T he H o no rable T ho m as A
. W i sema n, Jr. , Senior D i st ri ct Jud ge f o r t he M i d d l e D i st ri ct of T enness ee, s i t t i ng * b y de si gnat i o n. NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 10a0273n.06 Case No. 09- 1306 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT CI TI ZEN S BA NK, P laintif f-App ellee,
v. HOW AR D L . P AR

NE S, Defendan t-Appellant.

_______________________________________ ) ) ) ) ) ) ) ) ) ) ) ON AP P EA L F RO M THE UNITED STAT ES DIS TRICT COURT F OR THE E ASTERN DISTRICT OF MICHIG AN

BEFORE: BATCHEL DER, Chief Ju dge, SUTTO N, Circ uit Jud ge; and WISE MAN , Senior * District Judge. ALICE M. BATCHEL DER, Chief Ju dge. H o w a r d Pa rnes a ppeals the de nial of his motion to vacate a clerk’s entry of default judgme nt in favor of pl aintiff, C itiz ens Bank, cla iming that the court lac ked per sonal jurisdiction over him and that the defa ult judg ment should have be en vac ated be c a us e he c ou ld de mon str a te a me ri tor iou s de fe ns e . B e c a us e we fi nd no me ri t to e ith e r of th e se
c on te nti on s, we AF F I RM. I. Th e pla int if

f, Citi zen s B ank , ini tiate d thi s a c tio n on No ve mbe r 4 , 2 00 8, to e nf or c e a g ua ra nty g iven b y d ef

endant, Howard L . Parnes ( “Parne s”), a resident of

New Y ork, to Citiz ens B ank’s prede cessor -in-intere st, Republic Ba nk. The guara

nty was sec urity

for a $4.7 milli on loan made byT h e bo r r ow e r i s a Del a w a r e L LC
. 1
T he m anagi ng m em b er of t he b o rr o wer i s a M i chi gan co rpo rat i o n. 2 2 Re pu bli c B ank to C oo lid g e -C e da

r P ark Eq

uit ie s, L L C to p ur c ha se a sh op pin g c e nte r i n H olt , 1 Michig an. On Janu ary 31 , 2 00 2, Parn e s si g ne d a te rm loa n n ote in f

a vo r o f R e publi c B ank , in his capa city as President of Coolidge- Cedar Park Corp., the manag ing me mber of the borrowe r. The 2 note spec ifically

stated that it was executed in Michig an and g overne d by Michig an law. As secur ity

for the loa

n, Coolidge- Cedar Par

k Equities, L L C (“Coolidg e-Ceda r P ark” ) g ave R ep u b l i c B an k a f u tu re ad v an ce m o rt gage o nt h e s h o p p i n g ce n t er , an d P arn es s i gn edt h e m o rt gage
on Coo lid g e -C e da

r P ark ’s be ha lf

. A s a dd iti on a l se c ur ity

fo r r e pa y me nt o f t he loa n, Parn e s– in h is individual capac ity

–executed a Continuing L imited Gua ranty that g uara

nteed the repa

y ment of 50% of the loan’ s outstanding ba lance upon written dema nd following any

defa u l t by

Coolidge- Cedar Park. The guara

nty also stated that it was e x ecute d in Michiga n and g overne d by

Michig an law. The pa rties amende d the note seve ral times, extending the or igin al term; ea ch ame ndment was sig ned by

Parnes on be half of Coolidg e-Ceda r Park a nd on behalf

of himself as the g uara

ntor. The fina l amendment extended the matur ity date to Jul y

31, 2007. O nO c t o b e r 2 2 , 2 0 0 7 , C i t i z e n s B an k g a v e P ar n e s w r i t t e nn o t i c e o f

t h e l o an ’ s m a tu r i t y, Coolidge- Cedar Par

k’s def ault and the ba lance due and ow ing, a nd demande d pay

ment o n the g uara nty . After rec eiving the notice, Parnes contac ted Citi zens B ank, re questing that it forbea r fr om
any c oll e c tio n a c tio n, and on De c e mbe r 1 9, 20 07 , th e pa rt ie s e nte re d in to a

fo rb e ara nc e a g re e me nt. As with the previous a g ree ments, Parnes signe d the forbe ara nce ag ree ment on behalf

of Coolidge

-3

Cedar Par k and on beha lf of himself as guara ntor, and the a gre em en t specifie d that Michig an law g overne d. The for bear ance ag ree ment “ac knowledg e [d ] t h a t t h e I n d e b te d n e s s is va lid, presently

due and owing in full and fully

enfor cea ble subject to no def

enses, se t offs, cla ims or counte r cla ims of any kind or in any

amount” as be tween Citizens Bank a nd Coolidge- Cedar Par

k. I t also “ac knowledg e[d] that the Guar anty

is valid and fully enfor cea ble and is hereby

rea ffirme d and re stated, as if f ully set forth her ein, subject to no def enses, se t offs, cla ims or counter claims of any kind or in a ny amount.” Citi zens Bank a g ree d to a forbear ance period lasting until S eptember 30, 2008, “at whic h time, and without further notice, the B ank shall be e ntitled to ex erc ise any and all of its rig hts and reme dies to enforc e and c ollect the Indebtedne ss.” On Au g us t 1 1, 20 08 , an d A ugus t 29 , 2 00 8, Citi zen s B ank ’s c ouns e l r e min de d Pa rn e s’ counsel of the September 30, 2008, e x piration of the f orbea ranc e per iod and aske d whether the bank
c ou ld e xpe c t pa

y me nt, bu t re c e ive d n o r e sp on se . Ci tize ns B ank ’s c ouns e l se nt a la st r e min de r e -m a il on October

3, 2008, but ag ain re ceive d no response
. On Novembe r 4, 2008, Citiz ens B ank filed its complaint in the district court to enfor ce the g ua ra nty . T he same da

y , c ouns e l f

or Citize ns B ank

c a lle d Pa rn e s’ c ouns e l to se e if

Parn e s w ou ld waive service of process pursuant to Rule 4(d) of the F eder al Rules of Civil P roce dure ( “F RCP ”). Had Par nes ag ree d, he would have ha d six ty day s from the mailingof the wa iver re quest to defe nd. FRCP 4(d ) ( 3 )
. B u t Pa

r n e s d id n o t r e s p o n d , an d th e b an k s e r v e d th e Summ o n s an d Co mpla int on Parn e s at hi s Whi te Pla ins , N e w Y or k, res id e nc e on

No ve mbe r 1 2, 20 08 . Purs ua nt t o F RCP 12(a) (1)( A)(i) (2007) ( amende d 2009), his response was due by Dec ember

2, 2008.C i t i ze ns B an k re f ers to T h e b o lt a s th e “C o urt’ s C o urtro o m D ep uty .” It i s unc l ea r t o t he co urt wha t M s. 3 T he b o l t ’ s t i t l e re all y was. 4 At the time of ser

vice, howe ver, Par

nes wa s in a reha

bilitation fac ility due to a re cent medic al
c on dit ion . T he ple a din g s, the re fo re , h a d to be for wa rd e d to Parn e s’ da

ug hte r a nd the n to his attorney s, reduc ing the ir time for re sp o n d i n g to the complaint. Parnes’ New Y ork counse l called Citi zens Bank’ s counsel on November 26, 2008, to reque st an extension of tim e to file a n answe r, and the B ank’s c ounsel ag ree d to take no action in the m atter until Dec ember 10, 2008. Michig anbased c ounsel — who we re c onsidering repr esenting Parnes a s local counsel — then reque sted more time, and Citiz ens B ank ag ree d to an additional extension to Decembe r 12, 2008. A p p a r e nt l y b e l i e v i n g t h a th e n e e d e d

m o r e t i m e t o f

i l e h i s an s w e r , P ar

n e s ’ N e w Y o r

k a t t o r n e y, Matthew He arle , who had not y et made a ny appea ran ce a s counsel in the ca se, ca lled the district court to ask whe ther a formal moti on to extend the t ime to answe r would be required or whether an informal applica

tion, such as a letter , would suffice
. Hea rle spoke, e x parte , with J udg e B attani’s Case Mana g er, B erna dette The bolt , who advised H ear le that since he wa s reque sting only two 3

wee ks, no motion would be nece ssary , that she would not nee d to consult w ith the district judge, a nd that Parnes c ould have the two- wee k extension. S he fur ther dire cted He arle to w rite a conf irming letter that spec ified an e x act date by which time the response would be serve d. Hea rle wr ote such
a letter, confirming an extension to Dec ember 24, 2008, and elec tronically filed it o n t h e d istrict court’s doc ket on Dec ember 11, 2008. Citi zens Ban k ’s co u n sel rec eived the le tter throug h the
e le c tr on ic c a se fi lin g sy ste m on De c e mbe r 1 2, 20 08 , a

nd imm e diate ly

se nt a le tte r t o T he bo lt ob je c tin g to t

he su pp os e d e xten sio n a

nd comp la ini ngof

the imp ro pr ie ty

of the e x pa rt e communication.5

The district c ourt did not respond to e ither letter, nor did it enter any order extend i n g any deadline, and no attorney filed a motion or an appea ranc e on Parne s’ beha lf. On De cembe r 19, 2009, purs ua nt to Rule 55 (a ), Citi zen s Ba nk fi le d a pro pe rl y su

pp or te d re qu e st fo r e ntr

y of de fa ult a g a ins t Par n e s f o r f a il u r e to d e f

e n d
. T h e Cl e r

k e n te r e d th e d e f

a u lt th e s a me d ay . T h e n o n Dec ember 24, 20 08 , Ci tize ns B ank

fi le d a re qu e st f or a Rul e 55 (b )( 1) c le rk ’s e ntr y of jud g me nt b y

de fa ult
. Parn e s’ c ouns e l a tte mpt e d to “ se rv e ” Citi zen s B ank ’s c ouns e l wi th a Rul e 12 (b ) m oti on

to dismiss (for lack of persona l jurisdiction, forum non conve niens , or alter natively , to transfe r venue to the Southern District of Ne w York) on Dec ember 24, 2008, via e- mail, appar ently afte r Citiz ens B ank c ouns e l’ s o ff

ic e ha d c los e d fo r C hr istma s E ve . T he mot ion wa s n ot e le c tr on ic a lly

fi le d w ith the district court be cause Parnes’ “soon-to-be -re tained loca l c ounsel in Mic higa n” was a lrea dy

on
vacation for Christmas as well. The “ meet and c onfer ” confe renc e betwee n the par ties’ counse l took place on Dec ember

29, 2008; at that confe renc e, Citiz ens B ank’s c ounsel ac knowledg ed that he ha d
rec eived the motion but that he would not c onsent to the relief soug ht. Alleg edly , h e d i d not specific ally

object to the motion’s untimeliness or mention that he had submitt ed an application for
e n tr y o f d e f a u lt
. Pa r n e s ’ c o u n s e l th e n s e n t a c o p y o f th e mo ti o n p a p e r s to th e d is tr ic t judge ’s chambe rs and to plaintiff’s counsel, but on Dece mber 31, 2008, the district c ourt’s Calenda r Clerk informed Par

nes’ c ounsel that the motion could no t be ac cepte d beca use the Clerk of

Court had enter ed a Cler

k’s Entry of Judgment by

Def ault on Dec ember

30, 2008. Parnes f iled a motion to vacate t he def ault judgme nt on J anuar

y 14, 2009. On Fe bruar

y 23, 2009, the district court he ld a hearing on Parnes’ motion. Thoug h the court was clearly not happy with the way events had transpire d, it found t hat P arne s did not willfully defa ult and that any

delay
or pr e jud ic e c ou ld b e take n c are of thr ou g h im

po sit ion of c os ts. Th e c ourt , h ow e ve r, de nie d Pa rn e s’6

m o t i o nt o v a c a t e t h e d e f

a u l t j u d g m e n t b e c a

u s e i t f o u n d t h a t P ar

n e s h a d n o m e r i t o r i o u s d e f e n s e . It did not specifica lly

addre ss Parnes’ a

rg uments conce rning lack of jurisdiction. The district court
me mo r ia li ze d it s d e n ia l o f th e mo ti o n in an o r d e r o n F e b r u ar y 2 3 , 2 0 0 9
. I t is f

r o m this orde r that Parn e s n owa

pp e a ls. On appe al, Parne s rea sserts hi s arguments that the district court lac ked per sonal jurisdiction over him and that the district court erred in finding that he la cked a meritorious defe nse. In addition, he asse rts that the def

ault judgme nt is void because Citi zens Bank did not provide him with the require d three day s notice under Rule 55(b)(2) . We addre ss eac h of those ar g uments in turn.

II. Personal jurisdiction over a defe ndant is a threshold issue that must be present t o support any subsequent orde r of the district c ourt, including entry of the de fault judg ment. See Kroger Co. v. M a le a s e F o ods Corp. , 4 37 F .3 d 5 06 , 5 10 (6 th C ir . 2 00 6) . Su bje c t matte r j ur isd ic tio n in thi s c a se is ba se d u p o nd i v e r s i t y . T o d e t e r

m i n e w h e t h e r

p e r s o n a l j u r i s d i c t i o ne xi s t s o v e r ano u t
- o f

- s t a te defe ndant, the cour

t must find: (1) whether the forum state ’s long -ar m statute authorizes jur is d ic ti o n ; an d ( 2 ) if s o , w h e th e r e xe r c is in g th a t ju r is d ic ti o n c o mp o rts w it

h c o n s ti tuti onal due proce ss. Air Products & Controls , Inc. v . Safetech I nt’l, Inc., 503 F.3d 544, 550 ( 6th Cir. 2007). A. Michigan’s Long-Arm Statute Michig an’s long -ar

m statute extends limit ed per sonal jurisdiction over a non- resident if the claim “a ris[es] out of an a ct which c reates [certain] relationships,” including “[t] he tra n s ac t i o n of any business within the state.” M.C.L . 600.705(1). The “a ri s i n g from” require ment is met if the
ca u s e o f action wa s “made possible” by or “lies in the wa

ke of” the def

endant’ s contac ts with the forum state. Lanier v. Americ an Bd. of Endodontics, 843 F.2d 901, 909 (6th Cir. 1988) (a naly zing7

identically

worde d provision g overning corpor ate jurisdiction). The Michig an Supreme Court has int e rp re te d th e wo rd

“ any” in t

he ph ra se “ tr ans a c tio n o f a ny bu sin e ss” a s “ mea n[ in g] jus t w hat it say s. I t includes ‘ea ch’ a

nd ‘eve ry ’.” Sifers v. Horen , 1 8 8 N
. W. 2 d 6 2 3 , 6 2 4 n . 2 ( M ic h
. 1 9 7 1 )
. We have he ld t

hat “ if de fe nd ant c on du c te d e ve n th e sli g hte st a c t of bu sin e ss i n M ic hig an, th e fi rs t statutory criter ion for personal jurisdi ction
. . . is satisfied.” Lanier , 843 F.2d. at 906. The statute, there fore , expands personal jurisdiction of Michig an courts to the “full potential.” Chicago Blower Corp. v. Air Systems Associates, I nc., , 6 2 3 F. S u

p p . 7 9 8 , 8 0 0 (E
. D. M i ch
. 1 9 8 5 ) ( qu o t i n g Sif e rs , 188 N. W .2 d at 62 3). M or e ov e r, the Mic hig an Co ur t of Ap pe a ls h a s h e ld t

hat M. C.L . 6 00 .7 05 (1 ) “ is int e nd e d to be li be ra lly

c on str ue d in fa vo r o f r e c og nizi nglim ite d p e rs on a l juri sd ic tio n e sp e c ia lly wher e an or dinary

commerc ial transact ion is invol ved, abse nt violation of due proce ss of law.” Lazzaro v. Charl evoix

Lakes, 310 N.W.2d 295 , 2 97 (Mich. App. 1981) (af firming persona l jur i s d i c t i o n o v e r n o n r e s i d e n t g u ar an t o r s o f a l o an a g r e e m e n t , o u t o f w h i c h ar o s e a c t i o n f o r i ts brea ch). I n his brief, Parne s maintains an unconvincingargument that he h as not transa cted a ny bu sin e ss i n M ic hig an. He e rr on e ou sly re lie s o n tw o c a se s: Chicago Blower Corp. v. Air Systems Associates, Inc

. , 6 2 3 F
. Su p p . 7 9 8 ( E
. D
. M ic h
. 1 9 8 5) and Anderson v. FD IC , No. 96-70411,1996 U. S
. Di s t . L EXI S 19907 (E.D. Mich. 1996). B oth are inapposite. I n fac t, the court in Chic ago Blower Corp. did not even analy ze w hether the defe ndants came under Michig an’s long -ar m statute; ins te a d, it w e nt s tr a ig ht t o th e c on sti tut ion a l du e pr oc e ss a na ly sis be c a

us e Mic hig an’ s st a tut e is s o
ex p an sive. Anderson ad dre s s ed j u ri s d i ct i o n u n d er a se p ar at e pa rt o f th e st at u t e — M
. C
. L. 600.705(2) — Michig an’s tort jurisdiction provision.8

The fa ct is that Parnes pe rsonally g uara nteed the loan orig inally made by Republic Ba nk, and also signe d the loan note in his ca pacity as P re s ident of the borr ower ’s (Coolidge -Cedar Park Equities, L L C) manag ing me mber, Coolidge -Cedar Park, Corp., a Michig an cor poration. The loa

n specific ally

stated that it was executed in Michig an and g overne d by Michig an law. Par

nes knew that in the event of

defa ult, the bank would re quire him persona lly to make pay

ments up to 50% of the outstanding balanc e. And a fter the borrowe r’s d ef au lt, Parnes aske d Citi zens Bank to f orbea r from exerc ising its rig hts under the or igina l documents; he then ne g otia t ed t he for bear ance
a g re e me nt w iththe ba

nk . T he se a c ts c on sti tut e the tr ans a c tio n of bu sin e ss i n M ic hig an, pa rt ic ula rl y under the Sif

e rs court’s e x pansive interpr etation of M.C.L . 600.705(1). B. C ons ti tu ti ona l D ue P r oc e ss Constit utional due proc ess require s that the plaintiff establish that defe ndant has minimum contac ts with Michigan, that is, suf ficient contac t with the state so that the maintenanc e of the action d o es n o t o ff

end “‘traditional notions of fair pla y and substantial justice.’” I n t’ l S h o e Co

. v. W a s hington , 3 2 6 U. S
. 3 1 0 , 3 1 6 (1 9 4 5 ) ( qu o t i n g Milliken v. M eye r , 3 1 1 U
. S. 4 5 7 , 4 6 3 ( 1 940)). Minimum contac ts exis t wher e a “def endant’ s conduct a

nd connec tion with the forum state ar e such “that he would rea sonably anticipate be ing ha led into court there .” W orld-W ide Volkswagen Corp. v. W oodson , 444 U.S. 286, 297 (1980). The Six th Circu i t h as established a three -par t test for dete rmining w hether long- arm jur isd ic tio n o ve r a

n o ut- of -s ta te de fe nd ant c omp or

ts w ithdu e pr oc e ss: First, the de fenda

nt must purposefully avail him self of the privileg e of a cting in the forum state or causing a conseque nce in the forum state. Second, the cause of ac tion must a rise from the defe ndant’s activities there . Finally , the ac ts of the def endant or conseque nces c aused by

the def endant must have a substantial enoug h connec tion9

with the for

u m s tate to ma

k e th e e xe r c is e o f

ju r is d ic ti o no v e r

th e d e f e n d ant rea sonable. Southern Mach. Co. v . Mohasco I ndus., Inc. , 401 F.2d 374, 381 ( 6th Cir. 1968). The “ purposef

ul availment” r equire ment “ensur es that a defe ndant will not be haled into a jur isd ic tio n s ole ly

a s a re su lt o f r and om, fo rt

uit ou s, or a tte nu ate d c onta c ts, or

of the un ilate ra l a c tiv ity of anothe r par

ty or a third pe rso n.” Burger King Corp v. Rudzewicz , 471 U.S. 462, 475 (1985) (i nte rn a l qu otatio ns and

c itatio ns omi tte d)
. “ Juri sd ic tio n is pr op e r, ho we ve r, wh e re the c on ta c ts pr oximate ly

re su lt f ro m a c tio ns by

the de fe nd ant him se lf

that c re a te a

su bs tanti a l c on nect ion

wi th the forum State.” Id. (quoti n g Mc Ge e v. Int’l Life Insurance Co. , 355 U.S. 220, 223 (1957)) (empha sis in original). The “ arises f

rom” prongmere ly

means that the pla intiff’s ca u s e of a ction must be “made possible” by or be “conne cted with” the defendant’s contacts with the forum state. Air Products, 503 F.3d at 553. This is a “lenient standa rd.” Id. Th e “ re a so na

ble ne ss” pr on g is a lso le nie nt, be c a us e when the f

irst two prong s are met, “an inf ere nce of rea sonablene ss arises.” Id. at 554. With re sp e c t to a fo rum’ s p e rs on a l juri sd ic tio n o ve r n on re sid e nt gua ra nto rs , th e Sixth C ir c uit has alre ady

spoken with prec ision in National Can Corp. v. K Beverage Co. , 674 F.2d 1134 ( 6th Cir. 1982). In National

Can , th e c ourt

fo un d th a t a

no nr e sid e nt w ho ha d n e ve r s e t f oo t in the fo rum st a te of Ke ntucky

and whose only

relationship wit h the forum wa s that she was ma rried to a share holder of the c omp any

a t is su e and

ha d s ig ne d a

g ua ra nty a g re e me nt t

hat f a c ili ta te d a

Ke ntu c ky

bu sin e ss venture , was subject to the personal jurisdiction of t he for um state. Id. at 1137. The National Can court e asily

found all three Southern Mach. Co. criter ia wer e met. Ad d re ssing the “ purposef ul
a va ilm e nt” pr on g , it

no te d th a t:10

F ir st, the de fe nd ants vo luntari ly sig ne d th e g ua ra nti e s, wi tho ut w hic h c re dit wo uld no t ha ve be e n f ur nis he d. Th e g ua

ra nty a g re e me nts sh ow e d c le arl y that th e bu sin e ss the g uara ntors wer e assisti n g i n cr eating wa s to be locate d in Kentucky . . . . The gu ar an t o rs . . . t h ro u gh m ar i t al ri gh t s h a d a n e c o n o m i c i n t er es t i nKB C
. S i gn i n g a pe rs on a l g ua

ra nty fo r a Ke ntu c ky

bu sin e ss i n w hic h one ha s an ec on omi c int e re st i s the so rt of “ c on du c t and

c on ne c tio n w iththe fo rm [sic ] S ta te ” that make s it rea sonable to “a

nticipate being haled into c ourt there ” when the underly ing c ontrac t is breac hed. Id. at 1138. Wit h respe ct to the “ar ises from” pr ong , the cour t stated that “[t] he sec ond aspec t of the test obviously is satisfied. The gua ranty ag ree ments are the basis for the action.” Id. Turning to the

“ re a so na ble ne ss” pr on g, th e c ourt no te d th a t th e g ua

ra nto rs fr e e ly

c ho se to l oc a te the ve ntu re in Ke ntu c ky and vo lun tari ly

signe d th e g ua

ra nty a g re e me nt. The c ourt’s ana ly sis in National Can is e qu a lly

a pp lic a ble to P arn e s. F ir st, he vo lun tari ly signe d the per sonal g u ar an t y , which fa cilitated the loan, a llowing the pur chase of the Michig an shopping c enter

by an entity i n wh i ch h e h ad an ec onomic interest. He also soug ht a forbe ara nce ag ree ment from the ba

nk upon the orig inal defa

ult. Second, the guara

nty ag ree ment is the basis for this action. And finally , he per sonally soug ht after

and voluntarily : (1 ) ch o s e M ichig an as the loc a tio n f or his bu sin e ss v e ntu

re , a nd (2 ) s ig ne d th e g ua

ra nty a g re e me nt. Th e dis tr ic t c ourt pr op e rl y
e xer te d p e rs on a l juri sd ic tio n o ve r P arn e s. III . Be cause the district c ourt did, inde ed, have persona l jurisdiction over Parnes, w e now turn to his a rg uments reg arding the propriety of the district cour

t’s denial of his motion to set aside the de fa ult jud g me nt. Unlike a de fault, which ne eds only g ood cause t o b e s et aside unde r F ed. R. Civ. P. 55(c), a def ault that has become final as a judgme nt c an be set aside only under the stricter standa

rds forPar n es ’ mot i on t o v ac at e ac t u al l y ci t es t o Fed. R
. C i v . P
. 55(c ) , wh i ch al l ows t h e c ou r t t o s et as i de a n en t r y of 4 d e fa u ltfo r “g o o d c a u se .” H o w e v e r, h e d id no t m o v e the c o u rt to d o a n ythin g un til a fter the d e fau lt ju d g m e n t had been ent er ed. T o s et asi de a d ef aul t t hat ha s become f

i nal as a j udgm ent , Rul e 55( c) pr ov i des t h at t h e cou r t “ may s et a s i de a d e fau lt ju d g m e n t un d e r R u le 6 0 (b ).” 11 setting a side final and a

ppeala ble orde rs under

Fe d. R. Civ. P . 60(b). Fr on tie r Ins . Co. v. Blaty , 454 F .3 d 5 90 , 5 95 (6 th C ir . 2 00 6) . T he de nia l of a mot ion to v a cat e a

de fa ult jud g me nt, the re fo re , is revie wed f

or abuse of discre tion. Burrell v. He nderson, 434 F.3d 826, 831 ( 6th Cir. 2006). Upon re view of a

motion to vacate a

defa ult judgment, the district cour t should consider (1) wh e the r t he pr op on e nt’ s c ulp a

ble c on du c t le d to the de fa ult , ( 2) wh e the r t

he pr op on e nt h a s a meritorious claim or de fense , and (3) whether the oppos ing party would be pre judiced. W

e iss v . S t. Paul Fire & Marine Ins. Co. , 2 83 F .3 d 7 90 , 7 94 (6 th C ir . 2 00 2) ; United Coin Mete r C o . , In c. v. Seaboard Coastline Railroad , 705 F.2 d 8 3 9 , 845 (6th Cir. 1983). The c ulpable conduc t prong should be examined first, and whe n relief is soug ht under Fed. R. Civ. P. 60(b)( 1), as it was he re , 4 the propone nt must demonstrate that its default was the product of m istake, i nadver tence , surprise, or excusable ne g lect. Manufacturers’ I ndus. R el a t i o n s Ass’n v. East Akron Casting Co. , 58 F.3d 2 0 4 , 2 0 9 -1 0 (6 t h C i r. 1 9 9 5 ) ( qu o t i n g W aifersong, Ltd. v. Cl assic Music Ve nding , 976 F.2d 290, 292 (6th Cir. 1992)). Only

if the propone nt satisfies th i s p ro ng should the remainingtwo fac tors be examined; otherwise the motion to set aside the de fault judg ment should be denied. Id. At the district court leve l, the court de termined that the f irst and third Un ite d Co in fa ct o rs had bee n met, finding that “the action of prejudice and the delay for the month could be taken c are of in costs” a

nd that “the de fault is not willful. I think the letters and the c alls betwee n the par ties and with the Court indicate that defe ndant was try ing to do something .”12

Parn e s’ c ouns e l’ s d eci sio n to c on ta c t a c ourt ho us e of fi c ia l, e x part e , a

nd a tte mpt to informally extend a deadline that is set by the Fe dera l Rules is certainly questionable, at best, if not “culpa ble.” The Rules provide that the wa y to reque st time extensions is by motion. Citi zens Bank points to a Second Circuit case which is instructive in this reg ard: “ L itigants should not seek le g al advice from judg es or judicial staf f, and in a

ny case , attorne y s should know better than to re ly on such advic e. More over, ad h o c inqui ries re g ardingpurported a dvice a re diff icult to conduct, lead to uncer tain results and meddle in the internal wor kings of judge s’ chambers.” In re Am . S afe ty Indem . Co. , 502 F.3d 70, 73 ( 2d Cir. 2007). Neve rtheless, the district c ourt g ave Par nes the be nefit of the doubt wi t h respe ct to the culpable- conduct pr ong and denie d his moti on based on the lack of a mer itorious defense . We do not find that it abused its discretion in that reg ard. I n analy zing whethe r a de fenda

nt has a meritorious defe nse, “likelihood of success i s not the
me a sure . Rathe r, if

any de fe ns e re lie d u

po n sta te s a def

e ns e g oo d at l aw, the n a

me ri tor iou s d e fe ns e has bee n advanc ed.” United Coin Me ter Co., Inc., 70 5 F. 2d a t 84 5 ( c itatio ns omi tte d) . “ A d e fe ns e is sufficient if it contains eve n a hint of a sug g estion which, prove n at trial, would constitute a complete de fense . The ke y consideration is to determine w hether there is some possibil ity

that the outcome of the suit after a full trial will be contrary

to the result ac hieved by

the def ault.” Smith v. C.I.R. , 9 2 6 F. 2 d 1 4 7 0 , 1 4 8 0 (6 t h C i r. 1 9 9 1 ) ( qu o t i n g INVST Financial Group, Inc. v. Che m-Nuclear Sys., Inc

. , 8 1 5 F
. 2 d

3 9 1 , 3 9 9 ( 6 th

Ci r . 1 9 8 7 ) )
. I nh is b r ie f

, Pa r n e s c o n te n d s th a t h e a d v an c e d tw o
me ri tor iou s d e fe ns e s. F ir st, he argues t hat th e ba

nk ha s n ot s a tis fi e d o ne of

the pr e re qu isi te s to g uara ntor liability : written notice. The district court found that the O ctober 2007 letter to Parnes
s a t i s f i e d t h e n o t i c e r e qu i r e m e n t , b u t P ar n e s d i s a g r e e s , t h o u g h h e o f f e r s l i t t l e e x p l an a t i o na s t o w h y.13

Second, he a

rg ues that, af

ter the forbe ara

nce pe riod expired, the bank wr ong fully serve d a dema

nd fo r r e nt o n th e ten ant s of th e sh op pin g c e nte r, and by do ingso , d isr

up te d th e re nta l in c ome to Coolidge- Cedar Par

k, which impaire d its abilit y to properly

maintain the pro p er t y , an d in turn devalue d the prope rty

— which he c alls collatera l that secure s the loan. Th e dis tr ic t c ourt wa s c or re c t to c a ll Parn e s’ no -n oti c e argume nt “ bo g us .” De sp ite Parn e s’ alleg ation that the complaint did not include an a ssertion that the bank provide d notice, par ag raph 15 of the c omplaint, in actuality , plainly states that “Notice of the Ba nk’s intention [ to enforc e the Guar anty and for eclose ] was give n both to Cedar Park and the Guar antor on October 22, 2007.” The written notice of

October 2007 plainly

advised Parne s of the def ault and the de mand of pay ment on the g ua ra nty : “ PL EA SE TA KE F UR TH ER NO TI CE that y ou have pe rs on a lly g ua ra nte e d amou

nts owed to Citiz ens B ank by Coolidge- Cedar pa

rk Equit ies, L .L .C., pursuant to a Gua ranty . . . and DEMAND I S HEREBY MAD E for immediate pay ment of amounts due to the B ank under y our g uara nty .” F inally , the forbe ara nce ag ree ment specific ally waived any require ment of fur ther notice bey ond what Parne s had alre ady rec eived: “the Ba

nk ag ree s until S eptember 30, 2008 (the

“ F or be ara nc e Pe ri od ” ) ( a t w hic h ti me , and w ith ou t f ur the r n oti c e , th e B ank

sh a ll b e e nti tle d to
e xer c ise any

and a ll o f i ts r ig hts and

re me die s to e nf

or c e and c oll e c t the I nd e bte dn e ss)
. . . [th a t it ] will r e f r a in f r o m e xe r c is in g it s r ig h ts an d r e me d ie s p u r s u an t to th e la w in s u c h c a s e ma de and pr ov ide d. ” Th is defe ns e is no t “ g oo d at la w, ” a s Pa rn e s a sse rt s, be c a

us e (1 ) n oti c e wa s, in f

a c t, g iven, and ( 2) eve n if it had not been g iven, the for bear ance ag ree ment waived a ny further notice. Parnes’ “impairment of c ollatera l” def ense is spurious, as well. The mortg ag e author ized the ba nk to d e mand

re nt f ro m th e te na

nts of the sh op pin g c e nte r in the e ve nt of de fa ult . In a ny e ve nt, P ar n e s w a i v e d

t h i s d e f e n s e i nt h e G u ar an t y:14

The oblig ations of the Gua rantor here under are not relea sed, dischar g ed or in a ny way aff ecte d by rea son of the fa ct that . . . the value of any of the collater al
. . . may have chan g e d o r ma

y h e r e a f te r c h an g e . . . n o r b y an y o th e r c ir c u ms ta n c e s w hich might otherwise c onstitut e a le g al or e quitable dischar g e of a surety or g uara ntor. Mo re ov e r, the statut e wh ic h Pa rn e s cit e s for thi s ar g ume nt, M. C.L . 4 40 .3 60 5, pr ov ide s th a t “ A p a rt y is no t dis c ha

rg e d un de r thi s se c tio n if
. . . the ins tr ume nt or a se pa

ra te a g re e me nt of

th e party p ro v i d e s fo r w ai v er

o f d i s ch ar ge u n d er

t h i s s ec t i o nei t h er

s p ec i fi ca l l y

o r b y gen er al l an gu age i n d i c a t i n g t h a tp art i e s w a i v e d e f e n s e s b a s e d

o ns u r e t y s h i p o r

i mp a i r m e n to f c o l l a t e r a l
. ” M
. C
. L. 440.3605(9)( ii). Parnes ne verthe less contends that the me re f act that the district c ourt “d elved into t he underlying me rits of [his ] presented defe nses,” proves that his de fense s are “g ood at law.” He e ven g oes so far as to say

tha t th e dis tr ic t c ourt

ha d n o b us ine ss l oo kin g a t th e un de rl y ingme ri ts o f h is defe nses. H o weve r, the district cour t is not obl ige d mere ly

to acc ept Parne s’ g ener al asser tion of these two de fense s without even a “ hint of a sug g estion” of supporting evi d en ce. Se e Sm ith , 926 F.2d at 1480. Acc ording ly , the district court did not abuse its discre tion in deny ing Par nes’ motion to set
a sid e the de fa

ult jud g me nt. Parnes a lso arg ues that hi s jurisdictional arg ument constituted a “me ritorious defe nse.” Be cause we have alr eady

analy zed Parnes’ j u

r isdictional arg ument and found it lac king me rit, Parnes could not have w on his 60(b) motion on that gr ound. IV. I n his re ply br ie f, Parn e s ra ise s, fo r the fi rs t ti me , th e argume nt t hat th e de fa

ult jud g me nt i s actua lly void (thus, we should vac ate it) because he was entitled to three day s’ adva nce notice of the15

application for defa

ult judgme nt, pursuant to Rule 55(b)(2) (2007) ( amende d 2009). The Cler k of Court e nte re d th e de fa

ult jud g me nt, purs ua

nt t o Ru le 55 (b )( 1) , o n D e c e mbe r 3 0, 20 08 , a nd did so without provision of any

notice to Parne s . Parnes a rg ues that this was improper , beca use whe n a pa rt y ha s ma de an a

pp e ara nc e , th e pa

rt y is e nti tle d to thr e e da

y s’ no tic e un de r Rul e 55 (b )( 2)
. On ly when a party has fa iled to appea

r does Rule 55(b) (1) g overn, and Parnes asserts t hat his appea ranc e
wa s e vid e nt f

ro m th e c or

re sp on den c e be tw e e n h is atto rn e y s a nd tho se of Citi zen s B ank . B e c a

us e he a pp e are d, Parn e s argue s, he wa s e nti tle d to thr e e da y s’ no tic e of the ba

nk ’s a pp lic a tio n f

or de fa ult judgme nt, and the lac k there of re nders the de fault judg ment void. Whil e this is perhaps Par nes’ most comp el l i n g argument, he should have raised it much
sooner than in his reply brief befor e this Court. He failed to pr esent this a rg ument t o t h e d i s t ri ct
c ourt and did no t de ve lop it i n h is o pe nin g br ie f h e re . As a re su lt, thi s p art ic ula r i ssu e is n ot p ro pe rl y b ef o re us. See U

nited States v. Perk

ins , 9 9 4 F. 2 d

1 1 8 4 , 1 1 9 1 (6 t h C i r. 1 9 9 3 ) ( ci t i n g P a c h la v. Saunders System s, Inc. , 899 F.2d 496, 502) (“I ssues raised for the f irst time in a reply

brief a re not pr op e rl y be fo re thi s c ourt .” ); Farm Labor Org. Comm. v. Ohio Stat e Highway Patrol , 308 F.3d 523, 53 7 n .6 (6 th C ir . 2 00 2) . In a ny e ve nt, the law d oe s n ot c omp e l th e re su lt Pa rn e s se e ks
. To beg in our inquiry , it is appropriate to turn to the text of Rule 55(b): (b ) E nt e r ing a D e faultJudg m e nt (1) Bythe Clerk. I f the plaintiff’s c laim is for a sum ce rtain or a sum that can be ma de c e rt a in b y

c omp utatio n, the c le rk

—o n th e pla int if

f’ s r e qu e st, wi th a

n a ff ida vit sh ow ingthe a mou

nt d ue —mu st e nte r j ud g me nt f or tha t amou nt a nd c os ts a g a ins t a defe ndant who has be en def aulted for not a ppear ing and who is ne ither a minor nor an incompete nt person. (2) By the Cour t. I n all ot her ca se s, the pa rt y mus t a pp ly to t he c ourt fo r a de fa ult judgme nt. . . . I f the pa

rty ag ainst whom a defa

ult judg ment is sought has a ppear ed pe rs on a lly or by a re pr e se ntativ e , that pa rt y or its re pr e se ntativ e mus t be se rv e d w ith wr i t t en n o t i ce o f t h e ap p l i ca t i o nat l ea s t3 d ay s b ef o re t h e h ea ri n g.T here i s no noti ce req ui rem ent f o r t he cl erk’ s i ni t i al ent ry of d ef aul t unde r Rule 55 (a), s o l o ng as t he f ai l ure 5 to d e fen d is d e m o n stra te d b y “a ff id a v it o r o the rw ise .” C o u n se l fo r C iti z e n s B a n k su b m itt e d a n a ff id a v it to sa tisf

y this re q u ire m e n t. 16 Fe d. R. Civ. P. 55(b) (2007) (ame nded 2009). Thus, the Rules provide for two methods of enter ing
a de fa ult jud g me nt: (1 ) by the c le rk of c ourt , with no no tic e re qu ir e me nt, in t he e ve nt t hat th e pa rt y has fa iled to a

ppear , or (2) by the court, if the par ty has ente red a

n appea ranc e, with a r equire ment
o f 3 day s’ notice. Acc ording ly , our first inquiry should be whethe r Parne s indeed made an 5

a pp e ara nc e su ff ic ie nt t o tr ig g e r t

he thr e e da

y s’ no tic e re qu ir e me nt. The c ircuit courts a

re divided as t o whether a formal appea ranc e is nece ssary to trig g er the Rule 55(b)( 2) notice r equire ment. Compare Rogers v. Hartford L ife & Acc . Ins. Co. , 167 F.3d 933, 936-37 (5th Cir. 1999), Ke y Ba nk of M ain e v . Ta ble c lot

h Te x til e , 74 F.3d 349, 353 ( 1st Cir. 1996), I n r e R ox fo rd Foods, Inc. , 1 2 F.3d 875, 881 ( 9th Cir. 1993) , and H.F. Livermore Corp. v. Ak tie ng ese lls c ha

ft G e br ud

e r Lo e pfe , 432 F.2d 689, 691 (D
. C
. Cir. 1970), with Zue lzk e Too l & Engineering Co., I

nc. v. Anderson Die Castings , Inc. , 925 F.2d 226, 230 (7th Cir. 1991). We have fo un d th a t in fo rm a l a

pp e ara nc e s su ff ic e to t ri g g e r t he thr e e da

y s’ no tic e re qu ir e me nt, pa rt ic ula rl y if the informal c ontacts betwe en the pa rties “indicate the defaulting party intends to defend the suit.” Lutomski v. Panther Valley Coin Exc h. , 6 5 3 F. 2 d 2 7 0 , 2 7 1 (6 t h C i r. 1 9 8 1 ) ( p er cu ri am ) ( qu o t i n g 6 Moo r e ’ s F e d e r a l Pr a c ti c e 5 5
. 0 5 ( 3 ) )
. I n th is c a s e , th o u g h Pa r n e s ’ c o u n s e l d id n o t e n te r a f ormal appea ranc e, he did a dvise the district court of an intention to respond to the complaint (a lbeit in a qu ite un or tho do x ma

nn e r) and re qu e ste d tim e e xten sio ns fr om bo th pla int if f’ s c ouns e l and

the c ourt
. This indicates an intention to defe nd the suit a nd would entitle Parnes to Rule 55(b) (2) notice
. See L u tomski , 6 5 3 F
. 2 d a t 2 7 1 ( f i n d i n g t h a t i n f

o r m a l c o n v e r s a t i o n s b e t w e e n t h e p art i e s , w he re in plaintiffs reque sted extensions t o file, we re suf ficient to demonstrate intent to defe nd).17

Ho we ve r, the inq

uir y do e s n ot s top he re , b e c a us e on ce a g a in, the c ir c uit s are sp lit a s to whether the failure to pr ovide notice as r equire d by Rule 55(b)(2) rende rs the def ault judgme nt void, under Rule 60(b)( 4), or just voidable , under Rule 60( b)(6)
. Compare Pl anet Corp. v. Sullivan , 702 F.2d 123, 126 n. 2 ( 7th Cir. 1983), and W infield Assocs. v. Stonec ipher , 429 F .2 d 1 08 7, 10 91 (1 0th Cir. 1970), with In re Roxford Foods, Inc. , 12 F.3d 875, 881- 82 (9th Cir. 1993) and Savoretti v. Rodriguez-Jimine

z , 252 F.2d 290, 290 ( 5th Cir. 1958) (per curiam). Our circ uit ha s noted that lack of Rule 55(b)( 2) notice doe s not nece ssarily rende r t he def

ault judgme nt void, under Rule 60(b)( 4). I nstead, i t i s m er el y voidable, under Rule 60(b)(6)
. See Lutomski , 6 53 F .2 d at 27 1 ( “ a fa ilure to provide notice does not in itself rende r a judgme nt void, [but ] it is a serious procedur al irre g ularity .”) (interna l quotations omi tted). Given that this “proc edura l irregularity ” has no t v o i d ed the default judg ment, we se e no
re a so n to va c a te it. “ A d istri ct cou rt sh ould g ra nt r e lie f f ro m op e ratio n o f a

jud g me nt u

nd e r R ule 60(b)( 6) when it de termines in its sound discretion that substantial justice would be s er v ed.” Cin c inn ati

In s. Co. v . B

y e rs , 1 5 1 F. 3 d

5 7 4 , 5 7 8 (6 t h C i r. 1 9 9 8 ) ( ci t i n g O v e r b e e v . V a n W ate rs & Ro ge rs , 765 F.2d 578, 580 ( 6th Cir. 1985)). No substantial just ice would be serve d by doing so he re. Unlike in Lutomski , wher e we vaca ted the def

ault judgme nt beca

use the de fenda

nts ha d prese nted “strongarguments” t hat the dama g es as c alculate d by the def ault judgme nt were inacc urate , 653 F.2d at 271, Parne s has ar g ued no such thing. Nor has he demonstrated that the final re sult would be any dif fe re nt s ho uld

we va c a te a nd

re mand to t he dis tr ic t court, a s h e ha s u tte rl y fa ile d to pr e se nt a meritorious defe nse. V.18

A c c o r d ingly , we AF F IRM the dis tr ic t c ourt ’s de nia l of the mot ion

to v a c a te the de fa

ult jud g me nt.