United States District Court, D. Massachusetts
ORDER ON MOTION TO SET ASIDE DEFAULT JUDGMENT (DOC.
NO. 25) AND MOTION TO DISMISS (DOC. NO. 30)
Sorokin United States District Judge.
Stephen and Jennifer LaBollita sued Home Rental Connections
and Helios Vidal over injuries Stephen suffered during a trip
to Paris. Defendant HRC filed a motion to set aside the
default judgment entered by this court because this Court
lacks personal jurisdiction over HRC. Doc. No. 25. Plaintiffs
opposed, Doc. No. 36, HRC replied, Doc. No. 45, and
Plaintiffs filed a surreply, Doc. No. 51. Vidal filed a
Motion to Dismiss for lack of personal jurisdiction. Doc. No.
30. Plaintiffs opposed, Doc. No. 37, both Defendants replied,
Doc. No. 37, and Plaintiffs filed a surreply, Doc. No. 51.
The Court held a hearing on May 31, 2017. Doc. No. 56. The
Court ALLOWS the Motion to Set Aside Default Judgment, Doc.
No. 25, and the Motion to Dismiss, Doc. No. 30.
Stephen and Jennifer LaBollita are Massachusetts residents.
In 2013 they were were planning a vacation in Paris. Doc. No.
1 at 3. Defendant Paris Rental Connections is an alternate
name for Home Rental Connections (HRC). Id. at 1.
HRC is located in London. Id. HRC advertises
apartments (as well as other types of properties) for owners
including Defendant Helios Vidal. Vidal, a French resident,
owns the “French Flair” apartment in Paris.
Id. at 2-3. HRC advertises properties online through
websites including Slow Travel, TripAdvisor, HomeAway, Rent
by Owner, Airbnb, YouTube, Facebook, Twitter, and Instagram.
Id. at 2. Plaintiffs read reviews written in English
by Americans including Massachusetts residents. While those
websites can be accessed from Massachusetts, HRC does not
target Massachusetts or its consumers specifically. Doc. No.
27 at 2.
early 2013 Plaintiffs searched online for an apartment to
rent for their trip to Paris in July 2013 and found the Paris
Rental Connections website. Doc. No. 1 at 3. After reading
online reviews on multiple websites, including the Paris
Rental Connections website, Plaintiffs filled out an online
inquiry form on the Paris Rental Connections website stating
their interest in one or more properties, their contact
information including the city that they lived in, and their
vacation dates. Doc. No. 1 at 3; Doc. No. 38-1 at 136. An HRC
representative emailed Plaintiffs in response. Doc. No. 1 at
3. After a few emails back and forth, Plaintiffs and HRC
agreed that Plaintiff would rent the French Flair apartment
in Paris owned by Vidal on July 11, 2013 for seven nights.
Id. Plaintiffs and HRC executed by email a form
contract with the dates, apartment, amount and other similar
information completed. Doc. No. 1 at 3 Plaintiffs paid a
rental fee and security deposit by wire transfer from
Massachusetts before they left for Paris. Id.
According to the rental agreement, the check in time was 2:00
pm and a local agent of HRC would meet Plaintiffs at the
arrived in Paris at 2:35 pm on July 11, 2013, and contacted
HRC's agent who said she would arrive shortly.
Id. Plaintiffs went to the building in which French
Flair is located. They entered the common area of the
building using a code provided to them by HRC. Id.
No representative of HRC was present. Id. at 4.
Plaintiffs called and emailed HRC several times but were left
waiting in the common area of the property for “several
hours.” Id. While waiting, Plaintiff Stephen
LaBollita descended a spiral staircase in the common area and
fell, sustaining serious injuries. Id. Stephen
LaBollita went to the hospital after some confusion over the
ambulance with HRC and was diagnosed with a complete rupture
of his quadriceps tendon requiring emergency surgery.
three years later, Plaintiffs filed suit against HRC and
Vidal in the District of Massachusetts on July 8, 2016. Doc.
No. 1. Plaintiffs allege negligence against HRC (Count 1) and
Vidal (Count 2), negligent misrepresentation against HRC
(Count 3) and Vidal (Count 4), breach of contract against HRC
(Count 5), breach of warranty against HRC (Count 6) and Vidal
(Count 7), loss of consortium against HRC (Count 8) and Vidal
filed an affidavit of service as to HRC on October 5, 2016.
Doc. No. 5. On October 20, 2016, Plaintiffs requested that
the clerk enter default as to HRC. Doc. No. 6. On October 25,
2016, the clerk entered default. Doc. No. 7. On November 21,
2016, Plaintiffs moved for a default judgment as to HRC. Doc.
No. 8. On January 12, 2017, the Court allowed this motion.
Doc. No. 13, 14. However, no judgment entered against HRC.
Rather, the Court referred the matter to the Magistrate Judge
for an assessment of damages hearing and recommendation. Doc.
No. 15. On February 8, 2017, Magistrate Judge Bowler schedule
an assessment of damages hearing for March 8, 2017; the Clerk
mailed the notice of hearing to HRC that day. Doc. No. 16,
18. On the same day, Vidal's attorney entered a notice of
appearance. Doc. No. 19. On March 2, 2017, HRC's
attorneys entered notices of appearance and filed a motion to
set aside the default judgment. Doc. Nos. 23, 24, 25. On
March 2, 2017, Vidal filed a motion to dismiss for lack of
personal jurisdiction. Doc. No. 30. Plaintiffs opposed both
motions, Doc. Nos. 36, 37, and Defendants replied, Doc. Nos.
45, 46. Plaintiffs filed a surreply to the motion to dismiss
for lack of personal jurisdiction. Doc. No. 51. On May 31,
2017, the Court heard oral argument on both motions. Doc. No.
Motion to Lift Default
Defendants filed a motion to set aside the default judgment
under Rule 60(b)(1), Rule 55(c) governs because no final
judgment has entered. See Fed.R.Civ.P. 55(c)
(“The court may set aside an entry of default for good
cause, and it may set aside a final default judgment under
Rule 60(b).”). The ruling on the motion for a default
judgment was not itself a final judgment. The Court had
reached no conclusion regarding damages. Nor had the Court
entered a judgment let alone a final judgment under Rule
54(b). Thus, the less stringent Rule 55(c) standard applies.
demanding standards set by Rule 60(b) apply only in seeking
relief from a final judgment.” Fed R. Civ. P. 55
advisory committee note on 2015 amendment. “Good
cause” under Rule 55(c) “is a liberal standard,
‘but not so elastic as to be devoid of
substance.'” Commerce Bank & Trust Co. v.
Ria LLC, Civ. A. No. 4:14-cv-40140-TSH, 314 F.R.D. 338,
340 (D. Mass. 2016) (quoting Coon v. Grenier, 867
F.2d 73, 76 (1st Cir. 1989)). “Numerous factors are
relevant to an analysis under Rule 55(c): whether the default
was willful; whether setting aside the default would
prejudice the adversary; whether a meritorious defense is
presented; the strength of the proffered explanation for the
default; the good faith of the parties; the amount of money
involved; and the timing of the motion.” Id.
While those factors are relevant, however, “[t]he
‘Rule 55(c) determinations are case-specific' and
‘must, therefore, be made in a practical, commonsense
manner, without rigid adherence to, or undue reliance upon, a
mechanical formula.'” KPS & Assocs., Inc.
v. Designs by FMC, Inc., 318 F.3d 1, 12 (1st Cir. 2003)
(quoting Gen. Contracting & Trading Co. v. Interpole,
Inc., 899 F.2d 109, 112 (1st Cir. 1990)). The First
Circuit has noted that the policy considerations inherent in
Rule 1 “are at their zenith in the Rule 55(c)
milieu.” Coon v. Grenier, 867 F.2d 73, 76 (1st
Cir. 1989); see Fed.R.Civ.P. 1 (“These rules .
. . should be construed, administered, and employed by the
court and the parties to secure the just, speedy, and
inexpensive determination of every action and
argue only that the motion should be denied because HRC
failed to show excusable neglect in reliance on the Rule
60(b) standard. However, Rule 55(c) directs the Court to
consider other relevant factors as well. Here, the delay was
short, a month and a half from the order entering default
judgment and the motion to set aside the default judgment.
There is little, if any, prejudice to Plaintiffs as the
litigation has not proceeded, no hearing on the assessment of
damages was held, and final judgment has not been entered.
Additionally, the owner of HRC states that the papers she
received did not include a summons and pages were missing.
Doc. No. 27 at 3. She states that, while she knew that she
had been sued in the US, she did not know when or to whom she
was meant to respond to. Id. Finally, once HRC learned of