VFS Financing Incorporated v. Sea Horse Marine Incorporated et al
Filing
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ORDER denying 33 Plaintiff's Motion for Default Judgment and granting 34 Defendants' Motion to Set Aside Entry of Default. The clerk is directed to schedule this case for a Rule 16 conference. Signed by Judge Frederick J Martone on 6/14/11.(LSP)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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VFS Financing Inc.,
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Plaintiff,
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vs.
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Sea Horse Marine, Inc., et. al.,
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Defendants.
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No. CV 10-2339-PHX-FJM
ORDER
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The court has before it plaintiff's motion for default judgment as to defendants Sea
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Horse Marine, Inc., Wells Fargo Bank, and Oceanografia, (doc. 33). We also have before
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us defendants' motion to set aside entry of default (doc. 34), plaintiff's response (doc. 35),
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and defendants' reply (doc. 36).
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The clerk entered default against defendants on May 2, 2011 for failure to answer or
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otherwise appear (doc. 29). That same day, defendants finally filed an Answer (doc. 30).
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Plaintiff now moves, pursuant to Rule 55(b), Fed. R. Civ. P. for default judgment.
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Defendants request that we set aside the entry of default. Defendants argue that the entry of
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default is invalid because the Original Complaint was superseded and the Amended
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Complaint was not served properly on defendants.
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An amended complaint supersedes the original complaint. Forsyth v. Humana, Inc.
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114 F.3d 1467, 1474 (9th Cir. 1997). Here, plaintiff filed the Amended Complaint on April
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7, 2011 (doc. 22). It then applied for an entry of default on April 29, 2011. It is unclear
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which complaint plaintiff sought default on. However, in the applications' accompanying
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affidavits, plaintiff cites the affidavits of service of process associated with the original
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complaint (docs. 26, 27). By filing the Amended Complaint, any request for default as to the
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Original Complaint was mooted. See Best Western Int'l., Inc. v. Melbourne Hotel Investors,
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No. CV 06-2276-PHX, 2007 WL 2990132 (D. Ariz. Oct. 10, 2007). Plaintiff must first apply
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for an entry of default on the Amended Complaint and then move for default judgment. See
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id. (citing Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986)).
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Even if plaintiff did obtain an entry of default as to the Amended Complaint, we still
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must set it aside because defendants were not served properly. Rule 5(a)(2), Fed. R. Civ. P.
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requires that a pleading asserting new claims for relief be served on a party in default for
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failing to appear, in the manner provided for under Rule 4. Rule 4 generally requires
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personal service of a summons with the complaint. Rule 5(a)(2) is applicable because
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defendants had not appeared before the entry of default and the Amended Complaint asserts
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new claims for relief. See Employee Painters' Trust v. Ethan Enterprises, 480 F.3d 993, 999
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(9th Cir. 2007). Although the Amended Complaint alleges the same five causes of action,
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it relies on new facts and alternative legal theories. For example, in the Original Complaint,
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plaintiff alleged that defendants were in default because they owed money under the Loan
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Agreement (doc. 1 ¶ 35). In contrast, in the Amended Complaint, plaintiff admits that
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defendants paid their delinquent amounts, but alleges default because of a history of "chronic
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payment failures," among other things (doc. 22 ¶ ¶ 38, 43). Plaintiff even stated that the
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Amended Complaint "bring[s] additional defaults" against defendants (doc. 21).
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Because Rule 5(a)(2) is applicable, plaintiff must comply with Rule 4 before applying
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for an entry of default. Plaintiffs have not submitted any proof of service of the Amended
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Complaint. Instead, it appears plaintiff simply mailed a copy of the Amended Complaint to
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a former address of defendants' New Orleans Counsel. Accordingly, since plaintiff failed to
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comply with Rule 4 we lack personal jurisdiction over defendants. The entry of default is
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void. See Mason v. Genisco Tech. Corp., 960 F.2d 849, 854 (9th Cir. 1992).
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Therefore, IT IS ORDERED DENYING plaintiff's motion for default judgment
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(doc. 33). It is FURTHER ORDERED GRANTING defendants' motion to set aside entry
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of default (doc. 34).
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The clerk is directed to schedule this case for a Rule 16 conference.
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DATED this 14th day of June, 2011.
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