West Coast Servicing, Inc. v. McCarthy Rogers

Background

The court held a conference concerning two motions: West Coast Servicing, Inc.’s motion for default judgment and Rogers’s motion for an extension of time to file an answer. Rogers also requested a mandatory settlement conference under New York Civil Practice Law and Rules § 3408.

Settlement conference

The court denied Rogers’s request for a mandatory settlement conference under § 3408. It held that the provision does not bind federal courts. The court stated that settlement conferences in federal court are governed instead by Rule 16 of the Federal Rules of Civil Procedure.

Default and extension of time

The court applied the standard for setting aside an entry of default under Rule 55(c). It considered whether Rogers’s default was willful, whether she had presented a potentially meritorious defense, and whether setting aside the default would prejudice West Coast Servicing. The court also noted that courts apply a less rigorous standard when addressing an entry of default rather than a final default judgment, and that courts generally prefer resolving disputes on their merits.

The court found that Rogers had shown good cause, although it described the question as close. Rogers’s counsel represented that Rogers had initially retained another attorney whom she believed would handle the matter, but later had to retain new counsel. The court concluded that the default was not willful. Rogers also represented that she might have enough equity in the property to obtain a loan that could satisfy West Coast Servicing and possibly lead to a settlement. Finally, the case had been pending for only several months, so setting aside the default would not prejudice West Coast Servicing. The court stated that West Coast Servicing objected but offered no reasons why the entry of default should not be vacated.

Ruling and case schedule

The court vacated the entry of default as to Rogers, granted Rogers’s motion for an extension of time to file her answer, and denied West Coast Servicing’s motion for default judgment. In the order’s final disposition, the court stated that it “GRANTS IN PART and DENIES IN PART” the motion for an extension of time to file an answer. Rogers was directed to file her answer by November 29, 2022. The court also set March 31, 2023 as the discovery deadline and April 7, 2023 as the deadline for summary-judgment motions, and scheduled a post-discovery status conference for March 31, 2023. The parties were directed to file a letter addressing whether they wanted a referral for settlement purposes to Magistrate Judge Aaron or to mediation.