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U.S. Bank National Association v. Pooler

United States District Court, D. Maine

August 22, 2017

U.S. BANK NATIONAL ASSOCIATION, as Trustee for Citigroup Mortgage Loan Trust, Inc. Asset-Backed Pass-Through Certificates, Series 2007-AMC2, Plaintiff
v.
CYNTHIA POOLER and BRUCE H. POOLER, Defendants

          ORDER ON DEFENDANTS' REQUEST FOR ENTRY OF DEFAULT

          D. BROCK HORNBY, UNITED STATES DISTRICT JUDGE

         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) whether the default was willful;
(2) whether setting it aside would prejudice the adversary;
(3) whether a meritorious defense is presented;
(4) the nature of the defendant's explanation for the default;
(5) the good faith of the parties;
(6) the amount of money involved; and
(7) the timing of the motion to set aside the entry of default.

Id.

         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 prejudice[1] 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 ...


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