United States District Court, N.D. Mississippi, Oxford Division
SIDNEY WELCH, et al. PLAINTIFFS
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, et al. DEFENDANTS
M. BROWN UNITED STATES DISTRICT JUDGE
insurance dispute is before the Court on State Farm Mutual
Automobile Insurance Company's motion to set aside entry
of default. Doc. #12.
September 25, 2018, Sidney Welch and Shauna Welch,
individually and on behalf of M.W,  filed a complaint in the
United States District Court for the Northern District of
Mississippi against State Farm Mutual Automobile Insurance
Company and certain fictitious persons. Doc. #1. In the
complaint, the Welches allege that their vehicle, which was
insured by State Farm, was struck by an automobile, also
insured by State Farm, negligently driven by Linda
Toland. Id. at 2. The Welches also allege
that State Farm wrongly denied them uninsured motorist
benefits to which they are entitled under an insurance
policy. Id. at 3. A copy of the summons and
complaint was served on State Farm on October 2, 2018. Doc.
October 24, 2018, the Welches filed a motion for entry of
default. Doc. #4. The Clerk of the Court entered default in
their favor the next day. Doc. #5. Five days after the entry
of default, State Farm filed an answer to the complaint. Doc.
November 21, 2018, State Farm filed a motion to set aside the
default. Doc. #12. The Welches responded in opposition to the
motion, one day after the deadline to do so, on December 6,
2018. Doc. #16. State Farm replied on December 12, 2018. Doc.
to Federal Rule of Civil Procedure 55(c), a “court may
set aside an entry of default for good cause.”
“To decide if good cause exists, courts consider three
non-exclusive factors: ‘whether the default was
willful, whether setting it aside would prejudice the
adversary, and whether a meritorious defense is
presented.'” Koerner v. CMR Const. &
Roofing, L.L.C., 910 F.3d 221, 225 (5th Cir. 2018)
(quoting Lacy v. Sitel Corp., 227 F.3d 290, 292 (5th
Cir. 2000)). Because “[d]efaults are generally
disfavored, ” a motion to set aside an entry of default
should be granted “[u]nless it appears that no
injustice results from the default ….”
Id. (quoting Mason & Hanger-Silas Mason Co.
v. Metal Trades Council of Amarillo, Tex. & Vicinity,
AFL-CIO, 726 F.2d 166, 168 (5th Cir. 1984); In re
OCA, Inc., 551 F.3d 359, 370-71 (5th Cir. 2008)).
the good cause factors are non-exclusive, “[a] finding
of willful default ends the inquiry ….”
Id. “A willful default is an
‘intentional failure' to respond to
litigation.” In re OCA, Inc., 551 F.3d at 370
n.32 (quoting Lacy, 227 F.3d at 292) (emphasis
omitted)). A finding of negligence, in contrast, may warrant
setting aside default. Id.
defendant has the burden of showing by a preponderance of the
evidence that its neglect was excusable, rather than
willful.” Wooten v. McDonald Transit Assocs.,
Inc., 788 F.3d 490, 500-01 (5th Cir. 2015) (citation
omitted). Thus, when a defendant fails to explain the reason
for its delay, a willful default is presumed. Id.
Where a reason is offered, “perfection of service is
not determinative-the defendant's knowledge of the
perfected service, and the defendant's actions
post-service … play a role in measuring the
willfulness of [the] default.” Jenkens &
Gilchrist v. Groia & Co., 542 F.3d 114, 123 (5th
Cir. 2008). In the absence of “a legitimate claim of
prejudice that would arise from setting aside the default,
” a court should resolve all doubts in favor of the
defaulting party. Id.
Farm argues that its failure to timely answer is not willful.
In this regard, State Farm submitted the affidavit of Ronelle
Krenke, the claims specialist assigned ...