stated the nature of its defense and provided the factual basis for that

defense, I believe that Windsor Fashions made a sufficient showing of a potential

meritorious defense. Cracco, 559 F.3d at 631.

ACCORDINGLY, the Court:

C GRANTS Windsor Fashions, Inc’s Motion to Set Aside Default and for

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Leave to Answer or Otherwise Plead [DE 16];

C GRANTS Windsor Fashions, Inc. leave to answer or otherwise plead to

the complaint within twenty-one (21) days of the entry of this Opinion

and Order; and

C DENIES AS MOOT Reahna Burgin’s Motion for Default Judgment [DE

10].

SO ORDERED.

ENTERED: December 8, 2016

s/Philip P. Simon________________

PHILIP P. SIMON, CHIEF JUDGE

UNITED STATES DISTRICT COURT

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