In the Matter of the Complaint Against PROVEN PRODUCTS 521 Fifth Avenue at New York, NY 10175-0105 P.S. Docket No. 17/151; 01/18/84 Cohen, James A. APPEARANCE FOR COMPLAINANT: Kenneth N. Hollies, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-2111 APPEARANCE FOR RESPONDENT: Soloman H. Friend, Esq. Friend, Dorfman & Marks 575 Madison Avenue New York, NY 10022-2511
On December 2, 1983, Respondent filed a motion to vacate the order of default and accompanying False Representation Order No. 83-149, which were issued on November 22, 1983. Respondent contends that its default was excusable and that it has a good and meritorious defense to the allegations of the Complaint. Complainant opposes Respondent's motion on the grounds that good cause to vacate the default has not been shown. The return portion of False Representation Order No. 83-149 has been stayed during the pendency of Respondent's motion.
It is not disputed that the Complaint and Notice of Answer and Hearing were served on Respondent's mail service and signed for by a mail service employee on November 1, 1983. The mail service address is the address used by Respondent to obtain remittances for its product FORMULON, which is the product subject to the False Representation Order.
Respondent contends that it did not pick up the Complaint and Notice of Answer and Hearing until November 10, 1983, because during the period november 1 through November 10 its principal officer was out of the office for approximately three business days due to illness and for an additional period because his car was stolen. Approximately six days after Respondent's principal picked up the Complaint and Notice of Answer and Hearing he contacted and retained counsel to represent Respondent in these proceedings.
On November 21, 1983, Respondent's counsel first sought an extension of the period for filing an Answer. The Complaint and Notice of Answer and Hearing clearly apprised Respondent of the consequences of its failure to file a timely Answer. The Complaint and Notice of Answer and Hearing were properly served on Respondent on November 1, 1983, as is evidenced by a signed receipt executed on behalf of Respondent by its agent. The Answer was therefore required to be filed on or before November 16, 1983, but was not filed by that date. Respondent's unsupported contentions of illness and a stolen car do not excuse its failure to file a timely Answer. At best, Respondent has established that during approximately four days of the fifteen day period in which an Answer was to be filed, its principal officer was out of the office. Such unavailability does not excuse Respondent's failure to file a timely Answer or to timely request an extension of the period for filing an Answer. See Bay State Power Light & Supply, P.S. Docket No. 11/166 (P.S.D. on Mot. to Set Aside Default, Sept. 28, 1981); S & S Distributors, P.S. Docket No. 11/167 (P.S.D. on Mot. to Set Aside Default, Sept. 28, 1981) and cases cited therein at page 2. Moreover, Respondent's failure to establish procedures for handling mail while its principal officer was ill or otherwise occupied is not excusable. See Ritz, Division of MVCO, Inc., P.S. Docket No. 12/174 (P.S.D. on Mot. to Revoke Default, Jan. 26, 1982) and cases cited therein at p. 2.
Respondent contends that its motion should be granted because Complainant has neither "claimed nor proved" prejudice and it has a meritorious defense to the allegations of the Complaint. In addition, Respondent contends that under decisions applying the Federal Rules of Civil Procedure it would be entitled to have the default set aside.
Complainant's failure to allege or prove specific instances of prejudice is not determinative, as there is some prejudice to the public where inexcusable delay occurs in a proceeding under 39 U.S.C. § 3005. See Economic Data Corp., P.S. Docket No. 11/92 (P.S.D. on Mot. to Vacate Default Order, July 17, 1981). Furthermore, Respondent's unsupported allegation of the existence of a meritorious defense is insufficient to support a revocation of a default order. See Robinson v. Bantam Books, Inc., 49 F.R.D. 139 (S.D.N.Y. 1970); Nelson v. Coleman Co., 41 F.R.D. 7 (D.S.C. 1966). Finally, while the Federal Rules of Civil Procedure may be referred to for guidance, under those rules as well as the Rules of Practice applicable to this proceeding, a showing of good cause is required in order to support the exercise of discretion to set aside a default. A showing sufficient to support the exercise of discretion in this case has not been made. See S & S Distributors, supra; Bay State Power Light & Supply, supra; see also ViAids Labs., Inc., v. United States Postal Service, 464 F. Supp. 976 (S.D.N.Y. 1979).
Respondent also asserts that the failure to set aside the default will in some way affect its ability to negotiate an amicable settlement of this proceeding. Complainant has responded that it has already offered to settle, but its initial offer of settlement was not accepted. There is no indication that Respondent has attempted to settle this matter and there is no reason given why the issuance of the default order would hamper settlement efforts. However, in order to assure that Respondent has full opportunity to seek a settlement of this matter, the stay of the return portion of the False Representation Order will remain in effect for another thirty days. If no settlement is reached by February 17, 1984, the False Representation Order will be placed in full force and effect.
Accordingly, Respondent's Motion to Vacate Default and Revoke False Representation Order is denied.