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Shepard Claims Service, Inc. v. William Darrah & Associates

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Bloomberg Law

Citation. 796 F.2d 190, 1986 U.S. App. 5 Fed. R. Serv. 3d (Callaghan) 393

Brief Fact Summary. Shepard Claims Services, Inc. (Plaintiff), filed a contract action in the district court against William Darrah & Associates, alleging that an insurance broker (Defendant), failed to pay Plaintiff for services rendered. Defendant appeals from the district court’s denial of Defendant’s Motion to Set Aside Entry of Default.
Synopsis of Rule of Law. In order to have an order of default set aside, the defendant must make a motion and show a meritorious defense.



Facts. Plaintiff filed a contract action against Defendant for failure to pay Plaintiff for services rendered. On February 22, 1985, Defendant’s attorney’s secretary secured by telephone an extension of 45 days for filing an answer. By April 10, 1985, Defendant had not filed an answer, so Plaintiff requested that the clerk enter the Defendant’s Judgment of Default. On April 19, 1985, Defendant filed a “Notice of Retention” with an answer on April 26, 1985, and on April 29, 1985, with a notice of affirmative defenses, a counterclaim, interrogatories and a request for production of documents. On May 1, 1985, Defendant filed a response to Plaintiff’s Motion for Default Judgment and Motion to Set Aside Entry of Default. Plaintiff filed its Motion for Default Judgment on May 8, 1985, and Response to Defendant’s Motion to Set Aside Entry of Default. Defendant also filed two affidavits from his counsel and counsel’s secretary, which stated the agreement that there was to be a 45 day extension from the normal time period of 30 days to file an answer. Under this interpretation, the answer would have been due on April 23, 1985. Defense counsel insists that he did not learn of the April 10, 1985 Entry of Default until April 29, 1985. The district court denied Defendant’s Motion to Set Aside Entry of Default and found that Defendant’s attorney engaged in culpable conduct when he permitted his secretary to make arrangements for the extension, and then failed to review her work.

Issue. Whether Defendant’s Motion to Set Aside Entry of Default should be granted based on good cause?

Content Type: Brief


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