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Bankruptcy | Case Law | Rule 55

RULE 55

In re McGee, 359 B.R. 764, 771 (9th Cir. BAP 2006)

“The factors to be considered for entry of a default judgment include (1) the possibility of

prejudice to the plaintiff, (2) the merits of the plaintiff’s substantive claim, (3) the sufficiency of

the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute

concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong

policy underlying the Federal Rule of Civil Procedure favoring decisions on the merits.”

In re First T.D. & Investment , Inc., 253 F.3d 520 (9th Cir. 2001)

Bankruptcy court abused discretion by entering final default judgments that directly

contradicted its earlier ruling in the same action as to answering defendants.

In re Lam, 192 F.3d 1309 (9th Cir. 1999)

The court of appeals dismissed an appeal from a judgment of the B.A.P. The court held

that a bankruptcy creditor forfeits the right to appeal from the entry of a default by not seeking

relief in the court where the default was entered.

In re Beltran, 182 B.R. 820 (9th Cir. B.A.P. 1995)

Bankruptcy court may consider debtor’s testimony in creditor’s prove up hearing on

motion for default judgment

In re Kubrick, 171 B.R. 658 (9th Cir. B.A.P. 1994)

When considering entry of a default judgment, the court should consider the following

factors:

(1) the possibility of prejudice to the plaintiff,

(2) the merits of the plaintiff’s substantive claim,

(3) the sufficiency of the complaint,

(4) the sum of money at stake in the action

(5) the possibility of a dispute concerning material facts

(6) whether the default was due to excusable neglect and

(7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on

the merits Eitel v. Mccoool, 782 F.2d 1470, 1471-72 (9th Cir. 1986)

In re Roxford Foods, Inc., 12 F.3d 875 (9th Cir. 1993)

Failure to give notice of entry of default violated due process

In re Villegas, 132 B.R. 742 (9th Cir. B.A.P. 1991)

No discharge judgment against creditor without hearing on evidence. Court has broad

discretion to require evidentiary hearing as prerequisite to entry of default judgment

In re Hammer, 112 B.R. 341 (9th Cir. B.A.P. 1990), aff’d 940 F.2d 524 (9th Cir. 1991)

Debtor’s own negligence and lack of meritorious defense defeats motion to set aside

default judgment

Yusov v. Yusuf, 892 F.2d 784 (9th Cir. 1989)

Default judgment as a sanction approved against a party who has willfully and consistently

failed to obey court orders and procedures

Ringgold Corp. v Worrall, 880 F.2d 1138 (9th Cir. 1989)

Notice required for default - notice to lawyer

In re Campbell, 105 B.R. 19 (9th Cir. B.A.P. 1989)

Default judgment entered after no proper service is void (i.e., summons expired under

7004(f))

Alan Neuman Prod. Inc. v. Albright, 862 F.2d 1388 (9th Cir. 1988), cert. denied, 493 U.S. 858

(1989)

In re Stuart, 88 B.R. 247 (9th Cir. B.A.P. 1988)

Need for “prove-up”

Nilsson v. Louisiana Hyrolec, 854 F.2d 1538 (9th Cir. 1988)

Court can condition setting aside default upon payment of moving party’s attorney fees and

costs