Unreported / Non-Citable
Background
Kelly Bland filed a putative class action alleging that InVida Financial Network LLC and Brylorence Investments, LLC violated the Telephone Consumer Protection Act and analogous Texas law. Brylorence was served before Bland filed an amended complaint sufficiently alleging venue, while InVida was served twice.
After neither defendant timely responded, Bland obtained clerk’s entries of default and sought post-default discovery. Both defendants subsequently appeared, and Brylorence moved under Federal Rule of Civil Procedure 55(c) to set aside its default.
The Court’s Holding
The court found good cause to set aside Brylorence’s default. It concluded that Brylorence’s failure to respond was excusable neglect rather than willful conduct because the company reasonably but mistakenly believed the unserved amended complaint reset its response deadline and was in the process of retaining counsel. The court also found no cognizable prejudice to Bland from the delay.
Brylorence identified potentially meritorious defenses to the state-law and TCPA claims and acted diligently by retaining counsel and seeking relief less than three months after the default entry. The court also set aside InVida’s default because InVida had appeared, a default against it could prejudice Brylorence, and the court could not enter a default judgment against InVida on issues Brylorence would continue litigating.
The court ordered both defendants to answer or file an appropriate motion to dismiss within 21 days. It denied Bland’s request for expedited discovery and found moot her motion to compel and motion for leave to file a supplemental appendix. Ordinary discovery may begin after resolution of any motion to dismiss.
Key Takeaways
- A good-faith mistake about a response deadline can constitute excusable neglect supporting relief from a clerk’s entry of default.
- Delay alone is not prejudice under Rule 55(c); the plaintiff did not show lost evidence, increased discovery difficulties, or greater opportunities for fraud or collusion.
- A defense need only be potentially successful if proven, and defaults may be set aside where proceeding against one defendant would prejudice a jointly litigating codefendant.
Why It Matters
The decision reflects the preference for resolving cases on their merits and the comparatively lenient standard for setting aside an entry of default rather than a final default judgment. Defendants seeking relief should explain the default, identify concrete defenses, and act promptly after learning of it.
The order also illustrates how related defendants can affect the default analysis: a court may decline to proceed by default against one defendant when another will litigate overlapping issues and could be prejudiced by inconsistent treatment.