KeyBank National Association v. Direct Building Products Corp.

Background

On September 17, 2021, the court held a hearing on Defendants’ motion to vacate, or set aside, the default judgment. The opinion also refers to reasons stated during the hearing.

Legal standard

The court explained that deciding whether to set aside a default judgment is within the trial court’s discretion. It identified three factors: whether the default was willful, whether the defendant has a potentially valid defense, and how much prejudice the non-defaulting party would suffer if the case were reopened.

Court’s findings

The court found clear and convincing evidence that Defendants’ default and their delay in bringing the motion were willful. The record included affidavits of service, a certified-mail receipt showing acceptance of notice of the default judgment, communications from Direct Building Products’ former counsel, a signed receipt concerning Yoel Deen’s deposition notice, and an email about rescheduling the deposition. The court concluded that Defendants had actual notice of the lawsuit well before May 2021 and did not file the motion until August 23, 2021. Plaintiff’s counsel also stated at the hearing that Defendants had not raised objections on the merits before filing this motion.

The court further found that KeyBank would be prejudiced if the case were reopened. It relied on KeyBank’s nearly year-long efforts to collect the judgment, including efforts to have the judgment recognized in the District of New Jersey.

Disposition

For these reasons and the reasons stated at the hearing, the court denied Defendants’ motion. The Clerk of Court was directed to terminate the motion, identified as Document 30. The opinion does not state that the default judgment itself was vacated or modified.