Jose Raul Gonzalez Suarez et al v. Yolanda Chavez et al

Filing 59

MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: PLAINTIFFS MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANTS YOLANDA CHAVEZ, YOLANDA CHAVEZ FARMING, J&D HARVESTING INC., AND YB FARMING, INC. 34 DEFENDANT J&D HARVESTING, INC.S MOTION TO SET ASIDE DEFAULT 44 DEFENDANTS YOLANDA CHAVEZ AND YB FARMING INC'S REQUEST TO SET ASIDE DEFAULT 45 . The Court hereby GRANTS J&D Harvesting, Yolanda Chavez, and YB Farmings motions to set aside the default. Plaintiffs motion for default judgment against J&D Harvesting, Yolanda Chavez, and YB Farming is DENIED as moot. These defendants shall file their answers on or before December 12, 2018. Yolanda Chavez Farming is ordered to show cause in writing not later than December 10, 2018, why the default against it should be set aside. The order to show cause will stand submitted upon the filing of briefs. (lc)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No.
Title

CIVIL MINUTES – GENERAL
2:16-cv-04785-CAS (AFMx)
Date

‘O’

November 28, 2018
JOSE RAUL GONZALEZ SUAREZ; ET AL. v. YOLANDA CHAVEZ; ET
AL.

Present: The Honorable

CHRISTINA A. SNYDER

Catherine Jeang

Not Present

N/A

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(IN CHAMBERS) - PLAINTIFFS’ MOTION FOR DEFAULT
JUDGMENT AGAINST DEFENDANTS YOLANDA CHAVEZ,
YOLANDA CHAVEZ FARMING, J&D HARVESTING INC.,
AND YB FARMING, INC. (Dkt. 34, filed September 27, 2018)
DEFENDANT J&D HARVESTING, INC.’S MOTION TO SET
ASIDE DEFAULT (Dkt. 44, filed November 2, 2018)
DEFENDANTS YOLANDA CHAVEZ AND YB FARMING
INC.’S REQUEST TO SET ASIDE DEFAULT (Dkt. 45, filed
November 6, 2018)

I.

INTRODUCTION & BACKGROUND

On July 29, 2016, plaintiffs Jose Raul Gonzalez Suarez, Efrain Cruz Alcantar, Ana
Teresa Cruz Barcenas, and Rosaura Chavez Lopez brought this action against defendants
Yolanda Chavez, Yolanda Chavez Farming, Jorge Vasquez, J&D Harvesting Inc., YB
Farming, Inc., Ramirez AG Services, Inc., Ram Ag Farms, Inc., YIMS Farming, and
H2A Placement Services, Inc. Dkt. 1 (“Compl.”). The gravamen of the complaint is that
defendants acted in concert to recruit plaintiffs from Mexico to perform agricultural work
pursuant to H-2A visas in and around Santa Barbara County in 2013, and ultimately
violated various federal and state labor laws by forcing plaintiffs to remain confined to
their residence and place of work under threat of deportation and failing to pay plaintiffs
the wages owed to them pursuant to their employment contracts. See id. The complaint
was served on Yolanda Chavez, Yolanda Chavez Farming, J&D Harvesting, and YB
Farming. Dkts. 21, 22.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No.
Title

CIVIL MINUTES – GENERAL
2:16-cv-04785-CAS (AFMx)
Date

‘O’

November 28, 2018
JOSE RAUL GONZALEZ SUAREZ; ET AL. v. YOLANDA CHAVEZ; ET
AL.

On August 4, 2017, the Clerk entered default against defendants Yolanda Chavez,
Yolanda Chavez Farming, J&D Harvesting, and YB Farming. Dkt. 25. Plaintiffs
subsequently dismissed without prejudice defendants Jorge Vasquez, H2A Placement
Services, and YIMS Farming. Dkts. 25, 29, 30. On September 11, 2018, the Court
issued an order to show cause as to why this action should not be dismissed for lack of
prosecution with respect to Yolanda Chavez, Yolanda Chavez Farming, J&D Harvesting,
and YB Farming. Dkt. 31.
On September 27, 2018, plaintiffs filed the instant motion for default judgment
against Yolanda Chavez, Yolanda Chavez Farming, J&D Harvesting, and YB Farming.
Dkt. 34 (“Mot.”). All plaintiffs, except Efrain Cruz Alcantar, filed supporting exhibits.
Dkt. 34-2, Declaration of Jose Raul Gonzalez Suarez (“Suarez Decl.”); Dkt. 34-4,
Declaration of Ana Teresa Cruz Barcenas (“Barcenas Decl.”); Dkt. 34-3, Declaration of
Rosaura Chavez Lopez (“Lopez Decl.”). On October 25, 2018, J&D Harvesting filed an
opposition, dkt. 39 (“Opp’n”), and attempted to file an answer to the complaint, dkt. 40.
The Court subsequently issued an Order to Show Cause as to why the default should be
set aside as to J&D Harvesting. Dkt. 40.
The Court held a hearing on plaintiffs’ motion for default judgment on October 29,
2018. Yolanda Chavez appeared pro se to oppose plaintiffs’ motion. At hearing, Chavez
indicated that Yolanda Chavez Farming is no longer in operation. The Court vacated its
Order to Show Cause issued on October 26, 2018, and ordered J&D Harvesting, Yolanda
Chavez, Yolanda Chavez Farming, and YB Farming, Inc. to show cause in writing as to
why the defaults entered against them should be set aside.
On November 2, 2018, J&D Harvesting filed a motion to set aside default. Dkt. 44
(“J&D Mot.”). On November 6, 2018, Yolanda Chavez submitted a declaration
requesting to set aside the default as to Yolanda Chavez and YB Farming. Dkt. 45
(“Yolanda Mot.”).1 On November 13, 2018, plaintiffs filed oppositions to both motions.
Dkt. 47 (“J&D Opp’n”); Dkt. 48 (“Chavez Opp’n”).
On November 19, 2018, the Court held a hearing on the motions to set aside
default. Plaintiffs’ counsel agreed to submit evidence that plaintiffs were issued H-2A
1

Yolanda Chavez’s request does not address the default entered against Yolanda
Chavez Farming.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No.
Title

CIVIL MINUTES – GENERAL
2:16-cv-04785-CAS (AFMx)
Date

‘O’

November 28, 2018
JOSE RAUL GONZALEZ SUAREZ; ET AL. v. YOLANDA CHAVEZ; ET
AL.

visas to work for either J&D Harvesting or Yolanda Chavez. Having carefully
considered parties’ motions and supporting exhibits, the Court finds and concludes as
follows.
II.

LEGAL STANDARD

Pursuant to Fed. R. Civ. P. 55(c), a court may set aside an entry of default “for
good cause.” The Court considers three elements when evaluating whether “good cause”
exists: (1) whether defendant’s culpable conduct led to the default, (2) whether defendant
has a meritorious defense, and (3) whether reopening the default judgment would
prejudice plaintiff. TCI Group Life Insurance Plan v. Knoebber, 244 F.3d 691, 696 (9th
Cir. 2000) (noting that courts use the same factors to assess “good cause” under Fed. R.
Civ. P. 55(c) as for reviewing default judgments under Fed. R. Civ. P. 60(b)), overruled
on other grounds by Egelhoff v. Egelhoff Ex rel. Breiner, 532 U.S. 141, 147 (2001).
As a general rule, cases should be decided on the merits as opposed to by default,
and therefore “any doubts as to the propriety of a default are usually resolved against the
party seeking a default judgment.” Judge William W. Schwarzer, et al., California
Practice Guide: Federal Civil Procedure Before Trial § 6:11 (The Rutter Group 2009)
(citing Pena v. Seguros La Comercial, S.A. 770 F.2d 811, 814 (9th Cir. 1985)). As such,
the Court has broad discretion to overturn an entry of default. Mendoza v. Wight
Vineyard Management, 783 F.2d 941, 945–46 (9th Cir. 1986). This discretion is “more
liberally applied” where a defendant seeks to set aside an entry of default pursuant to
Rule 55(c) rather than a default judgment pursuant to Rule 60(b). United States v. Signed
Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091, n.1 (9th Cir. 2010).
Moreover, the rules governing motions to set aside defaults “are solicitous towards
movants, especially those whose actions leading to the default were taken without the
benefit of legal representation.” Id. at 1089. Nonetheless, the defaulting party carries the
burden to demonstrate that the default should be set aside. TCI Group Life Ins. Plan, 244
F.3d at 696.
III.

DISCUSSION

The Court finds that J&D Harvesting, Yolanda Chavez, and YB Farming
(“defaulting parties”) have satisfied all three of the elements required to set aside an entry
of default.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No.
Title
A.

CIVIL MINUTES – GENERAL
2:16-cv-04785-CAS (AFMx)
Date

‘O’

November 28, 2018
JOSE RAUL GONZALEZ SUAREZ; ET AL. v. YOLANDA CHAVEZ; ET
AL.
Culpable Conduct

It appears that the defaults entered against J&D Harvesting, Yolanda Chavez, and
YB Farming was not the result of culpable conduct. A movant’s conduct is culpable if he
or she acted with bad faith, such as an “intention to take advantage of the opposing party,
interfere with judicial decisionmaking, or otherwise manipulate the legal process.” TCI
Group Life Ins. Plan, 244 F.3d at 697. Merely choosing not to respond to a complaint
does not render a defendant’s conduct culpable. Id. This is especially true when a
defaulting party is representing himself pro se. Courts have held that “actual or
constructive notice of the filing of the action and fail[ing] to answer” may alone be
considered culpable behavior, but only if the movant is a “sophisticated part[y]
represented by counsel who may be presumed to be aware of the consequences of their
actions.” U.S. v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d at 1093.
The CEO of J&D Harvesting, Melquiades Jacinto Lara, avers that he called
plaintiffs’ counsel multiple times after receiving the complaint to inquire about the
lawsuit. J&D Mot. at 6. According to Lara, J&D Harvesting never employed any of the
plaintiffs. Id. Lara alleges that he did not understand the implications of receiving a
summons and complaint, and that he assumed J&D was no longer involved in the case
because J&D Harvesting did not employ the plaintiffs and because he never heard back
from plaintiffs’ counsel. Id. at 6, 16.
Yolanda Chavez explains that after she received paperwork from plaintiffs’
counsel, she called their office to explain that the plaintiffs did not work for her or her
business. Chavez Mot. at 2. When Chavez was told to go to plaintiffs’ counsel’s office
to give an “interview” on July 12, 2017, she did not understand that she was submitting to
a deposition. Id. Instead, she believed that she was providing plaintiffs’ counsel with
documentation proving that the defendants did not work for her so that she would no
longer be listed as a defendant. Id. Chavez avers that she did not hear from plaintiffs’
counsel again until September 2018 when she received paperwork regarding the hearing
on plaintiffs’ motion for default judgment. Id. at 3.
A movant’s conduct may be culpable if there is there is “no explanation of the
default inconsistent with a devious, deliberate, willful, or bad faith failure to respond.”
TCI Group Life Ins. Plan, 244 F.3d at 698 (emphasis added). The defaulting parties’
failure to respond appears to be the result of their lack of familiarity with the legal
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No.
Title

CIVIL MINUTES – GENERAL
2:16-cv-04785-CAS (AFMx)
Date

‘O’

November 28, 2018
JOSE RAUL GONZALEZ SUAREZ; ET AL. v. YOLANDA CHAVEZ; ET
AL.

system, not an intent to take advantage of plaintiffs or to otherwise manipulate the legal
process. The defaulting parties were not represented by counsel and cannot be held to the
heightened standards expected of practicing attorneys. As a result, the Court finds that
the defaulting parties’ failure to respond does not, in this case, amount to culpable
conduct.
B.

Meritorious Defense

In addition, the defaulting parties may have a meritorious defense in this action. “A
defendant seeking to vacate a default judgment must present specific facts that would
constitute a defense. But the burden on a party seeking to vacate a default judgment is not
extraordinarily heavy.” TCI Grp. Life Ins. Plan, 244 F.3d at 700 (citations omitted); see
also Hawaii Carpenters’ Trust Funds v. Stone, 794 F.2d 508, 513 (9th Cir. 1986) (A
defendant moving to set aside a default must show that “there is some possibility that the
outcome of the suit after a full trial will be contrary to the result achieved by the
default.”).
Here, plaintiffs’ claims all rest on allegations that the defendants recruited
plaintiffs to work for them under H-2A visas and then did not pay them for the work that
they performed pursuant to the terms of those visas. Yolanda Chavez is alleged to have
falsely imprisoned the plaintiffs. Each of the defaulting parties alleges that they never
associated with the plaintiffs and that none of the plaintiffs worked for them. J&D Mot.
at 5; Chavez Mot. at 2. At hearing, plaintiffs’ counsel agreed to provide proof that the
plaintiffs were granted H-2A visas to work specifically for either J&D Harvesting or
Yolanda Chavez. Plaintiffs have failed to submit any evidence that such visas were
issued to them. If the defaulting parties never recruited, employed, or even associated
with the plaintiffs, that would form the basis of a meritorious defense against each of
plaintiffs’ causes of action. See Yagman v. Galipo, 2013 WL 1287409 at *12 (C.D. Cal.
Mar. 25, 2013) (“[A defendant] need only assert ‘a factual or legal basis that is sufficient
to raise a particular defense’; the truth of that basis is determined later.”) (citations
omitted).
Accordingly, at this stage, and without any documentary proof from the plaintiffs
establishing that plaintiffs were issued H-2A visas to work for any of the defaulting
parties, the Court finds that the allegations in defaulting parties’ motions are sufficient to
justify setting aside the defaults.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No.
Title
C.

CIVIL MINUTES – GENERAL
2:16-cv-04785-CAS (AFMx)
Date

‘O’

November 28, 2018
JOSE RAUL GONZALEZ SUAREZ; ET AL. v. YOLANDA CHAVEZ; ET
AL.
Prejudice to Plaintiffs

Finally, the Court cannot discern any reason why vacating the defaults would
prejudice plaintiffs. “To be prejudicial, the setting aside of a judgment must result in
greater harm than simply delaying resolution of the case. Rather, ‘the standard is whether
[plaintiff’s] ability to pursue his claim will be hindered.’ ” TCI Group Life Ins. Plan, 244
F.3d at 701 (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)) (alteration in
original)). Examples of tangible harm to a non-movant include loss of evidence or
heightened discovery burdens. Id. (citing Thompson v. American Home Assurance Co.,
95 F.3d 429, 433-34 (6th Cir. 1996). Plaintiffs’ counsel at hearing indicated that
plaintiffs would be available to testify at trial. Thus, no such hardship exists here.
Plaintiffs are not prejudiced simply because they are deprived of a “quick victory” and
must litigate their claims on the merits. Bateman v. United States Postal Service, 231
F.3d 1220, 1225 (9th Cir. 2000). Nothing suggests that plaintiffs’ pursuit of this action
will be hindered or prejudicially delayed should the Court set aside the defaults.
Accordingly, the defaulting parties have satisfied all three of the elements required to set
aside the defaults.
V.

CONCLUSION

In accordance with the foregoing, the Court hereby GRANTS J&D Harvesting,
Yolanda Chavez, and YB Farming’s motions to set aside the default. Plaintiffs’ motion
for default judgment against J&D Harvesting, Yolanda Chavez, and YB Farming is
DENIED as moot. These defendants shall file their answers on or before December 12,
2018.
Yolanda Chavez Farming is ordered to show cause in writing not later than
December 10, 2018, why the default against it should be set aside. The order to show
cause will stand submitted upon the filing of briefs.
IT IS SO ORDERED.
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Initials of Preparer

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CMJ

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