The MPT Memo: Advising on a Default Judgment and the Timing Trap
You are a junior associate at a firm representing Plaintiff, who sued Defendant for breach of a $75,000 supply contract in federal court (diversity). Plaintiff filed the complaint on March 1. Defendant was served on March 10. Defendant's answer was due March 31 (21 days under FRCP 12(a)(1)(A)(i)). Defendant filed nothing. On April 20, Plaintiff's paralegal filed a motion for default judgment without first seeking entry of default. The clerk has not entered default. The partner hands you a file with these facts and asks for a memo analyzing: (1) whether Plaintiff can obtain a default judgment now; (2) what procedural steps are missing; and (3) whether Defendant can still respond. The file also contains a note that Defendant's registered agent claims service was defective because the summons was left with a receptionist rather than an officer. The partner wants a practical recommendation, not a treatise.
1. Draft the analysis section of the memo on the procedural steps required to obtain a default judgment, and assess whether the current motion can succeed.
Read the worked answer
Issue: Can Plaintiff obtain a default judgment on the current motion?
Rule - two-step process: Under FRCP 55, a default judgment requires two distinct steps:
- Entry of default by the clerk (FRCP 55(a)) - the clerk enters default when a party has failed to plead or otherwise defend, on a showing by affidavit or otherwise.
- Entry of default judgment (FRCP 55(b)) - the court (or clerk in limited cases) enters judgment. The clerk may enter judgment only if the claim is for a sum certain and the defendant is not a minor or incompetent (FRCP 55(b)(1)). Otherwise, the party must apply to the court under 55(b)(2), and the court may hold a hearing on damages.
Application:
- Step 1 is missing. No entry of default has occurred. The paralegal's motion for default judgment is premature and should be denied without prejudice.
- Sum certain? The claim is for $75,000 under a supply contract - a fixed liquidated sum. If the complaint states a sum certain with an affidavit of the amount due, the clerk could enter judgment under 55(b)(1) after entry of default under 55(a). If damages require proof (e.g., consequential damages, interest calculations), the court must enter judgment under 55(b)(2) after a hearing.
- Service defense: Defendant's agent claims defective service. If service was defective, the court lacks personal jurisdiction and default is improper. Plaintiff must establish proper service under FRCP 4 (individual service, or service on a corporation under 4(h) - state law methods, including service on an officer, managing agent, or authorized agent). Leaving the summons with a receptionist may or may not satisfy state long-arm service rules; Plaintiff should verify.
Recommendation: (1) Immediately file a request for entry of default under 55(a) with an affidavit of service and a showing that Defendant failed to plead. (2) Then file the motion for default judgment under 55(b), attaching an affidavit of the sum due and supporting the sum-certain basis. (3) Cure or confirm the service issue before seeking judgment - a default judgment entered on defective service is void and will be set aside under FRCP 60(b)(4). (4) Do not rely on the paralegal's filing as a valid motion; refile through counsel.
2. Can Defendant still respond, and what standard governs setting aside any default?
Read the worked answer
Yes. Defendant may still respond at any time before default judgment is entered, and even after entry of default, Defendant may move to set aside the default under FRCP 55(c), which incorporates the FRCP 60(b) grounds - but courts apply a more lenient standard for setting aside a default than for a final judgment ("good cause shown" under 55(c)).
Governing standard: Under 55(c), courts consider three factors (circuit-dependent, but widely applied):
- Whether the default was willful - mere negligence or a calendaring error may not be willful;
- Whether the defendant has a meritorious defense - Defendant should plead a specific defense (e.g., defective service, breach by Plaintiff, failure of condition);
- Whether setting aside would prejudice the plaintiff - delay alone is insufficient; Plaintiff must show concrete prejudice (lost evidence, witnesses unavailable).
Application:
- Before entry of default: Defendant can simply file an answer now; the court will likely allow it, and Plaintiff's premature motion should be denied.
- After entry of default: Defendant moves under 55(c). If the default was caused by a calendaring error (not willful), Defendant has a meritorious defense (e.g., defective service, or Plaintiff's own breach), and Plaintiff suffers no concrete prejudice, the court should set aside the default.
- Service defense: If service was in fact defective, the default judgment is void under 60(b)(4) and must be set aside regardless of the other factors - but Defendant bears the burden of establishing the defect.
Practical note: Plaintiff should not assume victory. The service issue is a jurisdictional landmine; Plaintiff should confirm proper service under FRCP 4(h) and state law before pressing for judgment. Defendant's best move is to file an answer immediately and, in the alternative, move to set aside any default.