Judge Denies Default Judgment Motion in FDCPA Case

Better late than never, a federal judge in Nevada has ruled, denying a motion for default judgment against a defendant in a Fair Debt Collection Practices Act case because the defendant has now starting to defend itself “in earnest.”

A copy of the ruling in the case of Hankerson v. Nationwide Capital Services can be accessed by clicking here.

After being served with a lawsuit for allegedly violating the FDCPA by attempting to collect on an illegal debt, the defendant attempted to engage in settlement negotiations with the plaintiff without counsel. When those settlement negotiations broke down, the defendant hired an attorney, but on the last day to file a response to the original complaint. The defendant notified the plaintiff that it had retained an attorney, but she did not file a notice of appearance with the court for two more months. In the meantime, the plaintiff filed an amended complaint, to which the defendant failed to respond in a timely manner. The defendant’s lawyer said she was relying on an email she sent to the plaintiff’s attorney, asking them not to file for default judgment and to have documents sent to her.

Now that the defendant’s attorney appears to be up to speed, if a default judgment motion were to be granted, it would no doubt spur a motion from the defendant to set aside that default, predicted Judge James Mahan of the District Court for the District of Nevada.

And while the defense counsel’s request for documents from the plaintiff’s attorney was “imprudent” noted Judge Mahan — had she filed her notice of appearance she would have had instant access to all the relevant documents — he added that the actions were not “culpable, or in bad faith.”