In Henry v. Oluwole, No. 21-2468 (2d Cir. July 15, 2024), a 2-1 panel of the Second Circuit holds not only that the district court erred in refusing to reopen a default judgment before and after a jury trial, but that judgment had to be entered for the party in default due to a fatal inconsistency in the jury verdict, citing Frow v. De La Vega, 82 U.S. 552 (1872).
The plaintiff Henry sued defendants Dr. Oluwole and his employer Bristol Hospital, alleging that Oluwole sexually assaulted her while on the job. “Henry asserted claims against Oluwole for assault, battery, false imprisonment, intentional infliction of emotional distress [IIED], negligent infliction of emotional distress [NIED], and negligence.” Oluwole failed to appear in the case and the district court entered a default judgment against him in 2015 on liability only.
Three years after entry of default judgment, four years after being served, and five years into the case, Dr. Oluwole first appeared in 2018 and moved to vacate the default judgment. He alleged that because of a motorcycle accident, which caused a traumatic brain injury, “the length and circumstances of his recovery . . . prevented him from receiving timely notice of the action.” Notwithstanding, the district court denied this first motion to vacate, finding his failure to appear willful.
The case against defendant Bristol Hospital proceeded to trial (with Dr. Oluwole as a witness) and the jury found the hospital not liable, based on jury findings that Henry had not “proven by a preponderance of the evidence that Dr. Oluwole engaged in tortious conduct towards her by sexually assaulting her” and had not “proven by a preponderance of the evidence that Dr. Oluwole engaged in tortious conduct towards her by assaulting or battering her.”
On Dr. Oluwole’s second motion to vacate after the jury verdict, “the district court vacated the default judgment against Oluwole as to assault and battery—holding that those claims were inconsistent with the jury verdict—but it left in place the default judgment as to Henry’s other claims. The district court then held hearings on damages. It declined to award economic damages and punitive damages to Henry, but it entered a final judgment ordering Oluwole to pay Henry $100,000 in noneconomic damages.” Final judgment was entered on September 29, 2021.
A 2-1 panel of the Second Circuit reverses the judgment and orders entry of judgment for Dr. Oluwale. The panel majority holds that the district court abused its discretion in denying Dr. Oluwole’s two motions to vacate the default judgment. While allowing that the evidence supported (if equivocally) a finding of willfulness, the record clearly supported Oluwole on two other findings. First, contrary to the findings below, there was no prejudice to the plaintiff from the delay. “The district court did not find—and the record did not suggest—that setting aside the default judgment would result in the loss of evidence, difficulties in discovery, or fraud and collusion.” Furthermore, in 2018, no trial date had been set, so Oluwole would have had time to conduct discovery without interfering with the schedule.
Second, “the district court correctly found that Oluwole asserted a potentially meritorious defense, specifically his contention that the ‘sexual encounter’ with Oluwole had been consensual,” thus weighing in favor of vacating the default judgment.
Having held that the motion to vacate ought to have been granted, the panel majority then holds that the default judgment against Dr. Oluwole cannot not stand under the rule of Frow, i.e., “if the suit should be decided against the complainant on the merits, the bill will be dismissed as to all the defendants alike— the defaulter as well as the others.”
In this case, the entry of judgment in favor of the hospital on all claims nullified any potential liability for Dr. Oluwole, because the jury found that he did not commit sexual assault. While the district court correctly “applied this method when it vacated the default judgment with respect to the six battery and one assault claims,” it ought to have dismissed the false imprisonment, IIED, NIED, and negligence claims against the doctor as well.
“The ultimate question is whether the well-pleaded allegations of the complaint—except those that conflict with the jury verdict—are sufficient to state a claim under Connecticut law for false imprisonment, IIED, NIED, or negligence. We conclude that the complaint fails to state these claims. For each claim, one or more essential elements is unmet. As a result, the default judgment against Oluwole must be set aside.”
Dissenting, Judge Kearse—without specifically addressing the Frow issue—would hold that there was no error in denying to motions for default, finding both willfulness and prejudice to plaintiff’s case.
The dissent enumerates record evidence supporting the district court’s findings: “(a) that Oluwole was in default for some five years before appearing in the action, (b) that his motion to vacate the default initially proffered the excuse that he had been disabled and hospitalized, but without support by any evidence–not even a sworn statement by Oluwole, (c) that Oluwole’s next proffered excuse–that he had not learned of this 2013 action until 2017–was stated in affidavits from Oluwole and his wife that were short-lived, being quickly withdrawn when Henry produced a message that she had received from Oluwole in 2015 referring to his not ‘fac[ing]’ her ‘in court,’ and (d) that during the five years prior to any attempt by Oluwole to appear in the action, at least two of Henry’s potential witnesses had died.”
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