Rule 55.Default

Reporter’s Notes—2020 Amendment: Rule 55 is amended to reflect the needs of current practice and to modernize language and make it consistent throughout the rule. The requirement of subdivision (a) for a separate entry of default by the clerk is eliminated in favor of a provision allowing the party seeking relief to file a motion for default judgment to initiate the process. The provision for entry of default as originally adopted in 1971 from Federal Rule 55(a) was intended to facilitate the provision of what was then Rule 55(b)(1) requiring the clerk on the plaintiff’s request and affidavit of the amount due to enter judgment when the amount was, or could be computed to be, a sum certain. Federal Rule 55(a) and (b)(1) retain those provisions with minor modifications. Vermont Rule 55(b), however, was substantially modified in 1972, requiring, in a revised paragraph (b)(1), a formal application for any default judgment and providing, in revised paragraph (b)(2), for the clerk to enter judgment for a sum certain “upon order of the Presiding Judge issued without notice and hearing.” The practice under former paragraph (b)(1) was deemed to impose “an undesirable responsibility upon clerks who may lack the necessary legal or fiscal training to carry it out.” Reporter’s Notes to 1972 Amendment. Thus, the formal separate entry of default in subdivision (a) is both unnecessary and superfluous. Rule 55(a) has been further amended to follow the Federal Rule by the deletion of “as provided by these rules,” so that an indication of an intent to defend, even if not in compliance with the rules, does not trigger the rule. Rule 55(b), making clear the application of the rule to any pleading seeking affirmative relief, is former Rule 55(d), redesignated without change in language. Rule 55(c) is former Rule 55(b). The introductory sentence of the former rule has been deleted as unnecessary. The first sentence of former Rule 55(b)(1), now Rule 55(c)(1), requiring an application to the court for a default judgment, is deleted as superfluous in light of the provision for a motion added to subdivision (a). The sentence added to paragraph (1) makes clear that the party seeking a default judgment has the burden on the issue of minority and must disclose any information in that party’s possession on the issue of competency. Rule 55(c)(2) is amended to eliminate the reference to entry of judgment by the clerk on order of the judge by providing simply that the court, that is the judge, enters judgment. It is also amended to use the more-generic terms opposing party and moving party in recognition of the fact that default can be sought by parties other than the plaintiff. The time for notice in Rule 55(c)(4) has been changed from five to seven days to allow for increasing slowness in the mail. Rule 55(c)(6) has been amended to make clear that there must be a motion and a hearing under paragraph (c)(4). Other minor verbal amendments are made in Rules 55(c)(3)-(7) for consistency with the preceding amendments. Rule 55(d), formerly Rule 55(c), has been revised for consistency with the amendment of Rule 55(a) eliminating the formal entry of default. The amendment preserves the distinction presently noted in Vermont cases between setting aside the judge’s ruling on a motion for default and setting aside a final judgment of default. As noted above, former Rule 55(d) is now Rule 55(b). The minor verbal amendments in Rule 55(e) are for consistency with the preceding amendments.

Reporter’s Notes—2018 Amendment: Rule 55(b)(4) is amended to extend its 3-day time period to 5 days consistent with the simultaneous “day is a day” amendments to V.R.C.P. 6.

Reporter’s Notes—2017 Amendment: Rule 55(c) is amended to adopt the amendment to F.R.C.P. 55(c) effective December 1, 2015. The federal rule was originally amended in 2007 as part of the general restyling of the Federal Rules. The 2015 amendment inserted “final” in the last clause, to make clear that the standards of Rule 60(b) apply only to a judgment that is “final” because it disposes of all claims among all parties, or because the judge has directed entry of final judgment under Rule 54(b). In the absence of finality, the judgment may be revised at any time under Rule 54(b). See Federal Advisory Committee’s Note to 2015 amendment of F.R.C.P. 55(c).

Reporter’s Notes—2015 Amendment: V.R.C.P. 55(b)(7) is added to incorporate in the civil rules the provisions of V.R.S.C.P. 3(e) as amended in 2013 and in a simultaneous 2015 amendment to cover the requirements for a motion for default in an action on a credit card debt. By simultaneous amendment, V.R.C.P. 9.1 is added to incorporate the pleading requirements for such actions added to the Vermont Rules of Small Claims Procedure by the addition of V.R.S.C.P. 3(h) in a 2013 amendment and a simultaneous 2015 amendment. New V.R.C.P. 55(b)(7) requires that a motion for default in a credit card action must be accompanied by signed evidence of the debt or, in the absence of such documentation, a credit card statement showing the debt, “or other competent evidence” of it. In addition, the motion must be supported with copies of the assignment and any subsequent assignments, linked to the defendant, and showing that the present plaintiff is the owner of the debt. These documents are being required because they are often helpful, or even necessary, to assist the court in determining that the plaintiff has a solid claim. New V.R.C.P. 9.1 requires that the complaint in such an action must plead similar specific details of the original transaction and subsequent assignments. The new rules are necessary because many credit card collection actions are brought in the Superior Court, Civil Division, as civil, rather than small claims, actions. Plaintiffs’ attorneys in such civil actions do not always follow the pleading and motion practice provided for small claims actions. As a result, defendants must expend significant resources and time on lengthy and difficult discovery to obtain the information and documents that V.R.S.C.P. 3(h) and (e) require to be pleaded and attached to a motion for default judgment in a small claims action. The rules will harmonize practice in small claims and civil actions and avoid the need for discovery with regard to basic items related to a credit card collection claim.

Reporter’s Notes—2009 Amendment: Rule 55(b)(1) is amended to provide that judgment by default may not be entered against a defendant who has not appeared until the party seeking judgment has filed an affidavit as to liability and damages. The purposes of the amendment are to give greater assurance that the party is entitled to a default judgment and to reduce the need to set aside default judgments under Rule 55(c). The affidavit must be on personal knowledge, whether of the party seeking judgment, the party’s attorney, or another person. The affidavit will serve as the required affidavit of the amount due under Rule 55(b)(2) when a party has not appeared and the claim is for a sum that is certain or readily computable. The affidavit may be considered by the court in determining whether it is necessary to hold a hearing or order a reference under Rule 55(b)(3) when a party has not appeared and the amount of damages or another matter is in issue. The requirement of an affidavit does not apply when a default judgment is sought under Rule 55(b)(4) or (6) against a party who has appeared in the action. Appearance has given the defaulting party the opportunity to challenge claims of liability and damages. In any event, there will either be a hearing on notice under Rule 55(b)(4) or, if the default is nonappearance at trial, the party seeking the judgment may elect to go to trial under Rule 55(b)(6).

Reporter’s Notes—2006 Amendment: Rule 55(b)(5) is amended for conformity with the Servicemembers Civil Relief Act, § 201, 50 U.S.C. app. 521, enacted by Congress in 2003 to replace the Soldiers’ and Sailors’ Civil Relief Act of 1940. The new Act addresses procedures regarding matters such as default judgments, landlord-tenant matters, and collections. It does not specifically require that the plaintiff’s affidavit be that of the plaintiff or plaintiff’s attorney or be on the affiant’s own knowledge. Accordingly, those elements have been omitted from the amended rule. The amended rule is consistent with current practice, permitted and encouraged by the statute, under which plaintiff’s attorney at the time of consideration of the motion makes affidavit that he or she has conducted a search of the Department of Defense Internet Services web site and has obtained a current DOD certificate as to defendant’s military status. This practice avoids the risk that an affidavit prepared earlier by plaintiff personally may be less persuasive or may be stale. The “appropriate action” provided by § 201 of the Act includes appointment of an attorney to represent the defendant, requiring a bond from plaintiff if the defendant’s status cannot be determined, a 90-day stay if there may be a defense requiring defendant’s presence, and setting aside a default if a returning defendant has a defense. Section 602 of the Act, 50 U.S.C. app. 582, further provides that either party or the court may apply for a certificate from the Secretary of Defense stating that defendant is or is not in military service. This certificate is deemed prima facie evidence of the facts as to service but does not substitute for the required affidavit.

Reporter’s Notes—1992 Amendment: This rule and Vermont Rule of Appellate Procedure 4 are amended in order to modify post-judgment and appellate practice with respect to default judgments. As amended, the rules require those who have had default judgments entered against them to challenge the judgment by way of Vermont Rule of Civil Procedure 60(b). An immediate appeal to the Supreme Court will not be heard. The principal change is found in Civil Rule 55(c). The rule now states that the court may set aside a default judgment in accordance with Rule 60(b) “and not otherwise.” Whatever excuse or error may exist must be brought to the attention of the trial court, for factual development on the record. If called upon to do so, the Supreme Court will review that record. Note that the practice as to setting aside an entry of default, as opposed to judgment by default, is unchanged. A simultaneous modification of Appellate Rule 4 adds motions to set aside judgments by default to the list of motions which toll the running of the appeal period. See Reporter’s Notes, V.R.A.P. 4—1992 Amendment. Rule 55(b)(6) governs judgments based on the evidence submitted at a duly noticed trial on the merits from which a party is absent. The second sentence of the subdivision provides special protection against execution, treating such judgments as default judgments under Civil Rule 62(b) (which requires service of default judgments upon the defendant prior to execution). The present amendment adds further protection, by equating motions to set aside these judgments with motions to set aside default judgments within the meaning of Appellate Rule 4. As discussed in the Reporter’s Notes to that rule, a timely motion to set aside a default judgment now has the effect of tolling the running of the appeal period. The amendments to the second sentence of subdivision (b)(6) include a reference to subdivision (c) of this rule as well as to V.R.A.P. 4. The reference to subdivision (c) has the effect of requiring that defendants in this situation seek relief under Rule 60(b) before filing an appeal, as any defendant under subdivision (c) would be required to do.

Reporter’s Notes—1988 Amendment: Rule 55(b), governing judgment by default, is amended to remove uncertainty in the operation of the rule, streamline its procedures, and modernize its language. Rule 55(b)(1) is amended to delete reference to representatives, such as “general” guardians, not found in Vermont law. The deleted references were placed in the Vermont rule when it was initially adopted. They were copied verbatim from Federal Rule of Civil Procedure 55. The two representatives being deleted are “general” guardian and “committee.” The rule as amended prohibits entry of default against an infant or incompetent person unless represented in the action by a “guardian, conservator or other such representative who has appeared therein.” Subdivisions (b)(2), (b)(3) and (b)(4) are rewritten, and subdivision (b)(6) is added, in response to the decision in Reuther v. Gang, 146 Vt. 540, 507 A.2d 972 (1986). Rule 55(a) states plainly that default may be entered when a party fails to plead “or otherwise defend.” The federal cases and authorities confirm that “mere appearance by a defending party will not keep them from being in default . . . .” 10 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure: Civil § 2682, at 411 (1983). If the party appears and indicates a desire to contest the action, it is within the court’s discretion whether or not to grant a default. Id. at 420. The rule itself also states that where a party has appeared, default may be entered only after three days’ notice to the defaulting party. See former V.R.C.P. 55(b)(3), Federal Rule of Civil Procedure 55(b)(2). In Reuther v. Gang, the Court held that where a party had failed to appear for trial but had otherwise appeared and defended, it was “improper” to enter a default judgment. The Court went on to note that the three-day notice provision would have applied if entry of default had been proper. The effect of the Court’s decision is that when the only default is failure to appear at trial, and in other respects the party has indicated a desire to contest the matter, it is an abuse of discretion to grant a default judgment. In response to this interpretation, the Supreme Court’s Advisory Committee on the Rules of Civil Procedure recommended to the Court, and the Court has agreed, that the rule should be amended to clarify its operation and, in part, avoid the result in Reuther v. Gang. The substance of subdivision (b)(2) is unchanged but the heading is modified. The former heading was “By the Clerk Upon Order.” The new heading is “By the Clerk When Claim is for a Sum Certain and Defendant Has Not Appeared.” This amendment is to bring more readily to the reader’s attention that the provisions for entering default without a hearing apply only if both of two conditions are met: (1) the claim must be for a sum certain; and (2) the defendant must not have made any appearance. Under Rule 55(a) this means no pleading has been filed and no other defense, entry of appearance or participation has occurred. 10 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure: Civil § 2686, at 429-36. A minor change in the text removes two gender-biased pronouns. Subdivision (b)(3) is amended substantially. The heading for the first time makes clear that the provisions in this subdivision, for the conduct of hearings in the discretion of the court, are triggered automatically when there has been no appearance and the claim is not for a sum certain, and also may be used whenever the court determines it to be appropriate. The old heading said simply “By the Court.” The text of subdivision (b)(3) has been amended to delete the confusing language found in the federal rule. On the one hand this language declared that this paragraph applied “in all other cases” than those covered by the prior subdivision. On the other hand, even though applicable to “all other cases,” the rule declared that if there had been an appearance the court must hold a hearing on three days’ notice. The rule did not expressly address those cases which were not for a sum certain and which lacked an appearance altogether. The rule inartfully governed cases which were for a sum certain and which had some type of failure to appear. Reuther v. Gang involved the latter situation. The amended rule states flatly that if the defendant has not appeared and the claim is not for a sum certain, the court should conduct such hearings as it deems necessary to determine damages or investigate any aspect of the claim. The court may, in its discretion, also conduct such hearings in connection with any other default judgment. But if the party has appeared, new subdivision (b)(4) applies. Subdivision (b)(4) separates out all cases in which the defendant has appeared. The prior rule dealt with those within subdivision (b)(3). The heading states “By the Court When Defendant Has Appeared.” In all such cases there must be a separate hearing on the request for default judgment. The hearing cannot be held until the clerk has provided the defendant with three days’ written notice. For example, if the defendant fails to appear at a duly noticed pretrial conference or motion hearing, the plaintiff may move for judgment by default. The matter will then be set for hearing on at least three days’ notice to the defendant. But in the factual setting presented in Reuther v. Gang, in which the defendant is notified of trial on the merits and fails to appear, new subdivision (b)(6) (discussed below) allows the plaintiff to proceed forward with the trial in lieu of seeking default. This procedure departs from Reuther v. Gang. It is based on the need to proceed with fairness to both sides in a civil dispute. Given that a trial has been scheduled and that the defendant either has not requested a continuance or has been denied a continuance, the plaintiff generally must expend the time and money to have present all the necessary lay and expert witnesses, sometimes under subpoena. No sound reason exists for, in effect, granting the defendant a continuance simply on the ground that the defendant has not appeared. Instead, the plaintiff may proceed forward with the trial. In sum, under the amended rule whenever the defendant has appeared there must be a hearing prior to issuance of a default judgment. If the default is being sought for any reason other than failure to appear at trial, the hearing must be on three days’ notice, by the clerk, to the defendant. In one respect, cases in which there has been an appearance continue to be governed by subdivision (b)(3). The court retains the discretion in all default cases to hold a hearing on any aspect of the claim. Former subdivision (b)(4) is renumbered as (b)(5) but otherwise is unchanged. Subdivision (b)(6) is added, as discussed above, to avoid the result in Reuther v. Gang. Plaintiffs are granted the option of taking the case out of the default rules and proceeding forward with the trial. Two advantages arise from this option. First, there is no requirement of providing three days’ notice before obtaining a judgment. Second, since the matter does not result in a default judgment, no affidavit need be filed under the Soldiers’ and Sailors’ Relief Act, 50 U.S.C.A. App. § 501 et seq., and subdivision (b)(5). In some cases, failure to appear at trial may be excusable. To guard against issuance of a writ of execution before a party has the opportunity to file a motion under Rule 60(b), judgments issued pursuant to Rule 55(b)(6) will be treated as if they were default judgments under Rule 62(b). The latter rule requires service of a default judgment prior to execution, and imposes a stay upon the filing of a motion to set aside a default judgment. The same protections will apply to judgments after trial under subdivision (b)(6). The new and amended subdivisions, and Rule 55 generally, sometimes refer to “plaintiff” or “defendant” and sometimes to one “party” or another. Under subdivision (d) the provisions of the rule are made applicable to motions by a plaintiff and to motions by any party seeking judgment by default on his or her third-party claim, cross- claim or counterclaim. Where the defendant seeks relief for failure of the plaintiff to appear or prosecute, the applicable rule is Rule 41.

Reporter’s Notes—1972 Amendment: This amendment changes Rule 55(b) to require that even when a judgment by default is for a sum certain, it may be entered by the clerk only upon order of the presiding judge. Former Rule 55(b)(1), providing that the clerk may enter such judgments as of course, is abrogated. The former practice imposed an undesirable responsibility upon clerks who may lack the necessary legal or fiscal training to carry it out. Under the amendment, the requirement of former Rule 55(b)(2) for a formal application for judgment other than for a sum certain is made applicable to all defaults. Upon such application, however, amended Rule 55(b)(2) permits the Presiding Judge, without notice or hearing, to order the clerk to enter judgment as of course if the amount is a sum certain and the other requirements of the paragraph are met. Notice and hearing are required under amended Rule 55(b)(3) only for judgments not coming under paragraph (2). Former Rule 55(b)(3) has been renumbered as 55(b)(4) to accommodate the amendments. A conforming change has been made in Rule 77(c).

Reporter’s Notes: This rule is substantially identical to Federal Rule 55 with one provision added from the Maine Rule. Rule 55(a), providing for entry of default by the clerk upon failure of the defendant to plead or otherwise defend, is similar in effect to 12 V.S.A. §§ 775, 4315 (now superseded) and former Chancery Rule 10. Rule 55(b)(1), (2), providing for judgment on default, is basically similar to prior Vermont practice. Under the rule, where defendant has not appeared and is not an infant or incompetent and the judgment sought is for a liquidated or readily ascertainable sum, the clerk may enter judgment on affidavit of the plaintiff as to the damages. See Weeks v. Lawrence, 1 Vt. 433 (1829). If any of the preceding conditions is not met, judgment may be entered only by the court, upon notice to appearing parties, with such further proceedings as may be necessary. See Fairview Garage, Inc. v. Terjelian, 127 Vt. 239, 246 A.2d 830 (1968); Bigelow v. Denis, 119 Vt. 21, 117 A.2d 261 (1955); Wellington v. Wellington, 124 Vt. 401, 205 A.2d 568 (1964); Sheldon v. Sheldon, 37 Vt. 152 (1864); Webb v. Webb, 16 Vt. 636 (1844). The principal difference is that, under former County Court Rule 31, unliquidated damages were to be assessed by the clerk unless otherwise ordered, with submission of questions of law to the presiding judge. See also former Chancery Rule 36 (decree pro confesso not to be entered for 10 days after time for appearance). The provision for trial by jury on damages found in Federal Rule 55(b)(2) is omitted as unwarranted by prior Vermont practice. Rule 55(b)(3), taken from Maine Rule 55(b)(4), requires an affidavit that defendant is not protected by the federal Soldiers’ and Sailors’ Civil Relief Act, 50 U.S.C.A. App. § 520 et seq., which imposes requirements of representation and bond in cases involving members of the armed forces on active duty and permits the reopening of default judgments entered against such individuals in certain circumstances. See 3 Barron & Holtzoff § 1214. The rule merely asserts what the federal act in any event requires. Rule 55(c) provides that entry of default under Rule 55(a) may be set aside for good cause shown and that judgment of default under Rule 55(b) may be set aside when appropriate under Rule 60(b), the general provision for setting aside judgments of any sort. The rule essentially duplicates the procedure under the last sentence of 12 V.S.A. § 775 (now superseded) and former County Court Rule 10.2. See Fairview Garage, Inc. v. Terjelian, supra. Rule 55(d) makes clear that the rule applies to all affirmative claims, however pleaded, and that the provisions of Rule 54(c), limiting relief on default to that demanded, apply in all cases. See Reporter’s Notes to Rule 54. Rule 55(e), requiring evidence of the claim as a basis for a default judgment against the State, is necessary to protect the public against unnecessary loss that may occur through such causes as delay in the transmission of process to the Attorney General’s office.