Defendants Key West & Caribbean Trading Company (Key West) and its president, Boyd Morrow, appeal from a default judgment in favor of plaintiff John Keegel, et al. (Keegel). We reverse and remand.

Keegel filed a complaint against Key West and Morrow on August 31, 1978 seeking rescission, restitution, compensatory damages, and interest, for alleged fraud, breach of contract, and violations of state and federal securities laws. After two attempts at service had failed, a court-appointed special process server succeeded in personally serving Key West and Morrow on December 27, 1978. Under Rule 12(a), Fed.R.Civ.P., answer was due within 20 days. No answer had been filed as of the due date.

Settlement negotiations followed on the heels of the December 27, 1978 service. On February 1, 1979, Miles Kauffman, counsel for Keegel, wrote Morrow. Noting that defendants were not represented by counsel, Kauffman (1) reiterated his agreement to request continuance of a scheduled February 2 status hearing to complete settlement, (2) reaffirmed Keegel's willingness to settle if $10,000 were tendered by March 5, 1979, (3) stated that, if settlement failed, defendants would have until March 15, 1979 to file answer, and (4) agreed not to seek default judgment before March 15, 1979.

Noting defendants' absence from the February 2 status hearing, and defendants' failure to retain counsel or file answer, the court refused a continuance and directed Kauffman to file for default. To Kauffman's representation that settlement might occur within thirty days, the court responded that default would "facilitate settlement."1 Kauffman did not inform the court of his having told defendants they had until March 15 to file answer, or of his agreement not to seek default judgment before that date, although he did note for the record that he had agreed with the defendant to request a continuance.

Defendants retained counsel. On February 22, 1979, unaware of the default, counsel filed a proposed answer and motion for extension of time to answer. The court issued an order to show cause why default judgment should not be entered. Defendants moved to set aside the default. Following a hearing on defendants' motion, the court issued memorandum and orders denying defendants' motion and their subsequent motion for reconsideration, and granting Keegel's Application for Judgment on Default for $10,060.2 Defendants appealed.

In its memorandum with the order denying the motion to set aside, the court attributed the default to defendants' "personal inaction" and "neglect" in not engaging counsel sooner, defendants having known the suit was imminent long before the complaint was filed. Taking a "dim view" of the parties' attempt to extend the time for answering, considering that action an improper usurpation of the court's function, the court concluded that defendants "had ample notice and opportunity to respond" to the complaint and thus were "not a surprised party upon whom a default judgment would be particularly harsh."

The sole issue is whether the district court erred in denying defendants' motion to set aside the default.

Rule 55(c), Fed.R.Civ.P., provides in relevant part: "For good cause shown the court may set aside an entry of default * * *." Though the decision lies within the discretion of the trial court, Moldwood Corp. v. Stutts, 410 F.2d 351, 352 (5th Cir. 1969), Provident Security Life Ins. Co. v. Gorsuch, 323 F.2d 839, 842 (9th Cir. 1963), Tozer v. Charles A. Krause Milling Co., 189 F.2d 242, 244 (3d Cir. 1951), exercise of that discretion entails consideration of whether (1) the default was willful, (2) a set-aside would prejudice plaintiff, and (3) the alleged defense was meritorious, Medunic v. Lederer, 533 F.2d 891, 893 (3d Cir. 1976), Thorpe v. Thorpe, 364 F.2d 692, 694 (D.C.Cir.1966), Erick Rios Bridoux v. Eastern Air Lines, Inc., 214 F.2d 207, 210 (D.C.Cir.1954), Tozer v. Charles A. Krause Milling Co., supra at 244-46. An abuse of discretion need not be glaring to justify reversal, modern federal procedure favoring trials on the merits. H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepte, 432 F.2d 689, 691 (D.C.Cir.1970); Thorpe v. Thorpe, supra at 694; Erick Rios Bridoux v. Eastern Air Lines, supra at 210.

Consideration of the listed criteria is not reflected in the district court's memorandum. Absence of record indication that proper standards were applied in refusing to set aside a default has been held sufficient in itself to warrant reversal. Medunic v. Lederer, supra. We need not, however, decide this case on that limited basis.

The "willful" criterion appears lacking. Amid ongoing settlement negotiations, Kauffman assured Morrow that no answer need be filed until March 15. Kauffman, an attorney, had dealt with Morrow, a layman, since April, 1978, and knew that Morrow was without counsel. Under those circumstances, there was no willfulness in Morrow's failure to answer in good faith reliance on Kauffman's assurances.3 Keegel's suggestion that Morrow intentionally evaded service of process, even if true, is insufficient to make defendants' failure to answer willful. No obligation to answer arose until after service was effected.

The "prejudice" to plaintiff criterion is also lacking. Kauffman's February 1 letter evidenced Keegel's willingness to accept as timely an answer filed by March 15, 1979. Defendants filed their proposed answer on February 22, 1979. That setting aside the default would delay satisfaction of plaintiffs' claim, should plaintiffs succeed at trial, is insufficient to require affirmance of the denial. Tozer v. Charles A. Krause Milling Co., supra at 246; Erick Rios Bridoux v. Eastern Air Lines, supra at 209.

The "absence of meritorious defense" criterion is also lacking. Likelihood of success is not the measure. Defendants' allegations are meritorious if they contain "even a hint of a suggestion" which, proven at trial, would constitute a complete defense. Moldwood Corp. v. Stutts, supra at 352; Tozer v. Charles A. Krause Milling Co., supra at 244. In their proposed answer, defendants here alleged lack of subject matter jurisdiction and denied any misrepresentations, fraudulent acts, or securities law violations. Though somewhat broad and conclusory, those allegations adequately meet the meritorious defense criterion for setting aside the default.4

In sum, on the record before us, the default was not willful, plaintiff would not be prejudiced if it were set aside, and defendants alleged a meritorious defense. There being no reason to deny defendants a trial on the merits, an abuse of discretion occurred in the refusal to set aside the default.

The district court's concern over an apparent attempt to usurp control of the court's docket is fully understandable. When justice is denied by delay to so many, the administration of justice demands the praiseworthy close control and supervision of its crowded docket intended here by the district court. It is clear that courts cannot surrender or shift that responsibility. Mere agreements of counsel or parties cannot alone be sufficient to waive the timeliness requirements of the Federal Rules. See Link v. Wabash R.R., 370 U.S. 626, 630-31, 82 S. Ct. 1386, 1388-89, 8 L. Ed. 2d 734 (1962).5 But, as above indicated, courts also " 'universally favor trial on the merits.' " Erick Rios Bridoux v. Eastern Air Lines, supra at 210 (quoting Manos v. Fickenscher, 62 A.2d 791, 793 (D.C.Mun.App.1948)). The assurances upon which defendants relied were part of and grew out of settlement negotiations, a dispute-resolving mechanism the courts seek to encourage. Settlement having failed, the interests of justice in this case would be ill-served by resort to a procedural device that would unfairly or unnecessarily foreclose resolution of the dispute on its merits. As above indicated, the most certain safeguard lies in application of the three listed criteria to motions to set aside defaults.

Accordingly, we reverse the orders entering judgment for Keegel and denying defendants' motion to set aside the default, and remand with directions to grant defendants' motion to set aside the default.