Reporter’s Notes:

(2013): Amendments to Rules 5(a), 54(c), and 55(b)(2) in 2013 responded to the Supreme Judicial Court’s decision in Hermanson v. Szafarowicz, 457 Mass. 39 (2010).

The Hermanson Problem. The Hermanson case dealt with G.L. c. 231, § 13B, which prohibits a demand for a specific monetary amount in a complaint (unless the damages “are liquidated or ascertainable by calculation and a statement under oath” accompanies the complaint) and the first sentence of Mass. R. Civ. P. 54(c), which provides that a default judgment may not exceed the amount requested in the demand for judgment.

The Court ruled that there was an “irreconcilable conflict” between the statute and the court rule, and accordingly, the statute prevailed over the rule. As a result, the language of Rule 54(c) that provided for a ceiling on the amount of a default judgment that may enter against a defendant was rendered ineffective. The Court noted, however, that the ineffective first sentence of Rule 54(c) served the “sound” policy of allowing a defendant, served with a complaint, to make a reasoned decision whether it might be financially worth a default rather than defending the case.

The Court referred to the Standing Advisory Committee on the Rules of Civil and Appellate Procedure the question whether the policy underlying the sentence “might continue to be served by an amendment to the rule that would eliminate reference to the ‘demand for judgment’ in the complaint but add a reference to the amount of damages set out in the civil action cover sheet” that accompanies the complaint.

The Standing Advisory Committee considered the matter at a number of meetings. The committee agreed that a mechanism should be found to provide a defendant with fair notice of the amount in controversy so that a defendant could make a reasoned decision whether it made sense to defend the case or to default. However, the committee did not recommend amending the civil action cover sheet to require a specific amount of damages. The committee noted that cover sheets are not universally used in all of the departments of the Trial Court with jurisdiction over damage claims. Further, the committee believed that such an approach-with a requirement that the cover sheet include a specific amount of damages-would undermine the legislative determination in G.L. c. 231, § 13B against inclusion of unliquidated amounts in civil complaints.

Rather than proposing that the amount of damages be contained in the cover sheet, the Standing Advisory Committee recommended to the Court, and the Court adopted, an approach that requires the party seeking a default judgment to provide advance notice to the defendant of the nature and type of damages sought that are not a sum certain. This approach required amendments to three rules: Rules 5(a), 54(c), and 55(b)(2).

Rule 55(b)(2) Statement of Damages. The 2013 amendments struck the second sentence of Mass. R. Civ. P. 55(b)(2) which provided for a seven-day notice to a defendant who had appeared in the action prior to a hearing on an application for default judgment.

Added to Rule 55(b)(2) were the following two sentences: “The court shall not conduct a hearing unless the party entitled to a judgment by default has provided notice to all other parties, including the party against whom a judgment by default is sought, of the date, time, and location of the hearing. Such notice must include a statement setting forth the nature and type of all damages requested and the amount of any damages that are a sum certain or a sum which can by computation be made certain.” The “all damage” language in the revised rule requires the party seeking a default judgment to set forth the nature and type of so-called “unliquidated” damages (for example, tort action for pain and suffering damages or loss of consortium damages) and the amount of any “sum certain” damages.

The notice must be sent by first-class mail to the last known address at least fourteen days prior to the hearing or by some other method that the court approves. Thus, a defendant who has been defaulted will have notice of the extent of his or her financial exposure prior to the hearing. The longer period of fourteen days for the notice (rather than the seven-day period in the prior version of the rule) recognizes the difficulties that may occur in providing notice to a defendant who has not appeared in the action.

The fourteen-day notice with its statement setting forth damages should also be filed with the clerk’s office. Mass. R. Civ. P. 5(d)(1).

Rule 54(c) Limitation Remains for Sum Certain Claims. The conflict between G.L. c. 231, § 13B and the first sentence of Mass. R. Civ. P. 54(c) that was addressed in the Hermanson case dealt with so-called unliquidated claims. The statute does not prohibit, and in fact recognizes, monetary demands in complaints where the damages are “liquidated or ascertainable by calculation” (if accompanied by a statement under oath). Accordingly, the 2013 amendments replaced the first sentence of Rule 54(c) with language that provides for a ceiling on damages that may be awarded after default in cases where damages that are set forth in the complaint are a “a sum certain or a sum which can by computation be made certain” (language taken from Rule 55(b)(1) ).

Only a party seeking a default judgment including any damages that are not a sum certain must serve the fourteen-day notice on the defendant prior to assessment of damages by virtue of the language added to Rule 55(b)(2) in 2013. Rule 55(b)(1) will continue to control entry of judgment by default where the demand for judgment is for only sum certain damages.

Rule 5(a) Service Requirements. The new requirement of a fourteen-day notice to a defaulted defendant prior to a hearing on damages (Rule 55(b)(2) ) necessitated an amendment to Mass. R. Civ. P. 5(a). Rule 5(a) had provided that service of a document need not be made on a defendant in default (with an exception of a pleading asserting “new or additional claims for relief.” As amended in 2013, Rule 5(a) adds another exception to the “no service” provision. The exception requires service on a defaulted defendant of the new fourteen-day notice describing the damages.

(2009): The 2009 amendments reflect changes resulting from the adoption of the Massachusetts Uniform Probate Code.

(2008): Prior to the 2008 amendments, there were different provisions regarding default for the Superior Court and District Court. In the Superior Court, the pre-2008 version of this rule authorized the clerk to enter a judgment by default in “sum certain” cases if the defendant had been defaulted for failure to appear; otherwise, the matter had to be presented to the court (Rule 55(b)(1) and (2) ). In the District Court, the pre-2008 version of this rule authorized the clerk to enter a judgment by default in “sum certain” cases, regardless of whether the default had been based on defendant’s failure to appear (Rule 55(b)(3) and (4) ). See Reporter’s Notes to the 1996 amendments to the Mass. R. Civ. P. (merging the District Court Rules into the Mass. R. Civ. P.).

The 2008 amendments to Rule 55 serve to eliminate the differing default provisions for the Superior Court and the District Court. The amended language adopts for the District Court the Superior Court version of Rule 55. Accordingly, Rule 55(b)(3) and (4), which had contained the District Court version, have been deleted. Also, Rule 55(b)(5) and (6) have been renumbered as Rule 55(b)(3) and (4).

In light of the above, the titles to subparagraphs (1) and (2) of Rule 55(b) have been changed to read “(1) By the Clerk” and “(2) By the Court.” In addition, the text of the pre-2008 version of subparagraph (5)-now renumbered as subparagraph (3)-has been amended to delete the reference to (b)(4).

Unrelated to the statewide one-trial system, the reference in renumbered Rule 55(b)(4) to the “Soldiers’ and Sailors’ Civil Relief Act” of 1940 has been deleted and replaced with the “Servicemembers Civil Relief Act.” Congress renamed the Act and updated the Act in 2003.

(1996): The 1996 amendments to Rule 55 changes the numbering of prior subparagraphs (b)(3) and (b)(4) to (b)(5) and (b)(6), respectively, in order to accommodate new subparagraphs (b)(3) and (b)(4). New subparagraphs (b)(3) and (b)(4) are drawn verbatim from now-repealed Rule 55 of the Dist./Mun. Cts. R. Civ. P., thus retaining the original District Court version of Rule 55. Changes in the title to subparagraphs (b)(1) and (b)(2) have been added to make clear that these two subparagraphs do not apply in the District Court. New subparagraph (b)(5) corresponds to what had been (b)(3), with minor changes, while new subparagraph (b)(6) is identical to what had been subparagraph (b)(4).

The following “Comments” to Rule 55, as originally adopted in the District Court in 1975 (and as later amended), explain the differences between default procedure in the District Court and in courts governed by the Mass. R. Civ. P.:

This rule represents a significant departure from the MRCP version. Changes were made primarily because of the high default rate in District Courts in contract actions where the claim is “for a sum certain or for a sum which can by computation be made certain.”

Under this rule, the question of whether the clerk or the court enters the default judgment no longer depends on whether the defendant has appeared. Rather, if the claim is for a sum certain, the clerk enters judgment according to (b)(1), and if it is not for a sum certain, the court enters judgment according to (b)(2).

In summary, the merger of the District Court rules into the Mass. R. Civ. P. has effected no change in the procedures by which default judgments are entered in the respective courts involved.

(1973): Rule 55 embraces two separate and distinct procedures:

(1) The entry of default, and (2) the entry of judgment by default. Rule 55(a) deals solely with entry of default, a formal, ministerial act of the clerk which does not constitute a judgment. Rule 55(b) provides the procedure for entering judgment by default which, in most cases, binds the defendant to the same degree as if he had appeared in the action and contested the allegations of the complaint. Riehle v. Margolies, 279 U.S. 218, 225 (1928).

Rule 55(a) authorizes the entry of default when the opposing party has “failed to plead or otherwise defend”. The language includes a defendant’s complete failure to file any papers at all, as well as his failure, after filing an appearance, to file an answer.

Rule 55(b)(1) changes slightly the language of Federal Rule 55(b)(1) by requiring the party seeking the default judgment to file an affidavit that the defendant is not an infant or incompetent. This amendment relieves the clerk of responsibility for determining the status of the defendant.

The filing of an appearance does not prevent the entry of default for failure to plead or otherwise defend, but it does, under Rule 55(b)(2), entitle a party to at least 7 days written notice of the application to the court for judgment on the default.

Rule 55(a) will produce no substantial change in Massachusetts practice. Generally, the Massachusetts rules of court and G.L. c. 231, § 57 authorized the clerk to enter a default for failure of a defendant to appear and answer. The plaintiff, however, was not required specially to request a default; if the return of service was in order, the clerk would automatically enter one.

In the federal system, a party who without answering attacks service or moves to dismiss is not liable to default for failure to appear. Bass v. Hoagland, 172 F.2d 205, 210 (5th Cir.1949). However, he is not usually held to have submitted himself to jurisdiction. This interpretation of Rule 55(a) may well change Massachusetts practice. See Dist. Ct. Rule 13.

Rule 55(b)(1) authorizes the clerk to enter a default judgment in certain limited circumstances. He shall do so upon plaintiff’s request if:

(1) the claim against the defendant is for a sum certain or for a sum which by computation can be made certain; and

(2) the default has been entered for failure to appear; and

(3) the defendant is not an infant or incompetent.

The absence of any one of the above factors precludes the clerk from entering the judgment and presents a Rule 55(b)(2) situation.

Under Rule 55(b)(1) the plaintiff must request the clerk to enter the judgment by default and submit affidavits establishing the amount due and stating that the defendant is not an infant or an adjudged incompetent person. The section is also affected by the Soldiers’ and Sailors’ Civil Relief Act, 50 U.S.C. App. § 520, which is discussed below.

Rule 55(b)(2) empowers the court to enter judgment by default in cases not covered by Rule 55(b)(1). Judgment by default entered by the court must be preceded by an application from the party entitled to judgment. Denial of the motion for default judgment is interlocutory and is not an appealable order. McNutt, Jr. v. Cordox Corporation, 329 F.2d 107 (6th Cir.1964). Relief from such an order lies under Rule 55(c) or Rule 60(b).

Where the party in default is an infant or incompetent the court may enter judgment only if the infant or incompetent is represented, as provided in Rule 55(b)(2), and the representative has appeared in the action. If the party has no representative or if the representative has not appeared, a default judgment may not be entered. The power to enter judgment by default under Rule 55(b)(1) or (2) is limited by the Soldiers’ and Sailors’ Civil Relief Act, 50 U.S.C. § 520, which applies to state litigation as well as federal. Before a judgment based on a default of appearance is entered the plaintiff is required to file an affidavit satisfying the provisions of Rule 55(b)(4).

If the defaulting party has not appeared in the action, he is not entitled to notice of the plaintiff’s pending application for judgment. Bowles v. Branick, 66 F. Supp. 557 (W.D.Mo. 1946 ). If the defaulting party has filed an appearance, the defaulted party must be served with written notice of the application for judgment at least 7 days prior to the hearing on such application. Federal Rule 55(b)(2) specifies a three-day notice period; the time has been extended to conform with the notice period for motions prescribed in Rule 6. Failure to serve the required notice is considered a serious procedural irregularity warranting reversal by an appellate court, Hoffman v. New Jersey Federation of Young Men’s and Young Women’s Hebrew Ass’ns, 106 F.2d 204 (3d Cir. 1939), or setting aside the trial court’s judgment, Meeker v. Rizley, 324 F.2d 269 (10th Cir.1963). It has been held, however, that failure to give written notice may not prevent the entry of judgment if the defendant has actual notice of the pending application. I.C.C. v. Smith, 82 F.Supp. 39 (E.D.Pa. 1949 ).

The purpose of Rule 55(b)(3) is to make it clear that the notice provisions of subparagraph (b)(2) supplement rather than supersede other notice requirements established by law. Thus, for example, Rule 55(b)(2) will have no effect upon G.L. c. 231, § 58A which provides that if a defendant is defaulted for failure to appear in a tort action wherein payment of the judgment is secured by a motor vehicle liability policy or bond, damages shall not be assessed until the expiration of four days after the plaintiff has given notice of such default to the issuing company and has filed an affidavit to that effect.

No hearing is provided if judgment is entered by the clerk. Where the court is required to enter the judgment, Rule 55 provides for a hearing. The hearing is not a trial; if the court determines that the defendant is in default, his liability is established and may not be contested. The defaulted party is, however, provided an opportunity to contest the amount of damages; the court may hold such hearings as it deems necessary including an accounting or reference to a master, In addition, a jury trial may be proper where provided by statute. Rule 55 is subject to the provisions of Rule 54(c) that a judgment by default may not be different in kind or exceed in amount that prayed for in the complaint. Neither Rule 54(c) nor Rule 55 should be interpreted to inquire the court to grant any relief at all. Thus if a complaint on its face seeks improper relief, e.g. an injunction against speech which is clearly constitutionally protected, the court need grant no relief at all, even though the defendant has been defaulted.

Rule 55(b) does not substantially change Massachusetts practice. It merely distinguishes those situations where the clerk may enter judgment by default from those where court action is required.

Rule 55(c) allows the court to set aside the entry of default for “good cause”; and may, for any of the grounds set forth in Rule 60(b), set aside a judgment by default. Because the entry of default is an interlocutory order, a motion under 55(c) is addressed to the sound judicial discretion of the trial judge and will not be reversed except for abuse of that discretion. Although an adequate basis for the motion must be shown, any doubt should be resolved in favor of setting aside defaults so that cases may be decided on their merits. Alopari v. O’Leary, 154 F.Supp. 78 (E.D.Pa. 1957 ).

Rule 55(c) is similar to prior Massachusetts practice. G.L. c. 231, § 57 specifically provides that at any time before judgment a default may be set aside for good cause shown. The grounds for relief from a judgment in Massachusetts are substantially similar to those recognized in the federal system. Rule 55(d) makes clear that the party entitled to a judgment by default may be a third-party plaintiff, or a party who has pleaded a cross-claim or counterclaim.