1990. On March 20, 1990, claimant's counsel told the court that he was unable to contact his client. The court then gave the government leave to respond to claimant's motion to vacate and leave for claimant to reply. The motion was referred to a magistrate for a report and recommendation.
Default occurred in this case because of claimant's failure to answer the government's verified complaint, written interrogatories, and document request. A default judgment may be set aside at the discretion of the court upon such terms as are just. Fed. R. Civ. P. 60(b). In order for a court to set aside a default judgment, claimant must show (1) good cause for default; (2) quick action to correct it; and (3) a meritorious defense to the complaint. United States v. Di Mucci, 879 F.2d 1488, 1495 (7th Cir. 1989). The government contends in this case that claimant has not demonstrated these criteria. This court disagrees.
Good cause for default may be established through a showing of mistake, inadvertence, surprise, or excusable neglect. Fed. R. Civ. P. 60(b)(1). The government argues, contrary to the magistrate's report and recommendation, that claimant has not shown excusable neglect. This court believes that claimant has provided sufficient evidence to show excusable neglect. The cause of claimant's default was his inability to communicate with counsel. Claimant's counsel represented to the court many times that he had difficulty communicating with claimant who lives in Texas. Based on counsel's representations, this court can conclude that claimant did not wilfully ignore communications. The actions of a third party were evidently at the root of the communication problem. Claimant was not receiving information from his attorney because claimant was going through a divorce and his wife kept the mail from him. "Rule 60(b) is applied liberally in the default judgment context . . . where the events contributing to the default judgment have not been in the meaningful control of the defaulting party, or its attorney." C.K.S. Engineers, Inc. v. White Mountain Gypsum Co., 726 F.2d 1202, 1206 (7th Cir. 1984). Claimant's inability to communicate with his attorney, through no fault of his own, constitutes excusable neglect.
Further, claimant took quick action to correct the default. Claimant's counsel provided proposed answers to the complaint and written interrogatories within 7 days of moving to vacate the default. The very next time claimant was in court he filed his answer to the complaint along with some answers to the written interrogatories. Although claimant has only partially remedied his default, (See United States' Response in Opposition to Reyes' Motion to Vacate, Exhibit D), he has taken prompt steps to begin the curing process.
Claimant also has established a meritorious defense. Claimant raises a Fourth Amendment claim "seeking the exclusion of evidence and challenging the existence of probable cause to believe the currency is forfeitable." Magistrate's Report and Recommendation at 6. While it would have been more proper for claimant to have raised his defense in a motion for summary judgment, claimant adequately raises the defense in his motion to suppress. The motion and accompanying exhibit provide sufficient facts to support an illegal search and seizure allegation. With this allegation, claimant questions the government's ability to show probable cause and, thus, establishes his defense.
The government argues that even if claimant has raised a fourth amendment defense, he has not rebutted all the information in the government's verified complaint. A motion to vacate is not the proper vehicle for holding a de facto forfeiture hearing. The government will have ample opportunity to make its probable cause showing in a summary judgment motion or during the forfeiture trial. If claimant can successfully claim that the evidence from the search and seizure should be excluded because it was illegally obtained, the government will be obliged to establish probable cause with evidence untainted by the illegal seizure. The government may then argue the evidence it details in its briefs. Once probable cause has been shown, claimant will need to prove by a preponderance of the evidence that the currency was not involved in illegal drug transactions. United States v. $ 250,000 in United States Currency, 808 F.2d 895, 897 (1st Cir. 1987).
"This circuit has a well-established policy favoring a trial on the merits over a default judgment." C.K.S. Engineers, Inc., 726 F.2d at 1205. Since claimant has satisfied the criteria for setting aside a default, his default may be vacated. However, this court may premise vacating the default on just terms. At this time, claimant has only partially remedied his default. Full remedy would require complete answers to the government's written interrogatories and compliance with the government's document request. The terms for vacating the default are that claimant comply with discovery. Should claimant not comply with discovery, the default judgment will stand.
IT IS SO ORDERED.
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