United States District Court, D. Utah, Central Division
MEMORANDUM DECISION AND ORDER GRANTING MOTION TO SET
ASIDE DEFAULT CERTIFICATE
Waddoups, United States District Judge.
moves to set aside a default certificate entered against it
on December 10, 2018 (ECF No. 12). Defendant acknowledges
that it was personally served with a copy of Plaintiff's
Summons and Complaint and “made a mistake and was
neglectful by not hiring counsel sooner to respond to the
Complaint . . . .” (ECF No. 13, at ¶¶ 4, 8).
For the reasons discussed below, the court sets aside the
default certificate entered against Defendant.
manufactures and sells high-end cabinets and other millwork
products used in residential and commercial construction.
(ECF No. 2, at ¶ 7). On or about December 17, 2016,
Plaintiff and Defendant entered into a written agreement
whereby Defendant agreed to sell and install a “Haunch
Cutter” machine in Plaintiff's facility.
(Id. at ¶¶ 8-9). After some delay,
Defendant delivered and installed the machine, but Plaintiff
alleges that it did not, and to this day does not, work
properly. (Id. at ¶¶ 10-20). On November
6, 2018, Plaintiff filed its Complaint against Defendant,
asserting causes of action for breach of contract, breach of
warranty, and rescission. (Id. at ¶¶
22-38). Plaintiff's Summons and Complaint was personally
served on Defendant's registered agent (who is also its
CEO and President) on November 13, 2018. (ECF No. 13-1 at
¶2). When Defendant failed to timely answer the
Complaint by December 4, 2018, Plaintiff moved this court to
enter default against Defendant on December 6, 2018. (ECF No.
11). A default certificate was thereafter entered against
Defendant on December 10, 2018 (ECF No. 12). Plaintiff filed
its motion to set aside that certificate on January 21, 2019.
55(c) of the Federal Rules of Civil Procedure states that a
“court may set aside an entry of default for good
cause.” The “good cause” requirement is a
lesser standard than what is required to set aside a default
judgment. See Polaski v. Colo. Dep't of Transp.,
198 Fed.Appx. 684, 685 (10th Cir. 2006). In determining
whether good cause exists, a court may consider
“whether the default was the result of culpable conduct
of the defendant, whether the plaintiff would be prejudiced
if the default should be set aside, and whether the defendant
presented a meritorious defense.” Hunt v. Ford
Motor Co., 65 F.3d 178, at * 3 (10th Cir. 1995)
(citations omitted). The court is not required to consider
each of these factors, nor is it limited only to these
factors. Id. Underlying the court's analysis is
the recognition that “[d]efault judgments are
disfavored by courts.” Polaski, 198 Fed.Appx.
undisputed that Defendant received proper service of the
Summons and Complaint but negligently failed to timely answer
the same. Plaintiff asserts that this constitutes willful and
culpable that does not support a motion to set aside default.
While the Tenth Circuit has recognized that “receiving
actual notice of complaint and failing to respond is culpable
conduct, ” this is not determinative of whether an
entry of default should stand. See Hunt, 65 F.3d
178, at * 3 (citing with approval Meadows v. Dominican
Republic, 817 F.2d 517, 521 (9th Cir. 1987)).
the other two factors weigh in favor of setting aside the
default. First, Plaintiff will not be prejudiced if the
default is set aside. While Plaintiff alleges that “is
prejudiced every day that the machine . . . remains idle in
[its] facility, ” it clearly has a duty to mitigate
such damages. Also, because Defendant moved to set aside
default within approximately six weeks of it being entered,
any alleged damage or prejudice is minimal. Thus, the only
real consequence that Plaintiff will suffer if the default is
set aside is that it must pursue its case, and
“[d]efending a case is not unreasonably
prejudicial.” Strupp v. Atlas Glob., LLC, 2018
WL 3405269, at *2 (D. Utah July 12, 2018). Second, Defendant
has presented a meritorious defense to Plaintiffs claim.
Attached to Defendant's Reply in Support of Motion to Set
Aside Default Certificate (ECF No. 13) is its Answer to
Plaintiffs Complaint, in which it denies all of Plaintiff s
allegations and asserts that it completed all agreed-upon
work. (ECF No. 13-1).
has a meritorious defense and moved reasonably quickly to set
aside the default, and Plaintiff will not be substantially
prejudiced if that default is set aside. These facts,
combined with the court's disfavor of default judgments,
establishes that setting aside default is appropriate in this
matter. Accordingly, the court hereby ORDERS
that the default certificate entered against Defendant in
this matter be ...