United Van Lines, LLC v. Michael Jacobs et al

Filing 28

ORDER GRANTING IN PART DEFENDANT'S MOTION TO SET ASIDE ENTRY OF DEFAULT AND DENYING DEFENDANT'S REQUEST TO DISMISS MISJOINED PARTY 23 by Judge Otis D. Wright, II. For the foregoing reasons, the Court GRANTS IN PART Michael's Moti on to Set Aside Entry of Default. To the extent Michael seeks to set aside the default entered against Ruby, his Motion is DENIED IN PART. Michael's request to dismiss the purportedly misjoined defendant is DENIED without prejudice. (lom)

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O 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 UNITED VAN LINES, LLC, 12 Plaintiff, 13 14 15 Case No. 2:20-CV-03741-ODW (PLAx) v. MICHAEL JACOBS, an individual; RUBY HANDLER JACOBS, an individual, 16 ORDER GRANTING IN PART DEFENDANT’S MOTION TO SET ASIDE ENTRY OF DEFAULT AND DENYING DEFENDANT’S REQUEST TO DISMISS MISJOINED PARTY [23] Defendants. 17 I. 18 INTRODUCTION 19 Pro se Defendant Michael Jacobs (“Michael”)1 moves to set aside entry of 20 default and to dismiss a purportedly misjoined party. (Mot. to Set Aside Default 21 (“Motion” or “Mot.”), ECF No. 23.) For the reasons that follow, the Court GRANTS 22 IN PART Michael’s Motion.2 II. 23 BACKGROUND 24 On April 23, 2020, Plaintiff United Van Lines, LLC (“United”) initiated this 25 action against Michael and his wife, Ruby Handler Jacobs (collectively 26 “Defendants”). (See Compl., ECF No. 1.) United filed this case because Defendants 27 28 The Court respectfully refers to Defendants by their first names to avoid confusion. Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 2 1 served it with a notice of intent to file lawsuit based on claims for relief that were 2 allegedly resolved via settlement in December 2014. (Id. ¶¶ 11–25.) United seeks a 3 declaration that Defendants are barred from litigating claims that have been resolved. 4 (Id. ¶¶ 26–29.) 5 United served Defendants with copies of the Summons and Complaint on 6 June 16, 2020. (See Proofs of Service, ECF Nos. 9–10.) Defendants failed to answer 7 or otherwise respond to the Complaint; accordingly, United moved for the Clerk to 8 enter default. (See Reqs. for Entry of Default, ECF Nos. 12, 14.) On July 23, 2020, 9 the Clerk entered default. (See Default, ECF No. 18.) On August 15, 2020, Michael 10 moved on behalf of himself, and on behalf of Ruby, to set aside entry of default and to 11 dismiss her as a misjoined defendant. (See generally Mot.) United has not opposed 12 the Motion. 13 III. PRELIMINARY MATTERS 14 As a preliminary matter, Michael, who is a non-attorney and a pro se litigant, 15 moves to set aside default on behalf of Ruby. (See generally Mot.) However, pro se 16 litigants have no authority to represent other parties. See Johns v. Cnty. of San Diego, 17 114 F.3d 874, 876 (9th Cir. 1997) (“[A] non-lawyer ‘has no authority to appear as an 18 attorney for others than himself.’” (quoting C.E. Pope Equity Trust v. United States, 19 818 F.2d 696, 697 (9th Cir. 1987)); Gutierrez v. Burrguan, No. ED CV 19-818-RGK 20 (Ex), 2019 WL 6825759, at *5 (C.D. Cal. July 12, 2019) (same); see also Fed. R. Civ. 21 P. 11(a) (“Every pleading, written motion, and other paper must be signed by at least 22 one attorney of record . . . or by a party personally if the party is unrepresented.”). 23 Accordingly, the Court does not consider Michael’s Motion to set aside default as it 24 relates to relief on behalf of Ruby. 25 Michael also seeks to dismiss his wife from this action as a misjoined party. 26 (See Mot. 6.) However, once default is entered, the only procedure available to the 27 defendant is a motion to set aside default. See Fed. R. Civ. P. 55(c). Therefore, to the 28 2 1 extent Michael seeks relief other than setting aside default (i.e., to dismiss Ruby as a 2 misjoined party), his Motion is DENIED without prejudice. 3 IV. LEGAL STANDARD 4 Federal Rule of Civil Procedure 55(c) authorizes a court to “set aside the entry 5 of default” for “good cause shown.” Fed. R. Civ. P. 55(c). District courts look at the 6 following three factors when deciding whether there is good cause to set aside the 7 entry of default: “(1) whether the plaintiff will be prejudiced, (2) whether the 8 defendant has a meritorious defense, and (3) whether culpable conduct of the 9 defendant led to the default.” Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108, 10 1111 (9th Cir. 2011) (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)). 11 “Where timely relief is sought from a default . . . , doubt, if any, should be resolved in 12 favor of the motion to set aside the [default] so that cases may be decided on their 13 merits.” Mendoza v. Wight Vineyards Mgmt., 783 F.2d 941, 945–46 (9th Cir. 1986) 14 (alterations in original) (internal quotation marks omitted). V. 15 16 17 DISCUSSION The Court addresses the aforementioned three factors to determine whether there is good cause to set aside default. 18 The first factor requires the Court to consider whether setting aside default will 19 prejudice United. See Brandt, 653 F.3d at 1111. “To be prejudicial, the setting aside 20 of a [default] . . . must result in greater harm than simply delaying resolution of the 21 case.” TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 701 (9th Cir. 2001). 22 United failed to oppose Michael’s Motion, so there are no facts demonstrating United 23 will be prejudiced by setting aside the default. Thus, this factor weighs in favor of 24 setting aside entry of default. 25 The second factor requires the Court to consider whether Michael has a 26 meritorious defense. See Brandt, 653 F.3d at 1111. The burden on Michael is not 27 great; he need only present specific facts that, if true, would demonstrate a meritorious 28 defense. TCI Grp. Life, 244 F.3d at 700. Michael raises several defenses to United’s 3 1 Complaint, including: (1) the purported settlement agreement is void as a result of 2 fraudulent inducement, and (2) United’s claim is barred by the statute of limitations. 3 (See Mot. 10–12.) The Court finds that these specific facts, if true, would demonstrate 4 meritorious defenses to United’s claim that it is entitled to a declaration that 5 Defendants’ threatened lawsuit is precluded by settlement agreement. Thus, Michael 6 has sufficiently identified a meritorious defense and this factor weighs in favor of 7 setting aside default. 8 The third and final factor requires the Court to determine whether Michael’s 9 culpability led to the entry of default. See Brandt, 653 F.3d at 1111. “[A] defendant’s 10 conduct is culpable if [they have] received actual or constructive notice of the filing of 11 the action and intentionally failed to answer.” 12 (emphasis omitted). “[I]n this context the term ‘intentionally’ means that a movant 13 cannot be treated as culpable simply for having made a conscious choice not to 14 answer; rather, to treat a failure to answer as culpable, the movant must have acted 15 with bad faith.” United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 16 615 F.3d 1085, 1092 (9th Cir. 2010). 17 Chapter 11 Bankruptcy and “[a]dvice from his bankruptcy attorney was to notice 18 [United’s] counsel of the bankruptcy which would . . . stay these instant proceedings 19 and not require [him] to answer the Complaint.” (Mot. 15.) However, “[d]ue to 20 illness of [Michael’s] attorney his notice was not provided” until after United moved 21 for entry of default. (Id.) Based on Michael’s representations to the Court, it does not 22 appear that his failure to answer the Complaint was in bad faith. Therefore, the Court 23 finds that Michael’s culpability did not lead to the entry of default and this factor 24 favors setting the default aside. 25 /// 26 /// 27 /// 28 /// TCI Grp. Life, 244 F.3d at 697 Michael claims that he is currently in 4 VI. 1 CONCLUSION 2 For the foregoing reasons, the Court GRANTS IN PART Michael’s Motion to 3 Set Aside Entry of Default. To the extent Michael seeks to set aside the default 4 entered against Ruby, his Motion is DENIED IN PART. Michael’s request to dismiss 5 the purportedly misjoined defendant is DENIED without prejudice. 6 7 IT IS SO ORDERED. 8 9 February 16, 2021 10 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 5

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