Trustee Blog

Entry of Default/ Conversion II

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Continuing with our discussion form Nov. 20, 2013. Trustee Frazer was the Chapter 7 Trustee  and Judge Houle is discussing the Entry of Default procedures:

Discussion:
A. Entry of Default

Federal Rule of Civil Procedure 55 states that “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party’s default.” Fed. R. Civ. P. 55(a). Per LBR 7055-1(b)(1), a motion for entry of default judgment shall contain the following:

When and against what party default was entered ̧

Whether defaulting party is an infant or incompetent person – ̧ (N/A)

Whether the defaulting party is currently on active duty – ̧ (N/A)

Whether notice has been served on defaulting party, if required by FRCP 55(b)(2) ̧

B. Default Judgment

Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute considering material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the FRCP favoring decision on the merits. See Eitel v. McCool,
782 F.2d 1470, 1471-72 (9th Cir. 1986).

 

Plaintiff served the Defendant, at Defendant’s address as indicated on the Court’s Docket, and Defendant’s counsel in the main case with the summons and Complaint. Defendant’s counsel was served at the address indicated on the Court’s Docket for the Defendant’s main case. Despite having received proper notice of the time for filing an answer, having received Plaintiff’s Request for Entry of Default, and having received the Motion, Defendant has failed to respond to the Complaint.

2. Whether the Default was due to Excusable Neglect

Defendant did not oppose the Motion. The Court notes that no answer was filed on the docket. As such, there is no evidence before the Court to suggest that default has been entered due to excusable neglect.

3. Merits of Plaintiff’s claim

Upon default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987). “The defendant, by his default, admits the plaintiff’s well-pleaded allegations of facts, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established.” Nishimatsu Construction Co., Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975); Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978); Cotton v. Massachusetts Mut. Life Ins. Co., 402 F.3d 1267,1278 (11th Cir. 2005) (do not have to take as true facts that are not well-pleaded or conclusions of law).

Practice Pointer:

The above shows the effect of not filing an answer.

 

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