17, 1982, and the first word from a lawyer for defendant was on June 16, 1982.
Defendant's president has submitted a reply affidavit. He denies none of the details set out in the plaintiff's affidavits. He also says he was told to talk to plaintiff's vice-president or credit manager to try to resolve the dispute and that he would allow "sufficient time" to resolve the dispute. He says he made such efforts and was awaiting responses in early June, 1982 and not having an affirmative response, turned the papers over to his lawyer.
This reply affidavit will not do to show excusable neglect. It is inconsistent with the moving affidavit, which asserts that the delay was due to "confusion in defendant's office, and the nature of the issues between the parties, and by mistake and inadvertence." The moving affidavit makes no mention of the now conceded conversations with general counsel and the attorney of record, or of any assurance that time would be extended to allow an attempt to resolve the matter. The reply affidavit fails to give any details of the efforts made after May 17th, although it is known that on May 28, 1982 a call was made to general counsel, and defendant was then told to get a lawyer, as he had been told on May 17, 1982.
The moving affidavit and the reply affidavit taken together, in light of the undenied facts shown by the answering affidavits, falls far short of the requisite showing. The court is satisfied that if there were any mention of an extension of time, it was in conjunction with the urging that defendant hire a lawyer and have him contact the attorney of record.
Whatever the court experience of defendant's president may be, the fact is that since defendant is a corporation it can appear only through a member of the bar of this court. Defendant was on notice by the summons that failure to answer within 20 days could result in a default judgment. Had he hired a lawyer, even after the call to Atlanta on May 28th, two weeks after service, the lawyer could have obtained an ex parte order for a 15 day extension by request to the court clerk under the rules of this court.
Other fact matters mentioned during argument but not presented as part of the record, cannot be considered. Nor will it do to mention undisclosed defenses especially when no draft of answer, setting out all defenses, is submitted with the motion itself.
Defendant knew, from the demand letter of February 18th that the claim was not for an insignificant amount. His attitude, in his calls to general counsel and the attorney of record, shows an arrogance and disregard of the consequences, not mistake, inadvertence or excusable neglect.
Under the circumstances shown by the record in this case, good cause has not been established for setting aside the default, pursuant to F.R.Civ. P. 55(c) or 60(b), and the motion is denied.
Since the damages are unliquidated, default judgment can only be entered by the court under F.R.Civ.P. 55 (b)(2).
Plaintiff will be required to serve defendant's attorney with its proofs for the entry of default judgment, and to bring the application on for a regular motion day, on notice in the usual way noting the changes in the General Rules of this District to take effect in the Fall. The defendant will be allowed to serve and file papers in response in accordance with those rules, limited to the question of damages. The motion will be decided under Rule 78, without oral argument, unless the court finds it necessary to conduct a hearing or order a reference, pursuant to F.R.Civ.P. 55(b)(2), in which case the parties will be notified accordingly.
SO ORDERED. [EDITOR'S NOTE: The following court-provided text does not appear at this cite in 585 F. Supp.]
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
ADMIRAL HOME APPLIANCES, a Division of MAGIC CHEF, INC., a Delaware corporationa v. TENAVISION, INC., a New Jersey corporation, Appellant (D.C. Civil No. 82-1279 - Newark)
Appeal from the United States District Court for the District of New Jersey
Argued February 28, 1984
Before SEITZ, Chief Judge, GARTH, Circuit Judge, and DIAMOND, District Judge.*
(Opinion Filed May 23, 1984)
Kingsley A. Jarvis, Esquire, (Argued), Suite 707, One Montgomery Plaza, Norristown, Pa., 19401 Attorney for Appellant
Steven D. Fleissig, Esquire, (Argued), Kalb, Friedman and Siegelbaum, 7 Becker Farm Road, Roseland, New Jersey 07068, Attorney for Appellee
This is an appeal from an order of the district court in a diversity action granting plaintiff a default judgment against defendant.
A complaint alleging breach of contract and a summons were served on defendant on May 14, 1982. On June 9, 1982, a default was entered by the clerk pursuant to Fed. R. Civ. P. 559a) because of the defendant's failure to appear.
On June 28, 1982, defendant filed a notice of a motion to vacate the default and to allow an answer to be filed. After affidavits were filed, the district court held a hearing and denied the motion in a memorandum and order entered August 5, 1982. Thereafter, plaintiff moved for a default judgment on notice. Defendant did not appear and a monetary judgment was entered. This appeal followed.
Defendant first argues that the district court erred in not setting aside the default and the default judgment on grounds of inadequate notice. This argument is frivolous. Rule 55(a) does not require notice to the defaulting party before the clerk can enter a default. Defendant was given ample notice on the face of plaintiff's summons, which Defendant's president concededly received, that a default could be entered if no answer was filed within 20 days.
The only notice requirement concerns the entry of a default judgment rather than a default. Rule 55(b)(2) requires that written notice of application for a default judgment must be served on the party in default at least 3 days in advance of the hearing date. Here, however, plaintiff met that requirement by mailing to defendant on Januyary 24, 1983, written notice of an application for a default judgment to be heard on February 14, 1983. We conclude that there was no infirmity in the notice given defendant.
Defendant's second assignment of error is that the district judge abused his discretion by not vacating the default on the grounds of defendant's excusable neglect, and because plaintiff and its counsel misrepresented to defendant's prsident, a lay person, the time available before he needed to enter a defense in this matter.
A fair reading of the district court's August 5, 1982 memorandum denying defendant's motion to vacate the default is that the district court found that defendant failed to show excusable neglect, inadvertence or mistake, and that he was not misled by plaintiff's counsel. The defendant's conduct need only be something more than mere negligence to be sufficiently culpable for this court to uphold the district judge's refusal to set aside the default. Hritz v. Woma Corp., 732 F.2d 1178, slip op. at 9 (3d Cir. 1984). The record showed that defendant's president had notice of the pending action but chose to harass plaintiff and its counsel rather than obtain legal advice, although plaintiff's counsel repeatedly advised him to do so. These conversations took place on May 17 and 28, after the suit was filed and well before the date defendant's answer would have been due. The district court correctly found neither neglect, inadvertence nor mistake, but rather a knowing refusal by defendant to appear in this action and present its defenses in court.
Defendant's president also maintained in an affidavit that he had been misled by plaintiff and its counsel into believing that he would be given time to attempt to resolve the dispute bfore he would have to file an answer. The district judge found this affidavit inconsistent with a prior affidavit which did not mention any misleading statements by plaintiff. He also found that the affidavit failed to show what, if anything, defendant's prsident was attempting to do to resolve the dispute, and that it did not controvert the affidavits of plaintiff's counsel that repeated advice was given defendant's president to obtain legal counsel. On the basis of these findings, the district judge did not abuse his discretion by holding that this affidavit failed to show that defendant's default was the result of its president having been misled by plaintiffs.
Our prior cases make it clear that the party in default must show that the default was not caused by his own culpable conduct in order to have it set aside. Defendant has not made such a showing. The findings made by the district judge in his August 5, 1982 opinion are sufficient for this court to know the basis for his refusal to vacate the default. Farnese v. Bagnasco, 687 F.2d 761, 765-66 (3rd Cir. 1982). We conclude that the district judge was well within his discretion in refusing to vacate the default entered by the clerk on June 9, 1982. On appeal defendant has not attacked the default judgment entered on February 15, 1983. It follows that the district court's February 15, 1983 order entering a default judgment in plaintiffs' favor will be affirmed.