Opinion ID: 771992
Heading Depth: 2
Heading Rank: 1

Heading: Entry of Default and Default Judgment

Text: 35 Rule 55(a) of the Federal Rules of Civil Procedure provides that 36 [w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise,the clerk shall enter the party's default. 37 Fed. R. Civ. P. 55(a). Under Rule 55(c), the court may set aside an entry of default [f]or good cause shown. Fed. R. Civ. P. 55(c). 38 In determining whether to set aside a party's default, the district court should consider principally (1) whether the default was willful; (2) whether setting aside the default would prejudice the adversary; and (3) whether a meritorious defense is presented. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). Because there is a preference for resolving disputes on the merits, doubts should be resolved in favor of the defaulting party. Id. at 95, 96. Ultimately, the matter of whether to grant relief from the entry of a default is 39 left to the sound discretion of a district court because it is in the best position to assess the individual circumstances of a given case and to evaluate the credibility and good faith of the parties. 40 Id. at 95. We will not reverse the denial of such a motion except for abuse of discretion. See, e.g., id.; American Alliance Insurance Co. v. Eagle Insurance Co., 92 F.3d 57, 62 (2d Cir. 1996); Davis v. Musler, 713 F.2d 907, 912 (2d Cir. 1983). 41 In challenging the defaults entered in the present case, Lavi and Omega repeatedly suggest that they were not in default because, after the order permitting their second set of attorneys to withdraw, Lavi appeared through his pro se daughter acting as attorney-in-fact. (Lavi/Omega brief on appeal at 11; id. at 12.) The suggestion that Mottahedeh could represent Lavi and Omega is, however, contrary to the principles that an individual may not be represented in court by another person who is not an attorney, see, e.g., 28 U.S.C. §1654 (an individual may conduct his own case[] personally or by counsel); Iannaccone v. Law, 142 F.3d 553, 558 (2d Cir. 1998) (because pro se means to appear for one's self, a person may not appear on another person's behalf in the other's cause), and that a corporation may not be represented by a person who is not an attorney, see, e.g., Pridgen v. Andresen, 113 F.3d 391, 393 (2d Cir. 1997) (a layperson may not represent a corporation). Mottahedeh was not an attorney and hence could not be allowed to represent Lavi or Omega in litigation. 42 In addition, Lavi and Omega contend that [n]o declaration of default was warranted (Lavi/Omega brief on appeal at 12) given that they obtained new counsel barely two months after the court's deadline and two days before the default motion was to be argued, that Powerserve had not moved for summary judgment, that discovery had been completed, and that it had been difficult to obtain counsel both because Lavi was incarcerated and unable to be of significant assistance and because prior counsel had filed retaining liens on defendants' files. These arguments in effect concede that Lavi and Omega were in default; and while the court was free to consider these facts as extenuating circumstances in ruling on the motion to vacate the default, the record was clear that Lavi and Omega, not having obtained counsel as ordered by the time of the January 1999 conference (and having filed no papers in opposition to the default motion by the court's March 1 deadline), were in default. The court clerk therefore properly entered the default.