In addition to the preference for resolving a case on the merits, courts in this jurisdiction have also applied a more lenient standard for setting aside an entry of default under Rule 55 than for setting aside a default judgment under Rule 60 of the Federal Rules of Civil Procedure. SeeKeegel, 627 F.2d at 375 n. 5 (citing 10 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2694); Capital Yacht Club v. Vessel AVIVA, 228 F.R.D. 389, 392 (D.D.C.2005) (noting that in a motion to vacate default judgment, " the higher burden for upsetting a default judgment attaches rather than the lower burden for vacatur of default." ) Accordingly, pursuant to Rule 55(c), a court can use its discretion to set aside an entry of default for " good cause shown."
. Courts resolve “[u]ncertainties around the willfulness of default” in favor of the defaulting party, “even where that party's explanation had slim or no supporting evidence.” Lerch Bates, Inc. v. Michael Blades & Assocs., Ltd., No. 20-cv-2223, 2021 WL 3363414, at *4 (D.D.C. Aug. 3, 2021); see also Capital Yacht Club v. Vessel Aviva, 228 F.R.D. 389, 393 (D.D.C. 2005) (finding default not willful even though the defaulting party had “not produced any evidence corroborating” its explanation, leaving the court “with a doubt (albeit a very strong doubt)” about the defendant's willfulness).
The decision of whether to set aside a default is committed to the sound discretion of the Court and must be exercised with the appreciation that "strong policies favor the resolution of genuine disputes on their merits. . . ." Capital Yacht v. Vessel Aviva, 228 F.R.D. 389, 393 (D.D.C. 2005) (quoting Jackson v. Beech, 636 F.2d 831, 835 (D.C. Cir. 1980); see Keegel v. Key West Carribean Trading Co., 627 F.2d 372, 373 D.C. Cir. 1980). The court's discretion requires consideration of three factors: (1) whether the default was willful, (2) whether a set-aside would prejudice the plaintiff, and (3) whether the alleged defense was meritorious.
This standard is more lenient than that applied under Rule 60(b) after a default judgment--as opposed to a default--has been entered. See Capital Yacht Club v. Vessel AVIVA, 228 F.R.D. 389, 392 (D.D.C. 2005). And given the " strong policies favor[ing] resolution of disputes on their merits," all doubts are resolved in favor of the party seeking relief from the default.
The court must balance three factors in evaluating whether a party has demonstrated good cause: (1) whether the default was willful; (2) whether a decision to set aside the default would prejudice the plaintiffs; and (3) whether the defendant has presented a meritorious defense. Keegel v. Key West Caribbean Trading Co., Inc., 627 F.2d 372, 373 (D.C. Cir. 1980), Capital Yacht Club v. Vessel Aviva, 228 F.R.D. 389, 393 (D.D.C. 2005); see also Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980) (describing approach as requiring balancing of factors). In applying this standard, all doubts shall be resolved in favor of the party moving to set aside the default.
However, a " default may be made by either the clerk or the judge." Jackson, 636 F.2d at 835; see alsoAbur, 437 F.Supp.2d at 169; Capital Yacht Club v. Vessel AVIVA, 228 F.R.D. 389, 393 (D.D.C.2005) . Nonetheless, Rule 55(a) envisions that parties will petition the Clerk of Court for the entry of defaults, Fed.R.Civ.P. 55(a) (stating that when appropriately supported " by affidavit or otherwise, the clerk shall enter the party's default" ), and the plaintiff, who is represented by counsel, should have followed this procedure.
A finding of bad faith is not necessary to conclude that the defendant acted willfully. Capital Yacht Club v. Vessel Aviva, 228 F.R.D. 389, 393 (D.D.C. 2005). Significantly, courts have held that default is willful when a defendant fails to meet an informal deadline after which plaintiffs specifically threatened to file for default.
Instead, in evaluating the prejudice to a plaintiff in setting aside a default, a court should consider not the mere fact of delay but rather any effects the delay may have on the plaintiff, such as the loss of evidence or increased difficulties in obtaining discovery. SeeEssroc Cement Corp. v. CTI/D.C., Inc., 263 F.R.D. 17, 21 (D.D.C. 2009). Further, an absence of prejudice to the plaintiff does not per se entitle a defendant to relief. SeeCapital Yacht Club v. Vessel AVIVA, 228 F.R.D. 389, 393-94 (D.D.C. 2005) (citations omitted)); see alsoInt'l Painters & Allied Trades Union, 288 F.Supp.2d at 31 (" The court has discretion to deny a motion to vacate if it is persuaded that the default was willful and that the defaulting party has no meritorious defenses." (citations omitted)).
To determine whether to vacate entry of default, the Court must first ascertain whether the defendant's failure to respond in a timely manner was willful. Bad faith is not necessary to conclude that the defendant acted willfully. Capital Yacht Club v. Vessel AVIVA, 228 F.R.D. 389, 393 (D.D.C.2005). " The boundary of willfulness lies somewhere between ... a negligent filing error, which is normally considered an excusable failure to respond, and a deliberate decision to default, which is generally not excusable."
" ‘ [D]elay in and of itself does not constitute prejudice.’ " Capital Yacht Club v. Vessel AVIVA, 228 F.R.D. 389, 393 (D.D.C.2005) (quoting KPS & Assocs., Inc. v. Designs By FMC, Inc., 318 F.3d 1, 15 (1st Cir.2003)). In evaluating the prejudice to a plaintiff in setting aside a default, a court should consider-not the mere fact of delay itself-but rather any effects such delay may have on the plaintiff (for example, loss of evidence or increased difficulties in obtaining discovery).