United States District Court, W.D. Oklahoma
MEMORANDUM OPINION AND ORDER
J. CAUTHRON United States District Judge
filed this action alleging Defendant committed racial
discrimination in violation of Title VII of the Civil Rights
Act of 1964, 42 U.S.C. §§ 2000e-1 et seq., 42
U.S.C. § 1981, and racial discrimination and retaliation
in violation of the Oklahoma AntiDiscrimination Act, 25 Okla.
Stat. §§ 1101 et seq. After Defendant failed to
respond, the Court entered default judgment on February 13,
2017. (Dkt. No. 15.) Now before the Court is Defendant's
Motion to Set Aside Default Judgment, which Defendant filed
pursuant to Fed.R.Civ.P. 60(b) and 55(c)[*] on March 15, 2017. (Dkt. No.
19.) Plaintiff has responded and the Motion is now at issue.
Federal Rules of Civil Procedure allow a court to relieve a
party of final judgment for mistake, inadvertence, surprise,
excusable neglect, or any other reason that justifies relief.
Fed.R.Civ.P. 60(b). The Tenth Circuit has stated “Rule
60(b) is an extraordinary procedure permitting the court that
entered judgment to grant relief therefrom upon a showing of
good cause within the rule. It is not a substitute for
appeal, and must be considered with the need for finality of
judgment.” Cessna Fin. Corp. v. Bielenberg Masonry
Contracting, Inc., 715 F.2d 1442, 1444 (10th Cir. 1983)
(citation omitted). This consideration is counterbalanced
with the notion that “strong policies favor resolution
of disputes on their merits.” Id. (citation
and internal quotation marks omitted).
bears the burden of establishing excusable neglect, and all
doubts will be resolved in favor of the party seeking relief.
Excusable neglect encompasses situations where the failure to
respond is a result of negligence. Jennings v.
Rivers, 394 F.3d 850, 856 (10th Cir. 2005). This has
been described more generally as including “both
simple, faultless omissions to act and, more commonly,
omissions caused by carelessness.” Id.
(citation and internal quotation marks omitted). The
determination is made in equity, and the Tenth Circuit has
defined the relevant factors as “the danger of
prejudice to [the opposing party], the length of the delay
and its potential impact on judicial proceedings, the reason
for the delay, including whether it was within the reasonable
control of the movant, and whether the movant acted in good
faith” and “whether the moving party's
underlying claim is meritorious.” Id. at
856-57 (citations and internal quotation marks omitted).
Additionally, the “district court is vested with a
great deal of discretion in its decision to grant or deny a
Rule 60(b) motion.” Cessna Fin. Corp., 715
F.2d at 1445 (citation omitted).
Defendant received summons on September 26, 2016, and a
temporary receptionist signed the return receipt. Defendant
offers no reason why it ignored the summons. Plaintiff served
copies of the Motion for Default Judgement, Entry of Default,
and two Court Orders, which were signed for by the Director
of HR/Payroll on December 22, 2016. Defendant represents the
HR/Payroll Director was occupied with her duties, misplaced
the documents, and neglected to take action.
the Court held a hearing on damages, Plaintiff filed a brief
in support, which Defendant received, signed for by the
Director of HR/Payroll, on February 10, 2017. Defendant
states it submitted the documents to an insurance broker, but
again, Defendant took no action to retain counsel. On March
14, 2017, about one month after the Court entered judgment
against Defendant, the company retained counsel and filed the
current Motion one day later.
Court will analyze Defendant's lack of response to three
notices of the pending suit under the excusable neglect
standard. Defendant argues the danger of prejudice to
Plaintiff is minimal because her costs expended are
relatively minimal and would still be recoverable if
Plaintiff prevails on the merits. After a review of the
timesheets presented in the Motion for Attorney's Fees
(Dkt. No. 16), it does appear that the vast amount of
Plaintiff's fees accumulated to date are due to
groundwork that would have been necessary whether or not
Defendant responded in this case. This factor weighs in favor
of setting aside the default judgment.
argues she will be prejudiced by the delay in collecting back
pay if the Court sets aside the default judgment. The Court
finds the interest in resolving a case on its merits, given
the relatively short delay when compared to the expected
timeline of a normal federal case, is outweighed by the need
for a speedy collection due to default. Additionally, the
impact on judicial proceedings will be minimal given the
procedural posture of the case.
Court will consider the reason for the delay, including
whether it was within the reasonable control of the movant.
Defendant claims the delay was caused by an inadvertent
mistake. While, in fact, a series of mistakes occurred, there
is no evidence Defendant purposely delayed filing or did so
strategically. Nonetheless, a company like Defendant must
have procedures in place so summonses are not
“misplaced and [their] existence neglected.”
(Def.'s Mot. to Set Aside Default J., Dkt. No. 19, p. 3.)
“Ignoring the point of delivery, whether intentionally
or not, throws a monkey wrench into a system designed
carefully to promote efficient service of process on
artificial entities.” Holcim (US) Inc. v. Limerock
Materials, LLC, No. 11-CV-00686-REB-CBS, 2012 WL
4442757, at *2 (D. Colo. Sept. 26, 2012). Upon cursory
review, it is apparent Defendant has been a party to other
lawsuits in the past and cannot claim ignorance of basic
judicial processes, although the company was unrepresented at
the time it received the documents. This factor weighs
against setting aside the default judgment.
argues Defendant did not act in good faith because its
disclosure of the timeline of service of filings was not
complete. The Court finds this action, while not commendable,
is excusable. Defendant retained counsel the day before the
current Motion was filed, and the need for speedy action was
necessary. There is no obvious culpable behavior, especially
when Defendant subsequently corrected the facts. See
United States v. Timbers Pres., Routt Cnty., Colo., 999
F.2d 452 (10th Cir. 1993) (citation omitted) (“[a]
moving party need not come into court completely unblemished,
but neither must a district . . . court ignore the
party's obvious culpable behavior”), abrogated
on other grounds by Degen v. United States, 517 U.S.
820, 825 (1996).
claims it can offer a meritorious defense: Plaintiff was not
terminated due to her race, but because the Oklahoma
Department of Human Services issued a Notice to Comply where
Plaintiff “was seen yanking a child by the arms and
pulling the child down the hallway.” (Dkt. No. 19-1.)
This notice formed grounds for Plaintiff's dismissal
under the employee handbook. In her Response, Plaintiff does
not contest the truthfulness of these statements; she merely
argues Defendant's meritorious defense is moot. After
weighing the equities, the Court finds this case must be
decided on its merits in the interest of justice to determine
the true reason for Plaintiff's termination.
reasons stated, Defendant's Motion to Set Aside Default
Judgment (Dkt. No. 19) is GRANTED. Accordingly, the
Court's Order (Dkt. No. 14) and Judgment (Dkt. No. 15)
and VACATED, and Plaintiff's ...