United States District Court, D. Maryland
Richard D. Bennett United States District Judge.
Santander Bank, N.A. ("Plaintiff or "Mr.
Gaver") brings this action against Defendants Mark
Gaver, Gaver Properties, LLC, Gaver Consulting, LLC, Fawley
Family Partnership, Pelican Colony Partnership, LLC and Donna
Gaver. (Am. Compl., ECF No. 39.) Currently pending before
this Court is Defendant Mark Gaver's Motion to Set Aside
Entry of Default. (ECF No. 81.) The issues have been fully
briefed and this Court has reviewed the parties'
submissions. For the following reasons, Defendant Mark
Gaver's Motion to Set Aside Entry of Default (ECF No. 81)
filed an initial complaint on February 8, 2017, alleging that
Mark Gaver ("Mr. Gaver"), obtained a credit line
and increases to that credit line for his company, Gaver
Technologies ("GTI"), by submitting to Santander
Bank fraudulent financial statements which grossly inflated
the financial performance of GTI. (ECF No. 1.) GTI is now
insolvent and unable to repay the outstanding balance of the
loan. (Id.) Plaintiff alleges that "[a]s a
direct and proximate result of Mark Gaver's fraud,
Santander has suffered damages of nearly $50 million."
(Id. at ¶ 68.) In addition, the Plaintiff
alleges that because Mr. Gaver was an alter-ego of GTI, Mr.
Gaver is personally liable for GTI's breach of the loan.
(Id. at ¶ 87.)
February 15, 2017, Plaintiff attempted to serve Mr. Gaver in
his personal capacity at his listed office address, but was
told that Mr. Gaver was neither physically present nor
maintained an office at the address. (ECF No. 25.) Around the
same time, Plaintiff also attempted to locate Mr. Gaver at
his personal address but was unsuccessful. (Id.)
Approximately five months later, on June 12, 2017, this Court
permitted the Plaintiff to serve Mr. Gaver by e-mail and
through his attorney, whose representation was for a separate
Florida proceeding. (ECF No. 29.) Plaintiff successfully
served Mr. Gaver on June 13 and 14, 2017. (ECF Nos. 30, 31.)
5, 2017, Mr. Gaver, acting pro se, timely filed a
Motion to Dismiss. (ECF No. 36.) One week later, Plaintiff
served Mr. Gaver with an Amended Complaint. (ECF Nos. 39,
61.) Once again, acting pro se, Mr. Gaver timely
filed a Motion to Dismiss the Amended Complaint, which this
Court denied on September 28, 2017. (ECF. Nos. 54, 59.)
Therefore, Mr. Gaver's response to the Amended Complaint
was due on October 12, 2017. (ECF No. 73.) Nevertheless, Mr.
Gaver did not respond to the Amended Complaint.
November 14, 2017, the Plaintiff filed a Motion for
Clerk's Entry of Default against Mr. Gaver. (ECF No. 71.)
One day later, on November 15, 2017, Mr. Gaver was arrested.
(ECF Nos. 81, 82.) On November 16, 2017, default was entered
against Mr. Gaver. (ECF No. 73.)
Federal Rule of Civil Procedure 55, this Court may set aside
the entry of default against Mr. Gaver "for good
cause." Fed.R.Civ.P. 55(c). As the United States Court
of Appeals for the Fourth Circuit explained in Colleton
Preparatory Academy, Inc. v. Hoover Universal, Inc., 616
F.3d 413 (4th Or. 2010):
When deciding whether to set aside an entry of default, a
district court should consider whether the moving party has a
meritorious defense, whether it acts with reasonable
promptness, the personal responsibility of the defaulting
party, the prejudice to the party, whether there is a history
of dilatory action, and the availability of sanctions less
Id. at 417 (quoting Payne ex rel. Estate of
Canada v. Brake, 439 F.3d 198, 203 (4th Or.
2006)).Motions pursuant to Rule 55(c) are left
"largely within the discretion of the trial judge."
Payne ex rel. Estate of Canada v. Brake, 439 F.3d
198, 205 (4th Or. 2006).
all of the Colleton factors, the record does not
show good cause to set aside Mr. Gaver's Entry of
Default. First, Mr. Gaver argues that he acted with
reasonable promptness. (ECF No. 81 at 2.) In
Colleton, the Fourth Circuit explained that this
factor weighed in favor of the moving party, a corporation,
when the corporation moved to set aside the entry of default
"within nine days after its counsel learned of the
existence of the case." 616 F.3d at 418 (citations
omitted). However, the record shows that Mr. Gaver had ample
notice of the lawsuit since he was served on June 13 and 14,
2017. Moreover, Mr. Gaver timely filed motions to dismiss in
response to the original Complaint and the Amended Complaint,
demonstrating his knowledge of the lawsuit. Although Mr.
Gaver was arrested on November 15, 2016, this was well after
October 12, 2017, the day a response to the Amended Complaint
was due. Therefore, this Court Ends that Mr. Gaver did not
act with reasonable promptness. By extension, since Mr. Gaver
met previous filing deadlines and was acting pro se,
this Court also finds that Mr. Gaver was personally
responsible for the default. See United States v.
Moradi, 673 F.2d 725, 728 (4th Cir. 1982) (holding that
"justice [ demands that a blameless party not be
disadvantaged by the errors or neglect of his attorney which
cause a final, involuntary termination of proceedings").
Mr. Gaver argues that he has a meritorious defense. To
establish a meritorious defense, the moving party must
proffer some evidence "which, if believed, would permit
either the Court or the jury to find for the defaulting
party." United States v. Moradi, 673 F.2d 725,
727 (4th Cir. 1982) (citations omitted). Specifically, Mr.
Gaver argues that he "has the meritorious defense of
impossibility or impracticability, as he was for large time
periods prevented by court order from making any payments to
the Plaintiff from GTI assets as well as operating his
company" pursuant to a February 28, 2017, ruling in a
separate divorce case. (ECF No. 81 at 4-5.) The Plaintiffs claim,
however, is that from 2009 to 2016 "Mark Gaver submitted
materially false and misleading financial statements and
other information concerning GTL" (ECF No. 39 at 23.)
Therefore, Mr. Gaver's argument is irrelevant and this
Court finds that Mr. Gaver does not have a meritorious
Mr. Gaver argues that the "Plaintiff will not be
prejudiced by setting aside the default." (ECF No. 81 at
6.) The Plaintiff "does not claim actual prejudice from
the default except for the unnecessary legal fees incurred .
. . [and] less drastic sanctions-including the award of legal
fees-are always available as an alternative to default."
(ECF No. 82 at 6-7.) Therefore, setting aside the default
would not cause the Plaintiff undue prejudice. However, the
lack of prejudice does not weigh heavily in this case when
compared to the promptness, personal responsibility, and lack
of meritorious defense factors. Accordingly, Mr. Gaver has
not shown good cause for this Court to set aside its entry of
IT IS HEREBY ORDERED this 23rd day of March, 2018, that
Defendant Mark Gaver's Motion to Set Aside Entry of
Default (ECF No. 81) is DENIED. The Clerk of this ...