Hariri v. Williams et al

1
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL ACTION NO. 3:25-CV-00237-KDB-DCK
MOHAMAD ALI HARIRI,
Plaintiff,
v. MEMORANDUM AND
ORDER
STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY, ARIENTE SIMONE
WILLIAMS, AND ALLSTATE
INSURANCE COMPANY,
Defendants.
In 2022, Ariente Williams rear-ended Plaintiff Mohamad Hariri, totaling his vehicle and
impairing his ability to earn income as a Lyft driver. Hariri initiated this action asserting numerous
state law claims against Defendants arising from the collision. Now before the Court are Hariri’s
Motions for Default Judgment (Doc. Nos. 21, 30) as to Defendants Allstate Insurance Company
(“Allstate”) and Ariente Simone Williams (“Williams”), Allstate’s Motion to Set Aside Entry of
Default (Doc. No. 25), and Williams’ Motion to Set Aside Entry of Default and for Extension of
Time to Answer the Amended Complaint (Doc. No. 28). The Court has carefully considered these
motions and considered the parties’ filings in support and in opposition to them. For the reasons
discussed below, the Court will GRANT Defendants’ Motions and DENY as Moot Plaintiff’s
Motions for Default Judgment.
I. BACKGROUND
In 2022, Defendant Williams rear-ended Plaintiff Mohamad Hariri while Hariri was
working as a Lyft driver and transporting a passenger. Amended Complaint (Doc. No. 9) at ¶¶ 1–
Case 3:25-cv-00237-KDB-DCK Document 55 Filed 10/31/25 Page 1 of 8

2
2. The collision totaled Hariri’s vehicle and damaged several others. Id. at ¶ 2. Williams admitted
fault, and her insurer, State Farm, allegedly offered Hariri $27,000 for the vehicle loss. Id. at ¶ 3.
Hariri accepted the offer but contends that State Farm later rescinded it without providing a
“written explanation.” Id. Hariri then requested that State Farm release the vehicle, so he could
remove it from the dealership where it was accruing storage fees. Id. at ¶ 4. Although State Farm
allegedly agreed to release the vehicle, Hariri asserts that it reversed course, and the vehicle was
ultimately relocated to a salvage yard. Id. at ¶ 5. Approximately forty days after the accident, Hariri
claims State Farm ceased payment for his rental car, leaving him reliant on public transportation
and unable to work for Lyft. Id. at ¶ 7.
Roughly six months after the collision, Hariri sent State Farm a demand letter. Id. at ¶ 8.
He alleges that the letter prompted an offer of $3,000 for bodily injury, but no compensation for
the totaled vehicle. Id. One month later, State Farm offered “the bodily injury policy limits,” which
Hariri accepted. Id. at ¶ 11. He contends, however, that the acceptance was compelled by financial
duress and his obligation to support family overseas. Id. at ¶¶ 9–11. Nearly three years later, Hariri
alleges that State Farm offered $18,000 for the vehicle, contingent upon his execution of a release
that purportedly waived his right to sue. Id. at ¶ 12. Hariri declined the offer. Id.
Separately, Hariri contacted Allstate, Lyft’s insurer, to inquire about underinsured motorist
(“UIM”) coverage. Id. at ¶ 14. However, Allstate denied him coverage because Hariri’s personal
insurance had lapsed. Id. In 2025, Hariri sought reconsideration, but Allstate again denied the
claim. Id. at ¶ 15.
Hariri filed suit in April 2025 against Defendants Williams, State Farm, and Allstate,
alleging negligence against Williams, and various state law claims against State Farm and Allstate.
He amended his complaint on July 31, 2025, and subsequently moved for entries of default against
Case 3:25-cv-00237-KDB-DCK Document 55 Filed 10/31/25 Page 2 of 8

3
Williams and Allstate for failure to respond. See Doc. Nos. 16, 22. Hariri then moved for default
judgment against both defendants. In response, Williams and Allstate filed motions to set aside
default, which Hariri opposes. The motions are fully briefed and ripe for this Court’s review.
II. DISCUSSION
Federal Rule of Civil Procedure 55(c) allows the Court to “set aside an entry of default for
good cause.” Fed. R. Civ. P. 55(c). While “good cause” is not defined in Rule 55(c), “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 drastic.”
Colleton Preparatory Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413, 417 (4th Cir. 2010)
(quoting Payne ex rel. Estate of Calzada v. Brake, 439 F.3d 198, 204–05 (4th Cir. 2006)). Courts
have “a strong preference that, as a general matter, defaults should be avoided and that claims and
defenses be disposed of on their merits.” Id. (citing Tazco, Inc. v. Director, Office of Workers
Compensation Program, U.S. Dep’t of Labor, 895 F.2d 949, 950 (4th Cir. 1990)).
A. Whether the Movants have Meritorious Defenses
To set aside a default, “all that is necessary to establish the existence of a meritorious
defense is a presentation or proffer of evidence, which, if believed, would permit either the Court
or the jury to find for the defaulting party.” Davis v. Univ. of N.C. at Greensboro, No. 1:19CV661,
2022 WL 112192, at *2 (M.D.N.C. Jan. 12, 2022) (quoting Carter v. City of High Point, No.
1:17CV148, 2017 WL 4043751, at *3 (M.D.N.C. Sept. 12, 2017)) (additional citations omitted).
The standard does not require proof by a preponderance of the evidence. See J & J Sports Prods.,
Inc. v. Argueta, No. 1:12cv1329, 2013 WL 5960859, at *2 (M.D.N.C. Nov. 7, 2013). Rather, the
inquiry centers on whether there exists “some possibility that the outcome ... after a full trial will
Case 3:25-cv-00237-KDB-DCK Document 55 Filed 10/31/25 Page 3 of 8

4
be contrary to the result achieved by the default.” Augusta Fiberglass Coatings, Inc. v. Fodor
Contracting Corp., 843 F.2d 808, 812 (4th Cir. 1988) (citation modified) (quoting 10 C. Wright,
A. Miller & M. Kane, Federal Practice and Procedure § 2697, p. 531 (2d ed. 1983)).
Here both Allstate and Williams contend that Hariri signed a release upon accepting
settlement funds from State Farm, thereby extinguishing any potential liability as to them. Allstate
further asserts that, under North Carolina law, the liability of a UIM carrier is derivative of the
tortfeasor’s liability; thus, a release of the tortfeasor (Williams) operates to release the UIM carrier
(Allstate). See Spivey v. Lowery, 116 N.C. App. 124, 446 S.E.2d 835 (1994). This defense satisfies
the minimal threshold of “some possibility” of success on the merits. Accordingly, this factor
weighs in favor of setting aside the defaults.
B. Acted with Reasonable Promptness
Whether a party has acted with reasonable promptness must be considered in light of the
specific facts and circumstances presented. Superior Performers, Inc. v. Thornton, No. 1:20-cv-
00123, 2020 WL 6060978, at *3 (M.D.N.C. Oct. 14, 2020) (quoting United States v. Moradi, 673
F.2d 725, 727 (4th Cir. 1982)) (internal quotations omitted). Allstate contends that service was
effectuated on the North Carolina Department of Insurance (“NCDOI”) on August 11, 2025. Doc.
No. 26 at 7. While a defendant typically has twenty-one days to respond, insurers served through
the NCDOI are afforded an additional twelve days under North Carolina law. See N.C. Gen. Stat.
§ 58-16-45. Thus, Allstate’s responsive deadline extended to September 13, 2025. Because Hariri
filed his Motion for Default on September 2, 2025–eleven days before Allstate’s response was
due–Allstate argues the motion was premature. The Court agrees. The timeline supports a finding
of reasonable promptness and weighs in favor of setting aside the default as to Allstate.
Case 3:25-cv-00237-KDB-DCK Document 55 Filed 10/31/25 Page 4 of 8

5
Williams asserts that she was served on August 12, 2025, and promptly notified her insurer.
See Doc. No. 22. However, her assigned counsel did not become aware of the service until
September 9, 2025, four days after Hariri moved for default. Id. District courts in the Fourth Circuit
have found that a defendant acted reasonably promptly when waiting seventeen, twenty-one,
thirty-two, and thirty-eight days after default was entered before attempting to set it aside. See J &
J Sports Prods., Inc. v. Casillas, No. 1:12-CV-5, 2013 WL 784544, at *7 (M.D.N.C. Mar. 1, 2013);
United States v. $10,000.000 in United States Currency, 2002 WL 1009734, *3 (M.D.N.C. Jan.
29, 2002); Esteppe v. Patapsco & Back Rivers R.R. Co., 2001 WL 604186, *4 (D. Md. May 31,
2001); Wainwright’s Vacations, LLC v. Pan Am. Airways Corp., 130 F. Supp. 2d 712, 718 (D. Md.
2001).
Here, Williams moved to set aside the default six days after its entry and just three days
after counsel first appeared on her behalf. Considering the case law above, this response was
reasonably prompt. Therefore, this factor weighs in favor of setting aside the default as to
Williams.
C. Personal Responsibility of Defaulting Party
In evaluating a party’s responsibility for the entry of default, the Fourt Circuit directs courts
to consider the “source of the default.” Davis, 2022 WL 112192, at *4. Where the default arises
from the party’s own conduct–whether through action or omission–this factor weighs against
setting it aside. Id. Here, neither Allstate nor Williams are the source of their respective defaults.
As previously discussed, the default entered against Allstate was premature under the applicable
statutory timelines. Williams promptly notified her insurer upon service and reasonably awaited
counsel’s response to the Amended Complaint. That response occurred six days after the default
was entered and was accompanied by a request for additional time to answer. On these facts, the
Case 3:25-cv-00237-KDB-DCK Document 55 Filed 10/31/25 Page 5 of 8

6
responsibility for the default does not rest with either defendant. Accordingly, this factor weighs
in favor of setting aside the defaults.
D. Prejudice to Plaintiffs
Delay alone does not constitute prejudice sufficient to defeat a motion to set aside an entry
of default. Colleton, 616 F.3d at 418 (citation omitted). Nor does the loss of a swift, default-based
judgment amount to prejudice. See Davis, 2022 WL 112192, at *4 (citing United States v.
Manriques, Nos. 1:10CR440-1, 1:13CV444, 2013 WL 5592191, at *5 (M.D.N.C. Oct. 10, 2013)).
Instead, prejudice arises where delay impairs a plaintiff’s ability to present evidence–such as the
unavailability of a witness, the loss of records, or the obstruction of evidentiary presentation.
Lolatchy, 816 F.2d at 952. Hariri contends that he will suffer “severe” prejudice if the defaults are
set aside, citing “years” of prelitigation delay allegedly caused by the insurers’ refusals to resolve
his claim. See Doc. Nos. 37 at 5; 42. However, both Allstate and Williams note that Hariri himself
waited more than two years before initiating this lawsuit, and that any additional delay would be
minimal. Moreover, Hariri has not identified any evidentiary prejudice resulting from the delay.
Accordingly, this factor supports setting aside the entries of default.
E. History of Dilatory Action
Courts generally assess a party’s history of dilatory conduct independently from the delay
that precipitated the default itself. Superior Performers, 2020 WL 6060978, at *3 (citing Colleton,
616 F.3d at 418). Hariri asserts that Defendants’ failures to respond reflect a broader pattern of
bad faith and dilatory behavior. See Doc. No. 37 at 5; 42 at 6. The Court disagrees. Hariri’s
allegations focus primarily on conduct that occurred prior to the filing of this lawsuit, and on the
delays that led to the entries of default. However, the prelitigation conduct at issue–namely,
Allstate’s denial of Hariri’s claim for UIM benefits–does not, standing alone, constitute dilatory
Case 3:25-cv-00237-KDB-DCK Document 55 Filed 10/31/25 Page 6 of 8

7
behavior. Moreover, Hariri has not identified any post-filing conduct that would suggest a
sustained pattern of delay or obstruction. In the absence of such a showing, this factor weighs in
favor of setting aside the entries of default.
F. Availability of Sanctions Less Drastic
Lastly, while Hariri contends that nothing short of maintaining the defaults will suffice, the
Court disagrees. Although Williams and Allstate allegedly failed to timely respond to the
Amended Complaint, the record does not support the imposition of sanctions. As discussed above,
each of the relevant factors under Rule 55(c) weighs in favor of setting aside the defaults. Allstate’s
default was entered prematurely, prior to the expiration of its statutorily extended response period
under N.C. Gen. Stat. § 58-16-45. Williams acted with reasonable promptness once her counsel
became aware of service and moved to set aside the default within days of entering an appearance.
Further, there is no evidence of bad faith, willful disregard of court procedures, or a pattern of
dilatory conduct following the initiation of this action. Nor has Hariri demonstrated any
prejudice—such as evidentiary loss or impaired trial preparation—that would justify punitive
measures. The Fourth Circuit has consistently emphasized that defaults are not favored and that
disputes should be resolved on their merits whenever possible. See Colleton, 616 F.3d at 417. In
this context, sanctions would be disproportionate to the conduct at issue and inconsistent with the
equitable principles that guide the Court’s discretion under Rule 55(c).
Accordingly, Allstate’s Motion to Set Aside Entry of Default (Doc. No. 25) will be
GRANTED. Williams’ Motion to Set Aside Entry of Default and for Extension of Time to Answer
the Amended Complaint (Doc. No. 28) will also be GRANTED. Allstate and Williams shall file
their responses to the Amended Complaint within fourteen (14) days of this Order.
Case 3:25-cv-00237-KDB-DCK Document 55 Filed 10/31/25 Page 7 of 8

8
III. ORDER
NOW THEREFORE IT IS ORDERED THAT:
1. Defendant Allstate’s Motion to Set Aside Entry of Default (Doc. No. 25) is
GRANTED;
2. Defendant Williams’ Motion to Set Aside Entry of Default and for Extension of
Time to Answer the Amended Complaint (Doc. No. 28) is GRANTED;
3. Plaintiff’s Motions for Default Judgment (Doc. Nos. 21, 30) are DENIED as moot;
and
4. Defendants Allstate and Williams are directed to respond to the Amended
Complaint within fourteen (14) days of this Order.
SO ORDERED ADJUDGED AND DECREED.
Signed: October 30, 2025
Case 3:25-cv-00237-KDB-DCK Document 55 Filed 10/31/25 Page 8 of 8