United States District Court, S.D. Mississippi, Western Division
ORDER DENYING MOTION TO SET ASIDE DEFAULT JUDGMENT
DAVID BRAMLETTE, District Judge.
This cause is before the Court on the motion of Defendants, Quality Homes of McComb, Inc. and Fresh Start Transport, Inc., to set aside default judgment [docket entry nos. 87, 88]. Having carefully considered the motions, the responses thereto, all applicable law, and being otherwise fully advised in the premises, the Court orders as follows:
I. Facts and Procedural Background
On or about June 26, 2013, Plaintiff, Samuel Tyson, filed a complaint alleging that Defendants delivered the wrong mobile home to his property, and that the mobile home was damaged both due to manufacturer's defects and those that arose during its delivery. Summons was issued to Quality Homes of McComb, Inc., ("Quality Homes") Fresh Start Transport, Inc., ("Fresh Start") and Cappaert Manufactured Housing, Inc., ("Cappaert") on September 25, 2013. Tyson personally served process on Robert A. Yawn, the registered agent for both Fresh Start and Quality Homes, on October 3, 2013, in a Burger King parking lot in Hammond, Louisiana. Both Fresh Start and Quality Homes failed to answer the Complaint within the twenty-one days required by Federal Rule of Civil Procedure 12(a).
An entry of default was made as to Fresh Start and Quality Homes on September 14, 2014. See Clerk's Entry of Default, ECF No. 49. Tyson moved for default judgment on October 7, 2014. On November 24, 2014, Tyson's motions for default judgment were granted. See Order, ECF No. 71. Quality Homes filed an answer to Tyson's complaint on January 3, 2015. See Answer, ECF 77. A hearing was held on February 3, 2015 where evidence regarding damages and issues pertaining to the default judgment were presented. On March 5, 2015 Defendants moved to set aside default judgment pursuant to the Rule 55(c) "good cause" provision and the "excusable neglect" exception pursuant to Rule 60(b).
A. Rule 55(c)
1. Parties' Arguments
The Defendants' argument relies on: (1) the general disfavor of default judgments and the preference to settle disputes by trial on the merits; (2) that the default was not due to willful behavior on the part of Quality Homes and Fresh Start, noting that both defendants "diligently sought counsel after being served" Mot. Set Aside Default J. ¶ 20; (3) that no prejudice will be placed on Tyson by setting aside the default judgment; and (4) that Defendants can present a meritorious defense.
Conversely, Tyson denies that Defendants are entitled to any relief whatsoever. Resp. ¶ 27. Tyson argues that Defendants' default should not be set aside because their default is considered willful.
"The court may set aside an entry of default for good cause...." Fed.R.Civ.P. 55(c). The Fifth Circuit Court of Appeals has identified three factors to consider in determining whether a default judgment should be set aside: (1) "whether the defendant was willful"; (2) "whether setting it aside would prejudice the adversary"; and (3) "whether a meritorious defense is presented." Murphy v. Simpson Dura-Vent Co., Inc., No. 5:07cv201, 2009 WL 458609, at *1 (S.D.Miss. Feb. 23, 2009) (quoting Lacy v. Sitel Corp., 227 F.3d 290, 292 (5th Cir. 2000)). "Being mindful that default judgments are generally disfavored in the law', the court considers severally each of these factors." Id . (quoting Mason & Hanger-Silas Mason Co. v. Metal Trades Council, 726 F.2d 166, 168 (5th Cir. 1984)). However, "where there is a willful or intentional failure to respond, the inquiry ends, and the Court need not make any other findings in refusing a party's request to set aside a default." Block Corp v. Nunez, No. 1:08-CV-53, 2009 WL 198366, at *3 (N.D. Miss. Jan. 26, 2009), (citing In re Dierschke, 975 F.2d 181, 184 (5th Cir. 1992)).
3. Court's Analysis
The primary factor the Court must examine is whether the Defendants' default was willful. Although Defendants were unaware that their attorney's staff member erred by not filing an answer to the complaint, the fact that the Defendants' attorney and the Defendants neglected the issue for nearly two years after the complaint was filed and served against them, indicates a willful default. Furthermore, Defendants' attorney was instructed at the prove up hearing to provide some proof that the answer to Plaintiff's complaint was sent to the wrong address. This could be via email records or an ...