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Management Registry, Inc. v. Batinich

United States District Court, D. Minnesota

July 30, 2018

MANAGEMENT REGISTRY, INC., Plaintiff,
v.
MILAN BATINICH, Defendant.

          James M. Morris, MORRIS & MORRIS, P.S.C., and Laura J. McKnight, Jessica M. Marsh, and Janet M. Olawsky, JACKSON LEWIS P.C., for plaintiff.

          Sonia Miller-Van Oort, Jonathan A. Strauss, and Ryan O. Vettleson, SAPIENTIA LAW GROUP, PLLC, for defendant.

          MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

          JOHN R. TUNHEIM CHIEF JUDGE

         Plaintiff Management Registry, Inc. (“MRI”), brought this diversity action against Defendant Milan Batinich in December 2017 in the U.S. District Court for the Northern District of Illinois, which transferred the action to this Court in May 2018. Batinich did not file his Answer until July 11, after the deadline imposed by the Federal Rules. MRI moves for entry of a default judgment against Batinich pursuant to Federal Rule of Civil Procedure 55(b). Because Batinich is technically not in default, and because the Belcourt factors do not weigh in favor of entering a default judgment against Batinich, the Court will deny MRI's motion.

         BACKGROUND

         MRI initiated this action in the U.S. District Court for the Northern District of Illinois in December 2017. (Compl., Dec. 7, 2017, Docket No. 1.) MRI asserts claims for various business torts against Batinich related to Batinich's former work for AllStaff, an MRI affiliate, and his current work for A.W. Companies, an MRI competitor. (See Id. ¶ 1.) A.W. Companies is a defendant in an earlier-filed, related action in this Court brought by MRI. See generally Mgmt. Registry, Inc. v. A.W. Cos., No. 17-5009, 2018 WL 461132 (D. Minn. Jan. 16, 2018).

         Before this action was transferred here, the parties engaged in quite the whirlwind of motion practice. On December 8, 2017, one day after filing its complaint, MRI moved for a preliminary injunction and for expedited discovery. (Pl.'s Mot. for Prelim. Inj., Dec. 8, 2017, Docket No. 5; Pl.'s Mot. for Expedited Disc., Dec. 8, 2017, Docket No. 8.) Five days later, Batinich opposed MRI's two motions and filed one of his own: an “omnibus motion” to dismiss or transfer the case. (Def.'s Mem. in Opp'n, Dec. 13, 2017, Docket No. 20; Def.'s Omnibus Mot. to Dismiss, Dec. 13, 2017, Docket No. 21.) Batinich moved to dismiss under Rule 12(b)(2) for lack of personal jurisdiction or to transfer the case pursuant to 28 U.S.C. § 1404(a). Batinich pointed the court to the earlier-filed, related action in this Court. The next day, December 14, the Illinois court held a hearing on the parties' motions at which both sides were represented by counsel and during which each side explained their view of the case. (See Tr. of Proceedings, Feb. 14, 2018, Docket No. 45.)

         In January 2018, the U.S. District Court for the Northern District of Illinois denied Batinich's motion to dismiss or transfer. (Order, Jan. 26, 2018, Docket No. 34.) MRI promptly renewed its motions for a preliminary injunction and for expedited discovery. (Pl.'s Mot. to Renew, Jan. 30, 2018, Docket No. 35.) Prior to a second hearing on MRI's (renewed) motions, Batinich asked the U.S. District Court for the Northern District of Illinois to reconsider his motion to dismiss or transfer; he also moved to strike a declaration that MRI submitted in its opposition to Batinich's motions. (Def.'s Mot. to Strike and to Reconsider, Feb. 15, 2018, Docket No. 46.) At that second hearing, the court took MRI's renewed motions under advisement and ordered MRI to respond to Batinich's motion to reconsider. (Minute Entry, Feb. 20, 2018, Docket No. 52.) In April, the U.S. District Court for the Northern District of Illinois granted Batinich's motion to reconsider and his motion to transfer, (Mem. Op., Apr. 2, 2018, Docket No. 55), and this case was transferred here in May (see Docket Nos. 56-57).

         It appears that Batinich's Answer was due on February 9, 2018.[1] Because Batinich filed a Rule 12 motion within twenty-one days of being served with MRI's complaint and summons, his time to file his Answer was extended to fourteen days after the court denied the motion. Fed.R.Civ.P. 12(a)(4)(A). Batinich's motion was denied on January 26, 2018, making Batinich's Answer due February 9. It does not appear, however, that either party gave much thought to Batinich's Answer until May - understandable given the parties' attention on their aforementioned motion practice.[2]

         On May 29, MRI moved for entry of default judgment, and a week later, Batinich sought an extension of time to file his Answer pursuant to Rule 6(b). (Pl.'s Mot. for Default J., May 29, 2018, Docket No. 67; Def.'s Mot. for Extension of Time, June 5, 2018, Docket No. 76.) The Court granted Batinich's motion, (Order, July 10, 2018, Docket No. 85), and Batinich filed his Answer on July 11 (Answer, July 11, 2018, Docket No. 86.)

         DISCUSSION

         I. STANDARD OF REVIEW

         Rule 55(b)(2) permits a court to enter a default judgment. But “default judgments are ‘not favored by the law and should be a rare judicial act.'” Belcourt Pub. Sch. Dist. v. Davis, 786 F.3d 653, 661 (8th Cir. 2015) (quoting In re Jones Truck Lines, Inc., 63 F.3d 685, 688 (8th Cir. 1995)). Instead, “there is a ‘judicial preference for adjudication on the merits.'” Id. (quoting Johnson v. Dayton Elec. Mfg. Co., 140 F.3d 781, 784 (8th Cir. 1998)). In determining whether to enter a default judgment, courts may consider several factors, including:

[T]he amount of money potentially involved; whether material issues of fact or issues of substantial public importance are at issue; whether the default is largely technical; whether plaintiff has been substantially prejudiced by the delay involved; . . . whether the grounds for default are clearly established or are in doubt[;] . . . how harsh an effect a default judgment might have; or whether the default was ...

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