Opinion ID: 1568305
Heading Depth: 3
Heading Rank: 3

Heading: The Nature and Extent of Prejudice Which May Be Suffered by the Plaintiff if the Default Judgment is Set Aside

Text: ¶ 21. The third prong of the balancing test concerns the prejudice, if any, suffered by the plaintiff if the default judgment is set aside. American States argues that Rogillio will suffer no prejudice if the default judgment is set aside because there are no witnesses whose memory will have suffered from the default and the resultant passage of time. American States further asserts that having to prove a claim against a defendant is not what is meant by cognizable prejudice under this prong of the balancing test. Bailey, 543 So.2d at 183. ¶ 22. Rogillio argues that he will suffer prejudice if the default judgment is set aside because such a decision will trigger the continuation of his litigation against Bi-County, which ended as a result of the default judgment against American States. Although Rogillio initially sued Farm Bureau, American States, and Bi-County, Farm Bureau was removed from the lawsuit, and Rogillio's claim against Bi-County was rendered moot after the default judgment was entered and upheld by the trial court. Therefore, Bi-County was released from the lawsuit. If the default judgment is set aside, Rogillio will have to continue its litigation against Bi-County in addition to proving its claims against American States. The fact that Rogillio will be forced to pursue litigation against Bi-County is a burden separate and distinct from the burden of proving the liability of American States, which this Court would not consider cognizable prejudice under the third prong. Bailey, 543 So.2d at 183. Therefore, this Court finds that Rogillio will suffer prejudice if the default judgment is set aside. ¶ 23. Furthermore, as Rogillio argues, he will suffer prejudice because of the ongoing financial and emotional distress related to his severe injuries. This Court has found that the fact that the injured plaintiff is without a resolution to her claim for that period of time [i.e., the period of delay caused by the defendant's default] constitutes prejudice. Pittman, 501 So.2d at 388; see also Stanford, 822 So.2d at 890 (finding that plaintiffs had suffered substantial prejudice in part from the financial and emotional distress they suffered). Rogillio filed his lawsuit against American States in March 2007. He perfected service upon American States' designated agent and proceeded with the litigation as he should have. Because of American States' carelessness and lack of diligence in defending the lawsuit, Rogillio properly obtained a default judgment more than four months after service of the complaint. American States filed a motion to set aside the default judgment more than one month after the default judgment had been entered  three weeks after it discovered that a default judgment had been entered against it and more than two weeks after it filed an answer and affirmative defenses. The trial court denied American States' motion approximately nine months after that. As this Court held in H & W Transfer & Cartage Service, Inc., the plaintiff may have been subject to prejudice from the granting of the motion in the sense that she would have been put to trial some months following the date when she would have originally been able to obtain a trial setting had [the defendant] responded promptly. H & W Transfer & Cartage Serv., Inc., 511 So.2d at 899. This Court finds that setting aside the default judgment would certainly have caused prejudice to Rogillio. ¶ 24. Thus, two of the three prongs weigh in favor of Rogillio and against setting aside the default judgment. We find, therefore, that the trial court did not abuse its discretion in denying the motion to set aside the default judgment. Although the second prong weighs in favor of American States, this Court has previously affirmed the trial court's denial of a motion to set aside default judgment where the second prong weighed in favor of the defaulting party. See, e.g., Pittman, 501 So.2d at 388-89; Stanford, 822 So.2d at 889-91. Additionally, we note that, while American States is now foreclosed from presenting any defenses as to liability, it will nevertheless be given an opportunity to contest the amount of unliquidated damages and raise any and all defenses it may have as to the damages claimed by the plaintiff. The trial court entered a partial default judgment as to liability. See Pointer, 509 So.2d at 873-74; Capital One Servs., Inc. v. Rawls, 904 So.2d 1010, 1018 (Miss.2004). In entering the partial default judgment, the trial court expressly provided that the defendant is entitled to a full defense on the issue of damages, including a jury trial. It is therefore ordered that this cause shall proceed on the issue of damages only, in all respects. Furthermore, as this Court stated in Pittman, [i]t may be that people will miss fewer trains if they know the engineer will leave without them rather than delay even a few seconds. Although we are not about to inaugurate a policy of entering irrevocable defaults where no answer has been filed by the thirty-first day, we are equally resolved that people know that the duty to answer must be taken seriously. At some point the train must leave. Pittman, 501 So.2d at 388-89. ¶ 25. American States argues in its rebuttal brief that the trial court abused its discretion by failing to consider the three-prong test. American States cites State Highway Commission v. Hyman, 592 So.2d 952, 956 (Miss.1991), McCain v. Dauzat, 791 So.2d 839, 843 (Miss.2001), Clark v. City of Pascagoula, 507 So.2d 70, 77 (Miss.1987), and Bryant, Inc. v. Walters, 493 So.2d 933, 937 n. 3 (Miss.1986) in support of its argument. These cases are either distinguishable from the facts of this case or fail to support American States' argument. In citing Hyman, American States merely directs this Court to the application of the three-prong test in a case in which this Court ruled that the default judgment should have been set aside. Hyman, 592 So.2d at 956. American States does not explain how the facts in Hyman are at all analogous to the facts of this case. In Dauzat, this Court remanded the case so that the trial court could consider the three prongs of the balancing test. Dauzat, 791 So.2d at 843. However, in Dauzat, the trial judge became perturbed with McCain and prematurely ended the hearing on the motion [to set aside the default judgment]. Id. This Court found that there was strong evidence that the trial court did not weigh the three factors. Id. In this case, it is clear that the trial court heard arguments from both sides regarding the application of the three-prong test during the hearing on September 4, 2007. The hearing was not prematurely ended, and the trial court took the matter under consideration for a significant period of time before entering an order denying the motion to set aside the default judgment. Although the trial court did not discuss the three-prong test in its order, there is no indication that the trial court failed to consider it in reaching its decision. In Clark, this Court affirmed the order of the trial court, which made no specific findings ... but merely set aside the default judgments. Clark, 507 So.2d at 77. American States does not explain how Clark supports its argument that the trial court abused its discretion by failing to consider the three-prong test. Lastly, American States also does not explain how footnote three [2] from Bryant, Inc. supports its argument. Therefore, we find that American States' argument that the trial court abused its discretion and failed to consider the three-prong test is without merit.