United States District Court, N.D. Indiana
OPINION AND ORDER
WILLIAM C. LEE, District Judge.
Before the Court is Defendant, Dr. Lawrence Curry's ("Dr.Curry"), "Motion to Vacate Default Judgment" [DE 19] filed on May 14, 2014. Plaintiff, Melody Anderson ("Anderson" or "Plaintiff") responded in opposition [DE 22] and requested oral argument [DE 24] on May 21, 2014 to which Dr. Curry replied on May 30, 2014. The Court heard oral argument on the Motion on August 20, 2014 [DE 33] and indicated a written opinion would follow. For the following reasons, the Motion to Vacate Default Judgment will be DENIED.
Anderson initiated the instant lawsuit on September 11, 2013 alleging the defendant engaged in gender discrimination pursuant to Title VII of the Civil Rights Act of 1964 by violating the Pregnancy Discrimination Act, 42 U.S.C. § 2000e-2(a), 2(k). In substance, the Plaintiff contends that Dr. Curry terminated her employment because she was impregnated by a married co-worker, Dr. Curry's close friend, and refused to either abort the pregnancy or give the child up for adoption.
As she was required to do prior to commencing suit, Anderson filed a complaint with the Equal Employment Opportunity Commission. Copies of the EEOC complaint were served upon Dr. Curry at the McKinley Medical Clinic. Likewise, on July 31, 2013, EEOC Form 161 which is titled "Dismissal and Notice of Rights" and which contains the Notice of Right to Sue was mailed by the EEOC to Dr. Curry's office manager at the McKinley Medical Clinic, Carolyn Curry. See [DE 1, Exh. 1, p. 5]. No assertion has been made in the current record that Dr. Curry was unaware of proceedings before the EEOC or that he failed to receive EEOC Form 161. Form 161 specifically states that the Plaintiff's next step is to file a lawsuit in federal or state court within the time frame specified in the notice.
This is precisely what Plaintiff did. After the EEOC issued the Right to Sue notice, plaintiff filed the present Complaint and served it on Dr. Curry. Dr. Curry admits he was served with a copy of the summons and Plaintiff's Complaint on September 13, 2013. The summons contained all of the instructions for Dr. Curry to properly answer the Complaint including the name and address of Plaintiff's counsel for purpose of service of his response upon counsel and the following language: "If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer with the Court." Despite this language, Dr. Curry did not file any responsive pleading with the Court.
On October 1, 2013, Carolyn Curry mailed a certified letter to Plaintiff's counsel wherein she articulated a different series of events than those alleged in the Complaint. Dr. Curry asserted that he worked with Carolyn Curry to prepare that letter. (Affidavit of Dr. Curry, DE 20-1 ¶ 10). This letter, however, was not signed by Dr. Curry and was never filed with the Court. Counsel did not at any time appear on Dr. Curry's behalf.
Subsequently, on October 7, 2013, after confirming the absence of any docketed entries on Dr. Curry's behalf, Plaintiff moved for a clerk's entry of default. In light of Dr. Curry's failure to respond to the Complaint with any filing on the docket, Plaintiff's counsel, pursuant to Fed.R.Civ.P. 5(A)(2), did not serve Dr. Curry with that motion. On October 25, 2013, the Clerk entered the default and the matter was set for a damages hearing on December 18, 2013. At that hearing, Plaintiff testified as to the facts of the case as well as to the damages she sustained by her termination. Dr. Curry did not receive notice of the hearing as the Federal Rules did not require it; nor, did he at any time prior to this time contact the Court to inquire as to the status of the litigation.
Consistent with the warning in the summons Dr. Curry received, on March 21, 2014, the Court granted Plaintiff's motion for default judgment and awarded her $82, 819.00 in damages from Dr. Curry. Again, Dr. Curry was not served with the default judgment pursuant to Fed.R.Civ.P. 5(A)(2). Thereafter, in an effort to collect on the judgment, Plaintiff instituted proceedings supplemental [DE 15] and the Court ordered Dr. Curry to appear. [DE 16]. The Court mailed notice to Dr. Curry on April 30, 3014. Upon receipt of this notice, Dr. Curry spoke with his personal attorney, Jim Miller, and was referred to current counsel. On May 13, 2014, current counsel appeared on Dr. Curry's behalf and filed the present Motion to Vacate Default Judgment. [DE 17-19]. As noted in the introduction, the parties briefed the motion and the Court held oral argument to discuss the merits of the motion.
Pursuant to Fed. Rule of Civ. P. 55(c), "[t]he 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. 60(b)(1) permits a court to set aside a default judgment on account of mistake, inadvertence, surprise, or excusable neglect. Fed.R.Civ.P. 60(b) (1). Relief under Fed.R.Civ.P. 60(b) is an "extraordinary remedy and is granted in only exceptional circumstances." McKnight v. U.S. Steel Corp., 726 F.2d 333, 335 (7th Cir.1984); C.K.S. Engineers, Inc. v. White Mountain Gypsum Co., 726 F.2d 1202, 1204-1205 (7th Cir.1984); Tate v. Riverboat Servs., Inc., 305 F.Supp.2d 916, 919 (N.D.Ind.2004). Nevertheless, it is within the sound discretion of this Court to determine whether to set aside a default judgment. McKnight, 726 F.2d at 335; C.K.S. Engineers, Inc., 726 F.2d at 1205. See also 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2693 (3d ed.2010).
When examining claims by litigants that a default judgment should be set aside, courts in this Circuit have found it appropriate that Rule 60(b)(1) be liberally applied, especially where default judgment is the result of an honest mistake rather than willful misconduct, carelessness or negligence. Tate, 305 F.Supp.2d at 919 ("[D]efault judgments should generally be set aside where the moving party acts with reasonable promptness, alleges a meritorious defense to the action, and where the default has not been willful."). Nevertheless, "where a defaulting party was aware of or should have been aware of its responsibilities to the opposing party and to the court, and failed to live up to those responsibilities through unexcused carelessness or negligence, the default judgment has been left intact." C.K.S. Engineers, Inc., 726 F.2d at 1206. Ultimately, the burden rests with the defaulting party to demonstrate all of the following: (1) good cause for the default; (2) quick action to correct it; and (3) a meritorious defense to the complaint. See Pretzel & Stoufer v. Imperial Adjusters, 28 F.3d 42, 45 (7th Cir.1994); U.S. v. Dimucci, 879 F.2d 1488, 1495 (7th Cir.1989); Tate, 305 F.Supp.2d at 919.
In this case, the Defendant asserts he has met all the elements to have the default judgment set aside. With respect to the element of "good cause, " Dr. Curry admits that he did not read the summons, he did not follow the directions contained in the summons, and agrees that this constitutes "neglect;" however, he believes it is excusable because he has a meritorious defense and he hired counsel as soon as he was served with the Order demanding his appearance for proceedings supplemental.
In response, Plaintiff argues that Dr. Curry has failed to demonstrate good cause. Specifically, Plaintiff posits that by admitting he failed to read the summons, Dr. Curry essentially ignored the summons. And, if ignoring a summons is an "excusable" form of neglect, every circumstance would qualify as excusable neglect so as to make the exception swallow the rule. Moreover, Plaintiff points out that Dr. Curry was aware that an EEOC proceeding had been instituted involving Plaintiff, his office manager was served with Form 161 and thus, he was certainly on notice of Plaintiff's claims so as to make the summons and Complaint even less of a surprise. Plaintiff's counsel notes that Dr. Curry is a well-educated medical doctor, owns two medical clinics (Dr. Curry Aff. ¶ 2) and admits he had a personal attorney, Jim Miller, that he calls upon for legal advice. Id. at ¶ 21. In addition, Plaintiff requests the court take judicial notice of information contained in the Indiana Department of Insurance, Patient's Compensation Fund Database, http://www.in.gov/idoi/2614.htm#2 ("IN Dept. of Insurance, PCF"). That database, "illustrates the name and location of the doctor, type of practice, the number of medical malpractice claims filed against them and their participation with panels." Id. Plaintiff represents, and the Court has independently verified, that this website lists Dr. Curry and his medical clinics as ...