OPINION
PER CURIAM.I. INTRODUCTION
Following the entry of a default judgment against him in excess of $7,000,000, Kim Michael Cook filed a peremptory challenge of the assigned judge and a motion to set aside the default judgment. The superior court rejected the peremptory challenge as untimely and refused to set aside the default judgment. Because three members of the court-Chief Justice Fabe, Justices Matthews and Bryner-have concluded that Cook has shown both excusable neglect and a potentially meritorious defense as to damages, we set aside the default judgment and remand for a redetermination of damages. Because three members of the court-Justices Eastaugh, Bryner, and Carpeneti-have concluded that Cook's peremptory challenge should be given effect, proceedings concerning the determination of damages on remand should be conducted before a different judge.
II. FACTS AND PROCEEDINGS
In the early morning hours of May 15, 1999, Palmer Police Officer James Rowland approached a parked car in which Kim Michael Cook was sleeping. In the series of events that followed, which are not the immediate concern of this case, both men fired gunshots and both were hit. Officer Rowland died as a result of his injuries.
Cook was arrested and charged with first-degree murder in connection with Rowland's death. As a result of his own injuries, Cook was hospitalized and underwent two surgeries before being transferred to a maximum security cell at Cook Inlet Pretrial Facility.
On May 27, 1999, Hallie Rowland, Officer Rowland's widow and the personal representative of his estate, filed suit against Cook for wrongful death. The complaint sought compensatory and punitive damages. Cook was served with the complaint when he appeared at a criminal arraignment on May 28, but he failed to answer the complaint within twenty days as required by law. As a result, Hallie Rowland applied to the clerk for entry of Cook's default on June 18.
Three days after the default was entered, Rowland requested a hearing to establish damages for the default judgment. She later withdrew that request and proposed that the court enter a default judgment without a hearing. She provided the court with affidavits supporting her claims for damages. One affidavit, from an economist, calculated Rowland's lost lifetime earnings at $1,8583,975.00. The other affidavit, from Rowland, claimed the estate's entitlement to $400,000 for non-economic damages, the maximum allowable award. Rowland calculated her total compensatory damages at $1,758,975, and proposed an award of punitive damages of three times that amount, or $5,261,025.
Superior Court Judge Beverly W. Cutler entered the default judgment against Cook on June 28, 1999, accepting in full Rowland's calculation of damages for a total judgment of $7,015,900.
On July 21 Cook responded to the civil suit for the first time, by moving to set aside the entry of default and the default judgment. He also then filed a peremptory challenge to the assigned judge pursuant to Civil Rule 42(c).
Judge Cutler denied Cook's peremptory challenge as untimely, and scheduled a hearing for two weeks later on Cook's motion to set aside the default judgment in order to determine "whether there is an evidentiary basis for defendant's claims." Cook sent a handwritten response to the court and Rowland's attorney stating that he would not be able to arrange for transportation from his maximum security cell in the prison to attend *264the hearing; both the court and Rowland's attorney received this response the day before the scheduled hearing. Although Cook did not appear at the hearing, his motion to set aside the default judgment was denied by the superior court at that time.
Cook filed this appeal challenging two decisions of the superior court. First, Cook argues that the court improperly denied his peremptory challenge. Second, Cook argues that the court erred by not setting aside the default judgment against him.
Subsequent to the entry of all briefs in this case, Cook was found guilty of first-degree murder in connection with Rowlands death.1
III. STANDARD OF REVIEW
We review an order refusing to set aside a default judgment for abuse of discretion.2 "We will not find an abuse of discretion unless we are left with a definite and firm conviction on the whole record that a mistake has been made."3 The interpretation and application of the right to disqualify a judge under Alaska Civil Rule 42(c) is a question of law that we consider de novo.4
IV. DISCUSSION
A. The Superior Court Abused Its Discretion in Refusing To Set Aside the Default Judgment against Cook.
Cook argues that the superior court erred when it refused to set aside the default judgment against him because his failure to respond was excusable neglect. The superior court denied Cook's motion at a hearing on September 15 because it found "no evidence to support Mr. Cook's claims."
The rules of civil procedure "provide relief from judgments which, for one reason or another, are unjust." 5 Civil Rule 55(e) provides that an entry of default may be set aside "[fJor good cause shown," and that a default judgment may be set aside "in accordance with Rule 60(b)." We have consistently held that disposition of a case on the merits is strongly preferred to judgment by default.6
1. Cook presented sufficient evidence of excusable neglect.
Civil Rule 60(b) sets forth a number of grounds that justify relief from a final judgment. Cook looks to apply the provisions of Rule 60(b)(1) which provide that a final judgment can be challenged "within a reasonable time ... not more than one year" for "mistake, inadvertence, surprise or exeusable neglect."
Specifically, Cook claims that his actions showed excusable neglect. In an affidavit filed July 21 Cook described the circumstances that made it difficult for him to respond to the May 28 summons. These circumstances included: injuries suffered as a result of gunshot wounds that led to two surgeries, the administration of pain medication, and limited use of his right hand; confinement in a maximum security unit at Cook Inlet Correctional Facility where he did not have use of a phone until June 22; lack of familiarity with court rules; and preoccupation with his criminal defense. As a result of these circumstances, Cook claims that he was not able to respond to the summons before the twenty-day period had expired on June 18.
In response to Cook's claims, Rowland alleges that those claims are "incredible," that Cook shows a level of sophistication that would have allowed him to understand the significance of the complaint, and that Cook acted in bad faith, choosing to ignore the action on the belief that his assets were beyond the reach of the court.
*265We have found excusable neglect in circumstances of disability which resemble in some respects those presented by Cook. In Gregor v. Hodges,7 we held that the superior court abused its discretion in refusing to set aside a default judgment on excusable neglect grounds where the defendant had a broken ankle and pneumonia and was bedridden and under the influence of pain medication. In addition, the defendant had difficulty in obtaining counsel until after the default judgment had been entered.8
We have also held that setting aside a default judgment may be warranted: where "a pro se litigant's default results from lack of familiarity with the rules, rather than gross neglect or lack of good faith, and where the litigant is unversed in the rules of civil procedure.9 Although Cook was later able to obtain legal assistance to respond, he was initially unable to contact an attorney during the time relevant to the default.
Based upon the circumstances presented by Cook, we find that his failure to respond to the complaint in a timely fashion is exeusa-ble. Cook was served with this lawsuit within two weeks of suffering multiple serious gunshot wounds. As a result, his claims that he underwent extensive medical treatment and was heavily medicated appear legitimate. In addition to his physical incapacitation, Cook was being held in a confined setting which allowed him minimal contact with the outside world. He was engaged in and likely preoe-cupied with defense of the extremely serious criminal charges filed against him. Based upon these circumstances, his neglect in responding before the superior court entered a default and awarded default judgment in his case was excusable. Rowland suggests that Cook acted in bad faith, but provides no reason to believe that Cook could profit by purposefully allowing a default to be taken against him. The suggestion of bad faith appears to be speculation and is not supported by any evidence.
2. Cook presented sufficient evidence to find "good cause" to set aside the default judgment.
We have directed that in determining whether "good cause" exists to set aside a default under Civil Rule 55(e), a court should consider: "whether the defendant has established the required meritorious defense, prejudice to plaintiffs, the culpability of defendant's conduct, the length of the period of default, the size of any potential award to plaintiffs, and alternative sanctions against the defendant." 10 An evaluation of these factors weighs in favor of setting aside the default judgment against Cook.
a. Cook has established a potential meritorious defense to the amount of damages.
In addition to the specific showing of excusable neglect to satisfy Rule 60(b), the rules governing setting aside a default judgment generally require that the movant have a meritorious defense."11 It is not necessary that the defendant show that, if relief is granted, the ultimate outcome will be different, but the defendant must demonstrate that the outcome might be different if a trial were held.12
Showing a meritorious defense demands "more than a perfunctory statement that a meritorious defense exists."13 The defaulting party "may be required to show that there is a factual or legal basis for the tendered defense." 14 Cook contends that this requirement only means that a defendant must say more than the conclusory *266statement "I have a defense." But the exact standard is not so easily defined, because the amount of proof required will change based on the persuasiveness of the other equitable factors considered under Rule 55(e)'s requirement of good cause.
Rowland argues that a meritorious defense requires both a claim of defense and a factual representation supporting that claim. Rowland relies upon our finding in Wright v. Shorten that a meritorious defense existed where the defendant pleaded a defense and presented evidence to support the claim.15 However, in several other cases we have not required evidence but have found a meritorious defense when facts supporting a claim of defense are merely alleged.16 Again, the existence and quality of evidence establishing a meritorious defense is a factor to be weighed in determining whether good cause exists to set aside the default judgment.
Cook has presented two different theories to attempt to meet the meritorious defense requirement. First, Cook contends that he was acting in self defense when he shot Officer Rowland. Cook states that he was fearful because he believed Officer Rowland "was going to kill or severely injure me." But Cook was found guilty of first-degree murder for the killing of Officer Rowland.17 Cook's conviction precludes him from presenting a merits defense to liability in the civil action.18
But Cook also claims that he has a meritorious defense against the amount of damages requested by Rowland and awarded by the superior court. To be meritorious a defense need not provide a complete defense to the action. Rather, a defense is meritorious if it will "reduce a plaintiff's award, and thereby alter the outcome of the suit." 19 Cook claims that if he were allowed to present his story of the events leading to Officer Rowland's death punitive damages might be assessed differently, or not at all, and that in any case testimony about his assets could support a reduced punitive damage award. In addition, he points out that in certain respects Rowlands award for past and future ecoriomic damages are not supported by underlying data and caleulations, and thus may be vulnerable to challenge.
We agree that Cook has established a potentially meritorious defense insofar as he has shown that the amount of damages awarded against him might be lower if he were allowed to participate in a damages hearing. Therefore we conclude that although Cook may not deny liability for Officer Rowland's death, he has shown a meritorious defense with respect to damages.
b. The award in this case is substantial.
We have held that the magnitude of a default judgment is a factor in considering whether it should be set aside. In Herts, the plaintiffs were awarded $463,319.43, which led us to comment that "[uJnless there are intervening equities, a controversy concerning damages of this magnitude should be resolved on its merits whenever possible." 20 In the present case this factor is certainly present.
*267c. Cook's conduct related to entry of the default was not significantly culpable.
We emphasize that the conduct relevant to this factor is not the conduct underlying the initial claim, in this case Cook's shooting of Officer Rowland (which was highly culpable), but the conduct related to entry of the default.21 Our finding that Cook's default was the result of "excusable neglect" sufficiently establishes that his failure to answer in a timely manner was not significantly culpable.
d. The duration of the default was minimal; setting aside the default judgment does not prejudice the plaintiff.
Default judgments are more likely to be set aside when the length of time the defendant is in default is minimal and setting aside will not result in prejudice to the plaintiff.22
In this case, Cook filed his motion to set aside the judgment on July 21, only twenty-three days after the default judgment had been entered. The default judgment itself followed quickly upon the events giving rise to the cause of action. Rowland has not presented this court with any argument that she will be prejudiced if the default judgment against Cook is set aside. This court has previously held that "[the mere fact that the nondefaulting party will be required to prove his case without the inhibiting effect of the default upon the defaulting party does not constitute prejudice which should prevent a reopening." 23
Further, on remand, the only relevant issue will be the amount of damages. Potential prejudice to the plaintiff can be reduced by not requiring the return of any seized property unless the final judgment turns out to be less than the value of the property seized. Civil Rule 60(b) directs that a motion to set aside a default should be granted "upon such terms as are just." We believe that retention of seized property under these conditions is a just term within the meaning of this rule.
B. Cook's Peremptory Challenge Must Be Given Effect on Remand.
Because the default judgment as to damages has been vacated by this opinion, on remand the superior court must determine damages in accordance with the provisions of Civil Rule 55(c). As explained in the separate opinions of Justice Carpeneti, in which Justice Eastaugh joins, and Justice Bryner, three members of the court have concluded that the peremptory challenge exercised by Cook must be given effect. Accordingly, on remand this case must be reassigned to a new judge in accordance with Civil Rule 42(c)(5).
v. CONCLUSION
For the reasons stated:
1. The default judgment as to damages is VACATED under the conditions expressed herein.
2. This case is REMANDED for a determination of damages.
8. Proceedings on remand shall be conducted before a new judge.
CARPENETI, Justice, with whom EASTAUGH, Justice, joins, concurring and dissenting.
BRYNER, Justice, concurring.
FABE, Chief Justice, with whom MATTHEWS, Justice, joins, concurring in part and dissenting in part.
. See State v. Cook, 3PA-99-832 Cr. (Alaska Super., October 27, 2000).
. See Wright v. Shorten, 964 P.2d 441, 443 (Alaska 1998).
. Id. (quoting Johnson v. Doris, 933 P.2d 1139, 1142 (Alaska 1997)).
. See Barber v. Barber, 915 P.2d 1204, 1208 n. 8 (Alaska 1996); Staso v. State, Dep't of Transp., 895 P.2d 988, 990 (Alaska 1995).
. Wright, 964 P.2d at 443.
. See Melendrez v. Bode, 941 P.2d 1254, 1258 (Alaska 1997); Hertz v. Berzanske, 704 P.2d 767, 771 (Alaska 1985); see also Wright, 964 P.2d at 444.
. 612 P.2d 1008, 1010 (Alaska 1980).
. Id.
. Wright, 964 P.2d at 444 (citations and quotation marks omitted); see also Rodriguez v. Rodriguez, 908 P.2d 1007, 1010 (Alaska 1995) (affirming that default should be set aside when pro se litigant filed answer on same day default was entered).
. Hertz, 704 P.2d at 771; Melendrez, 941 P.2d at 1258 (applying factors to default judgment).
. Wright, 964 P.2d at 445; Melendrez, 941 P.2d at 1258.
. Melendrez, 941 P.2d at 1258.
. Hertz, 704 P.2d at 772.
. Id.
. 964 P.2d at 445 (finding meritorious defense in a child support case where defendant claimed that he was not the real father and presented evidence of blood type)}.
. See Melendrez, 941 P.2d at 1258 (finding that in an action to quiet title, claim that plaintiff had no right to the property and that defendant was owed more than the default judgment provided was sufficient even though presented in briefing which left "much to be desired"); Gregor, 612 P.2d at 1010 (finding that in response to a claim of fraudulent possession of land, it was sufficient that the defendant's answer alleged that she had paid $10,000 for the property); Sanuita v. Hedberg, 404 P.2d 647, 651 (Alaska 1965) (finding meritorious defense where defendant denied plaintiff's assertions and asserted defenses of qualified privilege and truth to claim of libel).
. See State v. Cook, 3PA-99-832 Cr. (Alaska Super., October 27, 2000).
. See Howarth v. State, Public Defender Agency, 925 P.2d 1330, 1334-35 (Alaska 1996) ("[A] defendant convicted of a felony ... should not be allowed to claim in court in subsequent litigation that the elements essential to his conviction did not.exist.").
. Hertz, 704 P.2d at 772; see also Melendrez, 941 P.2d at 1258.
. 704 P.2d at 773.
. See Melendrez, 941 P.2d at 1258 (finding defendant culpable for default because he attempted to avoid service).
. See id.; Hertz, 704 P.2d at 773.
. Hertz, 704 P.2d at 773 (citation and quotations marks omitted).