CWT Canada II LP et al v. Danzik et al

Filing 47

ORDER granting the 33 Motion to Set Aside Default. Signed by Judge David G Campbell on 10/06/2016. (ATD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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CWT Canada II, LP, an Ontario, Canada
Limited Partnership

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Plaintiff,

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No. CV16-0607 PHX DGC
ORDER

v.
Elizabeth J. Danzik, an individual, et al.,
Defendants.

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The Court may set aside an entry of default if good cause is shown. Fed. R. Civ.

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P. 55(c). The Court considers (1) whether there was culpable conduct on the part of the

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defendant, (2) whether any meritorious defenses are available, and (3) whether there is

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any prejudice to the plaintiff. TCI Group Life Insurance Plan v. Knoebber, 244 F.3d 691,

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696 (9th Cir. 2001).

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“A defendant’s conduct is culpable if he has received actual or constructive notice

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of the filing of the action and intentionally failed to answer.” Id. at 697. In this case,

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Defendant Danzik sought counsel immediately after the default was entered and filed a

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motion to set it aside within 30 days. Docs. 22, 26, 33.

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To establish that a meritorious defense exists, a defendant must allege specific

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facts that would constitute a defense. Id. at 700. The Court need not conclude that the

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defendant will prevail on the alleged defense to determine that this factor weighs in favor

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of setting aside default. Apache Nitrogen Products, Inc. v. Harbor Insurance Co., 145

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F.R.D. 674, 682 (D. Ariz. 1993). The Court finds Danzik’s explanation of her defense

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sufficiently plausible to satisfy this requirement.

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Prejudice concerns any adverse effects the plaintiff might suffer if the default is

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set aside. Requiring Plaintiff to make its case on the merits rather than by default is not

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the kind of prejudice that satisfies good cause.

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After considering these factors, the Court will grant Defendant Elizabeth Danzik’s
motion to set aside the Clerk’s entry of default. Doc. 33.

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There is still the matter of service of process to be addressed. The Court could

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schedule a hearing and take testimony from various witnesses on the issues hotly

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disputed in the parties’ papers, but this appears unnecessary and wasteful.

If Ms.

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Danzik’s counsel can simply accept service, a hearing will be unnecessary. If Ms.

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Danzik declines to have her attorney accept service, the Court likely will proceed with an

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evidentiary hearing, and may assess fees and costs if it concludes that one party or the

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other sought to mislead the Court or multiply proceedings unnecessarily. Ms. Danzik’s

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counsel should file a notice by October 12, 2016, stating whether she agrees that he may

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accept service on her behalf.

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The Court will enter a ruling with respect to the motion for a default judgment
against Defendant Deja II, LLC in a separate order.

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IT IS ORDERED that the motion to set aside default (Doc. 33) is granted.

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Dated this 6th day of October, 2016.

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