Gourlay v. Sallie Mae, Inc. (In re Gourlay)

2012 FED App. 0001P (6th Cir.); Appellate Case No. 11-8066, on appeal from the U.S. Bankruptcy Court for the Eastern District of Kentucky at Adversary Case No. 11-5036
The Bankruptcy Appellate Panel of the Sixth Circuit ruled that it was not an abuse of discretion to deny a creditor's motion to set aside a default judgment when the creditor failed to demonstrate that it maintained minimal internal safeguards to ensure that process would reach the appropriate personnel, finding that the creditor’s conduct did not constitute excusable neglect, but rather, culpable conduct. Further, any legal error of the bankruptcy court related to the legal sufficiency of the adversary complaint could not be challenged on appeal as the time for reconsideration of a point of law under Rule 60(b)(1) is permitted only when relief from judgment is sought within the deadline for taking an appeal.
Procedural context:
Appeal to the Bankruptcy Appellate Panel of a bankruptcy court's denial of a motion to vacate a default judgment.
The debtor instituted an adversary proceeding against a creditor, seeking to determine the dischargeability of her student loan. The debtor perfected service on the creditor, and then filed a motion for default judgment against the creditor, which the court granted. The creditor subsequently filed a motion to set aside the default judgment, which the court denied. The creditor then timely appealed the court’s order denying its motion.
Arthur I. Harris C. Kathryn Preston Marilyn Shea-Stonum

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