Second Circuit – Bankruptcy court: In re Orion HealthCorp Inc.

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United States Court of Appeals for the Second Circuit

Bankruptcy court

Default judgment — Adding a party

In re Orion HealthCorp Inc.

23-311-bk

Judges Calabresi, Nathan, and Nagala

Background: The appellant appealed from the denial of its motion to vacate a default judgment. It argues that there was no personal jurisdiction and that that the court misapplied Rule 60(b) factors when it declined to vacate the judgment for good cause.

Ruling: The Second Circuit affirmed. The court held that the bankruptcy court possessed personal jurisdiction over the parties as Rule 15(a) applies to amendments seeing to add parties. Thus, if a plaintiff seeks to add a party to the complaint no later than 21 days after service of the complaint or after service of a responsive pleading, the plaintiff may do so once as of right without seeking permission of the court. The Second Circuit further held that there was no error in determining that the appellant’s default was willful as the default judgment was entered after it failed to file an answer or otherwise respond to the claims made against it, despite receiving proper service of process of the first and second complaints, as well as the default motion. Further, the owner of the appellant was aware of the proceeding when he filed papers in an adversary proceeding bearing the caption of the case.

Anthony F. Guiliano, of Giuliano Law, for the appellant; Brigitte R. Rose, of Thompson Coburn, for the appellee.

Oral argument audio