Eight Circuit Discusses Rule 60(b)(1); Lower Court Did Not Abuse Discretion in Denying Motion to Set Aside Default Judgment

Per Feeney v. AT & E, Inc., 472 F.3d 560 (8th Cir. Dec. 29, 2006):

On November 16, 2005, the Feeneys filed a motion for summary judgment and properly served Mitan by mail. Mitan did not file a timely response. . . . On December 30, Mitan filed a motion to set aside the judgment under Federal Rule of Civil Procedure 60(b)(1), claiming that his failure to respond to the motion for summary judgment was due to problems in receiving mail. The district court concluded that the problems Mitan experienced with service of process were "caused by Defendant Mitan's neglect in failing to regularly check his mail," and denied the motion on that basis. The court summarily denied Mitan's motion to reconsider, and Mitan appeals the two orders. We affirm the court's decision insofar as it declined to set aside the declaratory judgment . . . .

The district court's grant of summary judgment was the functional equivalent of a default judgment against Mitan, because it granted judgment without discussing the merits of the claim, based solely on Mitan's failure to reply. Federal Rule of Civil Procedure 60(b)(1) permits a district court to grant a defaulting party relief from judgment because of that party's "mistake, inadvertence, surprise, or excusable neglect." We review a district court's ruling on a 60(b)(1) motion for abuse of discretion. Union Pacific R.R. Co. v. Progress Rail Servs. Corp., 256 F.3d 781, 782 (8th Cir.2001). The determination of excusable neglect "is at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission." Pioneer Inv. Servs. Co. v. Brunswick Assoc. Ltd. P'ship, 507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993). The relevant circumstances include "the danger of prejudice to [the non-moving party], the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith." Id. The existence of a meritorious defense is also a relevant factor. Union Pacific, 256 F.3d at 782-783; Johnson v. Dayton Elec. Mfg. Co., 140 F.3d 781, 784 (8th Cir.1998).

The district court's analysis focused exclusively on the reason for Mitan's default and concluded, correctly in our view, that Mitan's failure to respond to the motion for summary judgment was due to his own neglect in failing to check his mail. When evaluating a motion to set aside a default judgment, however, courts must do more than simply determine whether the movant had a satisfactory reason for his neglect. Union Pacific, 256 F.3d at 783. The text of the rule, which provides that certain "neglect" will be "excusable," contemplates that the courts are "permitted, where appropriate, to accept late filings caused by inadvertence, mistake, or carelessness." Pioneer, 507 U.S. at 388, 113 S.Ct. 1489. Whether the movant had a good reason for delay is a key factor in the analysis, Lowry v. McDonnell Douglas Corp., 211 F.3d 457, 463 (8th Cir.2000), but even without a satisfactory explanation, relief may be required where other equitable considerations weigh strongly in favor of setting aside the default judgment. Union Pacific, 256 F.3d at 783. Although the district court's analysis was truncated, we conclude that the court properly refused to set aside the declaratory judgment that the Feeneys are the sole owners of Prime-Line, Inc. The most important factor in the analysis--reason for delay--weighs heavily against Mitan. . . .

Although Mitan's delay was relatively brief (he sought relief under Rule 60(b) within eight days of the entry of judgment), the Feeneys have not demonstrated substantial prejudice from such a brief delay, and there is no showing that Mitan acted in bad faith, these factors do not outweigh Mitan's carelessness and the absence of any apparent meritorious defense. While we think the district court's analysis was too narrowly focused, our independent consideration of the relevant equitable considerations leads us to conclude that the district court did not abuse its discretion in denying Mitan's motion to set aside the declaratory judgment that the Feeneys are the sole owners of Prime-Line, Inc. . . . For these reasons, we affirm the court's order denying the motion to set aside the declaratory judgment that the Feeneys are the sole owners of Prime-Line, Inc. . . . .