United States District Court, D. Nebraska
JEWISH FEDERATION OF LINCOLN, INC., a Nebraska NonProfit Corporation, Plaintiff,
KURT KNECHT AND JENNIFER ROSENBLATT, Defendants.
MEMORANDUM AND ORDER
M. GERRARD CHIEF UNITED STATES DISTRICT JUDGE
matter is before the Court on several motions relating to
defendant Jennifer Rosenblatt's default: Rosenblatt would
like her default vacated and leave to file an answer, while
the plaintiff Jewish Federation of Lincoln is pressing for a
judgment. But the Court finds cause to excuse
Rosenblatt's default, so the Court will grant her motions
and deny the Jewish Federation's.
Jewish Federation's initial complaint against Rosenblatt
was filed on April 2, 2018. Filing 1. It's not clear when
process was served, but Rosenblatt, appearing pro
se, filed a motion for extension of time to answer on
April 30. Filing 7. That motion was granted, and
Rosenblatt's answer was due on Friday, June 1. Filing 8.
Rosenblatt missed that deadline, but on Monday, June 4, the
Court received Rosenblatt's motion to stay this civil
case during the pendency of a wire fraud prosecution brought
against her based on the same underlying conduct (No.
4:18-cr-3023). Filing 9. The Jewish Federation opposed the
motion and moved to strike it, filing 10, but the Court
simply denied it, filing 12. The Court extended
Rosenblatt's answer deadline to July 5. Filing 12.
missed that deadline, and on July 6, the Jewish Federation
moved for default judgment. Filing 13. On July 9,
Rosenblatt-still appearing pro se from her home in
Kansas-asked for another 30 days to answer. Filing 14. And
she opposed default judgment. Filing 15. But those motions
were mooted by the Jewish Federation's filing of an
amended complaint (filing 19) and then a second amended
complaint (filing 23). Seefiling 17; filing 18;
filing 26. Rosenblatt filed a belated brief (filing 24) in
opposition to the Jewish Federation's motion for leave to
amend its complaint, claiming not to have been given
appropriate notice of the motion for leave to amend. But the
Court ruled that the second amended complaint was properly
filed and was (and remains) the Jewish Federation's
operative pleading. Filing 26. Rosenblatt's new answer
deadline was December 5. Filing 26 at 4.
missed that deadline, and on December 10, the Jewish
Federation filed another motion for default judgment. Filing
32. But the Court found that motion was premature because the
Clerk of the Court had not been asked to enter
Rosenblatt's default-so, the Court directed the Clerk to
enter Rosenblatt's default and denied the Jewish
Federation's motion without prejudice. Filing 35. The
Clerk's Entry of Default was entered on December 11.
Filing 36. On December 14, the Jewish Federation filed its
pending motion for default judgment. Filing 37.
December 28, Rosenblatt-still representing herself by mail
from Kansas-filed a motion to set aside the default and
opposition to default judgment. Filing 43. She argued that
she had a viable defense to the Jewish Federation's
claim, relating to the "amount in controversy," but
contended that question was "subsumed" in the
criminal case (where the question of restitution is still
unresolved). Filing 43. The Jewish Federation opposed setting
aside the default (filing 47) but, not content with simply
opposing the motion, also filed a motion for sanctions and
attorney's fees (filing 45), claiming that the motion to
set aside default was interposed only for delay.
Seefiling 46 at 2-3 (citing Fed.R.Civ.P. 11(b)).
January 4, 2019, counsel appeared for Rosenblatt, see filing
49, and through counsel, she filed a brief (filing 50) in
support of her motion to set aside default and in opposition
to default judgment. The Court set a briefing schedule on the
pending motions. Filing 51. On January 17, Rosenblatt filed a
motion for leave to answer out of time, along with a proposed
answer. Filing 53. All the pending motions have now been
fully briefed and submitted.
described above, there are a number of pending motions-but
the issue underlying all of them is Rosenblatt's default.
So, the Court starts there.
Civ. P. 55(c) provides that the Court "may set aside an
entry of default for good cause. . . ." When examining
whether good cause exists, the Court weighs 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). And although the same factors are
typically relevant in deciding whether to set aside entries
of default and default judgments, relief from a default
judgment requires a stronger showing of excuse than relief
from a mere default order. Johnson v. Dayton Elec. Mfg.
Co., 140 F.3d 781, 783 (8th Cir. 1998).
Court finds good cause for setting aside the entry of default
here. The Eighth Circuit draws a distinction between
contumacious or intentional delay or disregard for deadlines
and procedural rules, and a "marginal failure" to
meet pleading or other deadlines. Id. at 784. And
the Court is not unmindful of the fact that Rosenblatt, while
she repeatedly missed deadlines, was representing herself
from a distance, and at the same time facing a federal
criminal prosecution-circumstances that might test even
experienced counsel. See AGCO Fin., LLC v.
Littrell, 320 F.R.D. 45, 50 (D. Minn. 2017).
contrary to the Jewish Federation's argument, Rosenblatt
may have a meritorious defense: her proposed answer sets
forth her concession that she should repay some, but not all,
of the money demanded by the Jewish Federation. Whether a
meritorious defense exists is determined by examining whether
the proffered evidence would permit a finding for the
defaulting party. Stephenson, 524 F.3d at 914.
"The underlying concern is whether there is some
possibility that the outcome after a full trial will be
contrary to the result reached by the default."
Id. That concern is present here because there is an
actual dispute as to the amount of Rosenblatt's
finally, the Jewish Federation has made absolutely no showing
of how it would be prejudiced if the default were excused,
given that "prejudice may not be found from delay alone
or from the fact that the defaulting party will be permitted
to defend on the merits." Johnson, 140 F.3d at
785. Instead, setting aside a default must prejudice
plaintiff in a more concrete way, such as loss of evidence,
increased difficulties in discovery, or greater opportunities
for fraud ...