Johnson v. Sevda Inc.

Background

Scott Johnson filed a disability-access action against Sevda Inc. on June 21, 2021. After Sevda did not respond to several court orders requiring it to explain its failure to comply, the court struck Sevda’s answer. Johnson then requested entry of default, and the clerk entered Sevda’s default on August 1, 2022. Sevda’s next-day motion for reconsideration was denied as procedurally improper because default had already been entered.

Sevda then moved under Federal Rule of Civil Procedure 55(c) to set aside the entry of default. Its lawyer stated that his office had been closed twice because of COVID-19, that he had been infected multiple times, and that temporary staff had failed to keep him informed about court appearances. Johnson did not oppose the motion.

Legal standard

Rule 55(c) permits a court to set aside an entry of default for “good cause.” The court applied three factors: whether the party seeking relief engaged in blameworthy conduct that caused the default, whether it had a potentially valid defense, and whether setting aside the default would harm the other party. The court also emphasized that default is a severe remedy and that cases should generally be decided on their merits when possible.

Ruling

The court found good cause based on defense counsel’s statements and Johnson’s lack of any claimed prejudice. It therefore granted Defendant’s motion to set aside default. The order did not decide the underlying disability-access claims.

The parties were ordered to meet and confer and file, by September 9, 2022, a joint statement identifying the date selected for a GO 56 settlement conference. Defense counsel was ordered to serve the order on Sevda and file proof of service by September 2, 2022. The court stated that it would consider sanctions if Sevda failed to comply with the order.