United States District Court, D. Nebraska
MEMORANDUM AND ORDER
Smith Camp Chief United States District Judge.
matter is before the Court on the Motion to Set Aside
Clerk's Entry of Default and Default Judgment, ECF No.
32, filed by Defendant Securiguard, Inc., Health and Welfare
Plan (“Plan”). For the reasons stated below, the
motion will be granted.
Larson, an employee of Securiguard, Inc., filed this action
against the Plan and Defendant FCE Benefit Administrators,
Inc. (“FCE”), the Plan's third-party
administrator, on February 21, 2017, alleging violations of
the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. §§ 1001, et.
seq. Larson alleged that due to a misclassification of
his employee status under the Plan, he did not receive the
full amount of benefits to which he was entitled. In his
complaint, ECF No. 1, he pled claims for denial of benefits
under 29 U.S.C. § 1132(a)(1)(B); failure to provide plan
documents under 29 U.S.C. § 1132(c); failure to provide
continuing coverage notice under 29 U.S.C. § 1132(c)(1);
breach of fiduciary duty to act in accordance with plan
documents under 29 U.S.C. § 1104(a)(1)(D); and breach of
fiduciary duty to monitor under 29 U.S.C. § 1105.
HR Director, Leslie Howard-Watts, became aware of the lawsuit
on February 23, 2017. The same day, she sought assistance in
addressing the suit from FCE. On February 24, 2017, Larson
served FCE, which accepted service on behalf of the Plan. ECF
No. 19. Thus, the Plan's answer was due on March 17,
2017. On March 16, 2017, Howard-Watts received an email from
Denise Bethel of Trust Management Services
(“TMS”), an entity that maintains the same
physical address as FCE. The email stated “[w]e were
served with this lawsuit, and wanted to check in with you
about our plans for helping the plan defend this.” ECF
No. 33-2, Page ID 699. The next day, Bethel sent another
email to Howard-Watts that stated “[p]er our
conversation we will proceed with hiring counsel to defend
this legal matter against the plan.” Id.
Howard-Watts understood this to mean that TMS would defend
the Plan against Larson's suit.
March 29, 2017, an attorney who identified herself as counsel
for the Plan left a voicemail for Larson's counsel,
asking to discuss the law suit. Larson's counsel returned
the call the next day, but did not reach the attorney and
left a voicemail. Larson's counsel never received a
return call from the attorney.
April 5, 2017, Howard-Watts became aware that TMS would not
be defending the Plan in the present action. Howard-Watts
immediately contacted FCE's Director of Account
Management, who referred her to FCE's legal department.
Several days later, Howard-Watts spoke with FCE's legal
counsel, who informed Howard-Watts that the Plan would have
to respond separately to the lawsuit. However, Howard-Watts
“did not have enough experience with litigation to know
to ask who would be responsible for obtaining counsel, and
assumed that FCE would take care of it.” Supp. Brief,
ECF No. 33, Page ID 686.
1, 2017, Larson filed a Motion for Clerk's Entry of
Default, ECF No. 20, and a Motion for Default Judgment, ECF
No. 23, against the Plan. That same day, the Clerk of the
Court entered the Plan's default, ECF No. 22, and granted
the default judgment, ECF No. 24, in the amount of $161,
12, 2017, Howard-Watts received notice of the entry of
default and default judgment while on vacation. Four days
later, Howard-Watts contacted FCE to find out why FCE had not
responded to the lawsuit. On May 19, 2017, Howard-Watts spoke
with FCE's legal counsel, and learned that the Plan was
responsible for finding its own counsel. That same day,
Howard-Watts secured counsel to represent the Plan in this
action. On May 30, 2017, the Plan filed its motion to set
aside the entry of default and default judgment. ECF No. 32.
court may set aside an entry of default for good cause, and
it may set aside a final default judgment under Rule
60(b).” Fed.R.Civ.P. 55(c). “When examining
whether good cause exists, the district court should weigh
‘whether the conduct of the defaulting party was
blameworthy or culpable, whether the defaulting party has a
meritorious defense, and whether the other party would be
prejudiced if the default were excused.'”
Stephenson v. El-Batrawi, 524 F.3d 907, 912 (8th
Cir. 2008) (quoting Johnson v. Dayton Elec. Mfg.
Co., 140 F.3d 781, 784 (8th Cir. 1998)).
parties appear to agree that relief from the entry of default
should be evaluated under Rule 55(c), and relief from the
default judgment under the more rigorous Rule 60(b) standard.
See Grant v. City of Blytheville, Arkansas, 841 F.3d
767, 772 (8th Cir. 2016) (“Although the same factors
are typically relevant in determining whether to set aside
entries of default and default judgments, ‘[m]ost
decisions . . . hold that relief from a default judgment
requires a stronger showing of excuse than relief from a mere
default order.'” (alteration in original) (quoting
Johnson, 140 F.3d 781, 783 (8th Cir. 1998))).
However, Rule 55(c) was amended in 2015 through the insertion
of the word “final” before “default
judgment.” Burger v. Engineered Paint Applications,
LLC, No. 1:17-CV-1063-STA-EGB, 2017 WL 3431439, at *3
(W.D. Tenn. Aug. 9, 2017). As clarified by this amendment,
“[t]he demanding standards set by Rule 60(b) apply only
in seeking relief from a final judgment.”
Fed.R.Civ.P. 55 advisory committee's note to 2015
amendment (emphasis added). “Until final judgment is
entered, Rule 54(b) allows revision of the default judgment
at any time.” Id.
default judgment that does not dispose of all of the claims
among all parties is not a final judgment.”
Id.; see Fed. R. Civ. P. 54(b). “[I]f
the default judgment . . . was not final because it did not
dispose of all the claims of all the parties, then it is
subject to revision under Rule 54(b). The party seeking
relief does not need to satisfy Rule 60(b).” 10A
Charles Alan Wright et al., Federal Practice and
Procedure § 2692 (4th ed.) (internal footnote
the default judgment disposed of the claims against only one
of the two defendants. Therefore, because the default
judgment is not final, the Court will evaluate the motion
under the criteria of Rule 55(c) and not the more rigorous
standard of Rule 60(b). See Burger, 2017 WL 3431439,
at *3 (holding that “the demanding standards” of
Rule 60(b) did not apply to a motion to set aside a non-final
default judgment). Should the Court determine that good cause