E.E.O.C. v. Mike Smith Pontiac GMC, Inc.

• Decision Date: 14 March 1990
• Docket Number: No. 89-3036,89-3036
• Parties: 52 Fair Empl.Prac.Cas. 729, 53 Empl. Prac. Dec. P 39,746, 16 Fed.R.Serv.3d 1050 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, Cross-Appellee, v. MIKE SMITH PONTIAC GMC, INC., Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 524

896 F.2d 524

52 Fair Empl.Prac.Cas. 729,

53 Empl. Prac. Dec. P 39,746, 16 Fed.R.Serv.3d 1050

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Plaintiff-Appellant, Cross-Appellee, v. MIKE SMITH PONTIAC GMC, INC., Defendant-Appellee, Cross-Appellant.

No. 89-3036.

United States Court of Appeals Eleventh Circuit.

March 14, 1990.

Estelle D. Franklin, Asst. Gen. Counsel, Washington, D.C., for plaintiff-appellant, cross-appellee.

Paul Richards, Armonk, N.Y. and Wayne L. Helsby, Orlando, Fla., for defendant-appellee, cross-appellant.

Appeals from the United States District Court for the Middle District of Florida.

Before FAY and COX, Circuit Judges, and ESCHBACH ^*, Senior Circuit Judge.

FAY, Circuit Judge:

Appellant Equal Employment Opportunity Commission (EEOC) brought an action on behalf of Georgiana Bennett against Mike Smith Pontiac GMC, Inc. (Smith Pontiac) for its refusal to hire her because of her gender. The EEOC obtained an entry of default against Smith Pontiac as a result of Smith Pontiac's failure to respond to the complaint. After a bench trial on the issue of damages, the district court awarded the EEOC damages based on the average salary and average length of employment of other Smith Pontiac salespersons. Both parties challenge the amount of damages awarded. The EEOC's primary contention is that the district court should have used the period between which Georgiana Bennett was denied employment and the date the dealership was sold as the back pay period, rather than the average length of employment of Smith Pontiac salespersons. The EEOC further argues that the district court used erroneous figures in calculating back pay. Smith Pontiac challenges the district court's refusal to set aside the default judgment establishing liability. Smith Pontiac further contends that the period of back pay should have been limited to the length of the training program and that the district court erred in restricting evidence regarding the training program. For the reasons set forth below, we VACATE the judgment of the district court and REMAND for further proceedings consistent with this opinion.

BACKGROUND

Smith Pontiac was a Florida corporation which operated Pontiac, GMC, Alfa Romeo, and Mercedes automobile dealerships in the state of Florida doing business under the names of Mike Smith Pontiac GMC, Inc. and Friendly Motors from July 1983 until October 1987.

In early December 1983, Georgiana Bennett applied for employment as an automobile salesperson at Smith Pontiac. She was denied the position allegedly because she had previous sales experience and Smith Pontiac wanted only inexperienced salespersons. Subsequently, Bennett unsuccessfully sought employment at various other automobile dealerships. Having failed to secure an automobile sales position, Bennett found employment as a real estate salesperson.

On September 19, 1986, the Equal Employment Opportunity Commission, on behalf of Georgiana Bennett, filed a complaint alleging that Mike Smith Pontiac GMC, Inc. violated Title VII of the Civil Rights Act of 1964 by denying Bennett employment as an automobile salesperson because of her gender. The EEOC further alleged that Smith Pontiac failed to maintain employment applications for a period of six months as required by 29 C.F.R. section 1602.14. Smith Pontiac failed to plead or otherwise defend against the EEOC's allegations, and the clerk of the district court entered a default pursuant to Fed.R.Civ.P. 55(a). The district court refused to set aside the default entry.

The EEOC sought injunctive and monetary relief against Smith Pontiac. Prior to the trial to determine damages, the EEOC filed a motion in limine to exclude evidence relating to the issue of whether Bennett would have begun her employ in a training program had she been hired. The judge At trial, the EEOC sought to prove that it was entitled to recover the pay of a comparator male employed by Smith Pontiac for the period commencing in December 1983, when the alleged discrimination occurred, and ending in October 1987, when the dealership was sold. Smith Pontiac, arguing that Bennett would not have completed the training program had she been hired, contended that the EEOC was entitled to recover only the salary paid to employees who failed to successfully complete the training program. Alternatively, Smith Pontiac urged the court to award the EEOC damages based upon the average salary received over the average length of time salespersons hired in December 1983 remained employees. Smith Pontiac calculated that the average tenure of those hired in December 1983 was 21.5 weeks, and their average weekly salary was $191.56. In the event that these figures were rejected, Smith Pontiac argued that the figures to be used were the average salary and the average tenure of all non-Mercedes salespersons employed in December 1983 (including both longstanding and new employees). Smith Pontiac alleged that the average tenure of those non-Mercedes employees was 23 weeks, and their average weekly earnings were $231.43.

ruled that such evidence was admissible to mitigate damages but not to avoid liability, as liability had already been established. Ultimately, over the objection of opposing counsel, Smith Pontiac presented evidence that only about ten percent of the new employees completed the training class to become salespersons.

After a bench trial, the district court entered an order recognizing that the average weekly earnings for employees in all departments (including Mercedes) was $231.43, and that the average tenure of all employees was 21.5 weeks. Additionally, the district court found that plaintiff's interim earnings for the 21.5 week period were $706.50. ¹ Thus, the court ordered that the EEOC was entitled to $4975.75 in back pay plus $1495.52 in payment for lost benefits minus $706.50 in interim earnings. The trial judge arrived at a total award figure of $6471.27, which obviously resulted from miscalculation. In its final judgment, however, the court awarded the EEOC $5941.28, which reflected the proper amount of interim income and accurate calculations based on the figures used.

DISCUSSION

Appellant EEOC contends that the district court abused its discretion insofar as the court should have awarded back pay from the time Georgiana Bennett was denied employment to the date when the dealership was sold, a period covering forty-seven months. Appellant further asserts that the district court committed clear error in finding that the average tenure of all Smith Pontiac employees was 21.5 months and that the average salary of all Smith Pontiac employees was $231.43.

Cross-appellant Smith Pontiac challenges the district court's denial of its motion to set aside the default. Smith Pontiac contends that the district court applied the wrong standard in determining whether to set aside the default. It asserts that the court erroneously utilized the standard associated with default judgments (excusable neglect) rather than the standard associated with entries of default (good cause). Cross-appellant further argues that notwithstanding the trial court's failure to apply the appropriate standard, the court abused its discretion in refusing to set aside the default because Smith Pontiac alleged a meritorious defense and did not wilfully refuse to answer the complaint, and no prejudice to the EEOC would result. Additionally, Smith Pontiac challenges the district court's refusal to limit the back pay period to the length of time Georgiana Bennett would have been in training and contends that the judge erroneously limited the admission of evidence concerning the training program.

Setting Aside the Default

Rule 55(c), Fed.R.Civ.P., provides that the court may set aside an entry of default for good cause shown and may set aside a default judgment in accordance with Rule 60(b). Rule 60(b) allows the court to set aside a final judgment for excusable neglect, among other reasons. The importance of distinguishing between an entry of default and a default judgment lies in the standard to be applied in determining whether or not to set aside the default. The excusable neglect standard that courts apply in setting aside a default judgment is more rigorous than the good cause standard that is utilized in setting aside an entry of default. Jones v. Harrell, 858 F.2d 667, 669 (11th Cir.1988); United States v. One Parcel of Real Property, 763 F.2d 181, 183 (5th Cir.1985); Meehan v. Snow, 652 F.2d 274, 276-77 (2d Cir.1981) (per curiam). Smith Pontiac urges that because the court used the more rigorous excusable neglect standard rather than the good cause standard, this court should reverse the trial court's refusal to set aside the entry of default. Ordinarily, we would entertain this argument on the merits. However, Smith Pontiac has provided us with a more attractive alternative. In its motion to set aside the entry of default, Smith Pontiac argued that its failure to answer the EEOC's complaint was a result of excusable neglect and "point[ed] out the ... facts in support of its claim that Default was entered by reason of excusable neglect on the part of the Defendant...." R1-10-1. ² Thus, not only did Smith Pontiac fail to bring the good cause standard to the attention of the court, but also Smith Pontiac urged the court to use the excusable neglect standard. Consequently, even if the trial court did employ the incorrect standard in determining whether to set aside the default, we will not reverse its decision because Smith Pontiac invited the error. See Crockett v. Uniroyal, Inc., 772 F.2d 1524, 1530 n. 4 (11th Cir.1985); Overhead Door Corp. v. Newcourt, Inc., 611 F.2d 989, 990 (5th Cir.1980) (per curiam); cf. United States v. Males, 715 F.2d 568, 571 (11th Cir.1983).

Nor will we reverse the district court on the merits of the ruling. We review the district court's decision to uphold the entry of default for abuse of discretion. Jones, 858 F.2d at 669; ...