Aug 7

Simon vacates client’s default and wins stay of entire litigation

Scott D. Simon rescued a client after the Clerk of the U.S. District Court for the Southern District of New York had already entered a certificate of default. The client had been served with process through its registered agent, but the agent was inexplicably slow in notifying the client of the action, and only did so after default had been entered.

Simon convinced the court that default should be vacated because the client had not willfully defaulted and had reacted quickly after entry of default, and because vacating the default would not prejudice the plaintiff. Simon also cross-moved to dismiss or stay the entire litigation on the ground that the parties had agreed to arbitrate their dispute out-of-court.

The plaintiff contended that Goetz Fitzpatrick LLP’s client had waived the right to arbitrate by failing to respond to multiple emails about the potential arbitration. But Simon successfully argued that the short delay in responding could not result in a waiver and, in any event, the issue of waiver based on pre-litigation conduct is one for the arbitrator to decide. The court agreed and stayed the entire litigation.

Read the District Court’s full decision here.

Leave a Comment