Povill v. Mid American Property

2012 DNH 153

• Court: District Court, D. New Hampshire
• Decided: August 31, 2012
• Docket: 11-CV-287-SM
• Status: Published

Opinion

Povill v . Mid American Property 11-CV-287-SM 8/31/12 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Joshua Povill and Gary Povill, Plaintiffs

v. Case N o . 11-cv-287-SM Opinion N o . 2012 DNH 153 Mid American Property Management, Inc., Defendant

O R D E R

Defendant, Mid American Property Management, Inc. (“Mid

American”) seeks to set aside a default entered against it after

it failed to timely appear. Because I find good cause exists to

set aside the default, that motion (document n o . 30) is granted.

This case arises from significant water damage to

plaintiffs’ real property that allegedly resulted when a mortgage

lender (Bank of America) wrongfully took possession of the

property, changed the locks (precluding plaintiffs’ access), and

then failed to reasonably heat the building in winter, which

caused water pipes to burst and flood the premises. Mid American

says it acted at all times as Bank of America’s agent. When

served with process in this case, Mid American forwarded the suit

papers to Bank of America, which was also named as a defendant,

reasonably believing that Bank of America would handle the matter

on its behalf. Bank of America subsequently filed an appearance on behalf

of itself and Mid American in the original action filed in state

court, and later removed the case to federal court, but

apparently only on behalf of itself. Subsequently Bank of

America settled the claims against i t .

Without belaboring the matter, the default is set aside

because Mid American (through its president and sole shareholder,

Brandon Johnson) reasonably thought Bank of America was handling

the litigation on its behalf; subsequent correspondence from Bank

of America’s counsel advising Mid American to file a separate

appearance was not brought to Johnson’s attention by Mid American

clerical staff, through error (clerical staff merely “filed” the

correspondence based on the same misapprehension that Bank of

America was handling the matter); Johnson did not willfully

ignore the matter or intentionally fail to respond in a timely

manner, and the default by Mid American was not willful; Mid

American (through Johnson) promptly appeared at the hearing on

plaintiffs’ default judgment motion, after a different employee

brought the pending damages hearing to his attention and he

realized that a mistake had been made; Mid American complied with

the court’s directive to obtain legal counsel and file

appropriate pleadings within thirty (30) days; Mid American’s

motion to set aside default sets forth plausible and potentially

2 meritorious defenses related to causation; the amount involved is

not immodest to either party; setting aside the default will not

substantially prejudice plaintiffs since the merits of the case

relates almost exclusively to Mid American’s own conduct (and

plaintiffs’) and there is little chance of loss of relevant

evidence or discovery difficulties; setting aside the default is

also consistent with the recognized policy preference for

resolving civil disputes on the merits; Mid American, through

Johnson, acted in subjective good faith albeit carelessly and

naively; and plausible and potentially meritorious cross-claims

are likely. All of which is to say that good cause exists to set

aside the default. Fed. R. Civ. P. 55(c); Indigo America, Inc.

v . Big Impressions, LLC, 597 F.3d 1 (1st Cir. 2010).

Conclusion

The motion to set aside default (document n o . 30) is

granted, but conditioned on Mid American’s payment of plaintiffs’

reasonable attorney’s fees associated with pursuing the default.

The court would not expect fees exceeding $1,500.00 to be

reasonable. If the parties cannot agree on a reasonable figure,

plaintiffs’ counsel shall file a well-supported motion for

reimbursement which will be considered in due course.

3 SO ORDERED.

St/even J./McAuliffe fnited States District Judge

August 3 1 , 2012

cc: W . E . Whittington, Esq. Jennifer T . Beaudet, Esq. Thomas J. Pappas, Esq. Michael J. Ramsdell, Esq.