A District Court judge in Ohio has granted a defendant’s motion to set aside a default and default judgment that was entered against it in a Fair Debt Collection Practices Act lawsuit after it was unable to respond to the complaint in a timely manner as a result of lockdown provisions that were instituted as a result of the COVID-19 pandemic.
A copy of the ruling in the case of Watkins v. Nationwide Capital Services can be accessed by clicking here.
The plaintiff filed suit against the defendant in February 2020 for allegedly violating Sections 1692d(6), 1692c(5), and 1692g of the FDCPA, along with a provision of the Ohio Consumer Sales Practices Act. The claims relate to a series of phone calls made by the defendant to the plaintiff in which the plaintiff claims the defendant did not properly identify itself and in which the defendant allegedly made a threatening remark.
The complaint was served on the defendant — which is based in Nevada — in early March of 2020. On March 17, 2020, the state of Nevada shut down all non-essential businesses in response to the COVID-19 pandemic. On top of that, the defendant’s principal’s wife contracted COVID-19, forcing the principal to quarantine while taking care of his wife. Thus, the defendant failed to respond in a timely manner to the complaint.
The defendant — on his own — tried to negotiate a settlement with the plaintiff’s attorney after the plaintiff’s attorney notified the defendant of the default judgment. The defendant ultimately hired an attorney, and more settlement talks were held, but a deal could not be reached.
Because the defendant attempted to negotiate a settlement when notified of the judgment, it showed good faith and Judge Matthew W. McFarland of the District Court for the Southern District of Ohio determined that the defendant’s delay was a result of excusable neglect.
The defendant also mounted a meritorious defense to the plaintiff’s claims, passing the “extremely low bar” required to do so, Judge McFarland noted.
