MACREGEN, INC. v. BURNETTE

CourtDistrict Court, M.D. North Carolina
DecidedJune 2, 2021
Docket1:19-cv-00591
StatusUnknown

This text of MACREGEN, INC. v. BURNETTE (MACREGEN, INC. v. BURNETTE) is published on Counsel Stack Legal Research, covering District Court, M.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MACREGEN, INC. v. BURNETTE, (M.D.N.C. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

) MACREGEN, INC., ) ) Plaintiff, v. ) 1:19CV591 )

W. NEAL BURNETTE III, ) )

Defendant. ) ) MEMORANDUM OPINION AND ORDER This matter is before the Court on Plaintiff MacRegen, Inc.’s Motion for Attorneys’ Fees and Costs [Doc. #20] occasioned by the setting aside of the Clerk’s entry of default against Defendant W. Neal Burnette III (“Burnette”). For the reasons explained below, the motion is granted in part and denied in part in that MacRegen, Inc. (“MacRegen”) is awarded attorney’s fees, but the requested fees are reduced. MacRegen filed the instant action seeking a declaratory judgment as to its contractual obligations to Burnette. (See generally Compl. [Doc. #1].) Burnette was served on June 17, 2019 via a Federal Express delivery that his wife received but about which she failed to inform Burnette. (Decl. of W. Neal Burnette III, PhD ¶ 3 [Doc. #15-1].) He learned of the suit more than a week later upon receipt of an affidavit of service and “immediately sought legal representation.” (Id. ¶ 4.) He “was informed and believed that prospective counsel was prepared to represent [him]” only to learn on or about July 8, 2019 “that prospective counsel was unable to represent [him]”. (Id. ¶¶ 5-6.) Because Burnette failed to answer or otherwise respond to the Complaint timely, MacRegen sought entry of default against Burnette, which was entered on July 11, 2019. (Mot. for Entry of Default [Doc. #6]; Clerk’s Entry of Default [Doc. #8].) Aside from MacRegen’s certificate of

service filed on July 12, 2019 recording the service of the Entry of Default on Burnette, nothing was filed in the case until October 3, 2019 when MacRegen moved for default judgment. (See generally Docket; Mot. for Default J. [Doc. #10].) Unbeknownst to the Court, though, Burnette successfully secured (current)

counsel, Brad Hill (“Hill”), on July 22, 2019, (Decl. of Burnette ¶ 8), who emailed MacRegen’s counsel, David Dorey (“Dorey”) and Pamela Duffy (“Duffy”), the same day of his intent to move to set aside the default “by the end of the day tomorrow” and requested MacRegen’s position on the motion, (E-mail from Brad Hill to David Dorey (July 22, 2019) [Doc. #28-1]). Apparently the parties’ counsel discussed the matter over the telephone, (see Def.’s Mem. in Opp’n at 4 [Doc.

#26]), until August 27, 2019 when Dorey emailed Hill that MacRegen could not consent to setting aside the default (after explaining his reasoning but welcoming further discussion on the matter if Hill could supply cases in support of his position), (E-mail from David Dorey to Brad Hill (Aug. 27, 2019 3:46 PM) [Doc. #17-1]). In addition, Dorey conveyed his client’s interest in discussing resolution

of the matter, apparently a continuation of an earlier conversation between counsel, (E-mail from David Dorey to Brad Hill (Aug. 27, 2019 3:58 PM) [Doc. #17-1]), an invitation to which Hill responded the following day seeking further discussion, (E-mail from Brad Hill to David Dorey (Aug. 28, 2019) [Doc. #17-1]). Nevertheless, having learned on August 27 that MacRegen would not

consent to setting aside the default, Hill did not move the Court to do so. Nearly a month later, on September 22, Dorey emailed Hill, “ . . . I am somewhat surprised I have not seen a motion to open the default. What are your plans in that respect? While I left the timing issue open for some time to talk, I am not sure I understand what’s left to do for you to file your motion.” (E-mail from Dorey to Hill (Sept. 22,

2019) [Doc. #16-1].) But that inquiry failed in its attempt to encourage Hill to move things along. By October 3, Hill had yet to move to set aside default, so MacRegen moved for default judgment. Not until six days later did Hill make a notice of appearance before the Court and move to set aside entry of default, (Notice [Doc. #13]; Mot. to Set Aside Default [Doc. #14]), prompting the Clerk to remove the motion for default judgment from the Court’s consideration, (see Text

Entry (Oct. 10, 2019)). The motion to set aside entry of default was granted. (See generally Mem. Op. & Order [Doc. #18].) MacRegen has moved for an award of attorney’s fees1 in the amount of $16,450.00 “associated with filing its Motion for Entry of Default, Motion for

1 Although MacRegen entitles its motion as one for “Attorneys’ Fees and Costs”, it clarifies in its Reply that it “has not sought recovery of any costs” and that although “[t]he costs in Ms. Duffy’s affidavit were not redacted, . . . the total amount to be recovered only includes attorneys’ fees.” (Pl.’s Reply at 11 [Doc. #28].) Therefore, Burnette’s challenges to MacRegen’s recovery of costs, (Def.’s Mem. in Opp’n at 15-16), are not discussed. Default Judgment, and having to respond to Defendant’s Motion to Set Aside Entry of Default”. (Mot. at 3.) Burnette opposes the motion because there was no bad faith; instead Hill’s discussions with MacRegen’s counsel about settlement and

setting aside the entry of default “were designed to avoid the very fees and costs that Plaintiff now deems to be an appropriate sanction.” (Def.’s Mem. in Opp’n at 4-5.) In the alternative, were fees to be awarded, he argues that they should be awarded only for MacRegen’s Motion for Default Judgment because it is the only action attributable to Hill’s unreasonable delay. (Id. at 6-7.) He also contends that

it would be “unjust” to award fees for MacRegen’s opposition to Burnette’s motion because of the parties’ “robust discussions” about setting aside default to which MacRegen ultimately would not consent. (Id. at 6-7.) As the Court explained in the Memorandum Opinion and Order granting Burnette’s motion to set aside the entry of default, “[l]ess drastic sanctions [than denying Burnette’s motion] are available such as attorney fees or costs associated

with filing MacRegen’s Motion for Entry of Default and Motion for Default Judgment and having to respond to Burnette’s Motion.” (Mem. Op. & Order at 12 (citing Lolatchy v. Arthur Murray, Inc., 816 F.2d 951, 953-54 (4th Cir. 1987).) Such is the case here where months passed after default was entered before Hill noticed his appearance in the matter and moved to set aside the entry of default.

Although Burnette was found to be “mostly blameless” for the entry of default, he is a sophisticated individual, (see Decl. of Burnette, Ex. A Curriculum Vitae), whose actions to some degree caused MacRegen to move for entry of default after he failed to answer or otherwise respond to the Complaint. Then, Hill “failed to act with reasonable promptness in attempting to set aside the entry of default.” (Mem. Op. & Order at 7.) Parties’ discussions about resolving a matter are to be

encouraged, but counsel must remain aware of the consequences of failing to take certain actions before the Court in a timely manner. Here, Hill takes issue with awarding fees for time during which MacRegen was deciding if it would consent to Burnette’s motion. But, that consideration was occasioned entirely by Burnette’s default. After being notified that MacRegen would not consent to the motion, Hill

did not move the Court to set aside default. After receiving Dorey’s follow-up email the following month asking about his plans to move to set aside default, Hill still did not do so. Faced with Hill’s inaction, MacRegen moved for default judgment. An award of attorney’s fees for all stages of Burnette’s default is an appropriate sanction. The next step is to determine whether MacRegen’s requested attorney’s

fees are reasonable. MacRegen’s North Carolina counsel, Pamela S.

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Bluebook (online)
MACREGEN, INC. v. BURNETTE, Counsel Stack Legal Research, https://law.counselstack.com/opinion/macregen-inc-v-burnette-ncmd-2021.