CIVIL ACTION 02-518, SECTION "T" (5)
February 5, 2003
ORDER AND REASONS
Before the Court is a Rule 60(b) Motion for Relief From Judgment filed on behalf of the Defendant, George Thomas, aka "DJ Duck." The Defendant requested an oral argument on the Motion to be heard before the Court on February 5, 2003. The Court, having considered the arguments of counsel, the evidence presented, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.
On February 25, 2002, the Plaintiff, Wyatt Harris, in his capacity as Chief Executive Officer of W.H.A.T. Records, L.L.C., filed a complaint in the above captioned proceedings. The principal Defendant named was George Thomas, hereinafter "Duck." At the time of service, Duck was not residing at his registered address and his mail was not forwarded to him. On or about September 20, 2002, Duck returned to his domicile and received notice of the lawsuit. Duck was able to understand the Notice of Hearing for the confirmation of the Default Judgment, scheduled for September 25, 2002. Duck attempted to appear before the Court on that day but found the courthouse closed due to Tropical Storm Isidore. Duck then began seeking legal counsel which was finally obtained on November 11, 2002.
On August 6, 2002, approximately nine weeks after Duck was served with a copy of the Complaint and Summons, the Plaintiff entered a Request to Enter Default. On August 15, 2002, a Motion for Default Judgment was filed against Duck. On October 8, 2002, about seventeen weeks after Duck was served, the Court entered a Judgment by Default against Duck in the amount of $135,000 for loss of profit, loss of promotion and royalties, $1,000.00 for attorney's fees, and $187.04 for costs.
II. ARGUMENTS ON BEHALF OF THE PARTIES:
A. The Defendant's Arguments in Support of Rule 60(b) Motion:
The Defendant argues that the Judgment entered on October 8, 2002 to should be set aside and the Defendant should be allowed to file an Answer in response to the complaint to avoid a miscarriage of justice. The Defendant did not willfully allow the Default Judgment to be entered. The Defendant acted out of excusable neglect, mistake, inadvertence, and surprise. Since he has become apprized of the suit, the Defendant has sought legal counsel so that he may defend himself against the Complaint. The Defendant acted with as much haste as his experience (he is unsophisticated in legal matters), finances, and schedule would allow. The Judgment was rendered in the Defendant's absence, without the submission of evidence, and the merits of the case were not examined. The Plaintiff would not be unduly prejudiced if the Judgment is set aside because he must still prove his case against the remaining Defendants. Furthermore, the Defendant has a meritorious defense and will be severely prejudiced if he is compelled to pay the amount of the Judgment.
B. Arguments of the Plaintiff in Opposition to the Rule 60(b) Motion:
The Plaintiff argues that the Judgment should not be set aside because the Defendant has failed to show "good cause" why the Judgment should be vacated. The Defendant was served with the Complaint on two separate occasions: on May 26, 2002, a private process server. effectuated personal service of the Defendant at his home and then Plaintiff's counsel sent, by certified mail, a copy of the Complaint and Summons. Return receipt was received on June 13, 2002. If the Defendant could understand the Notice of Hearing, he should have been able to understand the clear language of the Summons that explicitly states that failure to file an answer within twenty-days of service will result in a Judgment by Default being entered. . . . The Defendant's default was willful and not a mistake and he may not avail himself of Rule 60(b) because he supposedly lacked legal sophistication or because he is ignorant of the law. The Plaintiff would be prejudiced if the Judgment is set aside because the Plaintiff has been litigating the case for over six months. The Defendant, therefore, has failed to show good cause why the Judgment should be set aside and the Judgment should stand while the Plaintiff is allowed to proceed against the Defendants who did answer timely.
III. LAW AND ANALYSIS:
Fed.R.Civ.P. 55(c) provides that "for good cause shown" a court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b). The factors to be considered in making a Rule 55(c) determination include: (1) whether the default was willful; (2) whether setting aside the default would prejudice the adversary; and, (3) whether a meritorious defense is presented. See CJC Holdings, Inc. v. Wright Lato, Inc., 979 F.2d 60, 64 (5th Cir. 1992).
Rule 60(b) of the Federal Rules of Civil Procedure sets forth the requirements for relief from a judgment or order as follows:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or
(6) any other reason justifying relief from the operation of the judgment.
The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken.
In an opinion by Judge Morey Sear of this Court, he set forth the following guidelines for applying this rule:
Rule 60(b) "must be equitably and liberally applied to achieve substantial justice." Blois v. Friday, 612 F.2d 938 (5th Cir. 1980). Accord, Laguna Royalty Co. v. Marsh, 350 F.2d 817, 823 (5th Cir. 1965). This rule, which allows the trial court to reopen a case, is:
most liberally applied to default judgments; its main application is to those cases in which the true merits of a case might never be considered because of technical error, or fraud or concealment by the opposing party, or the court's inability to consider fresh evidence. (Citations omitted.) The purpose of the motion is to permit the trial judge to reconsider such matters so that he can correct obvious errors or injustices and so perhaps obviate the laborious process of appeal. Weighing against the grant of a 60(b) motion is the desirability of finality in judgments. This is particularly true where the reopening of a judgment could unfairly prejudice the opposing party. (Citation omitted). But even without such prejudice, the desirability of orderliness and predictability in the judicial process speaks for caution in the reopening of judgments. These are matters that are addressed to the sound discretion of the trial court, and its ruling . . . will be reversed on appeal only upon a showing of abuse of discretion. (Citations omitted).Swift Chemical Co. v. Usamex Fertilizers, 490 F. Supp. 1343, 1349-1350 (E.D.La. 1980), affirmed 646 F.2d 1121 (5th Cir. 1981), rehearing denied 650 F.2d 282 (5th Cir. 1981) (quoting Fackelman v. Bell, 564 F.2d 734, 735-36 (5th Cir. 1977)).
The Court disagrees with the Plaintiff's argument that he will be unfairly prejudiced if the Judgment is set aside. The Plaintiff has several other Defendants remaining in the lawsuit and no additional energy should be required to pursue the claims against the Defendant, Duck. Furthermore, the Defendant has a meritorious defense.
IT IS ORDERED.