Opinion ID: 2632298
Heading Depth: 4
Heading Rank: 2

Heading: Cook presented sufficient evidence to find good cause to set aside the default judgment.

Text: We have directed that in determining whether good cause exists to set aside a default under Civil Rule 55(e), a court should consider: whether the defendant has established the required meritorious defense, prejudice to plaintiffs, the culpability of defendant's conduct, the length of the period of default, the size of any potential award to plaintiffs, and alternative sanctions against the defendant. [10] An evaluation of these factors weighs in favor of setting aside the default judgment against Cook.
In addition to the specific showing of excusable neglect to satisfy Rule 60(b), the rules governing setting aside a default judgment generally require that the movant have a meritorious defense. [11] It is not necessary that the defendant show that, if relief is granted, the ultimate outcome will be different, but the defendant must demonstrate that the outcome might be different if a trial were held. [12] Showing a meritorious defense demands more than a perfunctory statement that a meritorious defense exists. [13] The defaulting party may be required to show that there is a factual or legal basis for the tendered defense. [14] Cook contends that this requirement only means that a defendant must say more than the conclusory statement I have a defense. But the exact standard is not so easily defined, because the amount of proof required will change based on the persuasiveness of the other equitable factors considered under Rule 55(e)'s requirement of good cause. Rowland argues that a meritorious defense requires both a claim of defense and a factual representation supporting that claim. Rowland relies upon our finding in Wright v. Shorten that a meritorious defense existed where the defendant pleaded a defense and presented evidence to support the claim. [15] However, in several other cases we have not required evidence but have found a meritorious defense when facts supporting a claim of defense are merely alleged. [16] Again, the existence and quality of evidence establishing a meritorious defense is a factor to be weighed in determining whether good cause exists to set aside the default judgment. Cook has presented two different theories to attempt to meet the meritorious defense requirement. First, Cook contends that he was acting in self defense when he shot Officer Rowland. Cook states that he was fearful because he believed Officer Rowland was going to kill or severely injure me. But Cook was found guilty of first-degree murder for the killing of Officer Rowland. [17] Cook's conviction precludes him from presenting a merits defense to liability in the civil action. [18] But Cook also claims that he has a meritorious defense against the amount of damages requested by Rowland and awarded by the superior court. To be meritorious a defense need not provide a complete defense to the action. Rather, a defense is meritorious if it will reduce a plaintiff's award, and thereby alter the outcome of the suit. [19] Cook claims that if he were allowed to present his story of the events leading to Officer Rowland's death punitive damages might be assessed differently, or not at all, and that in any case testimony about his assets could support a reduced punitive damage award. In addition, he points out that in certain respects Rowland's award for past and future economic damages are not supported by underlying data and calculations, and thus may be vulnerable to challenge. We agree that Cook has established a potentially meritorious defense insofar as he has shown that the amount of damages awarded against him might be lower if he were allowed to participate in a damages hearing. Therefore we conclude that although Cook may not deny liability for Officer Rowland's death, he has shown a meritorious defense with respect to damages.
We have held that the magnitude of a default judgment is a factor in considering whether it should be set aside. In Hertz, the plaintiffs were awarded $463,319.43, which led us to comment that [u]nless there are intervening equities, a controversy concerning damages of this magnitude should be resolved on its merits whenever possible. [20] In the present case this factor is certainly present.
We emphasize that the conduct relevant to this factor is not the conduct underlying the initial claim, in this case Cook's shooting of Officer Rowland (which was highly culpable), but the conduct related to entry of the default. [21] Our finding that Cook's default was the result of excusable neglect sufficiently establishes that his failure to answer in a timely manner was not significantly culpable.
Default judgments are more likely to be set aside when the length of time the defendant is in default is minimal and setting aside will not result in prejudice to the plaintiff. [22] In this case, Cook filed his motion to set aside the judgment on July 21, only twenty-three days after the default judgment had been entered. The default judgment itself followed quickly upon the events giving rise to the cause of action. Rowland has not presented this court with any argument that she will be prejudiced if the default judgment against Cook is set aside. This court has previously held that [t]he mere fact that the nondefaulting party will be required to prove his case without the inhibiting effect of the default upon the defaulting party does not constitute prejudice which should prevent a reopening. [23] Further, on remand, the only relevant issue will be the amount of damages. Potential prejudice to the plaintiff can be reduced by not requiring the return of any seized property unless the final judgment turns out to be less than the value of the property seized. Civil Rule 60(b) directs that a motion to set aside a default should be granted upon such terms as are just. We believe that retention of seized property under these conditions is a just term within the meaning of this rule.