IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 17-40354

UNITEDHEALTHCARE INSURANCE COMPANY; UNITED 

HEALTHCARE SERVICES, INCORPORATED, 

 Plaintiffs - Appellees

v.

LISA HOLLEY, Medical Doctor, doing business as LH Medical Services, 

doing business as LH Anesthesia Associates, P.A.; HILLCREST 

AMBULATORY SERVICES, L.L.C., 

 Defendants - Appellants

Appeal from the United States District Court

for the Eastern District of Texas

USDC No. 4:14-CV-630

Before STEWART, Chief Judge, and CLEMENT, and SOUTHWICK, Circuit 

Judges.

PER CURIAM:*

Defendants Lisa Holley, individually and doing business as L.H. Medical 

Services (“LHMS”), L.H. Anesthesia Associates, P.A. (“LHAA”), (collectively 

“Holley”), and Hillcrest Ambulatory Services, LLC (“Hillcrest”), appeal the 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

February 7, 2018

Lyle W. Cayce

Clerk

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district court’s denial of their Emergency Motion to Vacate Clerk’s Entry of 

Default and their Emergency Motion to Set Aside Default Judgment pursuant 

to Federal Rules of Civil Procedure 55(c) and 60(b). For the reasons set forth 

below, we AFFIRM.

I

This dispute arises out of an alleged $2,065,115.87 in overpayments 

made by Plaintiff UnitedHealthcare Insurance Company (“United”) to Holley 

for medical services dating back to 2013.1 United alleges that Holley, an 

anesthesiologist, submitted several hundred claims seeking reimbursement 

from health plans administered by United that “misrepresent[ed] the scope of 

services” she actually performed. Accordingly, United sought return of the 

overpaid reimbursements from Holley, and the parties’ apparent attempts to 

negotiate a mutually agreeable settlement failed. On May 21, 2014, a United 

agent sent Holley’s then-attorney, Scott Nichols, a letter indicating that 

Nichols and United had been in contact earlier that year and requesting 

verification of Holley’s current financial position. The letter also detailed 

twenty-two separate attempts to contact Nichols and Holley that went 

unanswered and informed him that United would be referring the 

overpayment issue to its legal department if it did not receive the requested 

information. 

On August 8, 2014, United’s attorneys sent Nichols a pre-suit demand 

letter, offering a window of time to mediate the dispute. Nichols received the 

letter on August 11, 2014, and neither Nichols nor Holley responded. United 

proceeded to file suit against Holley and Hillcrest on October 1, 2014, alleging 

 

1 According to United’s complaint, overpayment was made to Holley for services 

performed under her assumed name, LHMS, and by her now defunct practice, LHAA. Holley 

allegedly created a new entity, Hillcrest, following United’s demand for return of the 

reimbursements in order to shift funds and avoid repayment. 

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various claims for fraud, negligent misrepresentation, money had and 

received, and unjust enrichment. The summons and complaint were served on 

Holley on October 6, 2014, and on Hillcrest on November 10. The summons 

and the complaint went unanswered. Default was entered as to Holley on 

November 17 and as to Hillcrest on December 10. Neither Holley nor Hillcrest 

responded to service of United’s original motion for default judgment or its 

subsequently amended motion. On January 29, 2015, the district court entered 

a final default judgment against Holley for the full amount of the alleged 

overpayments, $2,065,115.87. 

On November 8, 2015, United posted a notice of sale of a tract of Holley’s 

real property in an attempt to satisfy a portion of the default judgment. Holley 

and Hillcrest filed their emergency motions to vacate clerk’s entry of default 

and to set aside default judgment on December 29, and on January 4, 2016, 

Holley filed for Chapter 13 Bankruptcy. The district court stayed the motions 

pending Holley’s bankruptcy action, which Holley later dismissed voluntarily. 

On February 28, 2017, the district court lifted the stay and on March 6, it 

denied both defendants’ emergency motion to vacate clerk’s entry of default 

and their emergency motion to set aside the default judgment. Holley timely 

appeals. Holley raises two primary arguments on appeal: (1) the district court 

erred in failing to consider whether they had a meritorious defense; and (2) the 

district court erred in failing to conduct a hearing on damages.2

 

2 Holley also contends that the district court lacked personal jurisdiction over LHAA 

because United failed to properly serve the terminated corporate entity. Because Holley 

failed to raise this argument before the district court, it is waived. Broad. Music, Inc. v. 

M.T.S. Enters., Inc., 811 F.2d 278, 281 (5th Cir. 1987). Regardless, this argument is plainly 

meritless. Holley indisputably had notice of the suit, and they made the conscious decision 

not to defend it. Accordingly, they are estopped from challenging the sufficiency of the service 

of process. See id.; see also A.L.T. Corp. v. Small Bus. Admin., 801 F.2d 1451, 1459 (5th Cir. 

1986). 

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II

We review the district court’s denial of motions to vacate or set aside 

default judgment for abuse of discretion. Lacy v. Sitel Corp., 227 F.3d 290, 292 

(5th Cir. 2000). “It is not enough that the granting of relief might have been 

permissible, or even warranted[;] denial must have been so unwarranted as to 

constitute an abuse of discretion.” Seven Elves, Inc. v. Eskenazi, 635 F.2d 396, 

402 (5th Cir. 1981). Because courts “universally favor trial on the merits,” 

however, district courts’ discretion “obviously is not unlimited.” Matter of 

Dierschke, 975 F.2d 181, 183 (5th Cir. 1992) (internal quotations omitted). 

This court’s policy favoring resolution on the merits is, however,

“counterbalanced by considerations of social goals, justice and expediency, a 

weighing process [that] lies largely within the domain of the trial judge's 

discretion.” Rogers v. Hartford Life & Accident Ins. Co., 167 F.3d 933, 936 (5th 

Cir. 1999) (internal quotations omitted). A district court’s decision not to 

conduct a hearing on damages is also reviewed under an abuse of discretion 

standard. See Williams v. New Orleans Pub. Serv., Inc., 728 F.2d 730, 736 (5th 

Cir. 1984). Factual determinations underlying the district court’s decision, 

which include a finding of willful default, are reviewed for clear error. Wooten 

v. McDonald Transit Assocs., Inc., 788 F.3d 490, 495 (5th Cir. 2015). 

III

Rules 55(c) and 60(b) allow a district court to set aside its entry of default 

or default judgment for “good cause.” Lacy, 227 F.3d at 291–92; Fed. R. Civ. P. 

55(c); 60(b). In determining whether “good cause” exists, we consider three 

factors: (1) whether the default was willful; (2) whether setting aside the 

default would prejudice the opposing party; and (3) whether the movant 

presents a meritorious defense. Lacy, 227 F.3d at 292. The court may also 

consider other relevant factors, such as “whether [the movant] acted 

expeditiously to correct the default.” In re Chinese Manufactured Drywall 

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Prods. Liab. Litig., 742 F.3d 576, 594 (5th Cir. 2014). “A finding of willful 

default ends the inquiry, for when the court finds an intentional failure of 

responsive pleadings there need be no other finding.” Lacy, 227 F.3d at 292

(internal quotations omitted).

The district court found that Holley’s failure to respond to suit was 

willful. We agree, and Holley does not challenge this finding directly in her 

brief on appeal.3 Instead, Holley claims that the district court erred in failing 

to consider her allegedly meritorious defense. Holley does not cite any 

authority for her novel proposition that, even if the court finds a defendant’s 

default was willful, it is required to consider the defendant’s potentially 

meritorious defense to the substantive claims. This is likely because the weight 

of this court’s authority indicates the converse: once a district court finds that 

default was willful, the inquiry ceases, and it does not abuse its discretion in 

denying defendant’s request to set aside the judgment. See, e.g., Dierschke, 975 

F.2d at 184–85 (“Willful failure alone may constitute sufficient cause for the 

court to deny [the defendant’s] motion”); Lacy, 227 F.3d at 292 (“A finding of 

willful default ends the inquiry”); Rogers, 167 F.3d at 939 (affirming the 

district court’s denial of defendant’s motion to set aside the judgment on the 

sole basis that the default was willful). Accordingly, we reject Holley’s 

contention that the district court erred in failing to consider her defense. 

Moreover, the district court’s finding of willful default is amply 

supported by the record.4 Despite her admission that she received notice of the 

 

3 Holly has therefore waived her argument that the district court erred in finding that 

her default was willful. See United States v. Lindell, 881 F.2d 1313, 1325 (5th Cir. 1989).

4 Additionally, the district court found that setting aside the default judgment would 

prejudice United. [ROA.258] This conclusion is also sound. Holley’s behavior indicated an 

unwillingness to accept responsibility for her debt, Holley admitted they did not have the 

money to repay United, and enforcement of the default judgment may be the only opportunity 

United has to recoup its losses. [See id.]

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lawsuit, she took no further action to respond or stay abreast of the status of 

the litigation against her. Her actions following her receipt of notice 

demonstrate a true dereliction of her “duty of diligence to inquire about the 

status of [her] case.” Pryor v. U.S. Postal Service, 769 F.2d 281, 287 (5th Cir. 

1985). Mere confusion or lack of familiarity with the litigation process does not 

excuse Holley’s neglect of her responsibility to respond. See Dierschke, 975 F.2d 

at 184. The district court’s finding of willful default was certainly not clear 

error. It thus did not abuse it’s discretion in denying Holley’s motions to vacate 

or set aside the default judgment.

IV

Holley also claims that the district court reversibly erred in failing to 

hold a hearing on damages. We disagree. Rule 55(b)(1) provides that “[i]f the 

plaintiff’s claim is for a sum certain or a sum that can be made certain by 

computation, the clerk—on the plaintiff’s request, with an affidavit showing 

the amount due—must enter judgment for that amount.” Fed R. Civ. P. 

55(b)(1). If the amount of damages is not readily determinable, “[t]he court may

conduct hearings or make referrals.” Fed R. Civ. P. 55(b)(2) (emphasis added). 

Holley is correct that this court has previously interpreted Rule 55(b)(2) to 

mean that “a judgment by default may not be entered without a hearing unless 

the amount claimed is a liquidated sum or one capable of mathematical 

calculation.” United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979). 

We subsequently clarified that “[w]e did not . . . hold in United Artists that the 

failure to conduct a hearing on damages would provide a further, independent

basis for reversal in a Rule 60(b) case where the defendant, through his own 

fault, fails to take and prosecute an appeal [of the default judgment].” 

Williams, 728 F.2d at 736 (emphasis in original). Williams went on to explain 

that Rule 60(b) is not a substitute for appeal. Id. Accordingly, “even if the 

default judgment was improperly entered without a hearing on damages . . . 

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[t]he mere fact that [a] judgment [is] erroneous does not constitute ‘any other 

reason justifying relief’ from it.” Id. (internal quotations omitted).

Holley’s claim that the district court erred in failing to hold a hearing on 

damages fails for several reasons. First, the damages amount was for a sum

certain and was supported by a detailed factual affidavit as well as other 

evidence in the record. See Fed. R. Civ. P. 55(b)(1) At minimum, the damages 

amount was a sum that could be “made certain by computation.” Id.

Furthermore, Holley failed to appeal or even respond to the court’s entry of 

default. Instead, nearly a year later and only after United attempted to execute 

the judgment, Holley filed her emergency motions. As Williams makes clear, 

failure to hold a hearing on damages—even if the failure to do so was 

erroneous—is not a “further, independent basis for reversal” where the 

defendant willfully fails to undertake an appeal of the default judgment. 

Williams, 728 F.2d at 736. Accordingly, even if the district court erred in failing 

to hold a hearing—and we do not believe it did—the decision does not 

constitute an abuse of discretion. 

V

For the foregoing reasons, we AFFIRM. 

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