Taylor v. Bussiere et al

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
LIONEL N. BUSSIERE, JR.
THERESA M. GENNA
DEBTORS
CASE NO.
05-01206-5-ATS
TIMOTHY TAYLOR
Plaintiff
v.
LIONEL M. BUSSIERE, JR. and
THERESA M. GENNA aka
THERESA BUSSIERE
Defendants.
ADVERSARY PROCEEDING NO.
S-05-00115-5-AP
ORDER SETTING ASIDE ENTRY OF DEFAULT JUDGMENT
The matter before the court is the defendants’ response to the
plaintiff’s motion for entry of default judgment. A hearing took place
in Raleigh, North Carolina on September 8, 2005.
Lionel N. Bussiere, Jr. and Theresa M. Genna filed a petition for
relief under chapter 7 of the Bankruptcy Code on March 31, 2005. On
June 28, 2005, Timothy Taylor filed the complaint in this adversary
proceeding pursuant to 11 U.S.C. § 523(a)(2) to determine the
dischargeability of a debt. No responsive pleading was filed, and on
July 29, 2005, the court issued an order directing the plaintiff to
proceed. On August 8, 2005, the plaintiff filed a motion for entry of
default and default judgment, and an order granting default judgment
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was entered on August 10, 2005, before the defendants had time to
respond. The debtors/defendants did file a response to the motion for
default judgment on August 16, 2005, which the court will consider to
be a motion to set aside the default judgment.
The debtors and their attorney contend that they were not served
with the summons and complaint, and that they were not aware that an
adversary proceeding had been filed until they received the motion for
entry of default and default judgment. The order granting default
judgment had already been entered when the debtors’ attorney received
the motion, and the debtors had no opportunity to respond. The debtors
contend that they have meritorious defenses to the complaint, and that
they would have filed an answer had they been properly served.
Because the debtors and their counsel did not receive service of
the complaint, because they did not have time to respond to the motion
for default judgment, and because they presented a genuine issue as to
whether there is a meritorious defense to the action, the motion to set
aside the entry of default and default judgment is ALLOWED. The clerk
will set this matter for trial in 45 to 60 days.
SO ORDERED.
DATED: September 8, 2005
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