57. Is the court likely to grant the seller's motion seeking relief from judgment?

A default is simply a notation in the case file by the clerk that there has been no answer filed within the time permitted by the rules. Under Federal Rule of Civil Procedure (FRCP) 55, a default judgment is a judgment with the same effect as any other judgment entered because the defendant did not oppose the case. If a party against whom a judgment for relief is sought has failed to plead or otherwise defend, and that fact is made to appear by affidavit, or otherwise, the clerk must enter the default of that party. Once the default has been entered, the party may not proceed with the action until the default has been set aside by the court.

An entry of default may be set aside for «good cause shown.» Although not specifically required by the rules, a majority of courts will require that the defendant have a meritorious defense. A default judgment may be set aside as provided in FRCP 60 (relief from judgments).

FRCP 60(b) allows a court to relieve a party from a final judgment on the following grounds:

(i) mistake, inadvertence, surprise, or excusable neglect;

(ii) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under FRCP 59(b);

(iii) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(iv) the judgment is void;

(v) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated, or applying it prospectively is no longer equitable; AND/OR

(vi) any other reason that justifies relief.

B is correct. The court should not grant the seller's motion seeking relief from judgment on the ground of excusable neglect because the seller was served with the summons and complaint, knew of the action in time to appear, plead, or otherwise defend against it, and simply failed to do any of those things. Taken together, absent any other facts, those actions do not constitute excusable neglect.

A is incorrect. This answer is only partially correct. The court should not grant the seller's motion seeking relief from judgment, but it also may not simply set aside the entry of default. This is because default entries can be set aside under FRCP 55(c) only before a default judgment has been entered. Once the default judgment has been entered, relief must be sought through FRCP 60. Here, the court already entered the judgment.

C is incorrect. Although courts indeed tend to be more liberal in granting relief from default judgments (in comparison to other judgments), the mere fact that a default judgment was entered and the seller argues excusable neglect does not entitle the seller to relief here on policy grounds. Moreover, the seller's conduct did not amount to excusable neglect, as explained above.

D is incorrect. The seller has not demonstrated what is necessary to obtain relief from default judgment even though the motion is timely, the seller has a meritorious defense to the action, and the plaintiff would not be unfairly prejudiced if it were set aside. There is insufficient evidence to amount to excusable neglect, which is necessary to relieve the seller from a final judgment.