Bush v. Brenner Car Credit, LLC

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
SANDRA BUSH,
Plaintiff,
v.
BRENNER CAR CREDIT, LLC d/b/a
BRENNER CAR CREDIT OF
CARLISLE,
Defendants.
CIVIL ACTION NO. 1:25-cv-01224
(MEHALCHICK, J.)
MEMORANDUM
Plaintiff Sandra Bush (“Bush”) initiated this action on June 7, 2025, by filing a
complaint against Defendant Brenner Car Credit, LLC d/b/a Brenner Car Credit of Carlisle
(“Brenner”). (Doc. 1). Before the Court is Bush’s motion for default judgment (Doc. 7), filed
on October 23, 2025, and Brenner’s motion to set aside the Clerk of Court’s entry of default
(Doc. 9), filed on October 31, 2025. For the following reasons, Bush’s motion for entry of
default judgment (Doc. 7) will be DENIED and Brenner’s motion to set aside the Clerk of
Court’s entry of default (Doc. 9) will be GRANTED.
I. BACKGROUND AND PROCEDURAL HISTORY
Following an administrative action based on the same events, on July 7, 2025, Bush
filed a complaint and jury demand (the “complaint”) against Brenner alleging gender
discrimination, sexual harassment, and retaliation under Title VII and the Pennsylvania
Human Relations Act. (Doc. 1, at 3-4, 7-11). Counsel for Bush was familiar with Brenner’s
counsel from the law firm of Smigel, Anderson & Sacks, LLP, particularly Stuart S. Sacks
(“Sacks”), from the prior administrative proceedings. (Doc. 10, at 1). Bush’s counsel reached
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out to Sacks requesting acceptance of service of the complaint. (Doc. 10, at 1-2). On
September 2, 2025, counsel for Brenner advised Bush’s counsel as follows:
Mr. Koller: My partner Stuart Sacks has asked me to become involved
with the above matter. Our client has placed its insurance on notice of your
client’s claims and we are awaiting a coverage determination. If the company
accepts service, it may appoint its own counsel to defend. Therefore, we are not
in a position to accept service of the Complaint at this time. Please confirm
receipt of this email.
(Doc. 10, at 2).
On September 22, 2025, counsel for Bush executed service by personally serving
Brianna Smith, branch manager for Brenner. (Doc. 10, at 2; Doc. 12, at 4). Brenner did not
advise its counsel that it had been personally served with the complaint. (Doc. 10, at 2). Bush
filed a request for entry of default with the Court on October 17, 2025. (Doc. 12, at 4-5). On
October 18, 2025, counsel for Bush mailed the request for entry of default to Brenner at the
address of the dealership and at Brenner’s corporate headquarters. (Doc. 12, at 4-5). The Clerk
of Court entered default against Brenner on October 20, 2025. (Doc. 6). Brenner’s counsel did
not receive notice of service until the default notice was received by Brenner on October 22,
2025. (Doc. 10, at 2). Brenner filed an answer in this case on October 31, 2025. (Doc. 8).
II. LEGAL STANDARD FOR DEFAULT JUDGMENT
Default judgments are governed by a two-step process set forth under Rule 55 of the
Federal Rules of Civil Procedure. An entry of default by the Clerk of Court under Rule 55(a)
is a prerequisite to a later entry of a default judgment under Rule 55(b). See 10A Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure § 2682 (3d ed. 2007) (noting that,
“[p]rior to obtaining a default judgment under either Rule 55(b)(1) or Rule 55(b)(2), there
must be an entry of default as provided by Rule 55(a)”). Once the Clerk of Court has entered
a default, the party seeking the default may then move the court to enter a default judgment
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under Rule 55(b)(2). Entry of default does not entitle a claimant to default judgment as a
matter of right. 10 James Wm. Moore et al., Moore's Federal Practice § 55.31 (Matthew
Bender ed. 2010). Indeed, it is well settled that decisions relating to the entry of default
judgments are committed to the sound discretion of the district court. See Emcasco Ins. Co. v.
Sambrick, 834 F.2d 71, 74 (3d Cir. 1987).
Three factors control the exercise of the district court's discretion in assessing whether
default judgment should be granted following the entry of default: “(1) prejudice to the
plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and
(3) whether defendant's delay is due to culpable conduct.” See Chamberlain v. Giampapa, 210
F.3d 154, 164 (3d Cir. 2000) (citing United States v. $55,518.05 in U.S. Currency, 728 F.2d 192,
195 (3d Cir. 1984)). Even so, a court may “enter a default judgment based solely on the fact
that the default occurred” without considering the Chamberlain factors if the defendant has
been properly served but fails to appear, plead, or defend an action. See Anchorage Assocs. v.
Virgin Islands Bd. of Tax Review, 922 F.2d 168, 177 n.9 (3d Cir. 1990).
“A finding that default judgment is appropriate, however, is not the end of the inquiry.”
Martin v. Nat'l Check Recovery Servs., LLC, No. 1:12-cv-01230, 2016 WL 3670849, at *1 (M.D.
Pa. July 11, 2016). Prior to entering a default judgment, the Court must also determine
whether the “unchallenged facts constitute a legitimate cause of action.” See Wright et al., at
§ 2688; Broad. Music, Inc. v. Spring Mount Area Bavarian Resort, Ltd., 555 F. Supp. 2d 537, 541
(E.D. Pa. 2008) (stating that, “before granting a default judgment, the Court must . . .
ascertain whether ‘the unchallenged facts constitute a legitimate cause of action, since a party
in default does not admit mere conclusions of law’” (citations omitted)). In conducting this
inquiry, “the well-pleaded, factual allegations of the complaint . . . are accepted as true and
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treated as though they were established by proof.” See E. Elec. Corp. of N.J. v. Shoemaker Const.
Co., 652 F. Supp. 2d 599, 605 (E.D. Pa. 2009) (citation omitted). While the Court must accept
as true the well-pleaded factual allegations of the complaint, the Court need not accept the
moving party's factual allegations or legal conclusions relating to the amount of damages. See
Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).
III. DISCUSSION
Bush moves for the Court to enter a default judgment against Brenner (Doc. 7), while
Brenner moves for the Court to set aside the Clerk of Court’s entry of default. (Doc. 9).
Brenner contends that the default entered against it should be removed because Bush is not
prejudiced by removing the default; Brenner has a meritorious defense; and Brenner’s failure
to file an answer was an inadvertent mistake. (Doc. 10, at 2-3). Brenner explains that its failure
to file an answer to the complaint was based in part on the understanding that Bush was
holding off from serving the complaint until Brenner could determine the existence of
insurance coverage. (Doc. 10, at 3). Bush counters that Brenner’s failure to timely answer the
complaint was not inadvertent and resulted in prejudice to her ability to litigate the claims.
(Doc. 12, at 6-8).
Federal Rule of Civil Procedure 55(c) provides that, “[t]he court may set aside an entry
of default for good cause . . .” Courts have broad discretion in deciding whether to set aside
an entry of default. Doe v. Hesketh, 828 F.3d 159, 175 (3d Cir. 2016); Momah v. Albert Einstein
Med. Cntr., 161 F.R.D. 304, 307 (E.D. Pa. 1995) (citing Hamilton v. Edell, 67 F.R.D. 18, 20
(E.D. Pa. 1975)). Courts tend to disfavor the default procedure because the interests of justice
are generally best served with a decision on the merits. Farnese v. Bagnasco, 687 F.2d 761, 764
(3d Cir. 1982); Medunic v. Lederer, 533 F.2d 891, 893 (3d Cir. 1976); Momah, 161 F.R.D. at
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307. “Thus, Rule 55(c) motions are construed liberally in favor of the movant.” Momah, 161
F.R.D. at 307 (citing Hamilton, 67 F.R.D. at 20).
The Third Circuit has set forth three key factors to determine whether there is good
cause to set aside an entry of default: (1) whether setting aside the default would prejudice the
plaintiff; (2) whether defendant has asserted a meritorious defense; (3) the extent to which the
defendant’s culpability caused the default. Hesketh, 828 F.3d at 174-75; Chamberlain, 210 F.3d
at 164; Emasco Ins. Co., 834 F.2d at 83; Farnese, 687 F.2d at 764. The parties do not dispute
the second factor, that Brenner has submitted a meritorious defense. (Doc. 10, at 3; Doc. 12,
at 6-8; see Doc. 8). The Court will first address whether setting aside the Clerk of Court’s entry
of default will prejudice the plaintiff. Then the Cort will address whether the entry of default
was caused by culpable conduct.
A. BUSH IS NOT PREJUDICED BY SETTING ASIDE ENTRY OF DEFAULT.
Brenner avers that prejudice to Bush would be minimal because there was only a brief
period of delay between service of process and Brenner filing an answer to the complaint.
(Doc. 10, at 3). Bush counters that her ability to litigate the claims becomes more difficult the
longer it takes for Brenner to address the claims. (Doc. 12, at 6). Bush submits that she has
faced general prejudice associated with delay in litigation, including the costs of preparing
and serving the motion for default judgment. (Doc. 12, at 6).
Prejudice to a plaintiff “exists if circumstances have changed since entry of the default
such that plaintiff's ability to litigate its claim is now impaired in some material way or if
relevant evidence has become lost or unavailable.” Accu-Weather, Inc. v. Reuters Ltd., 779 F.
Supp. 801, 802 (M.D. Pa. 1991) (citing Zawadski de Bueno v. Bueno Castro, 822 F.2d 416, 420
(3d Cir. 1987)). “Delay in realizing satisfaction on a claim rarely serves to establish [a
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sufficient] degree of prejudice.” Feliciano v. Reliant Tooling Co., Ltd., 691 F.2d 653, 656-57 (3d
Cir. 1982).
While Brenner’s failure to file a timely answer has subjected Bush to some delay and
costs, nothing in this case indicates that Bush’s overall ability to pursue her claims suffers.
Bush only asserts the hours and costs lost in waiting to litigate the case. (Doc. 12, at 6). Bush
has not provided any indication of material impairments to her ability to litigate, such as a
loss of relevant evidence. See Zawadski de Bueno, 822 F.2d at 420; Gross v. Stereo Component
Systems, Inc., 700 F.2d 120, 122 (3d Cir. 1983); Accu-Weather, Inc., 779 F. Supp. at 802.
Therefore, the first factor, prejudice against Bush, weighs in favor of setting aside the entry of
default against Brenner.
B. BRENNER DID NOT DEMONSTRATE CULPABLE CONDUCT.
Brenner contends that the Clerk’s entry of default resulted from an inadvertent mistake
not culpable conduct. (Doc. 10, at 3-4). Brenner explains that it was awaiting a response on
the insurance coverage issue and was operating on an understanding that Bush’s counsel was
willing to wait to serve the complaint until Brenner’s counsel was determined. (Doc. 10, at 3-
4). Bush counters that Brenner’s delay was more than inadvertent. Bush reasons that
Brenner’s failure to timely answer the complaint cannot be considered inadvertent because
Brenner failed to provide any explanation as to the steps taken after receipt of service. (Doc.
12, at 7-8).
Culpable conduct is classified as “dilatory behavior that is willful or in bad faith.”
Dizzley v. Friends Rehab. Program, Inc., 202 F.R.D. 146, 148 (E.D. Pa. 2001) (citing Gross, 700
F.2d at 124). “‘Mere negligence’ on the part of the defendant does not satisfy the culpability
standard.” Daughtry v. Kauffman, No. 3:17-CV-0442, 2019 WL 118600, at *3 (M.D. Pa. Jan.
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7, 2019) (quoting Hritz v. Woma Corp., 732 F.2d 1178, 1183 (3d Cir. 1984)). Further, courts
consider “the extent to which the error is attributable exclusively to defendant['s] counsel.”
Momah, 161 F.R.D. at 308 (citing Interior Finish Contractors Assoc. v. Drywall Finishers Local
Union No. 1955, 625 F. Supp. 1233, 1239 (E.D. Pa. 1985)). Grounds sufficient to justify setting
aside a default judgment under Rule 55(c) include “mistake, inadvertence, surprise, or
excusable neglect” as well as “any other reason that justifies relief.” Fed. R. Civ. P. 60(b). The
Third Circuit has found that breakdowns in communication between client and counsel and
delayed efforts to appoint appropriate counsel do not constitute culpable conduct. Gross, 700
F.2d at 123-24; Donnelly v. Johns-Manville Sales Corp., 677 F.2d 339, 343 (3d Cir. 1982).
Brenner’s actions in this matter did not rise to a level of culpable conduct. Brenner
filed its answer on October 31, 2025 – 39 days after the date of service, 11 days after the Clerk
of Court’s entry of default, and 8 days after Bush filed the motion for entry of default judgment.
(Doc. 12, at 5). Brenner explained that it was operating on an understanding that Bush would
not serve the complaint until Brenner determined its counsel, which would be based on its
insurance coverage determination. (Doc. 10, at 3). Unfortunately, Brenner informed Bush of
the insurance coverage delay on the same day Bush effectuated service on Brenner. (Doc. 12,
at 7). While Brenner’s explanation for its failure to answer the complaint may demonstrate
negligence that had a dilatory result, it does not demonstrate dilatory intent or bad faith. See
Gross, 700 F.2d at 123-24 (finding no culpable conduct resulting from a breakdown in
communication between client and counsel); see Donnelly, 677 F.2d at 343 (finding prior
counsel’s efforts to locate appropriate counsel for the case was not a willful or dilatory delay).
Therefore, this factor weighs in favor of setting aside the entry of default. In exercising its
broad discretion, the Court finds that, with a lack of material prejudice against Bush, a
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meritorious defense already submitted by Brenner, and an absence of culpable conduct by
Brenner, setting aside the entry of default to allow for a decision on the merits best serves the
interest of justice. See Farnese, 687 F.2d at 764; Medunic, 533 F.2d at 893; Momah, 161 F.R.D.
at 307.
IV. CONCLUSION
For the foregoing reasons, Bush’s motion for entry of default judgment (Doc. 7) is
DENIED and Brenner’s motion to set aside the Clerk of Court’s entry of default (Doc. 9) is
GRANTED.
An appropriate Order follows.
Dated: January 15, 2026 s/ Karoline Mehalchick ____
KAROLINE MEHALCHICK
United States District Judge
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