United States District Court, E.D. Texas, Sherman Division
M.B., I.B., and J.S.
MATTHEW G. LANDGRAF
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE.
before the Court is Defendant Matthew Landgraf's Motion
for Relief from Final Default Judgment Pursuant to
Fed.R.Civ.P. 60(b)(1) (Dkt. #22). After reviewing the
relevant pleadings and motion, the Court finds the motion
should be granted.
April 12, 2012, a federal grand jury indicted Defendant on
two counts of production of child pornography in violation of
18 U.S.C. §§ 2251 (a) and (e). Subsequently,
Defendant entered a guilty plea in connection with the
indictment. As a result of Defendant's conduct, on
November 7, 2014, Plaintiffs M.B., I.B., and J.S. initiated
this suit seeking damages (Dkt. #1). On July 31, 2015, as a
result of Defendant's failure to answer, the Clerk filed
an Entry of Default (Dkt. #9). On April 4, 2016, the Court
entered a Final Default Judgment (Dkt. #18) against
April 4, 2017, Defendant filed a Motion for Relief from Final
Default Judgment (Dkt. #22). Plaintiffs filed their response
(Dkt. #26) on April 18, 2017, and Defendant filed his reply
(Dkt. #29) on April 25, 2017.
Rule of Civil Procedure 55(c) provides that a “court
may set aside an entry of default for good cause, and it may
set aside a default judgment under Rule 60(b).”
Fed.R.Civ.P. 55(c). Rule 60(b) lists five reasons for which
relief may be granted and contains a sixth catch-all category
for reasons not specifically listed. Fed.R.Civ.P. 60(b).
“[F]ederal courts should not be agnostic with respect
to the entry of default judgments, which are generally
disfavored in the law and thus should not be granted on the
claim, without more, that the defendant had failed to meet a
procedural time requirement.” Lacy v. Sitel
Corp., 227 F.3d 290, 292 (5th Cir. 2000). “Thus,
where there are no intervening equities any doubt should, as
a general proposition, be resolved in favor of the movant to
the end of securing a trial upon the merits.”
Defendant seeks to have the default judgment set aside under
both Rule 60(b)(1) and 60(b)(6). The Court finds it is only
necessary to address Defendant's Rule 60(b)(1) argument.
motion and just terms, the court may relieve a party or its
legal representative from a final judgment, order, or
proceeding for the following reasons: (1) mistake,
inadvertence, surprise, or excusable neglect . . . .”
Fed.R.Civ.P. 60(b)(1). When a party seeks to set aside a
default judgment pursuant to Rule 60(b)(1), the Court takes
into consideration three primary factors: (1) whether the
defendant willfully defaulted; (2) whether a meritorious
defense is presented; and (3) whether setting aside the
default judgment prejudices the plaintiff. Scott v.
Carpanzano, 556 F. App'x 288, 293 (5th Cir. 2014);
accord Jenkens & Gilchrist v. Groia & Co.,
542 F.3d 114, 119 (5th Cir. 2008); Lacy, 227 F.3d at
292. “Of these factors, two can be determinative: a
district court may refuse to set aside a default judgment if
it finds either that the default was willful or that the
defendant failed to present a meritorious defense.”
Scott, 556 F. App'x at 293-94. Other factors the
Court may consider are whether the defendant acted
expeditiously to correct the default and whether there is a
significant financial loss to the defendant. Id. at
294; accord Lacy, 227 F.3d at 292.
argues his default is not the result of willfulness but
instead the result of (1) Plaintiffs' informal agreement
with Defendant to forego filing an answer in order to
preserve Defendant's resources, (2) Plaintiffs'
decision to terminate this agreement unilaterally, (3)
Plaintiffs' failure to return records essential to
Defendant's defense, and (4) Defendant's conclusion
that Plaintiffs' next move included initiating formal
discovery, not seeking a default judgment. Conversely,
Plaintiffs assert despite any agreement between the parties,
Defendant should have filed an answer or obtained a written
agreement. Further, Plaintiffs claim seeking a default
judgment was implicit in their warnings to Defendant when
Defendant failed to adequately respond to Plaintiffs'
requests for documents.
willful default is an intentional failure to respond to
litigation.” Scott, 556 F. App'x at 294.
Here, Plaintiffs filed suit on November 7, 2014.
Subsequently, Defendant and his counsel agreed to postpone
filing an answer, pending settlement, in order to preserve
resources and increase any potential recovery Plaintiffs
might obtain (Dkt. #22, Exhibit 5 at ¶¶ 4-5).
Plaintiffs' counsel knew of Defendant's approach and
presented to the Court their approval of it. Further, counsel
for both parties engaged in continuous settlement
communications from November 26, 2014, through March 24, 2015
(Dkt. #22, Exhibit 2). Taking into account Plaintiffs'
counsel's knowledge and approval of Defendant's
approach to forego filing an answer pending settlement ...