Summary
This United States District Court for the Southern District of New York order grants the defendant's motion to set aside a Clerk's Certificate of Default and extend its deadline to answer the complaint. The magistrate judge determined that the default resulted from negligence regarding outdated registered agent contact information rather than willfulness, and noted that the underlying promissory note claim likely became moot following a shareholder-approved conversion and satisfaction of the debt. Accordingly, the court vacated the default and ordered the defendant to file an answer by February 18, 2025.
Topics
Practice areas
Questions Presented
- Whether the Court may set aside the Clerk’s Certificate of Default under Rule 55(c) based on lack of willfulness, a meritorious defense, and absence of prejudice.
- Whether the Court may extend Defendant’s time to answer the complaint.
Holdings
- The motion to set aside the Certificate of Default is GRANTED.
- Defendant’s motion to extend time to answer is GRANTED; Defendant must answer by February 18, 2025.
Key quotations
“The determination of whether to set aside a default is left to the ‘sound discretion of the judge, the person [who is] most familiar with the circumstances of the given case and . . . in the best position to evaluate the good faith and credibility of the parties.’” (at 1)
Factual background
Plaintiff sued Foxo for breach of a September 20, 2022 promissory note. Foxo failed to receive the summons and complaint due to an outdated address with its Delaware registered agent, resulting in a default. Foxo later obtained approval from over 50.01% of note holders to amend the note, cancelling it, and sought relief from the default. Plaintiff could not show prejudice from vacating the default.
Procedural history
Plaintiff filed a complaint alleging breach of a promissory note. The clerk entered a Certificate of Default after Defendant failed to answer. Plaintiff sought a default judgment. Defendant moved to set aside the default and to extend its time to answer. The magistrate judge considered the motion and issued an order granting both requests.