Wednesday, June 06, 2007, 5:34 AM

COA Balances Equities In Affirming Setting Aside Default

In Atkins v. Mortenson, the COA balanced the equities, rather than focusing on the defendant's diligence, in affirming the setting aside of an entry of default.

In Atkins, the defendant doctor, sued for malpractice, was served with process. He gave the materials to his office manager, who faxed the materials to the insurer. The insurer apparently did not receive the materials, no answer was filed, and default was entered. More than 30 days after an answer would have been due, the defendant filed an answer and made a motion to set aside the entry of default, which the trial court granted.

The COA noted that under the strikingly similar facts of Cabe v. Worley, 140 N.C. App. 250 (2000), it had refused to set aside entry of default, focusing there on the defendant's lack of attention to the suit. In Atkins, the defendant paid no more attention to the suit than did the Cabe defendant. Procedurally, though, the defendant in Cabe was fighting an uphill battle, trying to have the trial court's discretionary ruling against him reversed, whereas in Atkins, the trial court had ruled in favor of the defendant.

More interestingly, the Atkins court's focus, as opposed to that of the Cabe court, was decidedly not on the defendant's actions and inactions, which the Atkins Court viewed to be just one of several factors the court considers. Rather, the COA said it "must weigh defendant's diligence against any harm to plaintiff from the delay or injustice to defendant if he is not allowed to defend the case." The COA then focused on (1) the relative brevity of the delay (a little over a month), (2) the multi-million dollar judgment sought by plaintiff, (3) the potential damage to defendant's professional reputation, and (4) the defendant's meritorious defense to plaintiff's case, as demonstrated by summary judgment later granted in favor of defendant. Clearly factors for defense counsel to hit when seeking to set aside an entry of default.

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