Hubbuch v. Mullooly

Background

Edward B. Hubbuch, representing himself, sued Mullooly, Jeffrey, Rooney & Flynn LLP (MJRF), attorney Amy Gavlik, and JP Morgan Chase Bank, N.A. Hubbuch alleged violations of the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and state law related to a state-court credit-card debt-collection action. Among other allegations, he claimed that defendants mishandled responses to his requests, reported his account as charged off without indicating that the debt was disputed or being litigated, and sent a debt-collection letter that did not comply with federal law.

Hubbuch served MJRF on July 15, 2025. Its response was due August 5. After MJRF did not respond by that date, Hubbuch obtained a clerk’s certificate of default on August 7 and moved for a default judgment. He requested statutory, actual, and punitive damages, costs, and declaratory relief. MJRF appeared through counsel, filed a motion to dismiss, and then moved under Federal Rule of Civil Procedure 55(c) to vacate the certificate of default. MJRF argued that it mistakenly believed it had 30 days to respond, that Hubbuch would not be prejudiced by setting aside the default, and that it had a potentially meritorious defense based on Hubbuch’s alleged lack of constitutional standing.

Legal standard

Under Rule 55(c), a court may set aside an entry of default for good cause. The court considered whether MJRF’s default was willful, whether setting it aside would prejudice Hubbuch, and whether MJRF had presented a meritorious defense. Because no default judgment had yet been entered, the court applied the more flexible standard for setting aside a certificate of default. The court also noted that default judgments are disfavored and that disputes generally should be resolved on their merits rather than by default.

Court’s analysis

The court found that MJRF’s default was not willful. MJRF incorrectly believed that it had 30 days to respond, but the court found no indication that this mistake was egregious or intentional. The court emphasized that MJRF began taking steps to defend itself promptly, including filing a motion to dismiss and moving to vacate the default.

The court also found no legally sufficient prejudice to Hubbuch. The case was at an early stage, and Hubbuch did not show that setting aside the default would cause the loss of evidence, make discovery more difficult, or create a greater opportunity for fraud or collusion. The court rejected Hubbuch’s argument that the work required to oppose the Rule 55(c) motion itself constituted the necessary prejudice.

Finally, the court found that MJRF had raised a potentially meritorious defense. MJRF’s proposed defense—that Hubbuch lacked constitutional standing because he had not alleged a concrete injury—could, if established, provide a complete defense to the claims. The court used this defense only to assess whether the default should be vacated; it did not decide whether Hubbuch actually lacked standing or whether his claims ultimately failed.

Disposition

The court granted MJRF’s motion to vacate the certificate of default. It denied Hubbuch’s motion for a default judgment as moot because vacating the default removed the basis for that motion. The court set deadlines for MJRF’s motion to dismiss and for the parties’ further briefing. Judge Barbara Moses did not decide the pending claims on their merits in this order.