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Appeals of Default Judgments

Pursuant to USCS Fed Rules Civ Proc R 55, if the plaintiff’s claim is for a certain sum which can be corrected by computation, the party shall apply to the clerk for a default judgment.  For all other cases, the party shall apply to the court for a default judgment.  The court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60 (b).  A default judgment against the United States, its officers, or its agencies shall be entered only if the claimant establishes a claim or right to relief by evidence which satisfies the court.

A judgment by default is usually appealable if it meets the general requirements of appealability.  There is no mechanical formula for determining whether good cause exists to set aside an entry of default.  In Indigo Am., Inc. v. Big Impressions, LLC, 2010 U.S. App. LEXIS 3858 (1st Cir. Mass. Feb. 24, 2010), it was found that the courts may consider some relevant factors to determine whether good cause exists to set aside an entry.  The relevant factors are:

  • Whether the default was purposely done
  • Whether the setting aside of such default would prejudice the adversary
  • Whether a meritorious defense is presented
  • The nature of the defendant’s reasoning for the default
  • The good faith of the parties
  • The amount of money involved
  • The timing of the motion to set aside the entry of default.

Where no meritorious defense exists, it hardly makes any sense to set aside the entry of default since doing so, would merely delay the inevitable.  Entry of default in a federal court action by the clerk of the court is an interlocutory act, whereas the entry of a default judgment is a final action by the district court and as such may be appealed.  Also, an order denying a motion for a default judgment is not appealable.  In Mohawk Indus. v. Carpenter, 130 S. Ct. 599 (U.S. 2009), the court stated that an order is appealable if it (1) conclusively determines the question in dispute; (2) resolves a vital issue absolutely separate from the merits of the action; and (3) is effectively unreviewable on appeal from a final judgment.

In Sims v. EGA Prods., 475 F.3d 865 (7th Cir. Ind. 2007), the court stated that many civil litigants would like to have interlocutory appellate resolution of some important issue, but when the issue does not meet the standard for certification and is not feasible to enter judgment with respect to a separate claim or party, it is not possible to obtain an appellate decision until the case is over.

Inside Appeals of Default Judgments