Motion to Set Aside / Vacate Default Judgment (Debt Collection) - Hawaii

IN THE [☐ DISTRICT COURT / ☐ CIRCUIT COURT] OF THE [____________] CIRCUIT

STATE OF HAWAI‘I

Civil No. [____________]

DEFENDANT'S MOTION TO SET ASIDE / VACATE DEFAULT JUDGMENT

Filed Pursuant to Haw. R. Civ. P. 55(c) and 60(b)

Defendant, [____________] ("Defendant"), appearing [☐ pro se / ☐ by and through undersigned counsel], moves this Court, pursuant to Haw. R. Civ. P. 55(c) and 60(b), to set aside the [☐ entry of default / ☐ default judgment] entered against Defendant on [__/__/____], to stay and quash any execution or garnishment issued thereon, and to grant Defendant leave to file the Answer attached as Exhibit [__]. In support, Defendant states:

I. INTRODUCTION

1. This is a consumer debt-collection action in which Plaintiff seeks to collect an alleged [☐ credit-card / ☐ installment-loan / ☐ medical / ☐ other: [____________]] debt. A [☐ entry of default / ☐ default judgment] was entered against Defendant on [__/__/____] in the amount of $[____________].

2. Hawai‘i courts have "consistently adhered to the policy of affording litigants the opportunity to have their cases heard on the merits, where possible." Bettencourt v. Bettencourt, 80 Hawai‘i 225, 230, 909 P.2d 553, 558 (1995). Defaults are disfavored.

3. The default should be set aside because [summarize in one sentence: service was defective so the judgment is void / Defendant's failure to respond was not the result of inexcusable neglect, Defendant has a meritorious defense, and Plaintiff will not be prejudiced].

II. IDENTIFICATION OF THE DEFAULT JUDGMENT

4. On [__/__/____], the clerk entered a default against Defendant for failure to plead or otherwise defend. See HRCP 55(a). [☐ Applicable / ☐ Not applicable.]

5. On [__/__/____], the Court entered a default judgment against Defendant in the amount of $[____________], comprising alleged principal of $[__________], interest of $[__________], fees/costs of $[__________], and $[__________] in [____________].

6. Defendant [☐ first learned of the judgment on [__/__/____] when [describe — e.g., served with a garnishee summons / notified of a levy / discovered on a credit report]; / ☐ otherwise: [____________]]. This Motion is filed within a reasonable time and within one year of entry of the judgment. See HRCP 60(b).

III. LEGAL STANDARD

7. Setting aside default — HRCP 55(c). "For good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b)." The "good cause" standard for an entry of default is more lenient than the Rule 60(b) standard for a judgment.

8. Relief from judgment — HRCP 60(b). On motion and upon just terms, the court may relieve a party from a final judgment, order, or proceeding for: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud, misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment on which it is based has been reversed or vacated, or it is no longer equitable that it have prospective application; or (6) any other reason justifying relief.

9. Deadline. The motion must be made within a reasonable time, and for reasons (1), (2), and (3) not more than one (1) year after the judgment, order, or proceeding was entered or taken. HRCP 60(b). A motion under (b)(4) asserting the judgment is void is not subject to the one-year limit.

10. Three-factor test. A motion to set aside a default entry or default judgment "may and should be granted whenever the court finds (1) that the nondefaulting party will not be prejudiced by the reopening, (2) that the defaulting party has a meritorious defense, and (3) that the default was not the result of inexcusable neglect or a wilful act." BDM, Inc. v. Sageco, Inc., 57 Haw. 73, 76-77, 549 P.2d 1147, 1150 (1976).

IV. GROUNDS FOR RELIEF

☐ A. The Judgment Is Void — Defective Service / No Personal Jurisdiction (Rule 60(b)(4); HRCP 4). Defendant was never validly served as required by HRCP 4. Specifically, [describe — e.g., Defendant did not reside at the address of purported service; no copy was left with a person of suitable age and discretion residing there; the return of service is false or facially defective; Defendant was not within the State]. Because the Court never acquired personal jurisdiction over Defendant, the judgment is void and must be set aside, and the one-year limit does not apply.

☐ B. Mistake, Inadvertence, Surprise, or Excusable Neglect (Rule 60(b)(1); HRCP 55(c)). Defendant's failure to respond was the result of mistake, inadvertence, surprise, or excusable neglect — and was not the product of inexcusable neglect or any wilful act. Specifically, [describe — e.g., Defendant was hospitalized / off-island / never actually received the papers / reasonably misunderstood the deadline / a calendaring or mail-handling error occurred].

☐ C. Fraud, Misrepresentation, or Misconduct (Rule 60(b)(3)). The judgment was procured by fraud, misrepresentation, or misconduct of Plaintiff, including [describe — e.g., a false affidavit/return of service; a "robo-signed" affidavit of debt; misrepresentation of the amount, ownership, or that the action was timely].

☐ D. Newly Discovered Evidence (Rule 60(b)(2)). Defendant has discovered evidence that by due diligence could not have been discovered in time to move for a new trial, namely [describe — e.g., proof of payment/discharge; documents showing the debt belongs to another; records establishing the debt is time-barred].

☐ E. Satisfied / Discharged (Rule 60(b)(5)). The judgment, or the underlying obligation, has been satisfied, released, or discharged (including by discharge in bankruptcy).

☐ F. Meritorious Defense (BDM factor (2); supports relief). Defendant has one or more meritorious defenses to the underlying debt claim, set forth in Section V and in the proposed Answer attached as Exhibit [__].

V. MERITORIOUS DEFENSE

11. Under BDM, Defendant must show a meritorious defense — a defense that, if proved, would defeat or reduce the claim. Defendant asserts the following, each sufficient if proved:

☐ (a) Statute of Limitations. The alleged debt is time-barred. An action for the recovery of any debt founded upon any contract, obligation, or liability must be commenced within six (6) years after the cause of action accrued. Haw. Rev. Stat. § 657-1(1). The debt accrued on or about [__/__/____] (typically the date of default), more than six years before this action was filed.

☐ (b) Wrong Defendant / Mistaken Identity / Identity Theft. Defendant is not the person who incurred the alleged debt, or the account was opened or used through identity theft. [describe.]

☐ (c) Incorrect Amount; Unauthorized Interest/Fees. The judgment amount is incorrect, inflated, or includes interest, fees, or charges not authorized by agreement, unconscionable, or usurious. Plaintiff must itemize and substantiate each component.

☐ (d) Paid, Settled, or Discharged. The alleged debt has been paid, settled, released, or discharged in whole or in part.

☐ (e) Lack of Standing; No Proof of Assignment. Plaintiff is not the original creditor and failed to prove a complete, unbroken chain of assignment specifically identifying Defendant's account, including each bill of sale and assignment.

☐ Potential separate FDCPA claim—not by itself a defense that the debt is invalid. If a qualifying debt collector failed to provide the notice or verification required by 15 U.S.C. § 1692g, Defendant may have a separate civil claim under 15 U.S.C. § 1692k. A formal pleading is not an “initial communication” under § 1692g(d). Plead such a claim only if procedurally permitted, and evaluate any state-law issue separately.

☐ (g) No Enforceable Contract / No Account Stated. Defendant never assented to the balance alleged and the elements of the claim are not satisfied.

12. These defenses are verified in Defendant's Declaration below and stated in the proposed Answer attached as Exhibit [__].

VI. DEFENDANT'S DECLARATION

I, [____________], declare under penalty of law as follows:

1. I am the Defendant in this action and have personal knowledge of the facts stated here.

2. [Service / notice facts — e.g., "I was never served with the summons and complaint. I did not live at [address] on the date service was claimed," OR explain the mistake, inadvertence, surprise, or excusable neglect that caused the failure to respond.]

3. I first learned that a [default / default judgment] had been entered against me on [__/__/____], when [describe], and I moved promptly to seek relief.

4. I have a meritorious defense to this action, namely: [summarize the facts supporting the defense(s) checked in Section V — e.g., the debt is time-barred / is not mine / was paid / the amount is wrong / Plaintiff does not own it].

5. My failure to respond was not the result of inexcusable neglect or any wilful act, and setting aside the default will not prejudice Plaintiff.

6. I respectfully ask the Court to set aside the [default / default judgment], stay and quash any garnishment or execution, and allow me to defend on the merits.

I declare under penalty of law that the foregoing is true and correct.

DATED: [____________], Hawai‘i, [__/__/____].

_______________________________________
[____________], Defendant

VII. REQUEST TO STAY EXECUTION / QUASH GARNISHMENT

13. Defendant requests that the Court stay execution of the judgment — including any writ of execution, garnishee summons, or levy — pending resolution of this Motion, and quash or release any garnishment already issued. A stay is warranted because the judgment is [☐ void for lack of jurisdiction / ☐ likely to be set aside on the merits], and continued enforcement would cause irreparable harm by depriving Defendant of [☐ wages / ☐ funds in a deposit account, including funds that may be exempt from garnishment] before the Court rules.

VIII. RELIEF REQUESTED

WHEREFORE, Defendant respectfully requests that the Court:

A. SET ASIDE the entry of default under HRCP 55(c) and/or VACATE the default judgment entered on [__/__/____] under HRCP 60(b);

B. STAY execution and QUASH or RELEASE any writ of execution, garnishee summons, or levy issued on the judgment;

C. GRANT Defendant leave to file the Answer attached as Exhibit [__] and permit Defendant to defend on the merits;

D. AWARD Defendant costs and, to the extent permitted by law or contract, reasonable attorney's fees; and

E. grant such other and further relief as the Court deems just and proper.

IX. PROPOSED ORDER

A proposed order granting the relief requested is submitted herewith for the Court's convenience.

DATED: [____________], Hawai‘i, [__/__/____].

Respectfully submitted,

/s/ [____________________________________]
[____________________________________]
☐ Defendant, pro se ☐ Attorney for Defendant
Hawai‘i Bar No. (if attorney): [____________]
[Street Address]
[City], [State] [____]
Telephone: ([____]) [____]-[________]
Email: [____________________________________]

X. CERTIFICATE OF SERVICE

I hereby certify that on the [____] day of [____________], 20[____], a true and correct copy of the foregoing Motion to Set Aside / Vacate Default Judgment, the supporting Declaration, the proposed Answer, and the proposed Order was served upon Plaintiff's counsel of record (or upon Plaintiff, if unrepresented) in accordance with Haw. R. Civ. P. 5, by the following method:

☐ Hawai‘i State Judiciary Electronic Filing System (JEFS / JIMS), e-service to all counsel of record
☐ U.S. First-Class Mail, postage prepaid
☐ Certified Mail, Return Receipt Requested
☐ Hand Delivery
☐ Email (by agreement / where permitted)

Addressed to:

[____________________________________]
[____________________________________]
[____________________________________]

/s/ [____________________________________]
[____________________________________]

HAWAI‘I PRACTICE NOTES

• Two standards. A clerk's entry of default is set aside for "good cause shown" under HRCP 55(c) (lenient). A default judgment is set aside "in accordance with Rule 60(b)."
• Three-factor test (BDM): set aside should be granted where (1) the nondefaulting party will not be prejudiced, (2) the defaulting party has a meritorious defense, and (3) the default was not the result of inexcusable neglect or a wilful act. BDM, Inc. v. Sageco, Inc., 57 Haw. 73, 549 P.2d 1147 (1976).
• Deadline. Rule 60(b)(1)-(3): reasonable time and no more than one year after entry. A void-judgment motion under (b)(4) (e.g., defective service) has no one-year cap. Move promptly.
• Favor of merits. Hawai‘i courts favor deciding cases on the merits. Bettencourt v. Bettencourt, 80 Hawai‘i 225 (1995).
• Debt SOL: 6 years for an action to recover a debt founded on a contract, obligation, or liability (Haw. Rev. Stat. § 657-1(1)); covers most credit-card and written-contract debt. Confirm accrual.
• District vs. Circuit Court: District Court applies the DCRCP, which closely tracks the HRCP; confirm the corresponding DCRCP rule numbers (default / relief from judgment) if filing in District Court.
• Garnishment/exemptions: Confirm Hawai‘i wage-garnishment limits and exemptions (Haw. Rev. Stat. ch. 652; § 651-121 et seq.) and the procedure to claim them; a separate filing may be required.

Sources and References

• Hawai‘i Rules of Civil Procedure (Rule 55 Default; Rule 60 Relief from Judgment; Rule 4 Process): https://www.courts.state.hi.us/legal_references/rules/rulesOfCourt
• BDM, Inc. v. Sageco, Inc., 57 Haw. 73, 549 P.2d 1147 (1976): https://law.justia.com/cases/hawaii/supreme-court/1976/5713-2.html
• Bettencourt v. Bettencourt, 80 Hawai‘i 225, 909 P.2d 553 (1995): https://law.justia.com/cases/hawaii/supreme-court/
• Haw. Rev. Stat. § 657-1 (six-year limitation): https://law.justia.com/codes/hawaii/title-36/chapter-657/section-657-1/
• Haw. Rev. Stat. § 657-1.5 (declaration in lieu of affidavit): https://www.capitol.hawaii.gov/hrscurrent/Vol13_Ch0601-0676/HRS0657/
• Haw. Rev. Stat. ch. 443B (collection agencies); § 480-2 (UDAP): https://www.capitol.hawaii.gov/docs/HRS.htm
• Haw. Rev. Stat. ch. 652 / § 651-121 et seq. (garnishment; exemptions): https://www.capitol.hawaii.gov/docs/HRS.htm
• Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.: https://www.ftc.gov/legal-library/browse/rules/fair-debt-collection-practices-act-text
• CFPB — what is a default judgment: https://www.consumerfinance.gov/ask-cfpb/what-is-a-default-judgment-en-1459/