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Fidelity & Deposit Company of Maryland v. Jack Isom Construction Co., Inc.

United States District Court, N.D. Indiana, LaFayette Division

April 17, 2018

FIDELITY & DEPOSIT COMPANY OF MARYLAND, Plaintiff,
v.
JACK ISOM CONSTRUCTION CO., INC., and BILLY JACK ISOM, Defendants.

          OPINION AND ORDER

          RUDY LOZANO, JUDGE

         This matter is before the Court on: “Defendant, Billy Jack Isom's Verified Rule 60 Motion for Relief from Default Judgment, ” filed by Defendant, Billy Jack Isom, on January 24, 2018 (DE #21); (2) “Defendant, Billy Jack Isom's Amended Verified Rule 60 Motion for Relief From Default Judgment, ” filed by Defendant, Billy Jack Isom, on January 25, 2018 (DE #23); and (3) Plaintiff's Motion to Strike Supplemental Affidavit of Billy Jack Isom or, in the Alternative, Motion for Leave to File Response to Supplemental Affidavit of Billy Jack Isom” (DE #27). For the reasons set forth below, the Amended Motion for Relief From Default Judgment (DE #23) is GRANTED and the Clerk is ORDERED to VACATE the Default Judgment Order (DE #12) as to Defendant Billy Jack Isom and VACATE the Clerk's Entry of Judgment (DE #13) as to Defendant Billy Jack Isom. The Motion for Relief From Default Judgment (DE #21) is DENIED AS MOOT and the Motion to Strike Supplemental Affidavit (DE #27) is DENIED AS MOOT.

         BACKGROUND

         Plaintiff, Fidelity & Deposit Company of Maryland (“F&D”) filed a complaint against Defendants Jack Isom Construction Co., Inc. and Billy Jack Isom (“Isom”), on February 27, 2017. (DE #1.) On March 24, 2017, F&D filed an acknowledgment of service showing that the complaint had been mailed by “certified mail receipt, ” and while there is no signature, the tracking information shows that the complaint was delivered to Isom's home address on March 4, 2017. (DE #7.)

         On June 12, 2017, F&D filed a request for entry of default because neither defendant had filed an appearance, answered, or otherwise responded to the complaint. The Clerk entered default against Isom and Jack Isom Construction Co. on June 13, 2017. (DE #10.) On July 25, 2017, F&D filed a request for entry of default judgment against the Defendants. (DE #11.) On September 25, 2017, this Court granted the motion, issuing default judgment against both Isom and Jack Isom Construction Co., jointly and severally. (DE #12.)

         F&D initiated supplemental proceedings with a motion on October 18, 2017. (DE #14.) Magistrate Judge Andrew P. Rodovich granted the verified motion for proceedings supplemental and ordered the parties to appear in person on November 15, 2017. (DE #15.) Isom's attorney contacted F&D's counsel for the first time on November 9, 2017. (Kutch Aff., DE #27-1 at ¶ 4.) F&D's counsel agreed to file a motion to continue the hearing on proceedings supplemental so long as Isom provided a list of assets. (Id.)

         In the motion to continue the hearing on proceedings supplemental, counsel for F&D represented that “[t]he parties are currently discussing potential settlement of this matter” and that they needed approximately 30 days “to consider potential settlement.” (DE #16.) The Court granted the motion to continue the hearing. (DE #17.)

         On December 8, 2017, Isom's counsel requested more time to complete the list of assets. (Kutch Aff., DE #27-1 at ¶ 5.) On December 13, 2017, F&D filed a second motion to continue the hearing on the proceedings supplemental. (DE #18.) Once again, F&D represented that “[t]he parties are currently discussing potential settlement of this matter” and that they needed approximately 30 additional days “to consider potential settlement.” (Id.) The Court granted the second motion to continue the hearing on proceedings supplemental. (DE #19.)

         Joshua Kutch, an attorney for F&D, stated in his affidavit that “[i]n a letter dated January 15, 2018, Jack's counsel provided an utterly incomplete list of Jack's assets, as the first sentence of the letter stated, ‘I am still trying to piece together the financial history of Jack Isom and locate what remaining assets he has personally.'” (Kutch Aff., DE #27-1 at ¶ 6.)

         On January 24, 2018, Isom filed a Verified Rule 60 Motion for Relief from Default Judgment, and attached an affidavit from Isom. (DE #21.) A day later, on January 25, 2018, Isom filed an Amended Verified Rule 60 Motion for Relief from Default Judgment, also attaching an affidavit of Isom. (DE #23.)

         Later that same day, F&D filed a memorandum in opposition. (DE #24.) The Court issued an order vacating the supplemental hearing which was set for January 26, 2018. (DE #25.)

         On January 29, 2018, Isom filed a Supplemental Affidavit in support of the Amended Rule 60 Motion. (DE #26.) F&D filed a motion to strike, or alternatively, to file a response, to the supplemental affidavit on February 21, 2018. (DE #27.)

         DISCUSSION

         Generally, when a movant seeks relief from entry of a default before entry of judgment, Rule 55(c) applies, but a request to set aside a default judgment is controlled by Rule 60. Merrill Lynch Mortg. Corp. v. Narayan, 908 F.2d 246, 252 (7th Cir. 1990). The standards for determining whether to vacate an entry of default under Rule 55 or a default judgment under Rule 60 are essentially the same, although the test is applied more liberally when default judgment has not yet been entered. See Bluegrass Marine Inc. v. Galena Road Gravel, Inc., 211 F.R.D. 356, 357 (S.D. Ill. 2002). This circuit favors a policy of promoting a trial based on the merits, rather than default judgments. Cracco v. Vitran Express, Inc., 559 F.3d 625, 630-31 (7th Cir. 2009); see also C.K.S. Eng'rs, Inc. v. ...


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