Smith v. Smith

Filing 12

ORDER finding as moot 9 Motion for Default Judgment; granting 11 Motion to Set Aside Default. Defendant shall file his answer on or before 5/9/2014. Signed by Judge David G Campbell on 4/23/2014.(DGC, nvo)

Download PDF
1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Yolanda Denise Smith, Plaintiff, 10 11 ORDER v. 12 No. CV-13-02611-PHX-DGC Joseph Leynard Smith, 13 Defendant. 14 15 Before the Court are Plaintiff’s motion for default judgment (Doc. 9) and 16 Defendant’s motion to vacate the clerk’s entry of default (Doc. 11). The Court will 17 construe Defendant’s motion as a response to Plaintiff’s motion and as a motion to set 18 aside the entry of default under Federal Rule of Civil Procedure 55(c). The Court will 19 grant Defendant’s motion and deny Plaintiff’s motion for default judgment as moot. 20 I. Background. 21 On December 20, 2013, Plaintiff Yolanda Smith filed a complaint for breach of 22 contract. Doc. 1. On February 4, 2014, Plaintiff requested that the Clerk enter default 23 against Defendant pursuant to Rule 55(a) for failing to plead or otherwise defend the 24 action. Doc. 7. The Clerk entered default on February 5, 2014. Doc. 8. That same day, 25 Plaintiff filed a motion for default judgment. Doc. 9. On March 3, 2014, Defendant filed 26 a notice of appearance and motion to vacate default judgment. Doc. 10. On March 25, 27 2014, he filed an amended notice of appearance and motion to vacate the clerk’s entry of 28 default. Doc. 11. 1 II. Legal Standard. 2 Federal Rule of Civil Procedure 55(c) allows a court to “set aside an entry of 3 default for good cause[.]” Fed. R. Civ. P. 55(c). Courts consider three factors in 4 deciding whether good cause exists: (1) whether the moving party engaged in culpable 5 conduct; (2) whether the moving party has a meritorious defense; and (3) whether setting 6 aside the default will prejudice the non-moving party. 7 Knoebber, 244 F.3d 691, 696 (9th Cir. 2001) (citations omitted). The moving party bears 8 the burden of proving that the three factors weigh in favor of setting aside default. 9 Franchise Holding II, LLC. v. Huntington Rest. Grp., 375 F.3d 922, 926 (9th Cir. 2004). 10 This burden, however, is not “extraordinarily heavy.” TCI Grp., 244 F.3d at 700. “A 11 case should, whenever possible, be decided on the merits.” Id. at 697. 12 III. TCI Grp. Life Ins. Plan v. Analysis. 13 A. Culpable Conduct. 14 “A defendant's conduct is culpable if he has received actual or constructive notice 15 of the filing of the action and intentionally failed to answer.” Id. at 697 (citations 16 omitted). Intentional conduct, in this context, must rise to the level of conduct which is 17 willful, deliberate, or done in bad faith. Id. at 697-98. Defendant asserts that he failed to 18 respond to Plaintiff’s complaint because he was unaware that a breach of contract claim 19 had been filed against him in this Court. Doc. 11 at 1-2. Proceeding pro se at the time, 20 Defendant asserts that all previous legal matters between him and Plaintiff had occurred 21 in state court. Id. at 2. Thus, when he received an envelope from Plaintiff containing 22 legal documents, he failed to distinguish between the Petition for Modification of 23 Custody and Child Support filed in state court and the breach of contract claim filed in 24 this Court. Id. at 1-3. Defendant therefore filed a response only in state court. Id. at 4. 25 Defendant asserts that he did not learn about the complaint filed in this Court until after 26 he had secured legal counsel on February 25, 2014. Id. at 4-5. Because nothing about 27 Defendant’s conduct suggests a “devious, deliberate, willful, or bad faith failure to 28 respond,” the Court finds that his conduct was not culpable. TCI Grp., 244 F.3d at 698. -2- 1 B. Meritorious Defense. 2 “All that is necessary to satisfy the ‘meritorious defense’ requirement is to allege 3 sufficient facts that, if true, would constitute a defense[.]” United States v. Signed 4 Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1094 (9th Cir. 2010) 5 (citation omitted). 6 regarding the division of certain property, including the disposition of a residence in 7 Scottsdale. Doc. 1, ¶¶ 6, 7, 9. Plaintiff alleges that Defendant breached the contract by 8 failing to participate in the refinancing of the residence and by failing to pay for repairs. 9 Doc. 1, ¶¶ 13, 16. Defendant asserts that did not breach the contract because he signed 10 and transferred all the documents pertaining to the refinancing of the residence. Doc. 11 11 at 4. Defendant also contends that he has not received repair estimates, request for 12 reimbursement, or a demand for payment from Plaintiff. Id. at 4-5. These allegations, 13 accepted as true, satisfy the meritorious defense requirement. Plaintiff alleges that she entered into a contract with Defendant 14 C. Prejudice. 15 “To be prejudicial, the setting aside of a judgment must result in greater harm than 16 simply delaying resolution of the case.” TCI Grp., 244 F.3d at 701. “[T]he standard is 17 whether [Plaintiff's] ability to pursue [her] claim will be hindered.” 18 omitted). Plaintiff asserts that, absent a default judgment, Plaintiff will have “no means 19 of pursuing Defendant for his violations of the Contract.” Doc. 9 at 5-6. Plaintiff can 20 pursue Defendant for the alleged breach of contract by proving the merits or her claim. Id. (citations 21 This Circuit’s “rules for determining when a default should be set aside are 22 solicitous towards movants,” especially where, as in this case, the “actions leading to the 23 default were taken without the benefit of legal representation.” Mesle, 615 F.3d at 1089. 24 Whenever possible, a case should be decided on the merits and judgment by default is 25 “appropriate only in extreme circumstances[.]” Id. Because extreme circumstances do 26 not exist here, the Court will set aside default. 27 IT IS ORDERED: 28 1. The motion to set aside default (Doc. 11) is granted. -3- 1 2. Plaintiff's motion for default judgment (Doc. 9) is denied as moot. 2 3. Defendant shall file his answer on or before May 9, 2014. 3 Dated this 23rd day of April, 2014. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4-

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?