Mays v. Cavalry Staffing LLC

Filing 55

ORDER that the Court ADOPTS the R & R (Doc. 50 ); thus: The Court GRANTS Defendant's Motion to Set Aside Default Judgment (Doc. 41 ). The Court sets aside its default finding against Defendant on July 15, 2015 (Doc. 19 ). The Court vacates it s default judgment entered against Defendant on March 27, 2015 (Doc. 25 ) and the Clerk of Court is directed to reopen this action. The Court orders that Defendant file an answer to Plaintiff's complaint within 21-days of this Order. Signed by Judge G Murray Snow on 6/6/2016. (KMG)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Charles Mays,

No. CV-14-02593-PHX-GMS
Plaintiff,

10
11

v.

12

ORDER

Cavalry Staffing LLC,

13

Defendant.

14

Pending before the Court is Defendant Cavalry Staffing LLC’s Motion to Set

15

Aside Default Judgment pursuant to Federal Rule of Civil Procedure 60(b). (Doc. 41.)

16

The Court referred the motion1 to United States Magistrate Judge Eileen S. Willett for

17

disposition. Judge Willett issued a Report and Recommendation (“R & R”) that the

18

motion be granted on December 3, 2015. (Doc. 50.) Plaintiff Charles Mays timely filed

19

objections to the R & R. (Doc. 51.) For the reasons set forth below, the Court adopts the

20

R & R in full.

21
22
23

BACKGROUND
Neither party objects to the factual and procedural background as set forth by the
R & R. (Doc. 50.) The Court thus adopts it.

24

On October 7, 2015, Defendant filed a Motion to Set Aside Default Judgment

25

pursuant to Rule 60(b)(1). (Doc. 41.) Defendant contends that its failure to answer

26

Plaintiff’s complaint constitutes “excusable neglect,” is exempted under the Rules, and

27
28

1

The Court also referred a previous related Motion to Stay, which the court
granted and which is not at issue here. (Docs. 38, 39.)

1

thus the Court’s entry of default judgment should be vacated. The Magistrate Court

2

agreed and recommended granting Defendant’s motion. (Doc. 50.)
DISCUSSION

3
4

I.

Legal Standard

5

A “district judge may refer dispositive pretrial motions . . . to a magistrate, who

6

shall conduct appropriate proceedings and recommend dispositions.” Thomas v. Arn, 474

7

U.S. 140, 141 (1985); see also 28 U.S.C. § 636(b)(1)(B); Estate of Connors v. O’Connor,

8

6 F.3d 656, 658 (9th Cir. 1993). Any party “may serve and file written objections” to the

9

R & R. § 636(b)(1). “A judge of the court shall make a de novo determination of those

10

portions of the report or specified findings or recommendations to which objection is

11

made.” Id.; see also Fed. R. Civ. P. 72(b). A district judge “may accept, reject, or

12

modify, in whole or in part, the findings or recommendations made by the magistrate

13

judge.” § 636(b)(1); see also Fed. R. Civ. P. 72(b).

14

II.

Analysis

15

Rule 60(b) is “remedial in nature and therefore must be liberally applied.” Falk v.

16

Allen, 739 F.2d 461, 463 (9th Cir. 1984) (per curiam). A “judgment by default is a

17

drastic step appropriate only in extreme circumstances; [thus] a case should, whenever

18

possible, be decided on the merits.” Id. The Court’s analysis of a Rule 60(b) motion is

19

guided by the consideration of the following three-factors: (1) whether culpable conduct

20

of the Defendant led to the default, (2) whether the Plaintiff will be prejudiced, and (3)

21

whether the Defendant has a meritorious defense.

22

framework, the R & R recommended finding in favor of Defendant on all three factors.

23

Plaintiff raises two objections to the R & R.

Id.

After applying that legal

24

Plaintiff first objects to the sufficiency of an affidavit submitted by the

25

Defendant’s President David Stanley, which the Magistrate Court relied upon when

26

finding that Defendant’s failure to answer constituted “excusable neglect.” Plaintiff

27

argues that the affidavit fails to address various specifics about the Defendant’s receipt of

28

service; for example, who specifically is to receive documents from Defendant’s

-2-

1

designated service agent Business Filings. The Court finds the affidavit satisfactory. Mr.

2

Stanley, who, as Defendant’s President, is an individual with the authority to speak on

3

behalf of the Defendant as a whole, asserted as a sworn statement of fact: “To my

4

knowledge and belief, [Defendant] never received a copy of the Complaint in the lawsuit

5

at any time at our corporate offices in Ohio. [Defendant] has no record of receiving any

6

communication from Business Filing Inc. regarding [Plaintiff’s] lawsuit.” (Doc. 42 at 2.)

7

Mr. Stanley further averred: “Any lawsuit filed against [Defendant] should have been

8

brought to my attention. I was never made aware or told that [Plaintiff] filed suit against

9

[Defendant] by anyone in my employ or otherwise until I was made aware of an attempt

10

to collect on a judgment against [Defendant] being made by [Plaintiff].” (Id.) Plaintiff

11

presents no counter evidence or legal argument undermining the credibility or validity of

12

Mr. Stanley’s affidavit. Rather, Plaintiff seems to assert that because he properly served

13

Defendant’s agent, Defendant must present more evidence than an affidavit from its

14

President to show “excusable neglect.”

15

assertion, the Court finds the affidavit sufficient.

16

Defendant’s motion; moreover, it supports the finding of “excusable neglect,” because it

17

supports finding that the Defendant did not engage in any “willful, deliberate, or . . . bad

18

faith” conduct with the intent to take advantage of Plaintiff or to subvert the legal

19

process. See TGI Grp. Life Ins. Plan v. Kroebber, 244 F.3d 691, 697–98 (9th Cir. 2001).

However, without any legal basis for his
It is credible and relevant to

20

Plaintiff’s also contests the R & R’s “finding that Plaintiff will not suffer prejudice

21

due to the delay.” (Doc. 51 at 2.) “To be prejudicial, the setting aside of a judgment

22

must result in greater harm than simply delaying resolution of the case. Rather, the

23

standard is whether plaintiff’s ability to pursue his claim will be hindered.” TGI Grp.

24

Life Ins. Plan, 244 F.3d at 701 (internal quotation marks, citations, and modifications

25

omitted).

26

discovery difficulties, or “greater opportunit[ies] for fraud or collusion.” Id. (quoting

27

Thompson v. Am. Home Assurance Co., 95 F.3d 429, 433–34 (6th Cir. 1996)). Plaintiff

28

raises two insufficient objections; the first based on speculation and the second based on

Truly prejudicial delay causes tangible harms like the loss of evidence,

-3-

1

inconvenience.

Plaintiff surmises that evidence may be lost when he asserts that

2

“Defendant did not articulate at all what evidence had been preserved . . . .” (Doc. 51 at

3

2.) Without any direct or circumstantial proof of spoliation of other loss of evidence, the

4

posture of this case is not different from when Plaintiff filed his complaint. Discovery

5

has not begun and Plaintiff presents no reason beyond delay that this Court should

6

conclude that Plaintiff will suffer a tangible harm like loss of evidence if this lawsuit is

7

revived and decided on its merits. Plaintiff’s second argument relies on inconvenience;

8

since the Court entered default judgment, Plaintiff reasonably desires to hold on to the

9

benefit of his judgment, i.e., the over $80,000 being held by the Garnishee. However,

10

“being forced to litigate on the merits cannot be considered prejudicial for purposes of

11

lifting a default judgment. For had there been no default, the plaintiff would of course

12

have had to litigate the merits of the case, incurring the costs of doing so.” TCI Grp. Life

13

Ins. Plan, 244 F.3d at 701.

14

Nothing about Defendant’s conduct or the consequence of vacating the Court’s

15

default judgment rises to the requisite “extreme circumstance” which supports leaving the

16

default judgment in place.2
CONCLUSION

17
18

In the end, “vacating the default judgment merely restores the parties to an even

19

footing in the litigation.” Id. After de novo review of Plaintiff’s objections, the Court is

20

convinced that the Magistrate Court properly considered Mr. Stanley’s affidavit and

21

properly found that the “prejudice factor weighs in favor of Defendant.” (Doc. 50 at 7.)

22

In light of the fact that Plaintiff did not object to any of the R & R’s other findings, the

23

Court adopts the R & R in its entirety.

24

IT IS HEREBY ORDERED that the Court ADOPTS the R & R (Doc. 50); thus:

25

1.

26

The Court GRANTS Defendant’s Motion to Set Aside Default Judgment

(Doc. 41).

27
28

2

Plaintiff’s request for an evidentiary hearing is denied as the issue has been fully
briefed and the utility of such a hearing is outweighed by its dilatory and costly effect.
-4-

1
2
3
4
5
6
7

2.

The Court sets aside its default finding against Defendant on July 15, 2015

(Doc. 19).
3.

The Court vacates its default judgment entered against Defendant on March

27, 2015 (Doc. 25) and the Clerk of Court is directed to reopen this action.
4.

The Court orders that Defendant file an answer to Plaintiff’s complaint

within 21-days of this Order.
Dated this 6th day of June, 2016.

8
9
10

Honorable G. Murray Snow
United States District Judge

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

-5-