Hebda v. Lammers et al

Filing 25

ORDER granting 21 Motion to Set Aside Default; granting 22 Motion to Set Aside Default; vacating 10 Entry of Default. Signed by US Magistrate Judge John E. Simko on 8/15/12. (CMS)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION

FILED

AUG 15 2012
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DALE W. HEBDA,
Plaintiff,
-vs­
BRET J. LAMMERS, aJk/a'Kip Lammers; and
WILDCAT FARMING PARTNERSHIP,
Defendants.

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CIV. 12-4050

ORDER RE MOTIONS
TO SET ASIDE DEF AULT
(DOCS 21 & 22)

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Pending are the motions of the defendants to set aside entry of default. l
BACKGROUND
Dale Hebda served his complaint on Bret Lammers and Wildcat Farming Partnership on
March 27, 2012. An answer was not served until May 1,2012. In the meantime, on April 18,
2012, pursuant to Federal Rule of Civil Procedure 55(a) default was filed by the Clerk of Court
because Lammers and Wildcat had not timely filed a response to Hebda's complaint. 2 Lammers
and Wildcat have moved to set aside the default. There is a distinction between entry of default
and entry of default judgment. Here we are dealing with entry of default.
DISCUSSION AND DECISION
To justify setting aside default Lammers and Wildcat explain that they tried to hire a
lawyer, but the lawyer could not see them for a week. When they did see him, he could not take

lDocs. 21& 22.
2Doc.1O.

their case because of a potential conflict of interest. 3 They made an appointment to see another
la\V}'er, but he could not see them until April 30, 2012. By then the time for answering the
complaint had expired. The next day, May 1,2012, their la\V}'er filed an answer for each
defendant. Defendants did not communicate with Hebda's la\V}'er within the time for answering
to explain the problem they were having to find a la\V}'er or to ask for additional time to respond
to the complaint. The Summons which had been served upon Lammers and Wildcat advised
each that a lawsuit had been filed against each and that each had 21 days to respond to the
complaint. 4 The Summons also advised each of the identity of Hebda's la\V}'er, together with his
address. Finally, the Summons advised each "[i]fyou fail to respond, judgment by default will
be entered against for the relief demanded in the complaint."s Lammers and Wildcat argue
"[t]his case is progressing and the defendant should not be held in default for being unable to get

. to see an attorney ....

ill

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Hebda acknowledges he has not been prejudiced by the delay.7 But Hebda argues
Lammers and Wildcat have not shown good cause under Rule 55(c) to justify setting aside the
default. In addition to the absence of prejudice, Hebda argues that Rule 55(c) requires Lammers
and Wildcat to show excusable neglect and that each has a meritorious defense. 8 Hebda notes

3Docs. 21 & 22.

4Docs 3 & 4.

5Docs. 3 & 4.

6Docs. 21 & 22 p. 2.

7Doc.24.

SId. citing Johnson v. Dayton Electric Manufacturing Company, 140 F.3d 781,783-84

(8 Cir. 1998).
th

that Lammers and Wildcat did not even see a lawyer within the time for answering the complaint.
Rule 55(c) motions to set aside default have previously been considered by the Eighth
Circuit:
Rule 55(c) provides that the district court may set aside an entry of default "[f]or
good cause shown," and may set aside a default judgment "in accordance with
Rule 60(b)." Although the same factors are typically relevant in deciding whether
to set aside entries of default and default judgments, "[m]ost decisions ... hold that
relief from a default judgment requires a stronger showing of excuse than relief
from a mere default order." Connecticut Nat'l Mortgage Co. v. Brandstatter, 897
F.2d 883, 885 (7th Cir.1990); accord Shepard Claims Serv., Inc. v. William
Darrah & Assocs., 796 F.2d 190, 193-94 (6th Cir.l986); *784 Meehan v. Snow,
652 F.2d 274, 276-77 (2d Cir.1981). This is a sound distinction. There is a
'judicial preference for adjudication on the merits," Oberstar v. FD.lC., 987
F.2d 494, 504 (8th Cir.1993), and it is likely that a party who promptly attacks an
entry of default, rather than waiting for grant of a default judgment, was guilty of
an oversight and wishes to defend the case on the merits.9
Lammers and Wildcat have denied the substance of Hebda's allegations and have asserted
affirmative defenses. It cannot be concluded on the pleadings that their denials and affirmative
defenses are not meritorious any more than it can be concluded at this stage that Hebda's
allegations are meritorious. Their reasons for not timely answering are not excusable neglect.
But Hebda has not been prejudiced. And Rule 55(c) speaks of good cause. Rule 55(c) does not
require excusable neglect to set aside a default, although excusable neglect is a factor to be
considered. There is good cause to set aside the default judgment because the law favors
resolution on the merits, there are facts to sort out to determine whether Hebda's allegations or
whether the allegations of Lammers and Wildcat are more persuasive, Hebda has not suffered
prejudice from the delay in answering, and the delay was short. A Scheduling Order is already in
place. The trial court has discretion to grant or deny a motion to set aside default, but "when the

9

Johnson v. Dayton Electric Mamifacturing Company, 140 F .3d 781, 785 (8 th Cir. 1998).
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grant of a default judgment precludes consideration of the merits of a case, even a slight abuse of
discretion may justify reversal."lo
It is ORDERED that Lammer's motion (Doc. 21) and Wildcat's motion (Doc. 22) to set

aside default are GRANTED and the entry of default (Doc. 10) is vacated.
Dated August 15,2012.
John Simko

IOJohnson v. Dayton Electric Manufacturing Company, 140 F.3d 781, 785 (8 th Cir. 1998).
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