Opinion ID: 2651088
Heading Depth: 2
Heading Rank: 2

Heading: Willful Default

Text: “A willful default is an ‘intentional failure’ to respond to litigation.” Id. at 370 n.32 (emphasis in original) (quoting Lacy, 227 F.3d at 292). The district court found that all three Defendants willfully defaulted based on evidence that the Defendants were aware of the proceedings against them and that the Springer & Steinberg attorneys were specifically instructed not to enter an appearance in this case. We review the district court’s finding as it applies to each defendant. The evidence substantially supports the district court’s finding as to Mr. Carpanzano. First, Mr. Carpanzano’s first attorney withdrew because Mr. Carpanzano “failed to cooperate with the discovery process” and “refused to appear as requested and ordered.” Second, affidavits by Scott’s attorneys and supporting emails suggest that Mr. Carpanzano instructed his second set of attorneys to negotiate settlement of this matter but not to enter an appearance in the district court. Significantly, Mr. Carpanzano never denies this allegation. Third, this same evidence demonstrates that Mr. Carpanzano and 9 Case: 13-10096 Document: 00512512053 Page: 10 Date Filed: 01/24/2014 No. 13-10096 his attorneys were well aware that the case was proceeding toward default and that they were in communication with each other during this time. Fourth, the evidence suggests that, once final execution of settlement papers was at hand, Mr. Carpanzano also ceased communication with his second set of attorneys and did not finalize the settlement. Finally, other than ambiguously suggesting that a health condition (unsupported by any evidence of what the condition was) and absence from the country (unsupported by any evidence that electronic communication was not possible from that country) prevented him from defending this action, Mr. Carpanzano offers no real reason why he did not answer the second amended complaint despite having attorneys in the United States who were communicating with him regarding the case and actively pursuing settlement. In short, the district court’s finding that Mr. Carpanzano willfully defaulted is not clearly erroneous. Accordingly, we hold that the district court acted within its discretion in refusing to set aside the default judgment against Mr. Carpanzano. See In re OCA, Inc., 551 F.3d at 370 (stating that we may hold a district court acted within its discretion in denying relief from a default judgment if the defendant willfully defaulted). We therefore do not address how the remaining good-cause factors might apply to Mr. Carpanzano. By contrast, the record does not support the district court’s finding that Ms. Belcastro and Ms. Carpanzano also willfully defaulted by retaining counsel and then instructing them not to enter an appearance in the district court. We have found nothing in the record indicating that Ms. Belcastro and Ms. Carpanzano were ever in contact with the Springer & Steinberg attorneys or that they retained them as counsel. Scott puts forth no such evidence. 4 4 In fact, in the section of Scott’s appellate brief devoted to this argument, Scott mentions only the actions of Mr. Carpanzano. He does not address how Ms. Belcastro and Ms. Carpanzano willfully defaulted, nor does he explain why Mr. Carpanzano’s actions should be attributed to his wife and daughter. 10 Case: 13-10096 Document: 00512512053 Page: 11 Date Filed: 01/24/2014 No. 13-10096 Instead, the emails submitted by Scott’s attorneys reveal that at the time Mr. Carpanzano hired the Springer & Steinberg attorneys, Ms. Carpanzano and Ms. Belcastro were not defendants in this action; after the second amended complaint was filed, the proposed settlement circulated between Scott’s counsel and Mr. Carpanzano’s counsel simply contemplated that any settlement would serve to release the claims against the majority of the defendants, including Ms. Belcastro, Ms. Carpanzano, and others. Ms. Carpanzano states in her affidavit that her father hired the Springer & Steinberg attorneys and that they never contacted her. In their evidence, both Ms. Belcastro and Ms. Carpanzano repeatedly indicate that they were relying on Mr. Carpanzano (husband to one, father to the other) to make sure their interests were protected. Nothing in the record contradicts this assertion. While their reliance on Mr. Carpanzano acting with the attorneys he retained may have been negligent, it does not amount to an “‘intentional failure’ to respond to litigation.” In re OCA, Inc., 551 F.3d at 370 n.32 (quoting Lacy, 227 F.3d at 292). Because it is not plausible in light of the record as a whole, the district court’s finding that Ms. Belcastro and Ms. Carpanzano willfully defaulted is clearly erroneous. 5 We therefore consider 5 It appears that the district court relied upon the post-judgment failure of Ms. Belcastro and Ms. Carpanzano to respond to discovery and discovery orders to support the finding of willfulness. However, under the willful-default factor, our cases do not broadly take into account all potentially culpable actions of the defendant. The inquiry is properly constrained to examining the defendant’s pre-default actions to determine whether the defendant intentionally failed to file an answer or other responsive pleading after being served with a complaint. See, e.g., In re OCA, Inc., 551 F.3d at 370 n. 32 (“A willful default is an intentional failure to respond to litigation.” (emphasis in original) (citation and internal quotation marks omitted)); Lacy, 227 F.3d at 292 (describing willful default as an “intentional failure of responsive pleadings” (citation and internal quotation marks omitted)); In re Dierschke, 975 F.2d 181, 184–85 (5th Cir. 1992) (describing willful default as an intentional or willful “failure to answer”); Fed. Sav. & Loan Ins. Corp. v. Kroenke, 858 F.2d 1067, 1070 (5th Cir. 1988) (considering the defendant’s “culpability in allowing a default judgment to be entered against him”). Here, the record does not demonstrate that Ms. Belcastro and Ms. Carpanzano acted intentionally or willfully in failing to file an answer or other responsive pleading. 11 Case: 13-10096 Document: 00512512053 Page: 12 Date Filed: 01/24/2014 No. 13-10096 whether the remaining factors support denying relief to Ms. Belcastro and Ms. Carpanzano.