Opinion ID: 2756333
Heading Depth: 2
Heading Rank: 1

Heading: Vacating the Entry of Default

Text: On appeal Parker argues first that the district court abused its discretion by vacating the default entered against Scheck Mechanical. We analyze the court’s order under Federal Rule of Civil Procedure 55(c), as opposed to Rule 60(b), because Scheck Mechanical filed its motion before the court entered a final default judgment awarding damages. See Cracco v. Vitran Express, Inc., 559 F.3d 625, 630 (7th Cir. 2009). An entry of default may be set aside before entry of judgment upon showing good cause for the defendant’s inaction, prompt steps to correct the default, and an arguably meritorious defense to the lawsuit. Sun v. Board of Trustees of the University of Illinois, 473 F.3d 799, 809–10 (7th Cir. 2007). When we say the defendant must show a “meritorious defense” to the lawsuit, we mean more than bare legal conclusions, e.g., Breuer Electric Mfg. Co. v. Toronado Systems of America, Inc., 687 F.2d 182, 186 (7th Cir. 1982), but less than a definitive showing that the defense will prevail. See, e.g., Cracco, 559 F.3d at 631 (affirming discretionary decision to vacate default where defendant explained nature of defense and provided the factual basis for it). Scheck Mechanical showed good cause through declarations establishing that its failure to file a timely answer was not willful but the result of a mistake in processing the documents with its insurer. See id. The company acted quickly when it learned of the default, moving to set it aside just five days later. And the company made clear that, if it is a proper defendant, the evidence would establish that Parker was fired for a legitimate, non-discriminatory reason. Given the “lenient standard” for applying Rule 55(c) and the “policy of No. 13-3693 7 favoring trial on the merits over default judgment,” Cracco, 559 F.3d at 631, the district court acted well within its discretion when it set aside the default.