Setting Aside a Default Judgment

July 23, 2018 § Leave a comment

MRCP 55 governs defaults.

R55(a) states that “When 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 his default.

R55(b) provides: “In all cases the party entitled to a judgment by default shall apply to the court therefor. …”

R55(c) says that: “For good cause shown, the court may set aside a default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b).”

This is R60(b):

(b) Mistakes; Inadvertence; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:

(1) fraud, misrepresentation, or other misconduct of an adverse party;
(2) accident or mistake;
(3) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);
(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;
(6) any other reason justifying relief from the judgment.

The motion shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than six months after the judgment, order, or proceeding was entered or taken. A motion under this subdivision does not affect the finality of a judgment or suspend its operation. Leave to make the motion need not be obtained from the appellate court unless the record has been transmitted to the appellate court and the action remains pending therein. This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to set aside a judgment for fraud upon the court. Writs of coram nobis, coram vobis, audita querela, and bills of review and bills in the nature of a bill of review, are abolished. The procedure for obtaining any relief from a judgment shall be by motion as prescribed in these rules or by an independent action and not otherwise.

Aside from the plain language of the rules, how have the courts addressed the setting aside default judgments?

The COA’s decision in Emery v. Greater Greenville Housing and Revitalization Association, handed down June 12, 2018, took on the appellant’s claim that the chancellor erred in refusing to set aside a default judgment entered against him. Judge Carlton wrote the opinion:

¶23. As the Mississippi Supreme Court has explained, “[a]ccording to Rule 55(c), a default judgment may be set aside ‘[f]or good cause shown’ and in accordance with Rule 60(b).” BB Buggies, Inc. [v. Leon], 150 So. 3d [90] at 101 (¶23) [(Miss. 2014)] (quoting M.R.C.P. 55(c)). The Court has articulated a three-pronged balancing test the trial court must apply in determining whether to set aside a judgment pursuant to Rule 60(b):

(1) the nature and legitimacy of the defendant’s reasons for his default, i.e. whether the defendant has good cause for default,

(2) whether the defendant in fact has a colorable defense to the merits of the claim, and

(3) the nature and extent of prejudice which may be suffered by the plaintiff if the default judgment is set aside.

Id. As noted above, we apply an abuse of discretion standard in reviewing the chancery court’s denial of Emery’s motion to set aside the default judgment. If the chancery court’s decision is based upon an error of law, however, we will reverse. Tucker [v. Williams], 198 So. 3d 299, 309 (¶24) [(Miss. 2016)].

The decision goes on to analyze the facts of this particular case over the next dozen pages, reaching the conclusion that Emery failed to prove the necessary elements, and that the chancellor was not in error by refusing to set aside the default. You can read the opinion for yourself. It’s too lengthy and case-specific to be reproduced here.

Usually the lawyer is called upon to rescue the client from the client’s own failure and neglect to tend to his or her business that resulted in the default. That puts the lawyer in the unenviable digging-out-of-the-hole mode.

Sometimes it’s the lawyer’s oversight that put the client in the default hole. Don’t expect the chancellor to cut you any more slack than she would a lay person in the same situation. You still have to prove good cause, colorable defense, and nature of any resulting prejudice.

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