Keith v. Crisalli et al

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
SUSAN KEITH,
Plaintiff,
vs. 	5:25-CV-778
(MAD/MJK)
ORAZIO CRISALLI,
Defendant.
____________________________________________
APPEARANCES: 	OF COUNSEL:
SUSAN KEITH
P.O. Box 183
Clay, New York 13041
Plaintiff, pro se
MILBER MAKRIS PLOUSADIS 	PATRICK F. PALLADINO, ESQ.
& SEIDEN, LPP
1000 Woodbury Road - Suite 402
Woodbury, New York 11797
Attorney for Defendant
Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
On June 16, 2025, Plaintiff Susan Keith filed a complaint, pro se, against Orazio Crisalli
and Erin Condon, alleging violations of the laws established by the U.S. Securities and Exchange
Commission, as well as claims under the New York's Deceptive Practices Act, Racketeer
Influenced and Corrupt Organizations Act, and New York State contract, property, and tort laws.
See Dkt. No. 1. Plaintiff's allegations stem from her renting an apartment owned by Defendant
Crisalli, who is a "co-owner of Syracuse Realty Group, LLC, the property management company
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for the subject premises, and co-owner and co-executive officer of QP2 Properties, LLC." Id. at
¶ 79. Plaintiff contends she has suffered "carcinogenic exposure" while living in Defendant
Crisalli's building because of individuals smoking on the property. See generally Dkt. No. 1.
Plaintiff also filed an emergency motion for injunctive relief, see Dkt. No. 2, which the Court
denied, see Dkt. No. 8. Summonses were issued on Defendants Crisalli and Condon on June 17,
2025. See Dkt. No. 4.
On June 26, 2025, Plaintiff filed an amended complaint naming only Defendant Crisalli.
See Dkt. No. 13. Based on Plaintiff's request, a new summons was issued. See Dkt. Nos. 14, 15.
On August 6, 2025, Plaintiff requested a Clerk's entry of default. See Dkt. No. 19.
Default was entered the same day. See Dkt. No. 20. Plaintiff then filed various motions
requesting injunctive relief. See Dkt. Nos. 21, 23, 24.
On August 20, 2025, Defendant filed a letter informing the Court "that [his] legal
representation for this case is through [his] Errors and Omissions insurance policy. They recently
contacted [Defendant] and are assigning Counsel." Dkt. No. 27. Defendant requested thirty days
"to meet with them so that they can respond on [his] behalf." Id.
The next day, the Court issued a Text Order explaining, in part, as follows:
Defendants time to answer Plaintiffs complaint expired on August
5, 2025. Plaintiff has a currently pending motion for preliminary
injunction, and the Court has previously indicated that [o]nce the
motion is fully briefed, the Court will endeavor to issue a decision
as soon as possible. Dkt. No. 17. Defendants current response
deadline is set for August 28, 2025. In light of Defendant filing a
letter with the Court, it will extend his response deadline to
Plaintiffs motion until September 22, 2025. The Plaintiff's Reply
deadline is extended to September 29, 2025.
Dkt. No. 28.
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Later that day, on June 21, 2025, Plaintiff filed a motion for default judgment and a letter
motion asking for clarification on the "current posture" of the case. See Dkt. Nos. 29, 30.
Defendant's response deadline for the motion for default judgment was set for September 11,
2025. See Dkt. No. 29.
On September 11, 2025, Defendant, through counsel, filed a pre-motion letter requesting
the Court's permission to file a motion to dismiss Plaintiff's complaint for failure to state a claim.
See Dkt. No. 33. Plaintiff responded in opposition, arguing Defendant's contentions were baseless
because "[t]his case belongs in federal court under SEC jurisdiction with RICO enforcement
authority." Dkt. No. 35 at 3; see also Dkt. No. 34. The Court reviewed the parties' letters and
granted Defendant permission to file a motion to dismiss. See Dkt. No. 36.
Plaintiff responded in opposition, see Dkt. No. 40, and Defendant replied, see Dkt. No. 41.
Plaintiff requested permission to file a sur-reply. See Dkt. No. 42. The parties then filed six
letters arguing whether Plaintiff should be permitted to file a sur-reply and whether the letters, in
and of themselves, were appropriate. See Dkt. Nos. 43-48. The Court denied Plaintiff's request
and instructed both parties that no further submissions would be accepted regarding Plaintiff's
motion for a preliminary injunction or Defendant's motion to dismiss. See Dkt. No. 49.
Plaintiff subsequently filed a letter requesting permission to stay the case to give her time
to file an amended complaint. See Dkt. No. 50. Defendant opposed the request. See Dkt. No. 51.
Plaintiff filed a letter in further support of her request. See Dkt. No. 52. Plaintiff also filed a
letter withdrawing her motion for a preliminary injunction. See Dkt. No. 53. The Court granted
her request to withdraw her previous motion and denied the request to file a motion to amend.
See Dkt. No. 54.
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Plaintiff filed another letter on December 28, 2025, noting her intention to seek leave to
file a second amended complaint after the Court rules on the pending motion to dismiss, should
the Court dismiss any of her claims. See Dkt. No. 55. On February 1, 2026, Plaintiff filed a letter
asking for an update on the status of the case and whether a discovery conference will be held.
See Dkt. No. 56.
Presently before the Court is Plaintiff's motion for default judgment. See Dkt. No. 29.
Defendant's pre-answer motion to dismiss can be construed as an opposition to Plaintiff's motion
for default judgment, see Dkt. No. 37; however, even if the Court were unable to consider the
motion to dismiss at this juncture, "the [C]ourt may set aside an entry of default sua sponte, for
good cause." Negrin v. Kalina, No. 09-CV-6234, 2012 WL 4074992, *2 (S.D.N.Y. Sept. 11,
2012) (collecting cases); see also Miller v. Madison, No. 1:12-CV-0874, 2013 WL 2181240, *3
(N.D.N.Y. May 20, 2013) ("Although Defendant has not moved to vacate the Entry of default,
after considering the Amended Complaint and Defendant's explanations for his failure to timely
respond to it, the Court exercises its authority under Rule 55(c) to vacate sua sponte the Entry of
default for good cause shown"); Topolski v. Wrobleski, No. 5:13-CV-0872, 2014 WL 2215761, *9
(N.D.N.Y. May 29, 2014).
For the following reasons, Plaintiff's motion for default judgment is denied and the Clerk's
entry of default it vacated.
II. DISCUSSION
A. 	Legal Standard
"When a 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. C IV. P. 55(a). Once the clerk has entered a default, the Court may,
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among other things, require the plaintiff to "establish the truth of any allegation by evidence."
FED. R. C IV. P. 55(b)(2). The "district court has discretion under Rule 55(b)(2) once a default is
determined to require proof of necessary facts and need not agree that the alleged facts constitute
a valid cause of action." Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981).
Under Rule 55(c) of the Federal Rules of Civil Procedure, a court "may set aside an entry
of default for good cause" prior to an entry of final judgment. In deciding whether to vacate an
entry of default, "the district court is to be guided principally by three factors: (1) whether the
default was willful, (2) whether the defendant demonstrates the existence of a meritorious
defense, and (3) whether, and to what extent, vacating the default will cause the nondefaulting
party prejudice." S.E.C. v. McNulty, 137 F.3d 732, 738 (2d Cir. 1998); see also United States v.
Starling, 76 F.4th 92, 100 (2d Cir. 2023). "The factors a court considers when deciding whether
to set aside a Certificate of Default or a default judgment are the same, but 'courts apply the
factors more rigorously in the case of a default judgment, because the concepts of finality and
litigation repose are more deeply implicated.'" Ramsaran v. Abraham, No. 15-cv-10182, 2017
WL 1194482, *9 (S.D.N.Y. Mar. 30, 2017) (quoting Enron Oil Corp. v. Diakuhara, 10 F.3d 90,
96 (2d Cir. 1993)); see also Am. All. Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 59 (2d Cir. 1996) ("A
motion to vacate a default is subject to a less rigorous standard than applies to a Rule 60(b)
motion to vacate a default judgment") (citation omitted).
The Second Circuit "generally disfavor[s]" default judgment and has expressed a
"preference for resolving disputes on the merits." Enron Oil, 10 F.3d at 96; accord Am. All. Ins.
Co. v. Eagle Ins. Co., 92 F.3d 57, 61 (2d Cir. 1996) ("Strong public policy favors resolving
disputes on the merits"). Therefore, "all doubts must be resolved in favor of the party seeking
relief from the judgment in order to ensure that to the extent possible, disputes are resolved on
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their merits." New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005); see also Starling, 76 F.4th at
100 ("[C]ourts addressing motions to set aside default under Rule 55(c) are extremely forgiving to
the defaulting party and favor a policy of resolving cases on the merits instead of on the basis of
procedural missteps") (quotation marks and citation omitted).
B. 	Application
As to Defendant's "willfulness," the Second Circuit has interpreted the concept, "in the
context of a default, to refer to conduct that is more than merely negligent or careless." S.E.C. v.
McNulty, 137 F.3d 732, 738 (2d Cir. 1998) (collecting cases). "On the other hand, the court may
find a default to have been willful where the conduct of counsel or the litigant was egregious and
was not satisfactorily explained." Id. The Second Circuit set forth the following examples of
"willful" conduct:
[A]n attorney failed, for unexplained reasons, to respond to a
motion for summary judgment, . . . or failed, for flimsy reasons, to
comply with scheduling orders, . . .or failed, for untenable reasons,
after defendants had "purposely evaded service for months," to
answer the complaint, . . . or failed, for incredible reasons, to appear
for a scheduled pretrial conference and unaccountably delayed more
than 10 months before moving to vacate the ensuing default[.]
Id. at 738-39 (citations omitted). Courts generally hold pro se litigants to a less stringent
definition of "willfulness" because "[c]oncerns regarding the protection of a litigant's rights are
heightened when the party held in default appears pro se." Enron Oil Corp. v. Diakuhara, 10
F.3d 90, 96 (2d Cir. 1993). "Hence, as a general rule a district court should grant a default
judgment sparingly and grant leave to set aside the entry of default freely when the defaulting
party is appearing pro se." Id.
Additionally, as relevant here, "[b]y its terms, Rule 55(b)(2) requires advance written
notice only if the party against whom a default judgment is sought has 'appeared in the action.'"
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New York v. Green, 420 F.3d 99, 105 (2d Cir. 2005) (quoting FED. R. C IV. P. 55(b)(2)).
"Ordinarily, an appearance in an action requires a formal submission to the Court." Id. (citing
Key Bank of Maine v. Tablecloth Textile Co., 74 F.3d 349, 353 (1st Cir. 1996)). "Circuits are
divided on whether anything less than a formal appearance is necessary to actuate the notice
requirement of Rule 55(b)(2)." Id. However, "[f]or every court that has embraced the concept of
an informal appearance under Rule 55(b)(2) has required, at a minimum, that the defaulting party,
in communicating with the moving party, express 'a clear intention to defend' the suit." Id.
(collecting cases); compare U.S. Commodity Futures Trading Comm'n v. LaMarco, No. 17-CV-
4087, 2022 WL 18859042, *8 (E.D.N.Y. Dec. 27, 2022), R. & R. adopted, 2023 WL 2495869
(E.D.N.Y. Mar. 14, 2023) (determining that the defendant's conduct was not willful because "his
conduct demonstrates an 'intention and attempt to defend against the action.' . . . LaMarco only
filed the motion to vacate forty-nine days after the Clerk of the Court entered the default, which is
not enough to persuade the Court that LaMarco is an obstructionist adversary that failed to defend
this action"), with Bricklayers & Allied Craftworkers Loc. 2, Albany, N.Y. Pension Fund v.
Moulton Masonry & Const., LLC, 779 F.3d 182, 186 (2d Cir. 2015) ("[T]he record demonstrates
that defendants' default was willful. . . . [T]here is no dispute that Duane Moulton was aware of
the legal action pending against him and his company based on his own admissions and the fact
that the corporate defendant requested, through counsel, an extension of time to respond. Despite
this knowledge, the defendants failed to file a responsive pleading for over nine months after the
receipt of the summons and complaint").
Here, the record demonstrates that Defendant's failure to answer Plaintiff's pro se
complaint before the deadline set forth in Federal Rule of Civil Procedure 12 was not willful. In
Plaintiff's request for entry of default, she explains that Defendant emailed Plaintiff on June 18,
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2025, stating, "I see that you filed a lawsuit against us yesterday, on the advice from my Attorney
I should not respond to you until I am served the papers of your case and review them with him.
At that time, I cannot contact you directly, we can only communicate Attorney to Attorney." Dkt.
No. 19-1 at 1-2. Plaintiff states her amended complaint was served on Defendant on July 15,
2025. See id. at 2. The Clerk's entry of Default was entered on August 6, 2025. See Dkt. No. 20.
Defendant filed his pro se letter on August 20, 2025, explaining that he is waiting to speak with
an attorney who would respond on his behalf. See Dkt. No. 27. One day after Defendant filed
this letter, Plaintiff moved for default judgment. See Dkt. No. 29. Defendant's attorney first
communicated with the Court on September 11, 2025. See Dkt. No. 33.
The Court does not find this conduct to be a willful disregard of the case. Much like the
liberality that must be shown to Plaintiff because of her pro se status, the Court should "set aside
the entry of default freely when the defaulting party is appearing pro se." Enron Oil, 10 F.3d at
96. Defendant first appeared in the action, pro se, on August 20, 2025, which was two months
after the case was initiated. See Dkt. No. 27. When Defendant retained counsel, the attorney
engaged with the Court by filing a pre-motion letter, as required by the undersigned's Individual
Rules, within three months of the original complaint being filed. See Dkt. No. 33. Although
Defendant has not explained why he did not earlier retain counsel or why counsel did not sooner
file a pre-motion letter, the Court does not find the conduct to be a purposeful evasion of the case.
The Court also finds that the meritorious defense factor weighs in Defendant's favor.
"'[I]n order to make a sufficient showing of a meritorious defense in connection with a motion to
vacate a default judgment, the defendant need not establish his defense conclusively, but he must
present evidence of facts that, if proven at trial, would constitute a complete defense.'" State St.
Bank & Tr. Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 167 (2d Cir. 2004) (citing, inter
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alia, American Alliance Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 61 (2d Cir. 1996) ("A defense is
meritorious if it is good at law so as to give the factfinder some determination to make")).
Since the filing of Plaintiff's original complaint and emergency motion for preliminary
injunction, "the Court has [had] serious concerns regarding this Court's subject-matter jurisdiction
over this case." Dkt. No. 8. The Court need not and will not delve too deeply into Defendant's
pending motion to dismiss as that will be addressed in a separate decision; however, the Court
finds that there is enough in the motion to establish a meritorious defense. See Dkt. No. 37.
A lack of subject matter jurisdiction is a complete defense of an action. Defendant has
raised enough information in his motion to give the Court continued pause as to the validity of
Plaintiff's claims regarding S.E.C. violations, conspiracies, discrimination, and other state law
claims. See Li v. Fleet New York Metro. Reg'l Ctr. LLC, No. 21-CV-5185, 2022 WL 1666963, *8
(E.D.N.Y. May 25, 2022) ("Defendants have identified issues regarding the court's jurisdiction,
such that further briefing and consideration is warranted, and such that they have raised a
meritorious legal defense") (citing Lawtone-Bowles v. Seneca Cty. Corr. Div., No. 16-CV-227,
2021 WL 4034525, *3 (W.D.N.Y. Sept. 3, 2021); Bos. Post Rd. Med. Imaging, P.C. v. Allstate
Ins. Co., 221 F.R.D. 410, 414 (S.D.N.Y. 2004)).1
Finally, "[i]n considering the prejudice element, the Court looks to 'the effect of the delay
caused by the defendant's default, such as thwarting plaintiff's recovery or remedy . . . resulting in
the loss of evidence, creating increased difficulties of discovery, or providing greater opportunity
for fraud and collusion.'" LaMarco, 2022 WL 18859042, at *11 (quoting Gov't Emps. Ins. Co. v.
Anikeyev, No. 14-CV-3775, 2016 WL 1275042, *6 (E.D.N.Y. Mar. 31, 2016)). "[S]ince some
delay is inevitable when a motion to vacate default judgment is granted, 'delay alone is not a
1 This is not a determination on the merits of the pending motion to dismiss.
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sufficient basis for establishing prejudice.'' Id. (quoting Green, 420 F.3d at 110); see also Drywall
Tapers & Pointers of Greater New York Loc. Union 1974, IUPAT, AFL-CIO v. Creative
Installations, Inc., 343 F.R.D. 358, 365 (S.D.N.Y. 2022) ("In considering whether a plaintiff
would be prejudiced if a default judgment were vacated, the Court must take into account more
than mere delay or passage of time").
There is nothing before the Court which demonstrates that Plaintiff would be prejudiced
regarding her ability to conduct discovery or recover damages for her claims, if they proved
viable and meritorious, by vacating the Clerk's entry of defaul. "'[P]laintiff must demonstrate that
any prejudice resulting from the defendant's default cannot be rectified in the Court in another
manner were the default to be vacated.'" Id. (quoting Murray Eng'g, P.C. v. Windermere Props.
LLC, No. 12-CV-52 (JPO), 2013 WL 1809637, *5 (S.D.N.Y. Apr. 30, 2013)). Plaintiff has not
done so. Based on the Court's consideration of the requisite factors, Plaintiff's motion for a
default judgment must be denied.
Finally, Plaintiff has requested clarification on the posture of this action. See Dkt. Nos.
30, 56. Through this Memorandum-Decision and Order, Plaintiff's pending motion for a default
judgment has been denied. As such, the only motion currently pending before the Court is
Defendant's motion to dismiss, which will be decided in due course. Any discovery conference
will not be held until after the Court rules on the motion to dismiss and only if the Court permits
some or all of Plaintiff's claims to proceed.
III. CONCLUSION
After carefully reviewing the entire record in this matter, the parties' submissions and the
applicable law, for the reasons set forth above, the Court hereby
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ORDERS that Plaintiff's motion for a default judgment (Dkt. No. 29) is DENIED; and
the Court further
ORDERS that the Clerk of the Court's entry of default (Dkt. No. 20) is VACATED; and
the Court further
ORDERS that Plaintiff's letter requesting clarification as to the status of the case (Dkt.
No. 30) is TERMINATED; and the Court further
ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision
and Order on the parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: March 2, 2026
Albany, New York
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