UNITED STATES CO URT OF APPEALS FOR THE TENTH CIRCUIT

UNITED STATES OF AMERICA, Plaintiff-Appellee,

v. $285,350.00 IN UNITED STATES CURRENCY, Defendant.

----------------- ------------- TERRY FAULKNER, Claimant-Appellant. No. 13-6081 (D.C. No. 5:12-CV-00878-M) (W.D. Okla.)

ORDER AND JUDGMENT *

Before LUCERO , Circuit Judge, BRORBY , Senior Circuit Judge, and BACHARACH , Circuit Judge.

In this in rem civil forfeiture of $285,350.00, Claimant-Appellant Terry
Faulkner asserted that he was the custodian of the currency, which law enforcement

* After examining the briefs and appellate record, this pane l has determined unanimously to grant the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctr ines of law of the case, res judicata, and collateral estoppel. It may be cite d, however, for its persuasi ve value consistent with Fed. R. App. P. 32.1 a nd 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### December 4, 2013
Elisabeth A. Shumaker Clerk of Court- 2 - officers found in a hidden compartment of hi s vehicle. Through counsel, he filed a claim and an amended claim to the currency, pursuant to 18 U.S.C. § 983(a)(4)(A) and Rule G(5)(a) of the Supplemental Rule s for Admiralty or Ma ritime Claims and Asset Forfeiture Actions (Supplemental Rules). The government then served interrogatories on Mr. Faulkner concerning his interest in and possession of the currency, which he failed to answer until the district cour t ordered him to do so. He also failed to file an answer to the complaint, see § 983(a)(4)(B) and Supplemental Rule G(5)(b), despite two warnings by the government, so the district court granted the government’s motion to strike his claim, see Supplemental Rule G(8)(c)(i)(A). Thereafter, the clerk of the district cour t entered default agai nst “all third parties [including Mr. Faulkner] with an intere st in the defendant $285,350 in U.S. currency.” Aplt. App. at 40. Again th rough counsel, Mr. Fa ulkner moved to set aside the default, which the district court denied. The court then entered a default judgment and ordered the currency forfeited to the government. Mr. Faulkner, proceeding through the same counsel as in the district court, appeals the order denying his request to set aside the default and the default judgment. He challenges the clerk’s entry of default and the district court’s default judgment claiming (1) the failure to comply w ith the applicable ru les was the fault of Mr. Faulkner’s attorney, not Mr. Faulkner, a nd (2) default judgments are disfavored. The government argues that Mr. Faulkner does not have st anding to pursue his claim- 3 - for the currency because he did not challe nge the district cour t’s order striking his claim and amended claim. Mr. Faulkner filed his motion under Fed. R. Civ. P. 55(c), 1 which provides that “[t]he court may set aside an entry of de fault for good cause, a nd it may set aside a default judgment under Rule 60(b).” Rule 55(c) invokes the standards of Rule 60(b), which provides that a judgment may be set aside “[o]n motion and just terms.” “We generally review a district court’s denial of a motion to set asid e a default judgment under Rules 55(c) and 60(b) fo r an abuse of discretion.” Hukill v. Okla. Native Am. Domestic Violence Coal. , 542 F.3d 794, 796-97 (10th Ci r. 2008) (footnote omitted). Accordingly, under the abuse-of-discretion st andard, “[w]e reverse only if the district court’s conclusion is arbitrar y, capricious, whimsical or manifestly unreasonable or when we are convinced that the district court made a clear error of judgment or exceeded the bounds of permissible choice in the ci rcumstances.” Elm Ridge Exploration Co. v. Engle , 721 F.3d 1199, 1213 (10th Ci r. 2013) (internal quotation marks omitted). Three requirements must be met when setting aside a default judgment under Rule 60(b): “(1) the movi ng party’s culpable conduct did not cause the default; (2) the moving party has a meritorious defe nse; and (3) the non-moving party will not be prejudiced by setting aside the judgment.” United States v. Timbers Preserve , 999 F.2d 452, 454 (10th Cir. 1993), abrogated on other grounds by Degen v. United

1 The motion cited Rule 55(a), but the applicable subsection is Rule 55(c).- 4 - States , 517 U.S. 820, 825 (1996). The district court determined that Mr. Faulkner failed to meet the first two requirements, and we agree. In denying the motion to set aside the default, the district court found that Mr. Faulkner had willfully failed to file the required answer to the government’s forfe iture complaint, and that he had failed to present evidence of a meritorious defense. Appare ntly Mr. Faulkner claimed that he had saved $285,350.00 through the year s, even though his tax returns showed minimal income, if any. We find no abus e of discretion in the district court’s determination that Mr. Faulkner willfully failed to file an an swer and failed to present a meritorious defense. We further conclude that Mr. Faulkner is not entitled to relief due to his attorney’s admitted failure to comply with the rules. The Supreme Court has long rejected “the contention that dismissal of petitioner’s cl aim because of his counsel’s unexcused conduct imposes an unjust penalty on the clie nt. Petitioner voluntarily chose this attorney as his representative in the action, and he cannot now avoid the consequences of the acts or omissions of this freely selected agent.” Link v. Wabash
R.R. Co. , 370 U.S. 626, 633-34 (1962); accord Gripe v. City of Enid , 312 F.3d 1184, 1189 (10th Cir. 2002). Also unpe rsuasive is Mr. Faulkner’s argument that this civil foreclosure action is similar to a criminal proceeding b ecause the government is a party, so his attorney’s er rors should not be attributed to him. The Court has explained: Clients have been held to be bound by their counsels’ inaction in cases in which the inferences of consci ous acquiescence have been less- 5 - supportable than they are here, and when the consequences have been more serious. Surely if a criminal defendant may be convicted because he did not have the presence of mi nd to repudiate his attorney’s conduct in the course of a trial, a civil plaintiff may be deprived of his claim if he failed to see to it that his lawyer acted with dispatch in the prosecution of his lawsuit. And if an attorney ’s conduct falls substantially below what is reasona ble under the circ umstances, the client’s remedy is agains t the attorney in a suit for malp ractice. But keeping this suit alive merely becau se plaintiff should not be penalized for the omissions of his own attorn ey would be visiting the sins of [appellant’s] lawyer upon the [govern ment]. Moreover, this Court’s own practice is in keeping with this general principle. For example, if counsel files a petition for certiorari out of time, we attribute the delay to the petitioner and do not request an explanation from the petitioner before acting on the petition. Link , 370 U.S. at 634 n.10 (citations omitted). Mr. Faulkner also contends that the default judgment should be reversed because default judgments ar e disfavored. But default judgments are authorized by the court’s rules, see Fed. R. Civ. P. 55, and as we have discussed, may be set aside only if the district court ha s abused its discretion in granting the default judgment. We conclude that the distri ct court did not abuse its di scretion. Consequently, we need not address the government’s argum ent that Mr. Faulkner would not have standing to proceed if the defa ult judgment were set aside. The judgment of the distri ct court is affirmed. Entered for the Court
Wade Brorby Senior Circuit Judge