United States District Court, D. Colorado
A. BRIMMER CHIEF UNITED STATES DISTRICT JUDGE
matter is before the Court on Defendants' Motion to Set
Aside Clerk's Entry of Default [Docket No. 30] filed on
November 21, 2018. Plaintiff did not file a response.
Plaintiff did, however, file a Motion for Default Judgment
[Docket No. 32] on November 30, 2018.
filed this lawsuit against defendants on January 8, 2018
[Docket No. 1] and filed an Amended Prisoner Complaint on
August 9, 2018 [Docket No. 11] raising claims under the 8th and
14th Amendments. Docket No. 11 at 6, 8, 10. The Colorado
Department of Corrections (“DOC”) executed a
waiver of service on behalf of defendants Bland, Denwalt, and
Hansen on August 22, 2018. Docket No. 14. An answer was due on
October 22, 2018, but no answer was filed.
October 29, 2018, plaintiff moved for entry of default
pursuant to Fed.R.Civ.P. 55. Docket No. 25. The clerk refused
to enter default due to deficiencies in plaintiff's
motion. Docket No. 26. Plaintiff remedied the deficiencies
and filed a second request for entry of default on November
5, 2018. Docket No. 28. Default was entered as to defendants
Allusi, Bland, Denwalt, and Hansen on November 7, 2018.
Docket No. 29.
filed a motion to set aside the default as to defendants
Bland, Denwalt, and Hansen. Docket No. 30. In their motion,
defendants claim that their failure to file an answer or
otherwise respond was due to a miscommunication between the
DOC and the Office of the Attorney General which caused
defendants' counsel to be unaware that service had been
accepted. Docket No. 30 at 2, ¶ 6. Defendants state that
counsel learned of the entry of default on November 20 and
immediately took action to remedy the error. Id. at
3, ¶ 8. Defendants argue that good cause exists to set
aside the clerk's entry of default. Id.
Court may set aside an entry of default for good cause.
See Fed. R. Civ. P. 55(c). The good cause standard
is a less demanding standard than the excusable neglect
standard which must be shown for relief from judgment under
Fed.R.Civ.P. 60(b). Dennis Garberg & Assocs., Inc. v.
Pack-Tech Int'l Corp., 115 F.3d 767, 775 n.6 (10th
Cir. 1997). In determining whether to vacate the Clerk's
entry of default, the Court may consider the following
factors: (1) whether the defendant's culpable conduct led
to the default; (2) whether the plaintiff will be prejudiced
by setting aside the entry of default; and (3) whether the
defendant has a meritorious defense. See Hunt v. Ford
Motor Co., 1995 WL 523646, at *3 (10th Cir. Aug. 29,
1995) (unpublished) (citing In re Dierschke, 975
F.2d 181, 183 (5th Cir. 1992)). The Court need not consider
each one of these factors and may consider other factors in
its discretion. Id. The Court is guided by the
principle that “[t]he preferred disposition of any case
is upon its merits and not by default judgment.”
Gomes v. Williams, 420 F.2d 1364, 1366 (10th Cir.
1970); see also Katzson Bros., Inc. v. E.P.A., 839
F.2d 1396, 1399 (10th Cir. 1988) (noting that “default
judgments are not favored by courts”). It is, however,
within the Court's discretion to balance the judicial
preference against default judgments with
“considerations of social goals, justice and
expediency.” Gomes, 420 F.2d at 1366.
respect to the first factor, whether the default was caused
by defendants' culpable conduct, defendants concede that
their failure to file a timely answer was the result of a
miscommunication between their counsel and the DOC, which
accepted service on their behalf. Docket No. 30 at 4, ¶
14. Nevertheless, defendants assert that their conduct was
not culpable because the error was unintentional and because
they acted quickly to rectify their mistake after becoming
aware of the missed deadline and entry of default.
Id. “Generally a party's conduct will be
considered culpable only if the party defaulted willfully or
has no excuse for the default.” United States v.
Timbers Preserve, Routt Cty., Colo., 999 F.2d
452, 454 (10th Cir. 1993), abrogated on other grounds by
Degen v. United States, 517 U.S. 820 (1996). Generally,
an unintentional or good faith mistake does not rise to the
level of culpable conduct under Rule 55(c), particularly
where a party takes prompt action to remedy its error.
See Crapnell v. Dillon Companies, Inc., No.
14-cv-01713-KLM, 2015 WL 328524, at *5 (D. Colo. Jan. 23,
2015) (determining that “an unintentional or good faith
mistake is not considered culpable conduct for the purposes
of Rule 55(c)” and that “a party's prompt
motion to set aside an entry of default serves to mitigate
any culpability that may exist”); Zen & Art of
Clients Server Computing, Inc. v. Resource Support Assocs.,
Inc., No. 06-cv-00239-REB-MEH, 2006 WL 1883173, at *2
(D. Colo. July 7, 2006) (stating that “courts have
consistently held that an honest mistake by the Defendant
does not represent a willful failure to respond”).
Because there is no reason to doubt defendants'
characterization of the events leading to their failure to
timely file an answer, the Court finds that defendants'
error regarding the acceptance of service and resulting
deadlines does not rise to the level of culpable conduct
under Rule 55(c).
second factor also weighs in favor of setting aside the
default. Defendants moved to set aside the entry of default
one month after the deadline to file an answer and two weeks
after the entry of default. Given that the case was still in
its early stages, the Court is unable to identify any
prejudice that would result if the entry of default is set
aside. See SecurityNational Mortg. Co. v. Head, No.
13-cv-03020-PAB-BNB, 2014 WL 4627483, at *3 (D. Colo. Sept.
15, 2014) (“There is no prejudice to the plaintiff
where the setting aside of the default has done no harm to
plaintiff except to require it to prove its case.”
(internal quotation marks omitted)); Apex Mobility
Transportation, LLC v. First Transit, Inc., No.
14-cv-02645-REB-MEH, 2015 WL 59553, at *3 (D. Colo. Jan. 2,
2015) (finding no prejudice because defendant moved to set
aside entry of default within two weeks of the entry of
default, which had occurred less than a month after the case
was initiated). Plaintiff's failure to respond to
defendants' motion to set aside the entry of default,
beyond filing a motion for default judgment after defendants
filed their motion, is further indication that he would not
suffer any prejudice should the Court grant such
relief. See Estate of Ortiz v. Lithia Motors,
Inc., No. 08-cv-00907-PAB-KLM, 2009 WL 1258969, at *2
(D. Colo. May 5, 2009) (finding that factors weighed in favor
of setting aside entry of default where plaintiff did not
identify any undue prejudice it would suffer if entry of
default were vacated).
the third factor, defendants claim that they have raised
meritorious defenses in their Answer to the Amended Complaint
[Docket No. 31]. Docket No. 30 at 7, ¶ 20. In
determining whether a defendant has a meritorious defense for
purposes of setting aside an entry of default, “the
court examines the allegations contained in the moving papers
to determine whether the movant's version of the factual
circumstances surrounding the dispute, if true, would
constitute a defense to the action.” In re
Stone, 588 F.2d 1316, 1319 (10th Cir.
their answer, defendants assert ten affirmative defenses.
Docket No. 31 at 4-5, ¶¶ 1-10. However, their
assertions are conclusory and do not include “a
sufficient elaboration of facts to permit the trial court to
judge whether the defense, if movant's version were
believed, would be meritorious.” In re Stone,
588 F.2d at 1319; see also Id. at 1320 & n.4
(defendant's assertions that plaintiff's allegations
were “false, ” that plaintiff was prohibited from
relitigating certain issues under the doctrine of collateral
estoppel, and that plaintiff had failed to state a claim upon
which relief could be granted constituted “general
allegations of . . . meritorious defense” that were
insufficient to support defendant's motion for relief
from default judgment). Similarly, defendants assert, among
other things, that plaintiff failed to state a claim upon
which relief could be granted and that plaintiff's claims
may be barred by collateral estoppel or by an expired statute
of limitations. But these cursory allegations set out neither
factual bases nor legal bases sufficient to establish that
their defenses could be meritorious. See Id. at 1319
n.2 (stating that a “legal defense such as collateral
estoppel . . . would require sufficient facts to show the
nature of the prior action, that it involved the same
parties, and that the particular issues determined give rise
to a defense of collateral estoppel”). Defendants have
not established that they have a meritorious defense to
the Court need not consider every factor in determining
whether to set aside an entry of default. Hunt, 1995
WL 523646, at *3; see also SecurityNational Mortg.
Co., 2014 WL 4627483, at *3 (finding that, “even
if defendants' failure to timely respond was culpable,
the other factors weigh[ed] in favor of granting the motion
to set aside”); Edes v. Fredson, 344 F.Supp.2d
209, 213 (D. Me. 2004) (setting aside entry of default
despite defendant's failure to set forth a meritorious
defense). Given that the other factors - culpability and
prejudice - weigh in favor of setting aside the entry of
default, the Court finds that any doubts in regard to the
existence of meritorious defenses should be resolved in
defendants' favor. See Tozer v. Charles A. Krause
Milling Co., 189 F.2d 242, 245 (3d Cir. 1951) (holding
that any doubts regarding entry of default should be resolved
in favor of the defendant, particularly because
“[m]atters involving large sums should not be
determined by default judgments if it can reasonably be
avoided”); J & J Sports Prods., Inc. v.
Prado, 2008 WL 822159, at *2 (E.D. Cal. Mar. 27, 2008)
(stating that, in motion to set aside default, “any
doubts as to whether Defendants have a meritorious defense
are to be resolved in their favor”); Rasmussen v.
Am. Nat'l Red Cross, 155 F.R.D. 549, 552 (S.D. W.Va.
1994) (setting aside entry of default in light of
“general policy of deciding cases on their merits,
” despite fact that defendant's “meritorious
defense” argument was
of default is a harsh sanction, contrary to the preferred
policy of the resolution of disputes on the merits.”
Mitchell v. Wiley, No. 06-cv-00547-WYD-BNB, 2007 WL
1548945, at *2 (D. Colo. May 24, 2007). Considering the
absence of culpable conduct on the part of defendants, the
lack of prejudice to plaintiff, and the strong preference for
resolution of cases on their merits, see In re
Rains, 946 F.2d 731, 732-33 (10th Cir. 1991), the Court
finds good cause to vacate the entry of default as to
defendants Bland, Denwalt, and Hansen pursuant to
Fed.R.Civ.P. 55(c). Further, the Court finds good cause to
vacate the entry of default as to defendant Allusi because
there is no indication that he was properly served. See
Kriston v. Peroulis, No. 09-cv-00909-MSK-MEH, 2010 WL
11553397, at *2 (D. Colo. Oct. 28, 2010) (“[P]rocedural
deficiencies such as inadequate service, lack of subject
matter jurisdiction, or lack of personal jurisdiction
constitute good cause allowing an entry of default to be set
aside.”); see also Insituform Techs., Inc. v.
AMerik Supplies, Inc., 588 F.Supp.2d 1349, 1352 (N.D.Ga.
2008) (“Where service of process is insufficient, the
entry of default is void and must be set aside.”). It
that defendant's Motion to Set Aside Clerk's Entry of
Default [Docket No. 30] is GRANTED. It is
that the Clerk's Entry of Default against defendants
Allusi, Bland, Denwalt, and Hansen [Docket ...