Monster Film Limited v. Galloping Illusions Pty Ltd. et al

Filing 136

ORDER GRANTING COUNTER-DEFENDANT'S EX PARTE MOTION TO SET ASIDE ENTRY OF DEFAULT 130 by Judge Otis D. Wright, II. The Court finds that it is appropriate to decide Martinen's Counterclaim on the merits, because this is not an "extr eme circumstance" that warrants default. Accordingly, the Court GRANTS Monsters Motion to Set Aside Entry of Default. (ECF No. 130 .) Monster shall file its answer as a separate docket entry within 7 days of the date of this order. Failure to timely file an answer will result in the entry of default that will be much more difficult to set aside. (lom)

Download PDF
O 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 MONSTER FILM LIMITED, a 12 Case No. 2:16-cv-01414-ODW(KS) corporation, ORDER GRANTING COUNTER- 13 Plaintiff, 14 15 MOTION TO SET ASIDE ENTRY OF vs. DEFAULT [130] 16 17 GALLOPING ILLUSIONS PTY LTD., a 18 corporation, CARLOS ALPERIN, an 19 individual, ROHAM GHODSI, an 20 individual, CHRISTIAN MARTINEN, an 21 individual, and DOES 1-100, inclusive, 22 23 Defendants. 24 25 AND RELATED COUNTERCLAIMS 26 AND THIRD-PARTY COMPLAINTS 27 28 DEFENDANT’S EX PARTE 1 On April 5, 2018, Defendant and Counter-Claimant Christian Martinen 2 (“Martinen”) requested the Clerk to enter default against Plaintiff and Counter- 3 Defendant Monster Film Limited (“Monster”). (ECF No. 125.) The Clerk of Court 4 entered default against Monster on April 6, 2018. (ECF No. 129.) Monster then 5 applied ex parte to set aside the default (“Application”) on April 10, 2018, and 6 Martinen opposed the Application on April 11, 2018. (Appl., ECF No. 130; Opp’n, 7 ECF No. 133.) For the reasons set forth below, the Court GRANTS Monster’s 8 Application. (ECF No. 130.) 9 Monster argues that there is good cause to set aside the default because (1) 10 Monster’s conduct was not culpable, but rather a result of genuine confusion and 11 misunderstanding of the relevant legal standard applicable to service of process of the 12 Counterclaim; (2) Martinen would not be prejudiced by vacating the entry of default; 13 and (3) Monster has a meritorious defense. (Appl. 2.) Monster now asks that entry of 14 default be set aside so that it may properly defend the case. 15 Federal Rule of Civil Procedure 55(c) gives a district court the discretion to set 16 aside entry of default upon a showing of good cause. In assessing whether good cause 17 exists to set aside default, district courts look at three factors: “(1) whether the 18 plaintiff will be prejudiced, (2) whether the defendant has a meritorious defense, and 19 (3) whether culpable conduct of the defendant led to the default.” Brandt v. Am. 20 Bankers Ins. Co. of Fla., 653 F.3d 1108, 1111 (9th Cir. 2011) (quoting Falk v. Allen, 21 739 F.2d 461, 463 (9th Cir. 1984)). Courts must also keep in mind that default 22 judgments are “appropriate only in extreme circumstances” and cases should be 23 decided on the merits whenever possible. Falk, 739 F.2d at 463. 24 /// 25 /// 26 /// 27 /// 28 2 1 The Court finds that good cause exists for setting aside entry of default in this 2 case. Martinen is unlikely to be prejudiced, as he has a pending motion for summary 3 judgment and the parties are actively participating in this litigation. (See ECF No. 4 114.) Monster indicates that it has sufficient evidence of a meritorious defense against 5 Martinen’s sole claim of negligence and has submitted a proposed Answer to 6 Martinen’s Counterclaim with its Application. (Appl. 11.) 7 As to Monster’s culpability, Monster claims that it did not file an answer to 8 Martinen’s Counterclaim, because its counsel believed in good faith that the 9 Counterclaim was not properly served, and thus its actions were not culpable. (Appl. 10 8.) The Court finds Monster’s claim hard to swallow. Monster does not dispute that it 11 had actual knowledge of Martinen’s Counterclaim. 12 supposed improper service and avoid filing a responsive pleading, or any challenge to 13 service at all, when entry of default is on the line. As members of the bar, attorneys 14 owe their clients more than taking such a risk. Martinen argues that Monster “made a 15 deliberate decision to ignore the Counterclaim, instead of arguing ineffective service 16 at that time.” (Opp’n 8.) It’s clear from Monster’s response that the decision not to 17 respond was, in fact, deliberate, which the Court finds to be ill advised. However, the 18 Court decides to give Monster the benefit of the doubt here, and concludes that it has 19 presented sufficient support that its failure to plead was in good faith. Accordingly, 20 there is good cause for the Court to excuse Monster’s failure to respond to Martinen’s 21 Counterclaim. 22 23 24 25 26 /// 27 /// 28 3 Counsel should not rely on 1 The Court finds that it is appropriate to decide Martinen’s Counterclaim on the 2 merits, because this is not an “extreme circumstance” that warrants default. 3 Accordingly, the Court GRANTS Monster’s Motion to Set Aside Entry of Default. 4 (ECF No. 130.) Monster shall file its answer as a separate docket entry within 7 days 5 of the date of this order. Failure to timely file an answer will result in the entry of 6 default that will be much more difficult to set aside. 7 8 IT IS SO ORDERED. 9 10 April 11, 2018 11 12 13 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 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?