US BANK NATIONAL ASSOCIATION v. POOLER et al

Filing 29

ORDER ON DEFENDANTS' REQUEST FOR ENTRY OF DEFAULT re: 24 Motion for Entry of Default as to US BANK NATIONAL ASSOCIATION; and 27 Response in Opposition By JUDGE D. BROCK HORNBY. (jib)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
U.S. BANK NATIONAL ASSOCIATION,
as Trustee for Citigroup Mortgage
Loan Trust, Inc. Asset-Backed PassThrough Certificates, Series 2007AMC2,
PLAINTIFF
V.

CYNTHIA POOLER
POOLER,

AND

BRUCE H.

DEFENDANTS

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CIVIL NO. 1:17-CV-115-DBH

ORDER ON DEFENDANTS’ REQUEST FOR ENTRY OF DEFAULT
This case has become unnecessarily procedurally complex.
The defendants requested the Clerk to enter default on their counterclaims
against the plaintiff because the plaintiff failed to file an Answer to the
counterclaims. The defendants properly filed an Affidavit showing that failure.
Under the Rules, default should have been entered at that point: “the clerk must
enter the party’s default.” Fed. R. Civ. P. 55(a) (emphasis added). But the Clerk’s
Office mistakenly failed to enter the default. Instead, the Clerk’s Office allowed
the time to run as if the request was an ordinary motion. The plaintiff then filed
an “Opposition to Defendant’s Motion for Entry of Default,” claiming
inadvertence and arguing that the counterclaims were subject to dismissal under
Rule 12(b)(6), and that even if default were entered, and the counterclaims’
alleged facts were therefore deemed true, the defendants were not entitled to the

relief the counterclaims requested. The defendants next replied, arguing that
default should have been entered, that they were not required to respond to the
plaintiff’s merits arguments at this point, and that it is the plaintiff’s burden to
show good cause to remove the default.
The defendants are clearly correct in their procedural arguments. The
Clerk’s Office should have entered default upon receiving the Affidavit. Once
default was entered, according to the Rule “[t]he court may set aside an entry of
default for good cause.” Fed. R. Civ. P. 55(c). The burden is on the defaulted
party (here the plaintiff) to show good cause. In re Game Tracker, Inc., 746 F.
Supp. 2d 207, 217 (D. Me. 2010). Had the Clerk’s Office properly entered the
default, the plaintiff would have been required to file a motion to set aside the
default, not the same thing as a motion to dismiss.
But I am not going to prolong the procedural wrangling. I treat the default
as having been entered, and the plaintiff’s “Opposition” as a motion to set aside
the default. I have said in a previous case that “[t]he phrase ‘good cause’ is
liberally construed,” and that “[t]here is no mechanical formula for determining
whether good cause exists and courts may consider a host of relevant factors,”
“typically” including:
(1)
(2)
(3)
(4)
(5)
(6)
(7)

whether the default was willful;
whether setting it aside would prejudice the adversary;
whether a meritorious defense is presented;
the nature of the defendant’s explanation for the default;
the good faith of the parties;
the amount of money involved; and
the timing of the motion to set aside the entry of default.

Id.

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The plaintiff has not given me much to go on with respect to these factors,
but several of them are obvious.

There is no suggestion the default was

(1) willful; instead, the plaintiff’s explanation (4) is that it was “due to an internal
scheduling error by Plaintiff’s Counsel,” Opp’n to Def.’s Mot. (ECF No. 27) at 1,
and the defendants do not contest that assertion.

The defendants have not

alluded to (2) more than minor prejudice1 in setting default aside. The plaintiff
has (3) presented meritorious defenses, although I do not determine at this time
whether they are winning defenses. There is no suggestion of (5) bad faith on
either side. The counterclaims seek actual and statutory damages, costs and
attorney fees under both state and federal statutes, which could be (6)
substantial. The Opposition, which I am treating as a motion to set aside, was
(7) timely, being filed within the ordinary deadline for responding to a motion,
and not a lot of time has passed overall. (According to the defendants’ Affidavit,
the plaintiff’s Answer was due 21 days after April 26, 2017―i.e., May 17, 2017;
the defendants requested default on July 14, 2017, and the plaintiff opposed it
on August 4, 2017.)
Under the “liberally construed” standard, I conclude that there is good
cause to set aside the default. It is best for these counterclaims to be resolved
on their merits. But I also conclude that the plaintiff’s attempt at a Rule 12(b)(6)
motion to dismiss is not properly before me and that the defendants were entitled
not to respond to it on the merits.
They say that the plaintiff should have the burden to establish its entitlement to relief from
default, Defs.’ Reply (ECF No. 28) at 4, and I am assigning the plaintiff that burden. They also
say that denying the entry of default would put their counterclaims in procedural limbo, id., but
I have removed that limbo by ordering the plaintiff to respond to their counterclaims within 21
days.
1

3

Accordingly the request to enter default is GRANTED, and the plaintiff’s
Opposition, treated as a motion to remove the default, is GRANTED. The plaintiff
shall now respond to the counterclaims in accordance with the Rules and within
21 days.
SO ORDERED.
DATED THIS 22ND DAY OF AUGUST, 2017
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

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