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Delay Does Not Equal Default

October 31, 2018

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State laws usually establish time limits for defendants to respond to a complaint.  Failure to adhere allows a plaintiff to file a motion for a default judgment.

In <a href="https://www.law.com/thelegalintelligencer/almID/1540435207PA181296/?download=181296.pdf"><em>Ruggiero v. Moravian College</em></a>, plaintiff sued Moravian College based on its failure to accommodate her disability while she was a student.  The complaint was filed on March 23, 2018, and counsel for Moravian College was asked to accept service on April 6, 2018.  On April 11, 2018, counsel for Moravian stated it would accept service, but requested two weeks to determine whether Moravian College’s insurance company would assign him to the case.  Moravian’s insurer stated  it would provide counsel for the case.  Counsel for Moravian then received the complaint on April 25, 2018 and forwarded it to the insurer, under the belief that the insurer was going to assign the case to another law firm.  On July 6, 2018, Plaintiff filed a motion for default after receiving no response to the complaint.  Counsel for Moravian was then assigned to the case on July 9, 2018.

Three factors must be present to grant a motion for default: plaintiff must be prejudiced if default is denied; defendant cannot have a meritorious defense; and default must be the product of defendant’s culpable conduct.  <em>Chamberlain v. Giampapa</em>, 210 F.3d 154 (3d. Cir. 2000).  Plaintiff argued it endured prejudice because of the delay in that  witnesses left their employment at the College, and interest on Plaintiff’s student loan was compounded.  The Court rejected both arguments finding that witnesses would still be available even if they no longer worked at Moravian College, and a future damages award could compensate any accrued interest.  Secondly, the Court found no evidence of a meritorious defense, but did not find that aspect dispositive of the case.  Lastly, the Court found that the defendant did not act culpably because its Counsel relied on the insurer’s statements that it would defend the case.  The Court found that all factors were not fulfilled and denied the motion for default.

This case offers an important lesson for insurance carriers and counsel alike.  There was an almost three-month delay in action on the case after the insurer received the complaint, and the case does not explain what happened on the insurer’s end.  Communication between counsel and insurer is key in ensuring a default motion is not filed.  Fortunately, Moravian’s counsel was proactive in initially contacting the insurer and subsequently forwarding the complaint.  That conduct seemed to inform the Court’s decision to deny the motion for default.

Thanks to Malik Pickett for his contribution to this post.

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