Order | Filed: October 01, 2026
| Entered: October 01, 2026
Trustees of the Pavers and Road Builders District Council Welfare, Pension, and Annuity Funds et al v. TDII Corp. et al
Labor: E.R.I.S.A. | New York Eastern
Order Adopting Report and Recommendations Order on Report and Recommendations Order on Motion for Default Judgment
Order Denying 17 MOTION for Default Judgment -- On May 30, 2025, Magistrate Judge Lara K. Eshkenazi issued a Report and Recommendation ("R&R") recommending granting Plaintiffs' motion for default judgment as to all of Plaintiffs' claims, but reducing the requested award of attorneys' fees. See, Dkt. Entry No. 25 . On June 12, 2025, Defendant Thomas DeMartino ("DeMartino") appeared through counsel and requested an extension of time in which to respond to the R&R. See, Dkt. Entry Nos. 28 & 29 . For good cause shown, the Court granted DeMartino's extension request and ordered him to file objections to the R&R by no later than July 11, 2025. See, Electronic Order dated June 13, 2025. On July 11, 2025, DeMartino filed his objections to the R&R. See, DeMartino's Objections to R&R ("Objections"), Dkt. Entry No. 30 .
Courts in the Second Circuit prefer to resolve cases on the merits. See, e.g., City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 129 (2d Cir. 2011) (noting "a strong preference for resolving disputes on the merits"). In determining whether there is "good cause" to vacate entry of default under Fed. R. Civ. P. 55(c), a district court must consider three factors: (1) the willfulness of the default; (2) the existence of a meritorious defense to the defaulted claims; and (3) prejudice to the non-defaulting party should relief be granted. Roslyn 26, LLC v. Nat'l Gen. Ins. Co., 2025 WL 2494318, at *2 (E.D.N.Y. Aug. 29, 2025) (citing Pecarsky v. Galaxiworld.com, Ltd., 249 F.3d 167, 171 (2d Cir. 2001)). However, "no single factor is dispositive." FedEx TechConnect, Inc. v. OTI, Inc., 2013 WL 5405699, at *4 (S.D.N.Y. Sept. 23, 2013). Furthermore, "when doubt exists as to whether a default should be granted or vacated, the doubt should be resolved in favor of the defaulting party." Roslyn 26, LLC, 2025 WL 2494318, at *2 (citing Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993)).
The Court finds that there is "good cause" to vacate the certificates of default and deny Plaintiff's motion for default judgment. First, when viewed in the light most favorable to DeMartino and TDII Corp. ("TDII"), the default was not willful. DeMartino did not receive the summons and complaint, did not receive notice of the current lawsuit, and did not know of the lawsuit's existence until he received the R&R from the Court's clerk in or about early June. See, DeMartino Aff., Dkt. Entry No. [30-1], 24-25. Plaintiffs contend that Defendants' default was willful. See, Plaintiffs' Response to DeMartino's Objections to R&R ("Response"), Dkt. Entry No. 33 , at 14-16. However, in the context of a motion to vacate entry of default, a court should resolve a "factual dispute regarding willfulness … in favor of the party moving to set aside the default." OneWest Bank, N.A. v. Ruiz, 2018 WL 1318983, at *3 (E.D.N.Y. Mar. 13, 2018) (citing cases).
Second, DeMartino has shown that a meritorious defense exists. DeMartino argues that (1) Defendants are not liable to Plaintiffs' pursuant to the contract between the parties, (2) there is no basis to pierce the corporate veil, and (3) jurisdiction should be denied over the corporate veil piercing claims. See, Objections at 6-11. The burden for showing that a meritorious defense exists for purposes of Fed. R. Civ. P. 55(c) is low. DeMartino has satisfied that burden by identifying specific defenses to Plaintiffs' allegations. See, Certain Underwriters at Lloyd's London v. Mr. Demolition, 2020 WL 9260214 at *4 (E.D.N.Y. Dec. 28, 2020) ("To establish a meritorious defense, a defendant need not prove the defense conclusively."); OneWest Bank, N.A., 2018 WL 1318983, at *4 (noting that the defaulting parties "need to meet only a low threshold to satisfy the meritorious defense factor").
Third, denial of Plaintiffs' default judgment motion would not unfairly prejudice Plaintiffs. Delay alone is not enough t... (truncated)