Background
Plaintiffs Cheryl Roberts and William Chambers sued KJ Win, Incorporated, a trucking company, alleging that a KJ Win tractor-trailer caused a chain-reaction collision on an interstate highway in Mississippi that injured them. After Plaintiffs attempted service through the California Secretary of State, KJ Win failed to answer or appear, leading the district court to enter a default judgment totaling approximately twenty-eight million dollars. KJ Win later moved to set aside the judgment under Federal Rule of Civil Procedure sixty point one B, arguing the default was not willful and that the judgment was void due to defective service, but the district court denied the motion.
The court’s reasoning
The Fifth Circuit affirmed the district court’s denial of relief under Federal Rule of Civil Procedure sixty point one B, finding that KJ Win failed to carry its burden to show that its default was excusable rather than willful. The court held that once a defendant’s default is found to be willful, the inquiry ends and the court need not separately consider prejudice or the existence of a meritorious defense. Additionally, the court ruled that KJ Win forfeited its arguments regarding defective service of process and challenges to the damages award because they were not raised in the district court, and equitable considerations did not justify overlooking this forfeiture.
A finding of willful default ends the inquiry.
Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 500 (5th Cir. 2015)
What it means going forward
The decision reinforces that defendants must actively defend against default judgments or raise jurisdictional and damages challenges in the district court, as appellate courts will not consider new arguments regarding service validity or liability caps raised for the first time on appeal.