FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2009-014

ELIZABETH LEE, RYAN LEE, SEEMA SHAH, MIE BABA, YASUO BABA, and TAYLOR STRONG,
Plaintiffs,

vs.

FEDERATED STATES OF MICRONESIA, through its Chief Public Defender Julius J. Sapelalut,
Defendant.
_____________________________________________

ORDER DENYING MOTION(S)

Dennis K. Yamase
Associate Justice

Decided: April 5, 2013

APPEARANCES:

For the Plaintiffs: Michael J. Sipos, Esq.
P.O. Box 2069
Kolonia, Pohnpei FM 96941

For the Defendant: Tmioci Romanu
Office of the Public Defender
P.O. Box PS-174
Palikir, Pohnpei FM 96941

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HEADNOTES

Civil Procedure - Default and Default Judgments - Entry of Default
When a defendant who has been properly served has not appeared and answered or otherwise defended within the allotted time and the plaintiff has made that fact to appear to the court clerk, the clerk must, right then, enter the default. The plaintiff does not have to serve a copy of that request on the defendant because the defendant has by then failed to appear or otherwise defend and therefore has no grounds on which to oppose the plaintiff's request. Lee v. FSM, 18 FSM Intrm. 631, 633 (Pon. 2013).

Civil Procedure - Default and Default Judgments - Entry of Default; Constitutional Law - Due Process - Notice and Hearing
When the summons served with the complaint had warned the defendant that if it did not appear or defend within twenty days of service of the complaint a default judgment could be taken against it, that constitutes the notice to the defendant and the defendant's opportunity to respond that is required by due process of law, and because the defendant had its chance to appear but did not, the defendant is not entitled to a second notice and warning that since it has not answered or otherwise defended, the plaintiff is now going to get an entry of default and a default judgment. That notice has already been given and the opportunity to be heard has been afforded and has passed. Lee v. FSM, 18 FSM Intrm. 631, 633 (Pon. 2013).

Civil Procedure - Default and Default Judgments - Entry of Default - Setting Aside
In order to vacate an entry of default, the defendant must show good cause - a liberal and less rigorous standard under Rule 55(c) rather than the more restrictive standard of excusable neglect for setting aside a default judgment under Rule 60(b). In determining whether good cause to vacate an entry of default exists a court evaluates 1) whether the default was willful, 2) whether setting it aside would prejudice the adversary, and 3) whether a meritorious defense is presented. Lee v. FSM, 18 FSM Intrm. 631, 633 (Pon. 2013).

Civil Procedure - Default and Default Judgments - Entry of Default - Setting Aside
Setting aside a default would prejudice the plaintiffs when a witness who made a key admission that goes to the issue of liability, a core issue which the defense seeks to contest on the merits, has, in the four years since the default was entered, passed away; when, although the plaintiffs may be able to obtain similar evidence by other difficult means, would not have the benefit of his testimony; when, if the defendant had not defaulted, the plaintiffs could have deposed this witness in order to preserve his testimony, but by defaulting, this deposition became superfluous and unnecessary; and when because of the passage of the four years, only one of the six expatriate plaintiffs is currently in the FSM, thus making it difficult and burdensome for the plaintiffs to present their case at a trial on the merits when it would not have been three years earlier. This prejudice to the plaintiffs alone is sufficient to deny vacating the default. Lee v. FSM, 18 FSM Intrm. 631, 633 (Pon. 2013).

Civil Procedure - Default and Default Judgments
The defendant's assertion that it cannot be held liable unless there is an apportionment of fault between it and the non-party driver of its vehicle does not seem to be a meritorious defense because that driver is not a party and a trial on the merits would only determine if the defendant were itself liable. Lee v. FSM, 18 FSM Intrm. 631, 633-34 (Pon. 2013).

Civil Procedure - Default and Default Judgments
While it is uncertain how willful the original default was, the defendant's later lack of diligence was willful when it asked for 30 days' enlargement to file an answer but did not, at any time within that 30 days, prepare and file an answer or prepare and file a motion to vacate the default and file its proposed answer with it and when it did not move for a further enlargement or attempt to do anything in the following months so the court finally denied the motion to enlarge over four months later. Lee v. FSM, 18 FSM Intrm. 631, 634 (Pon. 2013).

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COURT'S OPINION

DENNIS K. YAMASE, Associate Justice:

This comes before the court on the defendant's Motion to Set Aside Entry of Default and Motion in Opposition to Entry of Default Judgment, filed April 2, 2013; the defendant's Supplemental Motion to Set Aside Entry of Default and Motion in Opposition to Entry of Default Judgment, filed April 3, 2013; the plaintiffs' Opposition to Motion to Set Aside Entry of Default; Reply to Opposition to Motion for Entry of Default Judgment; Motion to Strike the Motion to Dismiss Added Supplementally Without Leave of Court, filed April 4, 2013; and the defendant's Amended Supplemental the defendant's Motion to Set Aside Entry of Default and Motion in Opposition to Entry of Default Judgment/Motion to Dismiss, filed April 4, 2013. The motions are denied.

The defendant FSM seeks to vacate the entry of default made on April 1, 2009, and a reconsideration of an August 18, 2009 court order striking the FSM's motion for enlargement of time filed on April 1, 2009, but after the default was entered. The court's August 18, 2009 order denied the motion to enlarge as untimely since it was filed after a default was entered and ordered it stricken. The April 1, 2009 motion asked for an extra 30 days to file an answer. The FSM did not file an answer within the requested 30 days or at any time in the next four years.

The FSM contends that the entry of default is defective because the plaintiffs' request for entry of default should have been served on it before it was granted. This is incorrect. When a defendant who has been properly served has not appeared and answered or otherwise defended within the allotted time and the plaintiff has made that fact to appear to the court clerk, the clerk must, right then, enter the default. FSM Civ. R. 55(a). See also 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure§ 2682, at 19 (3d ed. 1998); 6 James Wm. Moore et al., Moores's Federal Practice¶ 55.03[1], at 55-15 (2d ed. 1988). The plaintiff does not have to serve a copy of that request on the defendant because the defendant has by then failed to appear or otherwise defend and therefore has no grounds on which to oppose the plaintiff's request. The defendant had its chance to appear but did not because the summons served with the complaint warned the defendant that if it did not appear or defend within twenty days of service of the complaint, a default judgment could be taken against it. That constitutes the notice to the defendant and the defendant's opportunity to respond that is required by due process of law. The defendant is not entitled to a second notice and warning that since it has not answered or otherwise defended, the plaintiff is now going to get an entry of default and a default judgment. That notice has already been given and the opportunity to be heard has been afforded and has passed.

The FSM also seeks to vacate the entry of default. In order to vacate an entry of default, the defendant must show good cause - a liberal and less rigorous standard under Rule 55(c) rather than the more restrictive standard of excusable neglect for setting aside a default judgment under Rule 60(b). FSM Dev. Bank v. Gouland, 9 FSM Intrm. 375, 377-78 (Chk. 2000). In determining whether good cause to vacate an entry of default exists a court evaluates 1) whether the default was willful, 2) whether setting it aside would prejudice the adversary, and 3) whether a meritorious defense is presented. Id. at 378.

In this case, setting aside the default would prejudice the plaintiffs because a witness who made a key admission that goes to the issue of liability, a core issue which the FSM now seeks to contest on the merits, has, in the four years since the default was entered, passed away. That he is not available to testify at trial is prejudicial to the plaintiffs, who, although they may be able to obtain similar evidence by other difficult means, would not have the benefit of his testimony. If the FSM had not defaulted, the plaintiffs could have deposed this witness in order to preserve this witness's testimony. But by defaulting, the FSM made this deposition superfluous and unnecessary. To remove the default after four years would thus prejudice the plaintiffs. Further prejudice to the plaintiffs arises from the passage of the four years because, of the six expatriate plaintiffs, only one is currently in the FSM, thus making it difficult and burdensome for the plaintiffs to present their case at a trial on the merits when it would not have been three years ago. The prejudice to the plaintiffs alone is sufficient to deny the FSM's motions.

The FSM also claims to have a meritorious defense. It asserts that it cannot be held liable unless there is an apportionment of fault between it and the non-party driver of its vehicle. That driver is not a party. A trial on the merits in this case would only determine if the FSM were liable. Therefore this defense does not seem to be meritorious.

While the court is unsure how willful the original default was, later lack of diligence does appear willful. The FSM's April 1, 2009 motion that was filed after the default had been entered asked for 30 days' enlargement to file an answer. The FSM, however, did not, at any time within that 30 days, prepare and file an answer or prepare and file a motion to vacate the default and file its proposed answer with it. Nor did it move for a further enlargement or attempt to do anything in the following months so the court finally denied the motion to enlarge over four months later.

Accordingly, the FSM's motions are denied. The entry of default will not be vacated.

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