MEMORANDUM**

Lorenzo and Wanda Benavidez (collectively "Benavidez"), appellees, filed an action against various entities of the Town of Guadalupe (collectively "the Town"), alleging acts of police misconduct. The Town was insured by National Union Fire Insurance Co. of Pittsburgh, Pennsylvania ("National"). National denied coverage. The District Court for the District of Arizona awarded the Benavidez a judgment of $900,000, plus attorney's fees. The Town paid Benavidez $75,000 in exchange for a convenant not to execute on the remainder of the judgment.

On October 27, 1987, Benavidez served a summons and writ of garnishment on the Director of Insurance of the Arizona Department of Insurance ("the Department of Insurance"), naming National as the garnishee. National had forty days from that date to reply to the writ. A.R.S. Sec. 20-222(B). The Department of Insurance sent the documents to National. National received the documents on November 2, 1987, but did not answer the writ within the forty days prescribed by law.

On December 10, 1987, the district court issued an order directing National to either answer the writ at least five days prior to a December 21, 1987 hearing, or appear at the hearing. The Department of Insurance sent the order to National on December 18, 1987. It is unclear when National's mail room received notice of the hearing, but National's State Relations and Compliance Department received the notice on December 24, 1987. On December 21, 1987, however, the district court granted a default judgment against National for over $900,000, based on National's failure to answer the writ or appear at the hearing.

On June 20, 1988, roughly six months after the entry of the default judgment, National moved to set aside the default judgment under Fed.R.Civ.P. 60(b)(1). The district court refused to set aside the judgment. National appeals. We affirm.

A district court's factual findings with respect to a Rule 60(b)(1) motion are reviewed for clear error. Meadows v. Dominican Republic, 817 F.2d 517, 521 (9th Cir.1987). If the facts are undisputed or the findings are not clearly erroneous, we review a refusal to set aside a judgment under 60(b)(1) for abuse of discretion. Id.; see also Pena v. Seguros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir.1985).

A Rule 60(b)(1) motion "shall be made within a reasonable time, ... and [ ] not more than one year after the judgment ... was entered." Rule 60(b). A district court has the discretion to deny the motion if: (1) the defendant's culpable conduct led to the default; (2) the defendant has no meritorious defense; or (3) the plaintiff would be prejudiced if the judgment is set aside. Meadows, 817 F.2d at 521. If the default judgment issues as a result of the defendant's culpable conduct, we may affirm without considering whether the defendant shows a meritorious defense or the plaintiff would suffer prejudice if the judgment were set aside. Id.

The district court held that National's conduct was culpable in that National failed to have a procedure for determining the deadline for the answer of the writ of garnishment. National contends that its system for mail capture and distribution broke down on this one occasion.

The district court's conclusion that it was culpable for National not to have adequate procedures to ensure the timely answer to the writ was not clear error. After the writ was received on November 2, 1987, the writ was forwarded to four different offices, some located in the same building. No person in the first three offices was qualified and willing to determine the significance of the writ or formulate a response. On November 30, 1987, twenty-eight days after receipt, the writ reached Dean Ball, the first person who undertook any action with respect to the writ. Nothing anomalous unduly delayed the processing of the writ.1 The due course of National's mail processing system left Ball little time to make a timely reply to the writ.

We do not reach the issue of whether Ball's handling of the writ was negligent. Even if we assume Ball was diligent in seeking to determine the significance of the writ, his inability to make a timely and correct determination of the significance of the writ, the deadline to file an answer, and the possibility of a default judgment, further supports the district court's conclusion that National lacked proper safeguards for the handling of the writ.

The district court's December 10, 1987, order required National to respond to the writ of garnishment five days prior to a December 21, 1987, hearing or to appear at the hearing. National argues that it received the order too late to abide by its terms. Thus, National urges that the district court's denial of its Rule 60(b) motion to set aside the resulting default judgment was an abuse of discretion as a denial of due process.

We agree with the district court that National's argument would be persuasive if it had moved to set aside the default judgment within a reasonable time. National, however, waited approximately six months from the date of the judgment to file its Rule 60(b) motion. National therefore cannot show that it would have timely responded to the writ or appeared at the hearing if it had received timely notice of the hearing. Under these circumstances it was not an abuse of discretion for the district court to deny the motion to set aside the default judgment.

AFFIRMED.