IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS
May 20, 2011
SANTANDER CONSUMER USA INC., PLAINTIFF,
FRANK T. PEARSON AND DONNA K. PEARSON, DEFENDANTS;
AND FRANK T. PEARSON AND DONNA K. PEARSON, COUNTER-CLAIMANTS,
SANTANDER CONSUMER USA INC., COUNTER-DEFENDANT;
AND FRANK T. PEARSON AND DONNA K. PEARSON, THIRD PARTY PLAINTIFFS,
HSBC BANK AND HSBC AUTO FINANCE, THIRD PARTY DEFENDANTS.
The opinion of the court was delivered by: Murphy, District Judge:
MEMORANDUM AND ORDER
Before the Court are Defendants/Counter-Claimants/Third Party Plaintiffs Frank T. and Donna K. Pearson's motions for default judgment against Counter-Defendant Santander Consumer USA Inc. (Doc. 5) and Third Party Defendants HSBC Bank and HSBC Auto Finance (Doc. 6).*fn1 The Pearsons filed their countersuit and third party complaint on December 17, 2010 in the Fifth Judicial Circuit, Cumberland County, Illinois case Santander Consumer USA, Inc., successor in interest to HSBC Auto Finance, Inc. v. Frank T. Pearson and Donna K. Pearson, case no. 2010 SC 118. That Cumberland County case was opened on November 19, 2010 when Santander Consumer USA, Inc. filed its "Verified Complaint for Detinue and Other Relief." The Pearson's countersuit/third party complaint named several additional partiesSincluding the FBI and Director of the FBI, who removed the action to this Court. Notice of removal was filed January 7, 2011. Santander, HSBC Bank, and HSBC Auto Finance responded to the Pearson's countersuit/third party complaint on February 11, 2011 with a motion to dismiss (Doc. 16).*fn2
The Pearsons' January 31, 2011 motions for default judgment correctly state that Santander, HSBC Bank, and HSBC Auto Finance's response was late. At the time the Pearsons filed their motions for default judgment, Santander et al. had not yet replied to the countersuit/third party complaint. According to Federal Rule of Civil Procedure 81(c)(2), Santander, HSBC Bank and HSBC Auto Finance's response to the Pearsons was due within the latest of: 21 days after receipt of the Pearson's counterclaim; or 7 days after the notice of removal was filed. The '21 day' time frame put the response due date at January 7, 2011, while 7 days from the notice of removal gave the parties until January 14, 2011Sso January 14, 2011 was the appropriate date for response.
FED.R.CIV.P. 81(c)(2). Santander, HSBC Bank, and HSBC Auto Finance's response was thus 17 days past due when the Pearsons filed their motions for default judgment, and ultimately 28 days past due.
In these circumstances, 28 days does not constitute willful disregard of the Pearsons' countersuit/third party complaint and will not support a default judgment. See A. Bauer Mechanical, Inc. V. Joint Arbitration Bd. Of Plumbing Contractors' Association and Chicago Journeymen Plumbers' Local Union 130 U.A., 562 F.3d 784, 791 (7th Cir. 2009) ("Where a party willfully disregards the procedures of the court, we have held that the district court is justified in entering default against that party."). Removal from Cumberland County occurred during the time that Santander, HSBC Bank, and HSBC Auto Finance's response was due, and, as Santander brought the original suit, it is difficult to say that Santander was resisting litigating. Additionally, responding to the Pearson's skeletal complaint may account for added time. The Seventh Circuit "has a well established policy favoring a trial on the merits over a default judgment. For that reason, a default judgment should be used only in extreme situations, or when other less drastic sanctions have proven unavailing." Sun v. Board of Trustees of the University of Illinois, et al., 473 F.3d 799, 811 (7th Cir. 2007). Default judgment is "a weapon of last resort, appropriate only when a party wilfully disregards pending litigation." Id. The Court will not employ default judgment here.
Defendants/Counter-Claimants/Third Party Plaintiffs Frank T. and Donna K. Pearson's motions for default judgment are therefore DENIED.
IT IS SO ORDERED.
G. PATRICK MURPHY United States District Judge