Equity Solutions LLC v. Fowler et al

Filing 21

ORDER GRANTING defendants' motion to set aside the default (doc. 16 ) and DENYING plaintiff's application for entry of default judgment (doc. 15 ). Plaintiff shall respond to the motion to dismiss (doc. 14 ) on or before March 15, 2013. Signed by Senior Judge Frederick J Martone on 3/5/2013.(KMG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Equity Solutions LLC,
Plaintiff,

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vs.

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Reginald D. Fowler; Spiral Inc.,
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Defendants.
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No. CV 12-02646-PHX-FJM
ORDER

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The court has before it plaintiff’s application for entry of default judgment (doc. 15),

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defendants’ response (doc. 17), plaintiff’s reply (doc. 19); and defendants’ motion to set

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aside default (doc. 16), plaintiff’s response (doc. 18), and defendants’ reply (doc. 20).

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Plaintiff filed this action on December 11, 2012, asserting claims against defendant

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Reginald Fowler for breach of contract and against defendant Spiral, Inc. for default on a

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promissory note. Spiral’s and Fowler’s responsive pleadings were due January 9, 2013 and

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January 11, 2013, respectively. Neither party responded by their deadline, and on January

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15, 2013, the Clerk entered default against both defendants pursuant to Rule 55(a), Fed. R.

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Civ. P. (doc. 12). Spiral filed an answer to the complaint on January 15, 2013 (doc. 13), the

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same day default was entered, and Fowler filed a motion to dismiss on January 16, 2013

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(doc. 14). On January 30, 2013, defendants moved to set aside the default (doc. 16).

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“[J]udgment by default is a drastic step appropriate only in extreme circumstances;

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a case should, whenever possible, be decided on the merits.” Falk v. Allen, 739 F.2d 461,

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463 (9th Cir. 1984). We may set aside a default “for good cause.” Fed. R. Civ. P. 55(c). We

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will consider whether defendant’s culpable conduct led to the default, whether the defendant

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has a meritorious defense, and whether the plaintiff will be prejudiced. Falk, 739 F.2d at

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463.

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Defendants contend that Fowler took a trip to England after he was served, did not

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return until January 18, 2013, and that because of some unspecified “miscommunication”

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between defendants and their lawyers, the responses were filed 6 days late. We do not

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believe that this 6 day delay is so culpable as to justify a default judgment. There has been

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no prejudice occasioned by this default. No discovery has been conducted. No Rule 16

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order is in place. The action is at its early stages and now defendants’ responsive pleadings

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have been filed. Finally, defendant Fowler has presented a potentially meritorious defense

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in his motion to dismiss (doc. 14). In the interest of deciding cases on their merits, IT IS

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ORDERED GRANTING defendants’ motion to set aside the default (doc. 16) and

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DENYING plaintiff’s application for entry of default judgment (doc. 15).

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Plaintiff shall respond to the motion to dismiss (doc. 14) on or before March 15, 2013.

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DATED this 5th day of March, 2013.

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