LaPorte Savings Bank v. Schmidt

Filing 35

OPINION AND ORDER: denying 29 Motion for Judgment by Default; denying 31 Motion to Strike Defendant's Answer to Plaintiff's Second Amended Complaint; and granting 33 Motion for Leave to File an Answer to Plaintiff's Second Amended Complaint. Signed by Magistrate Judge Andrew P Rodovich on 3/6/2012. (rmn)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION

LaPORTE SAVINGS BANK fka
City Savings Bank,

)
)
)
Plaintiff
)
)
v.
)
)
ADELE A. SCHMIDT, as Trustee
)
of Trust No. 3 and individually,)
)
Defendant
)

Case No. 2:10 cv 491

OPINION AND ORDER
This matter is before the court on the Motion for Judgment
by Default [DE 29] filed by the plaintiff, LaPorte Savings Bank,
on January 18, 2012; the Motion to Strike Defendant's Answer to
Plaintiff's Second Amended Complaint [DE 31] filed by LaPorte
Savings Bank on January 20, 2012; and the Motion for Leave to
File an Answer to Plaintiff's Second Amended Complaint [DE 33]
filed by the defendant, Adele Schmidt, on January 23, 2012.

For

the reasons set forth below, the Motion for Judgment by Default
[DE 29] is DENIED, the Motion to Strike Defendant's Answer to
Plaintiff's Second Amended Complaint [DE 31] is DENIED; and the
Motion for Leave to File an Answer to Plaintiff's Second Amended
Complaint [DE 33] is GRANTED.

Background
On December 15, 2010, the plaintiff, LaPorte Savings Bank,
filed a complaint for damages.

LaPorte later amended its com-

plaint, and on April 11, 2011, the defendant, Adele Schmidt,
filed a motion to dismiss for failure to state a claim.
Schmidt's motion was denied.

She filed her answer to LaPorte's

amended complaint on August 23, 2011.

On December 1, 2011,

LaPorte was granted leave to file a second amended complaint.
LaPorte's second amended complaint restated Count I and Count II
of its first amended complaint and added a third count.

Schmidt

did not timely answer, and on January 18, 2012, LaPorte filed a
motion for a Clerk's entry of default and a motion for default
judgment. Schmidt responded by filing her answer on January 20,
2012.

The Clerk entered default on January 23, 2012.

Schmidt

filed a motion for extension of time to file her answer to
LaPorte's second amended complaint that same day.

LaPorte

opposes Schmidt's motion and moves to strike her untimely answer.
Discussion
Federal Rule of Civil Procedure 55(a) governs the entry of
default and default judgment.

When a defendant fails to answer a

complaint or otherwise defend itself, the clerk can enter a
default.

See also Jackson v. Beech, 636 F.2d 831, 835 (D.C. Cir.
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1980) ("Once a defendant fails to file a responsive answer, he is
in default, and an entry of default may be made by either the
clerk or the judge.").
default judgment.

Entry of default must precede an entry of

See, e.g., Hirsch v. Innovation International,

No. 91 Civ. 4130, 1992 WL 316143, *1 (S.D.N.Y. Oct. 19, 1992).
When a party applies for judgment by default under Rule
55(b)(2), "the district judge is required to exercise sound
judicial discretion in determining whether the judgment should be
entered."

10A Wright & Miller, Federal Practice and Procedure 3d

Ed. §2685 (1998).

In determining whether to enter a default

judgment, the court may consider a number of factors including
whether there is a material issue of fact, whether the default is
largely technical, whether the plaintiffs were substantially
prejudiced, and how harsh an effect a default judgment might
have.

10A Wright & Miller, §2685.

This circuit favors a policy

of promoting a trial based on the merits rather than default
judgments.

Cracco v. Vitran Express, Inc., 559 F.3d 625, 631

(7th Cir. 2009); Sun v. Board of Trustees University of Illinois,
473 F.3d 799, 811 (7th Cir. 2007); C.K.S. Eng'rs, Inc. v. White
Mountain Gypsum Co., 726 F.2d 1202, 1205 (7th Cir. 1984).
LaPorte argues that a default judgment should be entered
against Schmidt for her failure to answer the second amended
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complaint.

Schmidt did not file an answer until January 20,

2012, 30 days late.

Aside from the tardiness in filing an ans-

wer, Schmidt otherwise has defended this case since its inception.

Schmidt has attended both status conferences, fully

briefed her motion to dismiss, and, to the best of the court's
knowledge, has participated in discovery.
In addition, the Standards for Professional Conduct Within
the Seventh Judicial Circuit state that attorneys practicing in
this Circuit "will not cause any default or dismissal to be
entered without first notifying opposing counsel," when the
identity of counsel is known.

See Standards of Professional

Conduct Within the Seventh Federal Judicial Circuit, available at
http://www.ca7.uscourt.gov/Rules/rules.htm#standards (last
visited Feb. 24, 2012).

Contrary to this rule, LaPorte did not

first notify counsel for Schmidt prior to applying for default
judgment.

Despite the lack of notice, Schmidt filed an answer to

the second amended complaint within two days of LaPorte's motion
for default judgment.

Under these circumstances, Schmidt's

technical failure to file an answer has not prejudiced the
plaintiff or otherwise delayed the litigation of this case.
Therefore, the motion for default judgment is DENIED.
sets aside the Clerk's entry of default.
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The court

Because Schmidt was prompt to file an answer to LaPorte's
second amended complaint, and the court has determined that
default judgment would be inappropriate under the circumstances,
the court GRANTS Schmidt's Motion for Leave to File an Answer to
Plaintiff's Second Amended Complaint [DE 33] and DENIES LaPorte's
Motion to Strike Defendant's Answer to Plaintiff's Second Amended
Complaint [DE 31].
ENTERED this 6th day of March, 2012

s/ ANDREW P. RODOVICH
United States Magistrate Judge

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