The opinion of the court was delivered by: MICHAEL J. REAGAN, District Judge
Defendant First Metropolitan Mortgage failed to move, answer,
or otherwise respond to Cheryl Boone's first amended complaint in
this case. That complaint was filed December 1, 2004, stricken
January 14, 2005, and reinstated February 14, 2005 (Docs. 143,
The Court's electronic filing system notified counsel for First
Metropolitan of the filing of the first amended complaint at
2:12 pm on December 1, 2004 and notified counsel for First
Metropolitan of the reinstatement of the first amended complaint
at 10:58 am on February 14, 2005. First Metropolitan took no
action with respect to the first amended complaint.
On March 4, 2005, Boone moved for a Clerk's entry of default
and, separately, for default judgment against First Metropolitan
(Docs. 203, 204). First Metropolitan's counsel received
electronic notification of both motions as they were filed. First
Metropolitan took no action in response to either motion and did
not request additional time in which to move, answer, or
otherwise plead in response to the first amended complaint. Five days later, the Clerk of Court entered default as to First
Metropolitan (Doc. 205). First Metropolitan's counsel was sent
notification of the Clerk's entry of default at 11:53 am on March
9, 2005. First Metropolitan took no action to set aside or vacate
the Clerk's entry of default.
Four weeks passed. On April 7, 2005, the undersigned District
Judge granted Boone's motion for default judgment against First
Metropolitan as to liability, reserving for later determination
the question of damages (Doc. 219). Ten more days passed without
a peep from First Metropolitan. Finally, on April 18, 2005, First
Metropolitan moved to vacate the default judgment and file an
answer herein (Doc. 220).
FEDERAL RULES OF CIVIL PROCEDURE 55(c) and 60(b) authorize
a District Court to set aside a clerk's entry of default or a
default judgment "for good cause shown" and (as to motions
challenging default judgments) "excusable neglect." A movant must
satisfy the same threepronged test to set aside an entry of
default and a default judgment, but the test is applied more
stringently if default judgment has been entered. Pretzel &
Stouffer, Chartered v. Imperial Adjusters, Inc., 28 F.3d 42, 47
(7th Cir. 1994). See also Merrill Lynch Mortgage Corp. v.
Narayan, 908 F.2d 246, 250-51 (7th Cir. 1990).
A party seeking to vacate a default judgment must show: (1)
good cause for the default, (2) quick action to correct the
default, and (3) a meritorious defense to the complaint.
Robinson Engineering Co. Pension Plan and Trust v. George,
223 F.3d 445, 453 (7th Cir. 2000); U.S. v. 8136 Dobson Street,
Chicago, Illinois, 125 F.3d 1076, 1083 (7th Cir. 1997),
cert. denied, 523 U.S. 1111 (1998); Pretzel,
28 F.3d at 45.
Turning to the first element of the three-pronged test, the law
of this Circuit clarifies what does not qualify as good cause
for default. Communication breakdowns, mis-calendaring answer deadlines, and "routine back-office problems" do not
constitute good cause for default. Pretzel, 28 F.3d at 45-46.
Nor does inadvertence, ignorance of an applicable deadline,
unfamiliarity with the rules, or an erroneous belief as to the
need to file an answer. Norgaard v. DePuy Orthopaedics, Inc.,
121 F.3d 1074, 1075 (7th Cir. 1997); Prizevoits v. Indiana
Bell Telephone Co., 76 F.3d 132, 133 (7th Cir. 1996).
The United States Court of Appeals for the Seventh Circuit has
[T]he standard for vacating default judgments
requires that "cause" for failure to respond be
separated from "good cause," and "neglect of
litigation from "excusable neglect." The standards
contained in the cases are justifiably vague,
requiring extraordinary circumstances as a sufficient
condition to justify disturbing a default judgment,
see, e.g., C.K.S. Eng'g, Inc., 726 F.2d at 1204-05
(collecting cases); Planet Corp. v. Sullivan,
702 F.2d 123, 125 (7th Cir. 1983), or at least the
absence of any willful disregard for duties, simple
carelessness, or negligence before a default judgment
will be vacated.
Jones v. Phipps, 39 F.3d 158
, 164 (7th Cir. 1994).
In the case at bar, First Metropolitan maintains that
difficulties in the format of the first amended complaint (First
Metropolitan received it in pdf format but preferred it in Word©)
caused "confusion on the part of counsel" and that the situation
was further muddied by the mistaken belief (by First
Metropolitan's counsel) that Plaintiff soon would seek to file a
second amended complaint, "thus obviating the immediate need to
file a response to the First Amended Complaint" (Doc. 220, p. 4).
Furthermore, First Metropolitan explains that, after the Clerk of
Court made the entry of default, "the date to respond was not
properly docketed," due to chaotic conditions at counsel's office
in the wake of a key secretary's departure (id.).
No explanation is tendered as to why, prior to the entry of
default, First Metropolitan took no action upon receiving notice of Boone's filing of the
motions seeking entry of default and default judgment. The moment
those motions were filed, First Metropolitan's counsel should
have sensed the urgency of the situation. Moreover, the
undersigned Judge waited another four weeks after the Clerk
made the default entry before ruling on the motion for default
judgment. Nothing in the record excuses the delay in letting a
month elapse after receiving notification of the Clerk's entry
of default. At that point alarm bells had plainly tolled, and
First Metropolitan prolonged action at its own peril.
Additionally, First Metropolitan's prior record of inattention
in this case belies the current assertion of excusable neglect.
For instance, in September of 2002, First Metropolitan was
defaulted on an earlier pleading (a cross-claim brought against
First Metropolitan by Defendant Metro East Title). First
Metropolitan had to move to vacate that default, a motion
fortunately (for First Metropolitan) rendered moot by Metro
East's filing of an amended cross-claim.
Plus, First Metropolitan simply failed to appear for the July
7, 2004 hearing/status conference before the undersigned Judge.
And the Clerk's Office of this Court had to print and send paper
copies of electronically-filed pleadings and Orders to First
Metropolitan's counsel for months, until she properly registered
as a user of this Court's electronic filing system a step she
took only after the undersigned Judge expressly directed her to
do so via written Order.*fn1
Here, as in Jones v. Phipps, the party seeking to set aside
default judgment has failed to demonstrate circumstances
constituting good cause or excusable neglect. Rather, this
case reveals simple inattention to "obligations in the period immediately
preceding entry of default," and lack of any response on this
issue until eleven days after the default judgment was entered,
"an unfortunate choice given the relatively more liberal standard
for vacating an ...