Background
In December 2021, a tractor-trailer operated by an employee of KJ Win, Inc. — a California-based trucking company — was parked on the shoulder of I-20 in Newton County, Mississippi. Plaintiffs Cheryl Roberts and William Chambers alleged that the parked truck caused another tractor-trailer to abruptly change lanes, triggering a chain-reaction collision that seriously injured both. Roberts suffered a traumatic brain injury along with neurological, orthopedic, and psychological problems; Chambers sustained a fractured sternum, headaches, and PTSD. They sued KJ Win in October 2023 in federal court under theories of negligence, negligence per se, gross negligence, and respondeat superior.
Plaintiffs encountered significant difficulty serving KJ Win. Its registered agent’s California address on file with the Secretary of State turned out to be a vacant residence, and service at a second address in FMCSA records also failed. The district court authorized substituted service through the California Secretary of State under California Corporations Code § 1702. Even after that service was effected, KJ Win never answered or appeared. The court clerk entered a default in January 2024, and following an evidentiary hearing on damages, the district court entered judgment on July 8, 2024, awarding Roberts $1.8 million and Chambers just over $1.039 million — a total of $2,839,806.73.
KJ Win surfaced in October 2024 and moved to vacate the default judgment under Federal Rule of Civil Procedure 60(b), arguing its default was not willful, that Plaintiffs would suffer no prejudice from vacatur, and that it possessed meritorious defenses. The district court denied the motion in April 2025, finding KJ Win had willfully defaulted, and KJ Win timely appealed.
The Court’s Holding
The Fifth Circuit affirmed, finding no abuse of discretion in the district court’s Rule 60(b)(1) ruling. Applying the framework from Wooten v. McDonald Transit Associates, the court noted that a finding of willful default ends the Rule 60(b)(1) inquiry — courts need not separately assess prejudice to the opposing party or the strength of the defendant’s defenses once willfulness is established. KJ Win offered no explanation for what happened between service and its belated effort to vacate the judgment, could not produce a supporting affidavit, and could not even affirmatively deny it knew of the suit. The court held that KJ Win’s bare assertion that service was defective and that it should not be penalized for failing to maintain accurate records with the Secretary of State did not satisfy its burden of showing excusable neglect by a preponderance of the evidence.
The court also held that KJ Win forfeited its Rule 60(b)(4) argument — that defective substituted service voided the judgment for lack of personal jurisdiction — by raising it for the first time on appeal rather than in its Rule 60 motion below. Adopting the reasoning of the Seventh and Eleventh Circuits, the Fifth Circuit held that personal jurisdiction challenges to default judgments are forfeited if not raised in the district court Rule 60(b) proceeding, likening such challenges to Rule 12(b)(2) motions to dismiss that must be raised in a defendant’s first responsive filing. The court declined to recognize an exception to the forfeiture rule, reasoning that KJ Win’s arguments were not purely legal — they implicated factual questions about the manner and adequacy of service and KJ Win’s own post-service conduct.
Finally, the court found forfeited KJ Win’s two newly raised damages challenges: that Mississippi’s statutory cap on non-economic damages applied collectively across all plaintiffs rather than per plaintiff, and that KJ Win was entitled to a pro tanto offset for an alleged settlement between Plaintiffs and another defendant. Neither argument had been presented to the district court. The court declined to reach their merits, noting that the underlying legal and factual questions were undeveloped and that no miscarriage of justice would result from holding KJ Win to ordinary forfeiture rules.
Key Takeaways
- Under Fifth Circuit precedent, a finding of willful default under Rule 60(b)(1) is dispositive — once a district court finds willfulness, it need not separately weigh prejudice to the plaintiff or the defendant’s asserted meritorious defenses.
- A defendant who fails to maintain a current registered agent address, offers no affidavit or evidence explaining why it did not respond to suit, and cannot deny knowledge of the lawsuit will not meet its burden to show excusable neglect sufficient to vacate a default judgment.
- The Fifth Circuit adopted the rule that personal jurisdiction challenges to default judgments under Rule 60(b)(4) are forfeited if not raised in the district court Rule 60 proceeding, aligning with the Seventh and Eleventh Circuits.
- Arguments regarding statutory damages caps and comparative-fault offsets must be raised in the district court — raising them for the first time on appeal after a default judgment results in forfeiture, particularly where the record is factually undeveloped.
Why It Matters
This decision reinforces the steep burden defendants face when trying to unwind a default judgment after willfully failing to appear. For trucking companies and other corporate defendants, maintaining accurate registered agent and carrier records is not merely a regulatory formality — failure to do so can eliminate a defendant’s ability to contest service, demonstrate excusable neglect, and ultimately vacate a multi-million dollar judgment.
The court’s adoption of the forfeiture rule for Rule 60(b)(4) personal jurisdiction challenges is also significant. By holding that defendants who file a Rule 60 motion must raise all jurisdictional objections in that motion or lose them on appeal, the Fifth Circuit closes a potential loophole that could otherwise allow defendants to strategically hold back threshold defenses. Defense counsel handling default judgment situations must now take care to assert every available ground — including service and personal jurisdiction challenges — at the district court level or risk permanent waiver.