UNIVERSITAS EDUCATION, LLC, Plaintiff, Appellee, v. LILLIAN GRANDERSON, as successor to Jack E. Robinson, III, Defendant, Appellant, JACK E. ROBINSON, III, Third Party Plaintiff, v. LOEB & LOEB LLP, Third Party Defendant.
No. 23-1675
United States Court of Appeals For the First Circuit
April 15, 2024
Before Montecalvo, Thompson, and Rikelman, Circuit Judges.
Elizabeth N. Mulvey, with whom Jason N. Strojny and Libby, Hoopes, Brooks & Mulvey P.C. were on brief, for appellant.
Joseph L. Manson III, with whom Law Offices of Joseph L. Manson III was on brief, for appellee.
April 15, 2024
THOMPSON, Circuit Judge. When Plaintiff Appellee Universitas Education, LLC (“Universitas“) first initiated this lawsuit against Jack E. Robinson, III (“Robinson“) in 2015, it sought damages against him for (among many other things) alleged violations of the Racketeer Influenced and Corrupt Organizations (“RICO“) Act. But a lot has happened since then -- most notably, Robinson died in November 2017.1
In the aftermath of Robinson‘s death, this case took a turn from the merits of Universitas’ claims against him to a focus on finding a proper party to substitute into the case to act as a personal representative of his estate. Eventually, Universitas landed on Defendant Appellant Lillian Granderson (“Granderson“), Robinson‘s elderly mother, as a proper party to substitute and filed two motions in the district court, one to sub her in, pursuant
Now on appeal, Granderson argues the district court made some mistakes in granting Universitas’ motion to substitute and motion for default judgment. After disentangling the (admittedly) complicated procedural history underlying the district court‘s decisions, we conclude that Granderson has a point, but only as to the motion for default judgment. Accordingly, we affirm the district court as to the motion to substitute and vacate the default judgment. Our reasons for doing so follow.
The Procedural History3
On May 14, 2015, Universitas initiated this lawsuit against Robinson in the United States District Court for the District of Massachusetts, alleging RICO and supplemental state law claims. In essence, the complaint alleged that Robinson, a lawyer himself, facilitated a former client‘s theft of over $30 million in life-insurance proceeds belonging to Universitas.
Robinson did not take these allegations lying down. To the contrary, over the ensuing eighteen months, he defended himself through the filings of various motions, including a motion to dismiss, a motion to reconsider the district court‘s denial of that motion to dismiss, a motion to transfer the case to the United States District Court for Southern District of New York, and a motion to compel arbitration. And he defended himself (literally) to the end when he died in November 2017. On November 28, 2017, Seth Marcus (“Marcus“), Robinson‘s lawyer in the case, informed the district court and Universitas of Robinson‘s death through the filing of a Notice of Suggestion of Death.
Following Robinson‘s death, the district court converted an upcoming December 20, 2017 motion hearing on Robinson‘s then-still-pending motion to compel arbitration to a status conference to figure out how best to proceed. The district court also ordered Universitas and Marcus to file a joint status report in anticipation of that status conference to give it a run-down of what issues remained in the case in light of Robinson‘s death. Taking their cue from the district court, they did just that and filed a joint status report, which stated (among many other things) that a personal representative had not yet been appointed, Universitas would file a motion to extend the time to file a motion for substitution until after it received notice of the personal representative‘s identity, and several of the pending matters before the district court could not be resolved without the appointment of a personal representative.
February 1, 2018 arrived and brought with it some welcome and relevant news. In Universitas’ and Marcus’ joint status report, Marcus indicated that he had spoken with Granderson, who informed him that Robinson had a Last Will and Testament (“the Will“), Robinson had named her as the executrix, she was still interviewing possible estate attorneys, and probate proceedings had not yet commenced. Marcus also indicated in the joint status report that he had received a call from Jeraldine Williams-Shaw (“Williams-Shaw“), a lawyer who had not yet been retained by Granderson but was investigating the extent of Robinson‘s estate in anticipation of likely being retained.
The next few months saw no further developments or updates on the personal-representative front.4 What those next few months did see, though, was the filing of several motions on Universitas’ part. It filed three motions to extend the time to file a motion to substitute, the first on February 21, 2018, the second on March 23, 2018, and the third on May 22, 2018. The district court promptly granted each motion.
With no updates to move the case along, the district court scheduled another status conference for July 23, 2018. At that status conference, Marcus informed the district court and Universitas that Granderson had decided not to initiate any probate proceeding for Robinson‘s estate, so no personal representative had been formally appointed. With that new tidbit of information, it became clear to Universitas that, if it wanted to proceed with its lawsuit, it would need to petition a probate court to appoint a personal representative for Robinson‘s estate. Accordingly, at the July 23, 2018 status conference, Universitas requested another extension to file the motion to substitute in order to give it time to initiate the relevant probate proceedings.5 As it had done before, the district court granted Universitas the extension, this time until October 23, 2018.
The next few months came and went with no real progress -- in fact, quite the opposite. Over the remaining months of 2018 and first two months of 2019, Universitas filed four status reports, informing the district court that it had indeed filed a creditor‘s petition in the Plymouth County Massachusetts Probate Court seeking the appointment of a personal representative for Robinson‘s estate, but that three separate lawyers had declined to be appointed the estate‘s personal representative. In these status reports, Universitas also sought further extensions of the time to file a motion to substitute6 and informed the district court that it would be filing a request for the district court to appoint a receiver,7 pursuant to
Things picked back up on February 5, 2019, at which point the district court held a status conference with only Universitas and its counsel. At the status conference, the district court got down to business and noted its reticence at appointing a personal representative or receiver itself, given the difficulty the Plymouth County Probate Court was having in finding somebody willing to take on the task. As an alternative, the district court suggested that, because discovery was complete, it “would entertain something in the nature of default process that consisted of the submission of a motion for summary judgment fully supported, followed by service on the likely beneficiaries of any estate that Mr. Robinson may have.” The “impediment” with this approach, the district court noted, was that “in the absence of a personal representative, there‘s nobody here . . . -- that we know of -- to respond to a motion for summary judgment. And I would want to be sure that there was the equivalent of notice -- effective notice -- on those persons who otherwise might be expected to respond. That may be the statutory beneficiaries of any estate, either here or somewhere else. I just don‘t know where that somewhere else might be.”
To bypass this pesky impediment, the district court suggested the following:
That I permit say 45 days of discovery to see if you can find out who those people might be and identify them for purposes of service so that they get served with whatever motion for summary judgment is what I suggest, because that‘s giving me the factual materials. I kind of struggled with a motion to dismiss before. And then I‘d feel fairly comfortable if they don‘t come forward and respond, and you have a well-founded basis for summary judgment to enter something like a default judgment. It may be a failure to state -- it may be failure to prosecute or failure to defend their claims, but it‘s a default sort of issue, and then you can be on to the business of trying to execute on that judgment.
Universitas mulled it over and agreed with that plan of attack, and “only ask[ed] that the [district] [c]ourt continue to extend the deadline . . . for substitution.” The district court responded that it would do that, but it would take that matter up when Universitas’ discovery was over because it “want[ed] to think about that” since “[t]here really isn‘t anybody to substitute now.”
At the end of the status conference, the district court summarized its marching orders. Discovery would be reopened until April 5, 2019, so that Universitas could “figure out who‘s who in the line of succession here or who it is that [it] would proffer as someone who can properly be said to have sufficient interests in the estate to provide some response or at least be notified of the response” and so that Universitas could “identif[y] [Robinson‘s] assets.” The stay the district court originally issued upon Robinson‘s death was extended until April 5, 2019, and Universitas was given a tentative June 3, 2019 deadline for filing its summary judgment motion. Finally, the district court put an April 12, 2019 status conference on the books to discuss post-discovery next steps.
In the following weeks, Universitas got straight to work. In a status report it filed in anticipation of the April 12, 2019 status
The April 12, 2019 status conference (attended only by Universitas) saw additional updates. At the conference, Universitas explained to the district court that it had “made substantial progress in identifying the [W]ill and identifying assets.” Specifically, it noted that Robinson had taken out several life insurance policies before his death, totaling about $3 million, and a portion of those proceeds were to be paid to Shadow Ridge Properties, LLC (“Shadow Ridge“), a corporation of which Robinson and Novak each owned half. The Will, Universitas explained, provided that Robinson‘s fifty-percent interest in Shadow Ridge would go to Granderson upon his death.
Universitas continued and spelled out other deposition-related developments. As to Novak, it explained to the district court that her motion to quash was still pending, but it expected to be able to depose her soon. As to Granderson, Universitas explained that it successfully deposed her and, during that deposition, she said she did file the Will in probate court in Florida. Universitas also indicated that the Will provided that should Granderson be unwilling or unable to serve as the personal representative, two of Robinson‘s cousins, Cecily Ingram (“Ingram“) and Eileen Heathington (“Heathington“), could serve in her place9 and that Heathington was present for Granderson‘s deposition. Finally, Universitas told the district court that, at the deposition, it had “put [Granderson and Heathington] on notice that [it] would be filing a motion for summary judgment and that [it] would be serving it on them.”10
Still unclear about the status of a personal representative, the district court followed up and asked, “Do you understand that Ms. Granderson or anyone else has actually been appointed to administer the estate?” Universitas clarified that it was
The next few months passed by without much to report -- that is, until July. On July 8, 2019, Granderson made her first appearance (of, eventually, quite a few appearances) on the district court‘s docket. She filed pro se,11 as a non-party to the case,12 an affidavit of hers, the same one that she had also filed in the United States District Court for the Middle District of Florida. The affidavit more or less informed the district court that she had been cooperative with Universitas’ subpoena; she submitted, in anticipation of her deposition, all the documents that she had in her possession that were addressed to Robinson; she informed Universitas at her deposition of the Will; Novak had told her that Shadow Ridge had no assets, so Granderson decided not to initiate any probate proceedings; and she viewed Universitas’ continued efforts to question her as harassment.
Two additional developments occurred in July 2019. First, the district court extended the discovery and summary judgment deadlines to July 26, 2019 and September 3, 2019, respectively. Second, Universitas finally succeeded in deposing Novak on July 25, 2019. During her deposition, she indicated that Shadow Ridge had no substantial assets remaining, Shadow Ridge had received about $2 million in proceeds from Robinson‘s life insurance policies, and Granderson had received slightly less than $1 million of those proceeds, as Robinson had left his ownership interest in Shadow Ridge to Granderson.13
With Novak‘s deposition now complete, Universitas turned its attention to its upcoming summary judgment deadline and timely filed its motion and supporting documentation on September 3, 2019.14 Nevertheless,
The case was briefly brought back to life in the summer of 2020, with two notable developments. First, Granderson made her second appearance on the docket on June 2, 2020 with a pro se motion to dismiss for lack of subject matter jurisdiction, which she filed as a non-party to the case as she did before. While not particularly a beacon of clarity, the motion seems to be a copy of a motion filed with the United States District Court for the Middle District of Florida in an effort to prevent Universitas from deposing her again. Second, Granderson was indeed deposed again on July 13, 2020, demonstrating that her efforts in Florida proved unsuccessful. During that deposition, at which Granderson was represented by Williams-Shaw, Granderson confirmed (among many other things) that she had received a check for a total of $923,747.60 from the life insurance policy proceeds from Shadow Ridge. And with those two developments, the case went (inexplicably) dormant again.
A flurry of activity in the 2021 new year awoke the case from its slumber. First up (and importantly), on January 26, Universitas filed a Request for Entry of Default (“the Request“) against Robinson‘s estate (not Robinson specifically), pursuant to
Second, on March 1, 2021, Universitas moved for default judgment against Robinson‘s estate, pursuant to
Notwithstanding these filings and flurry of activity, the case went dead-dead this time for reasons that (again) remain unclear. Indeed, the next activity in the case came nearly thirteen months later in June 2022. But that activity was merely two letters. The first was a letter from Universitas to the district court inquiring about the status of its pending motions for summary judgment and default judgment since the district court had not acted on either of its pending motions. The second was a counseled letter from Granderson (her fourth appearance on the docket), arguing that no party had been substituted into the case and Universitas’ motion for default judgment should be denied. The case, nevertheless, remained dead-dead for several more months.
That is, until February 7, 2023, at which point the district court issued a sweeping order adjudicating all the pending motions. The district court‘s February 7, 2023 order started off with substitution. It noted that “[d]espite the initial challenges Universitas faced when trying to identify a successor, Universitas now contends that Ms. Granderson is an appropriate substitute under [Federal Rule of Civil Procedure] 25” and it agreed with that assessment. Accordingly, the district court ordered that the stay it had put in place back in 2017 be lifted,20 that Universitas serve Granderson by March 31, 2023 with copies of the February 7, 2023 order and with copies of the Notice of Suggestion of Death that Marcus filed in November 2017. The district court
Following the issuance of the February 7, 2023 order, the case proceeded rather quickly, in contrast to the previous periods of inactivity. A few weeks later, Universitas filed two status reports detailing its efforts at serving Granderson with copies of the February 7, 2023 order and Notice of Suggestion of Death, despite Granderson‘s apparent refusal to accept service from the service processor at her home in Florida. At the April 12, 2023 status conference held remotely, the district court ordered Universitas to file a motion to substitute by April 19, 2023 and allowed Universitas to refile its motion for default judgment no later than May 12, 2023. The district court indicated that it would “schedul[e] a hearing on the motion for default judgment promptly and w[ould] further address the execution of the judgment when appropriate.” While it does not appear that Granderson was present for this status conference, Williams-Shaw was present and the district court “treat[ed] [her] participation in this status conference as that of an interested party since no formal appearance as counsel of record has been accepted by the [c]ourt.”22
Universitas promptly filed its motion for substitution on April 18, 2023 and served it upon Granderson. The district court granted the motion a few weeks later on May 8, 2023 because Granderson failed to file an opposition within fourteen days of service as required by local rules. See
After a nearly two-month lull in activity, the district court denied Granderson‘s opposition/motion to vacate substitution, and granted Universitas’ motion for default judgment, without scheduling any hearing on the motion for default judgment as it had previously indicated it would. Despite Granderson‘s six appearances and filings, the district court‘s default judgment indicated that “Robinson . . . and his Estate, through substituted party Lillian Granderson, . . . failed to plead or otherwise defend in this action.” The default judgment then ordered that Universitas recover from Robinson‘s estate, through substituted party Granderson, the hefty sum of $92,031,830.55 (plus interest).
Not wanting to be on the hook for a $92 million bill, Granderson filed a timely appeal and brought the case to our bench.
The Issues
Having made it out the other end of that procedural-history maze, we turn our attention now to the issues on appeal. To remind, Granderson challenges the district court‘s granting of Universitas’ motion to substitute and motion for default judgment. We‘ll take each in turn, kicking things off with the motion to substitute, before ending with the motion for default judgment.
Motion to Substitute
Granderson believes the district court was wrong to sub her into the case as a representative for Robinson‘s estate and hopes that we will reverse that decision. She pins those hopes on three arguments, all relating to Universitas’ alleged failure to follow the proper
Starting off with our standard of review, we review a district court‘s decision to substitute a party under
With our standard of review squared away, we turn now to the substitution process. When a party dies during litigation and the “claim survives the death
(a) Death.
(1) Substitution if the Claim Is Not Extinguished. If a party dies and the claim is not extinguished, the court may order substitution of the proper party. A motion for substitution may be made by any party or by the decedent‘s successor or representative. If the motion is not made within 90 days after service of a statement noting the death, the action by or against the decedent must be dismissed.
. . .
(3) Service. A motion to substitute, together with a notice of hearing, must be served on the parties as provided in Rule 5 and on nonparties as provided in Rule 4. A statement noting death must be served in the same manner. Service may be made in any judicial district.
To effectuate that substitution, “[t]he rule [first] requires ‘service of a statement noting the death,’ but fails to specify upon who that notice must be served.” Marcus, 80 F.4th at 43 (quoting
While the rule does not specify who qualifies as a “decedent‘s successor or representative” and, therefore, a “proper party”
Once service of the statement noting the death is effectuated, the last step in the process is the actual motion to substitute, which must (as just explained) be filed and served within ninety days.
Against this backdrop, we turn now to Granderson‘s first argument against substitution, which goes like this: By Universitas’ own admission, it became aware that Granderson was the executrix of Robinson‘s Will at her April 12, 2019 deposition,25 so it should have served her with a motion to substitute within ninety days of it having learned that information. And by failing to do so within ninety days -- the argument goes -- Universitas should have been required to explain its multi-year delay pursuant to
This argument, as Universitas argues, falls short for several reasons. To start, recall that Granderson did not timely oppose Universitas’ substitution motion. That means her argument was forfeited below. See Crispin-Taveras v. Mun. of Carolina, 647 F.3d 1, 7 (1st Cir. 2011) (“A party‘s failure, on account of ignorance or neglect, to timely oppose a motion in the district court constitutes forfeiture.“). And “[f]orfeited arguments are only considered for plain error.” Nat‘l Fed‘n of the Blind v. The Container Store, Inc., 904 F.3d 70, 86 (1st Cir. 2018). But nowhere in her briefing does Granderson even attempt to map her argument onto plain error‘s four prongs, which require that “(1) an error occurred (2) which was clear or obvious . . . (3) affected [her] substantial rights [and] (4) seriously impaired the fairness, integrity, or public reputation of the judicial proceedings.” Id. (second alteration in original) (citation omitted). This necessarily means that she, in addition to forfeiting the argument below, has waived it on appeal. See United States v. Colón-De Jesús, 85 F.4th 15, 25 (1st Cir. 2023).26
Recognizing that our decision in Marcus is her argument‘s undoing, she attempts to distinguish that case because, there, it was the plaintiff who died, whereas here it was the defendant. Moreover, in Marcus she notes, there was also “no indication that [the substitute plaintiff] actually received notice” and “sat on h[er] hands while the 90-day window lapsed.” Id. at 44 (second alteration in original) (citation and internal quotation marks omitted). In Granderson‘s view, because Universitas was aware of the proper party to substitute for many years, Marcus should not apply because it would be inequitable and would undermine federal courts’ interest in finality to allow Universitas “perpetual and unlimited control of the 90-day clock” by allowing it to pick and choose when to serve the statement noting the death and, thereby, start the clock.
As an initial matter, there is no language in Marcus or
Having thrown Granderson‘s first argument in the bin, we turn our attention to her remaining two arguments, neither of which do the trick. Granderson‘s next argument is essentially a recycling of her first, but with a new coat of paint. She (confusingly) argues that the ninety-day clock began to run when Marcus filed the Notice of Suggestion of Death on November 28, 2017.29 Because Universitas did not file its motion to substitute for years after that, Granderson argues
The amended rule establishes a time limit for the motion to substitute based not upon the time of the death, but rather upon the time information of the death as provided by the means of a suggestion of death upon the record, i.e., service of a statement of the fact of the death. The motion may not be made later than 90 days after the service of the statement unless the period is extended pursuant to Rule 6(b), as amended.
As a last-ditch effort, Granderson contends that it would be unfair to allow substitution because nearly six years have passed since Robinson‘s death and, in the interim, she “has aged further and her physical and medical limitations [have] worsened over time.” While we are sympathetic to Granderson‘s health issues, this argument is also forfeited and waived for the reasons stated above. Moreover, despite these health issues, Granderson‘s filings, both pro se and counseled, demonstrate that she is still able to litigate this case.
Ultimately, having parried all of Granderson‘s contentions, we determine that she was served in accordance with
Motion for Default Judgment
While Granderson‘s arguments regarding substitution didn‘t get her a win, she has better luck with her arguments regarding default judgment. When you get right down to it, she basically argues that the district court erred because default judgment is entered only after entry of default, which requires that the party have failed to plead or otherwise defend, and neither Robinson nor she failed to plead or otherwise defend. In Granderson‘s mind, Robinson pleaded and defended the case, so entering default against him was inappropriate simply because he died and (obviously) stopped defending himself. For her part, she argues she certainly defended the case both before and after her substitution, as evidenced by her numerous appearances and filings on the docket (six in total). Thus, according to Granderson, the district court abused its discretion in granting Universitas’ motion. We agree for reasons we‘ll get into after we take two beats, the first to explain our standard of review and the second to lay out the default judgment process.
“We review orders entering default judgment for abuse of discretion.” In re MacPherson, 254 B.R. 302, 305 (B.A.P. 1st Cir. 2000). Within that review, we may also review “the interlocutory entry of default.” Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). As before, the same examples of abuses of discretion apply here. See In re MacPherson, 254 B.R. at 305. One relevant example of an abuse of discretion worth repeating is ignoring “a material factor deserving significant weight.” Id. (citation omitted).
Turning to the ins and outs of default judgments,
A defaulted party is deemed “to have conceded the truth of the factual allegations in the complaint as establishing the grounds for liability as to which damages will be calculated.” Franco v. Selective Ins. Co., 184 F.3d 4, 9 n.3 (1st Cir. 1999). Notwithstanding that concession, the district court “may examine a plaintiff‘s complaint, taking all well-pleaded factual allegations as true, to determine whether it alleges a cause of action.” Ramos-Falcón v. Autoridad de Energía Eléctrica, 301 F.3d 1, 2 (1st Cir. 2002) (citation omitted). While “[a] hearing may be required . . . to set damages when the amount is in dispute or is not ascertainable from the pleadings,” the district court can also order a default judgment “without a hearing of any kind,” assuming it “has jurisdiction over the subject matter and parties, the allegations in the complaint state a specific, cognizable claim for relief, and the defaulted party had fair notice of its opportunity to object.” In re The Home Rests., Inc., 285 F.3d 111, 114 (1st Cir. 2002) (citations omitted). On that score, the district court may also “choose to hold a hearing to establish the truth of any averment in the complaint.” Id. at 114-15 (citation and internal quotation marks omitted).
All that said, default judgment is a “drastic” measure “that runs contrary to the goals of resolving cases on the merits and avoiding harsh or unfair results.” Remexcel Managerial Consultants, Inc. v. Arlequín, 583 F.3d 45, 51 (1st Cir. 2009) (citations and internal quotation marks omitted). As such, it “should be employed only in an extreme situation,” Stewart v. Astrue, 552 F.3d 26, 28 (1st Cir. 2009) (citation omitted), and to protect diligent parties from clearly unresponsive adversaries, see Ortiz-Gonzalez v. Fonovisa, 277 F.3d 59, 63 (1st Cir. 2002) (citing H.F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691 (D.C. Cir. 1970)).
Applying this rubric here,32 we think the district court abused its discretion by entering default judgment against Granderson because such a judgment can only be entered after entry of default. In the case at bar, though, no entry of default had ever been entered against Granderson and no entry of default could have been entered against her because (contrary to Universitas’ argument) she did “otherwise defend” the lawsuit. A simple once-over of the district court‘s docket shows why that is so. The only entry of default in the record was against Robinson (who is, emphatically, not Granderson), and Universitas never moved for entry of default against her once she had been subbed into the case.
Furthermore, just as Granderson argues in her brief, she appeared six times total in the case and filed substantive motions challenging the proceedings. Notably, the majority of these appearances and filings occurred before Granderson was ever even subbed into the case and had any formal obligation to respond as a party to the litigation. While there can certainly be scenarios in which, despite a party‘s appearances or filings, default judgment might still be appropriate, “[d]efault judgment for failure to defend is appropriate when the party‘s conduct includes ‘willful violations of court rules, contumacious conduct, or intentional delays.‘” Ackra Direct Mktg. Corp., 86 F.3d at 856 (quoting United States ex rel. Time Equip. Rental & Sales, Inc. v. Harre, 983 F.2d 128, 130 (8th Cir. 1993)). It is not appropriate where the party‘s conduct amounts to “a ‘marginal failure to comply with time requirements.‘” Id. (quoting Harre, 983 F.2d at 130). Indeed, our own caselaw reflects as much. See Alameda v. Sec‘y of Health, Educ. & Welfare, 622 F.2d 1044, 1048 (1st Cir. 1980) (“[T]he Secretary‘s failure to file the requested memoranda or even explain the failure after months of
To be sure, we concede that some of Granderson‘s filings might not have been as clear or as artful as Universitas or the district court might have liked and that her opposition to the motion to substitute was untimely. But these purported failings must be viewed in context. Several of her filings were pro se, which “are subject to ‘less stringent standards than formal pleadings drafted by lawyers.‘” In re Flynn, 582 B.R. 25, 31 (B.A.P. 1st Cir. 2018) (quoting Erickson v. Pardus, 551 U.S. 89, 94 (2007)). Her untimely opposition to Universitas’ motion to substitute was merely days late and did not amount to “months of delay.” Alameda, 622 F.2d at 1048. To boot, once Granderson had been substituted into the case, there were no pending motions for her to respond to and, once Universitas filed its second motion for default judgment, she timely opposed that motion, thereby “defend[ing]” the only thing in the record that she could have defended. And the greater context of the whole case demonstrates that Granderson, soon after Robinson‘s passing, informed Marcus of the Will and her role as executrix and that, over the six years of litigation following Robinson‘s passing, she made several substantive filings on the record (including opposing both of Universitas’ motions for default judgment) and consistently raised her concerns to the district court that no party had been subbed into the case. Under these particular case circumstances, we believe the district court abused its discretion in granting default judgment against Granderson.
Our conclusion finds further support in the fact that the district court did not explain why it thought default judgment was appropriate in this scenario. The district court‘s default judgment merely states that default judgment was entered because “Robinson . . . and his Estate, through substituted party Lillian Granderson, . . . failed to plead or otherwise defend in this action.” Nowhere does the district court acknowledge Granderson‘s multiple appearances and filings or even explain why, despite her multiple appearances and filings, she should still be considered to have “failed to . . . otherwise defend.” As we‘ve noted in the past, “ignor[ing]” such “a material factor deserving significant weight” is an abuse of discretion, plain and simple. In re MacPherson, 254 B.R. at 305 (citation omitted) (concluding issuance of default judgment “would have to be remanded” where “the court failed to weigh factors pertinent to its decision“).
Recognizing that it‘s on the losing end of this default judgment scenario, Universitas attempts to counter with three arguments -- none of which is a silver bullet. First, it argues that Granderson forfeited any challenge to the default judgment because her opposition to that motion below merely incorporated by reference the arguments in her opposition to the motion to substitute. According to Universitas, therefore, we should review her argument that she otherwise defended for plain error and, because she didn‘t address plain error‘s four prongs, we should consider that argument waived. Put simply, we don‘t buy any of what Universitas is selling. It cites no First Circuit caselaw for the proposition that incorporated-by-reference filings before the district court amount to forfeiture below. And we are aware of none. Universitas does, however, cite to an unpublished case from the Sixth Circuit, where our sister circuit concluded that “it is well settled that a
Second, Universitas argues that, “[w]hile it is true that Mr. Robinson did originally litigate the case, after his death he and his representatives did not,” because Granderson‘s filings were otherwise untimely and threadbare. We are not persuaded. To begin, the implication that Robinson could have continued to litigate the case after his death makes no sense. More to the point, it is unclear to us how Granderson could have litigated, or could have been reasonably expected to litigate, the case prior to her substitution into the case. Furthermore, we have already concluded, as previously discussed, that Granderson‘s actions amount to “otherwise defend[ing]” as contemplated by
Third, and for its swan song, Universitas argues that we should not reverse the default judgment because its “Motion for Default Judgment matched the requirements of Rule 55” by providing the necessary affidavits and service. There is, quite simply, no merit to this argument because Universitas let other procedural requirements fall by the wayside. As we mentioned above, “[p]rior to obtaining a default judgment under [
Laying those mistakes on the table, Universitas first moved for the clerk of the district court to enter default under
All told, we conclude that the district court abused its discretion in entering default judgment against Granderson, where she defended the case and no entry of default had been entered against her.
The Wrap-Up
Having reasoned through all the issues, we make official the conclusion we previewed above: We affirm the district court as to substitution, vacate the default judgment, and remand this matter back to the district court for further proceedings consistent with this opinion. The parties shall bear their own costs.