The defendants, Guangcheng Zhu and Guru Constrarchit Ltd., brought a motion to set aside a default judgment.
The court applied the five-factor test for setting aside default judgments, finding that while the motion was brought promptly and there was an arguable defense for conversion, breach of trust, and punitive damages, the defendants failed to provide a plausible explanation for their default, having made a conscious decision not to participate in the proceedings until their bank accounts were frozen.
The court partially granted the motion, setting aside only the portion of the default judgment related to conversion, breach of trust, and punitive damages ($99,628.58), while upholding the remainder of the judgment, including damages for breach of contract and costs.