Court Opinion

ID: 8921161
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:15:26.977418+00
Date Added: 2024-06-11T17:09:17.926764
License: Public Domain

GARTH, Circuit Judge,
concurring:
I concur with the result reached in Judge Adams’ opinion that it is appropriate to remand to the district court for explicit findings of fact with respect to prejudice and culpable conduct. I write separately, however, to emphasize that this court has adopted a liberal standard with respect to default judgments, see Gross v. Stereo Component Systems, Inc., 700 F.2d 120, 122 (3d Cir.1983), and to stress that it is the unique and particular function of the district court to make the factual findings which are required by the Medunic, Farnese, Feliciano, and Gross cases.1 Our discussion of the record, therefore, cannot and should not bind the district court.
Indeed, at first blush, it would appear that the district court had found as a fact that the plaintiff had suffered no prejudice, just as it had found as a fact that Woma had a meritorious defense, thus satisfying two of the three factors found in the Medunic line of cases. However, as Judge Adams points out, the manner in which the district court addressed the subject of prejudice to the plaintiffs arguably falls short of an unequivocal finding of fact. The district court had reasoned:
As to the question of the prejudice which would be suffered by the plaintiffs should the default be vacated, most obviously, plaintiffs are now time-barred from bringing an action against Woma’s *1187parent corporation, which Woma claims is the actual manufacturer of the pump. Of course, plaintiffs would have been time-barred from bringing such a suit the day after they filed this action on May 1, 1980, and thus 20 days before Woma could have possibly been found in default. Thus, it might be argued that plaintiffs’ own inaction for two years after the plaintiff husband’s accident, and not Woma’s failure to plead, precipitated this particular prejudice____ [F]or the purposes of deciding this motion, we assume the plaintiffs’ problem with the statute of limitations is of their own making. We also note that they still have the second defendant in this action, Mining Progress, against whom to proceed.
App. 182a. Thus, while a reading of the district court’s opinion might well have led to a holding that the district court had found no prejudice, it could as well be argued, as Judge Adams suggests, that a more explicit factual finding should be made as to this all-important factor.
With regard to the meritorious defense factor, the district court judge also found that “there can be no doubt that defendant Woma has set forth a meritorious defense to plaintiffs’ action,” App. 182a, namely, that the pump alleged to have caused Hritz’ injuries was neither manufactured nor distributed by it. Hritz did not contest this finding on appeal, and so, as Judge Adams’ opinion recognizes, no additional factual finding on this score is needed.
As to the third factor, i.e., whether the culpable conduct of the defendant led to the default judgment, this court has held that culpable conduct is to be defined in terms of “willfulness” or “bad faith” on the part of the defendant. See Gross, 700 F.2d at 124; Feliciano, 691 F.2d at 657. However, as Judge Adams points out (Maj.Op. at 11), neither Gross nor Feliciano had been decided at the time the district court rendered its decision in this case. The thrust of the district court’s reasoning was that Woma had been neglectful and that nothing in the record could support a finding of excusable neglect. The district court judge wrote:
Here, of course, we have no way of knowing just who is responsible for the delay. It is as likely to have been the defendant’s fault as the insurer’s fault.
* * * * * *
In this case, Woma failed to communicate with its insurer for the two and a half months after the time for filing an answer had ended and before default had been taken. It still failed to communicate with its insurer a month later when it received notice of the hearing on the petition for entry of default judgment. Still, it remained silent after the judgment was entered three months later. Only when it was actually threatened with execution on the judgment was it moved to inquire as to the status of the case. * * *
We are left with the inescapable fact that it was the defendant, Woma, which was sued, and the defendant, Woma, which was responsible for timely filing of an answer to the complaint. Its failure to do so represents neglect, and nothing in the record would support a finding that its neglect should be excused.
App. 184a (emphasis added).
By failing to address the subject of whether Woma’s conduct was willful or in bad faith, a remand to the district court now becomes essential so that the district court may make the finding required by Farnese, Feliciano, and Gross. Now that we have established the standard of culpable conduct that must be found in order to sustain a default judgment — a standard which cannot be satisfied even by a finding of “inexcusable neglect” — it becomes even more vital that the district court be afforded an opportunity to apply that standard to the present record, or one that the court may desire to have amplified.2 Thus it is *1188appropriate to remand for that essential finding as well.
While it should be remembered that this court’s overriding preference is the disposition of litigated matters on the merits rather than by default — and to this extent we encourage liberality in vacating default judgments — nonetheless we will uphold the district court’s exercise of discretion in refusing to vacate a default judgment if the three Medunic factors are satisfied.3 I therefore join in the remand of this case to the district court so that it may make the necessary findings of fact and comply with our recent decisions.

. Medunic v. Lederer, 533 F.2d 891 (3d Cir.1976); Farnese v. Bagnasco, 687 F.2d 761 (3d Cir.1982); Feliciano v. Reliant Tooling Co., 691 F.2d 653 (3d Cir.1982); Gross v. Stereo Component Systems, Inc., 700 F.2d 120 (3d Cir.1983). These cases held that the three factors that must be evaluated in considering a motion to reopen a default judgment under Fed.R.Civ.P. 60(b) are (1) whether the plaintiff will be prejudiced; (2) whether the defendant has a meritorious defense; and (3) whether culpable conduct of the defendant led to the default. Gross, 700 F.2d at 122; Feliciano, 691 F.2d at 656; Farnese, 687 F.2d at 764.

. I would not preclude the district court from opening and developing the record if, in its discretion, that court deemed it necessary or desirable to do so in order to comply with our instructions.

. The district court’s discretion is also sufficiently broad so as to permit the district court to condition its ruling in the event that it determines the judgment should be vacated. Judge Adams, in his opinion, appropriately refers to such considerations indicating that even where a default judgment is reopened, the district court has the discretion to condition its ruling upon a waiver by the defendant of an affirmative defense (such as the statute of limitations) and upon a consent to service where appropriate. See Maj. Op. at 1182 n. 3. I am in full accord with the possibility expressed by Judge Adams that such a condition, if deemed appropriate and depending upon the ultimate disposition of this case, be considered by the district court.