United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
L. WHITE UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiffs Notice of Default
Judgment and Motion to Strike Defendant's Answer (Doc. #
6) (ECF No. 9), Motion to Set Aside or Vacate Default
Judgment and to Deem Defendant's Answer and Affirmative
Defenses Valid as Filed (ECF No. 14), and Defendant
Professional Recovery Consultants, Inc.'s Motion for A
Protective Order (ECF No. 21).
Plaintiffs Notice of Default Judgment and Motion to Strike
Defendant's Answer (Doc. # 6) (ECF No.
9), Motion to Set Aside or Vacate Default Judgment and to
Deem Defendant's Answer and Affirmative Defenses Valid as
Filed (ECF No. 14)
February 9, 2016, Plaintiff Vicki Boncek ("Plaintiff)
filed a Petition for violations of the Fair Debt Collection
Practices Act against Defendant Professional Recovery
Consultants, Inc. ("Defendant") in the associate
circuit court of St. Louis County, Missouri. On March 16,
2016, Judge Lawrence J. Permuter, Jr., Associate Circuit
Court Judge for St. Louis County, entered default judgment
against Defendant. See 16SL-AC03761. On March 17,
2016, Defendant filed a Notice of Removal in this Court. (ECF
No. 1). On March 23, 2016, Defendant filed an answer in this
Court. On April 7, 2016, Plaintiff moved to strike
Defendant's answer. (ECF No. 9). On April 14, 2016,
Defendant moved to set aside the default and deem its answer
and affirmative defenses valid. (ECF No. 14).
entry of default judgment occurred before the 30-day removal
deadline. Defendant retained Missouri counsel one day after
the "return date" set for Defendant and
twenty-three days after being served with process. Defendant
requests that this Court set aside or vacate the default
judgment pursuant to Fed.R.Civ.P. 59(e) or Fed.R.Civ.P.
60(b). (ECF No. 12). Defendant, a Michigan-based company, did
not understand the significance of the "return
date" as the answer deadline. (ECF No. 12 at 6).
Defendant claims "[a]midst the flourish of activity
surrounding Defendant's rapid retention of the
undersigned on March 17, 2016 and the face of the press of
other business, the undersigned unwittingly prepared,
received approval for, and filed Defendant's Answer while
overlooking the judgment entered in the state court and under
the misimpression that his answer would be timely pursuant to
Fed.R.Civ.P. 81(c)(2)(C)." (ECF No. 12 at 6). Defendant
claims that this error was unintentional and that it has
proceeded in good faith. See Rule 59(e). In the
alternative, Defendant asserts that good cause exists for the
Court to set aside or vacate the default judgment under Rule
60(b). Under Rule 60(b)(1), the Court may relieve a party
from a final judgment based upon "mistake, inadvertence,
surprise, or excusable neglect." Defendant asserts that
its "counsel was attentive to this case once retained
for defense and promptly acted in its representative capacity
in this matter." (ECF No. 12 at 8). Defendant contends
that its failure to obtain Missouri counsel sooner was not in
bad faith and was quickly cured.
response, Plaintiff admits that Federal Courts have the
authority to issue necessary orders for properly removed
state court matters. (ECF No. 18 at 2). Plaintiff even admits
that Federal Courts can set aside a state-court default
judgment. (ECF No. 18 at 5). Plaintiff argues that removal
was improper because the state court default judgment was not
set aside initially, prior to removal. (ECF No. 18 at 2).
Even if this matter was properly removed, Plaintiff argues
that Defendant has not met its burden in requesting the
default judgment be vacated. (ECF No. 18 at 2). Plaintiff
claims that she has "expended much energy, time and
wasted correspondence with Defendant's counsel in order
to reinforce an already valid default judgment and has caused
Plaintiff to incur unnecessary attorney's fees and
emotional distress." (ECF No. 18 at 4). Plaintiff argues
that vacating the default judgment under Rule 59(e) is
improper because Rule 59(e) motions serve a limited function
of correcting manifest errors of law or to present newly
discovered evidence. (ECFC No. 18 at 5-6). Plaintiff argues
that the stricter standard under Fed.R.Civ.P. 60(b) applies
for setting aside a default once it has ripened into a
judgment. (ECF No. 18 at 7). Plaintiff argues that Defendant
has not provided any case law to support its position that to
set aside the default judgment under Rule 60(b)(1). (ECF No.
18 at 7-8). Plaintiff cites to the legal qualifications of
defense counsel as argument that they should not have missed
the deadline for filing an answer and should have sent a
representative to the March 16, 2016 hearing on the motion
for default judgment. Plaintiff further contends that defense
counsel's failure to properly docket the answer date does
not constitute excusable neglect under Rule 60(b). Plaintiff
claims that Defendant has acted in bad faith and/or with
willful disregard to the Court's procedures by removing
this action "hoping to usurp the state-court default
judgment." (ECF No. 18 at 10-12). The Court has
jurisdiction to enter an order vacating or setting aside the
default judgment of the state court. Butner v.
Neustadter, 324 F.2d 783, 786 (9th Cir. 1963) (after
removal, "a motion to set aside a default may be made in
the district court under Fed.R.Civ.P. 60(b) because of
mistake, inadvertence, surprise, or excusable neglect");
Barrier v. Thompson/Ctr. Arms Co. Inc., 796 F.3d
897, 901 (8th Cir. 2015). Further, the court may set aside
the default judgment under either Rule 59(e) or Rule 60(b).
The Court notes that counsel for Defendant learned of this
matter one day after the state court default judgment was
entered and then counsel promptly removed this action to
Federal Court. Defendant has shown that its failure to timely
answer Plaintiff s Petition was unintentional or based upon
excusable neglect. Based upon the short time period while
Defendant was in default, this Court has good cause for
setting aside the default judgment and allowing this case to
proceed on the merits. Johnson v. Dayton Elec. Mfg.
Co., 140 F.3d 781, 785 (8th Cir. 1998) (quoting
Shepard Claims Serv., Inc. v. William Darrah &
Associates, 796 F.2d 190, 193 (6th Cir. 1986)
('"when the grant of a default judgment precludes
consideration of the merits of a case, even a slight abuse of
discretion may justify reversal'"); Johnson v.
Dayton Elec. Mfg. Co., 140 F.3d 781, 784 (8th Cir. 1998)
(citing Oberstar v. F.D.I.C, 987 F.2d 494, 504 (8th
Cir. 1993) (There is a "judicial preference for
adjudication on the merits"). Therefore, the Court
vacates the default judgment and deems Defendant's answer
Defendant Professional Recovery Consultants, Inc.'s
Motion for A Protective Order
Motion, Defendant requests a Motion for a Protective Order to
prevent Plaintiff from conducting any "post-judgment
discovery" pursuant to Fed.R.Civ.P. 69. (ECF No. 21).
The Court grants this Motion because the Court has vacated
the state court default judgment.
IT IS HEREBY ORDERED that Plaintiffs Notice of Default
Judgment and Motion to Strike Defendant's Answer (Doc.
# 6) (ECF No. 9) is DENIED.
FURTHER ORDERED that Motion to Set Aside or Vacate Default
Judgment and to Deem Defendant's Answer and Affirmative
Defenses Valid as Filed (ECF No. 14) is GRANTED. The Court
vacates the default judgment and holds that Defendant's
Answer and Affirmative defenses are valid as filed.
FINALLY ORDERED that Defendant Professional Recovery
Consultants, Inc.'s Motion for A ...