United States District Court, D. New Mexico
SANDY TRAINER, on behalf of herself and all others similarly situated, Plaintiff,
STATE OF NEW MEXICO CORRECTIONS DEPARTMENT, Defendant.
PROPOSED FINDINGS AND RECOMMENDED
H. Ritter, U.S. Magistrate Judge.
matter comes before the Court on Defendant's Motion to
set Aside Clerk's entry of Default and Supporting
Memorandum Brief, [Doc. 8], filed December 20, 2018. Pursuant
to the provisions of 28 U.S.C. Sections 636(b)(1)(B) and
(b)(3) and Federal Rule of Civil Procedure 72(b), presiding
District Judge Martha Vázquez referred Defendant's
Motion to the undersigned Magistrate Judge to issue proposed
findings and a recommended disposition. [See Doc.
24]. Having considered the parties' briefs and all
pertinent authority, the Court recommends that
Defendant's Motion be granted and that
the Clerk's entry of default be set aside.
Trainer initiated this action against the State of New Mexico
Corrections Department (“the Department”) via a
Class Action Complaint, filed September 26, 2018. [See
generally Doc. 1]. In her Complaint, Ms. Trainer alleges
that she and other similarly situated women were
discriminated against on the basis of their sex by being
misclassified as independent contractors. [See id.,
p. 1]. Ms. Trainer alleges that her male counterparts
transitioned from contractor status to full employee status
while she and other similarly situated women “were kept
at contractor status on account of their sex.”
[Id., p. 5]. Ms. Trainer also alleges that she was
“retaliated against for her report of a September 2015
assault by Andy Ray. . . . [by] being blacklisted from moving
from contractor status to employee status.”
[Id.]. On the basis of these facts, Ms. Trainer
brings claims under Title VII and the New Mexico Human Rights
Act. [Id., pp. 4-5].
were issued on September 27, 2018, and Ms. Trainer served the
Department on October 3, 2018. [See Doc. 3]. The
Department did not answer or otherwise response to Ms.
Trainer's Complaint, so she filed an Application for
Entry of Default under Federal Rule of Civil Procedure 55(a)
on November 6, 2018. [Doc. 3]. The Clerk subsequently entered
default on November 7, 2018. [Doc. 4].
a month and a half later, on December 20, 2018, the
Department entered an appearance, filed an Answer and jury
demand, and filed the instant Motion to set aside the
Clerk's entry of default. [See Docs. 5, 6, 7,
8]. The Department's explanation for its delay relates to
the requirements for service under New Mexico law.
[See Doc. 8, p. 3]. That is, under the New Mexico
Rules of Civil Procedure, Ms. Trainer was required to serve
both the Department and the New Mexico Attorney General.
[See Id. (quoting Rule 1-004(H) NMRA)]. The
Department admits that there is no such requirement under the
Federal Rules, but nonetheless argues that its
mistake was reasonable because, under those Rules, a
plaintiff is required to either serve the chief executive
officer of a state-created governmental organization or to
effect service in accord with state law (requiring service on
both the Attorney General and the Department). [See
Id. (quoting Federal Rule of Civil Procedure 4(j)(2)].
Further complicating the matter, explains the Department, is
the fact that this is not Ms. Trainer's only lawsuit
against it. [See id., p. 1]. Rather, Ms. Trainer
currently has a suit pending in the First Judicial District
Court for the State of New Mexico against the Department and,
as of the filing of the instant Motion, she had not served
the Attorney General, meaning that service of process has not
been accomplished in the state case. [Id., p. 3]. As
such, because the Attorney General has not been served,
counsel for the Department did not believe that it had been
served in the federal case “until it was discovered
that the Clerk's Entry of Default had been
entered.” [Id.]. Given this confusion, the
Department moves the Court to set aside the Clerk's entry
of default. [See generally Doc. 8].
Trainer's opposition to the Department's Motion is
straightforward. [See generally Doc. 10]. Most
basically, she argues that the Department has done nothing to
shoulder its admittedly light burden to demonstrate
“good cause” to set aside the default under Rule
55(c) because it has failed to demonstrate that it did not
act culpably in failing to answer, and has not set forth
sufficient facts to demonstrate it has a meritorious defense
to Ms. Trainer's allegations. [Id., p. 1]. Thus,
she argues that the Department's Motion should be denied.
[Id.]. The Department's Reply brief counters
that an unintentional or good faith mistake does not rise to
the level of culpable conduct under Rule 55(c), that it has
in fact set forth a meritorious defense through its Answer,
and that Ms. Trainer has failed to demonstrate prejudice.
[See generally Doc. 12');">12');">12');">12]. For the reasons that
follow, the Court finds the Department's arguments to be
more convincing at this stage of the proceedings.
preferred disposition of any case is upon its merits and not
by default judgment.” Gomes v. Williams, 420
F.2d 1364, 1366 (10th Cir. 1970) (citing Meeker v.
Rizley, 324 F.2d 269 (10th Cir. 1963)). “The
default judgment must normally be viewed as available only
when the adversary process has been halted because of an
essentially unresponsive party. In that instance, the
diligent party must be protected lest he be faced with
interminable delay and continued uncertainty as to his
rights.” In re Rains, 946 F.2d 731, 732-733
(10th Cir. 1991) (quoted authority omitted). Thus,
“this judicial preference is counterbalanced by
considerations of social goals, justice and expediency[, ] a
weighing process which lies largely within the domain of the
trial judge's discretion.” Gomes, 420 F.2d
at 1366 (footnotes omitted).
Rule 55(c), good cause is required to be shown for the court
to set aside an entry of default.” Hunt v. Ford
Motor Co., 8');">65 F.3d 178, *3 (10th Cir. 1995)
(unpublished) (citing Fed.R.Civ.P. 55(c)). “[T]he good
cause required by Fed.R.Civ.P. 55(c) for setting aside an
entry of default poses a lesser standard for the defaulting
party than the excusable neglect which must be shown for
relief from judgment under Fed.R.Civ.P. 60(b).”
Dennis Garberg & Assocs., Inc. v. Pack-Tech Int'l
Corp., 115 F.3d 767, 775 n.6 (10th Cir. 1997). As such,
“entries of default are often set aside. The requisite
‘good cause' … is not ‘good cause'
for the defendant's mistake, but rather ‘good
cause' justifying the court's decision to set the
default aside.” Quintana v. Arbogast, CV
08-112');">12');">12');">127 BB/LFG, 2010 WL 11626764, at *3 (D.N.M. 2010) (quoted
deciding whether to set aside an entry of default, courts may
consider, among other things, whether the default was
willful, whether setting it aside would prejudice the
adversary, and whether a meritorious defense is
presented.” Watkins v. Donnelly, 551 Fed.Appx.
953, 958 (10th Cir. 2014) (unpublished) (quoting Pinson
v. Equifax Credit Info. Servs., 316 Fed.Appx. 744, 750
(10th Cir. 2009) (unpublished)). “These factors are not
‘talismanic' and the court may consider other
factors.” Hunt, 65 F.3d at *3 (quoting In
re Dierschke, 81');">975 F.2d 181, 184 (5th Cir. 1992)). For
example, “[o]ne of the other factors that courts have
considered is whether the dispute involves a substantial
amount of money.” Roberson v. Farkas, CV
09-0795 JCH/WDS, 2011 WL 13117113, at *4 (D.N.M. 2011).
“Another factor supporting setting aside the default
are Defendants' efforts to cure the default.”
Clawson v. Southwest Cardiology Associates, P.A., CV
99-0379 MV/RLP, 2000 WL 36739788, at *4 (D.N.M. 2000).
“Ultimately, the factors a court considers should be
liberally applied in favor of setting aside the entry of
default to allow a determination on the merits.”
Niederstadt v. Eldridge, CV 16-0255 SMV/CG, 2016 WL
9777152, at *3 (D.N.M. 2016). “However, the court need
not consider all the factors. If the default was the result
of the defendant's culpable conduct, the district court
may refuse to set aside the default on that basis
alone.” Hunt, 65 F.3d at *3.
a defendant's conduct is considered culpable if he has
defaulted willfully or has no excuse for the default.”
Id. (citations omitted). Mere negligence will not
suffice. Watkins, 551 Fed.Appx. at 958. Nor will
“an honest mistake” or “inadvertent
mistakes.” See E.E.O.C. v. Bell Gas, Inc., CV
02-1090 WJ/DJS, 2003 WL 27385375 at *2 (D.N.M. 2003); see
also Clawson, 2000 WL 36739788, at *4. Moreover,
“[d]efault is discouraged where counsel's
inadvertence, rather than defendant's bad faith, has
cause the late filing of an Answer.” Chavez v.
Dennis, CV 05-0186 MCA/ACT, 2006 WL 8444274, at *2
(D.N.M. 2006). That said, a defendant's conduct is
culpable if it fails to answer or otherwise respond to the
complaint after receiving actual notice of the complaint.
Hunt, 65 F.3d at *4. A defendant's conduct in
failing to answer is also culpable where it “was an
informed choice based on the advice of counsel.”
Cadigan & Park, P.C. v. Abbasid, Inc., CV
10-0694 WJ, 2010 WL 11527156, at *3 (D.N.M. 2010). Likewise,
the defendant's sophistication and experience as a
litigant matters. Id.
assessing prejudice, the Tenth Circuit has indicated that
there is none where the defaulting party subsequently files a
responsive pleading and participates in the lawsuit. See
U.S. v. Rice, 898');">295 Fed.Appx. 898, 901 (10th Cir. 2008)
(unpublished); see also Niederstadt, 2016 WL
9777152, at *3. Thus, “[t]he fact that a plaintiff will
have to litigate an action on the merits rather than proceed
by default does not constitute prejudice.”
Chavez, 2006 WL 8444274, at *3 (quoted authority
the defaulting party must demonstrate a meritorious defense
to the action. SeeGomes, 420 F.2d at 1366.
“In an attempt to determine the meritorious nature of a
defense, the trial court must have before it more than mere
allegations that a defense exists.” Id.
“Bald allegation[s]” without the support of
underlying facts, will not sustain the burden of the
defaulting party.” Id. However, “[i]t
does not take much to establish the existence of a
meritorious defense sufficient to set aside a default - only
the alleging of sufficient facts that, ...