Laskiewicz v. Swartz et al

Filing 52

ORDER signed by Magistrate Judge Craig M. Kellison on 12/17/2012 GRANTING defendant's 47 Motion to Set Aside Default. Defendant Eric Allen Berg shall file response to Second Amended Complaint within 14 days of date of Order. (Marciel, M)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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DAVID LEE LASKIEWICZ,

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No. 2:11-cv-2828-JAM-CMK

Plaintiff,
vs.

ORDER

RUSSELL SWARTZ, et al.,
Defendants.
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Plaintiff, proceeding in this action in propria persona, brings this civil action.

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Pending before the court is defendant Berg’s unopposed motion to set aside default (Doc. 47).

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As no opposition to motion was filed, the court vacated the hearing set for December 12, 2012.

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This action was originally filed on October 26, 2011. Plaintiff then filed a first

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amended complaint on November 21, 2011. The summons was returned to the court on January

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17, 2011, and plaintiff filed a request for entry of default on March 7, 2012, after no response to

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the complaint was filed. On March 9, 2012, the Clerk of the Court enter the default of one

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defendant, Kinney, but declined to enter the default for the other two defendants, Swartz and

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Berg, as it could not be determined whether they were appropriately served. The Initial

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Scheduling Conference was held on March 14, 2012, with the plaintiff appearing telephonically
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and defendant Swartz appearing in person. The matter was continued for resolution of service

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issues and the default as to defendant Kinney. Plaintiff then attempted service of defendants

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Berg and Swartz again, and returned the summons as executed on March 22, 2012. The

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continued scheduling conference was held on April 11, 2012; none of the defendants appeared

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nor had filed a response to the complaint. The court noted that if plaintiff filed a request for

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entry of default as to the remaining defendants, the court would set a hearing to address the issue

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of actual damages. However, before plaintiff filed a request for entry of default, the defendants

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filed a motion to dismiss or more definite statement, thereby responding to the complaint prior to

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the entry of their default. This resulted in the Clerk declining to enter the defendants’ default

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when plaintiff’s request was received. Following a hearing on the defendants’ motion, the court

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granted the motion for more definite statement, and granted plaintiff leave to file a second

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amended complaint. Defendants were directed to file a response to the second amended

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complaint pursuant to Federal Rule of Civil Procedure 12(a)(4). No response to the second

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amended complaint, which was filed July 2, 2012, was received by the court, and plaintiff’s

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request for entry of default was granted by the Clerk on September 5, 2012. Plaintiff then filed a

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motion for default judgment on October 26, 2012, but failed to set it for a hearing. Defendant

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Berg’s motion was filed a few days later, on November 1, 2012. No response from either

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defendant Swartz or Kinney has yet to be received.

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Rule 55(c) of the Federal Rules of Civil Procedure provides for relief from an

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entry of default for “good cause shown.” An application under Rule 55(c) to set aside a default is

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addressed to the sound discretion of the trial court. Savarese v. Edrick Transfer and Storage,

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Inc., 513 F.2d 140, 146 (9th Cir. 1975). Because of the preference for deciding cases on their

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merits whenever possible, motions for relief from default entries should be viewed liberally, see

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Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984), resolving all doubts in favor of the party

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seeking relief. See, e.g., Schwab v. Bullock's Inc., 508 F.2d 353, 355 (9th Cir. 1974); Butner v.

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Neustadter, 324 F.2d 783 (9th Cir. 1963).
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In considering a motion to set aside a clerk’s entry of default pursuant to Rule

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55(c), courts “uniformly consider” the factors relevant to a motion to set aside a default

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judgment, pursuant to Fed. R. Civ. P. 60(b). 10 Wright and Miller, Federal Practice and

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Procedure (“Wright & Miller”), § 2694. Any of the reasons which are sufficient to justify relief

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under Rule 60(b) will justify relief under Rule 55(c). Id. “The court’s discretion is especially

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broad where, as here, it is entry of default that is being set aside, rather than a default judgment.”

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Mendoza v. Wight Vineyard Mgmt, 783 F.2d 941, 945; See also Brady v. United States, 211

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F.3d 499, 504 (9th Cir. 2000) (quoting O’Connor v. Nevada, 27 F.3d 357, 364 (9th Cir. 1994)).

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A motion to set aside a default judgment under Rule 60(b) may be denied if: (1)

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the plaintiff would be prejudiced by granting it; (2) the defendant has no meritorious defense; or

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(3) the defendant’s culpable conduct led to the default. Pena v. Seguros La Comercial, S.A., 770

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F.2d 811 (9th Cir. 1985). Finally, although there is no express requirement of timeliness in Rule

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55(c), the fact that a defaulted party acts quickly to cure the default and seek relief is viewed as a

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strong reason for the court to exercise its discretion to set aside the default. Wright & Miller,

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§ 1698.

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When applying the good cause standard, the Ninth Circuit has typically found a

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defendant’s conduct to be culpable “where there is no explanation of the default inconsistent with

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a devious, deliberate, willful, or bad faith failure to respond.” TCI Group Life Ins. Plan v.

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Knoebber, 244 F.3d 691, 698 (9th Cir. 2001). Although a defaulting party’s familiarity with

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legal process or representation by an attorney may strongly suggest the likelihood that the delay

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was deliberate, willful or in bad faith, legal sophistication or ignorance is not the decisive factor.

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See id. at 699 n.6. “[S]imple carelessness is not sufficient to treat a negligent failure to reply as

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inexcusable, at least without a demonstration that other equitable factors, such as prejudice,

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weigh heavily in favor of denial of the motion to set aside a default.” United States v. Signed

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Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1092 (9th Cir. 2010).

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Here, the factors weigh in favor of defendant Berg. The court sees no prejudice to

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plaintiff, defendant has set forth the possibility of a meritorious defense, and there was no

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culpable conduct leading to the default. Defendant Berg explains that he was represented by

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counsel, one of the co-defendants in this matter, who became ill during the time a response to the

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second amended complaint was due. Defendant Berg had been in contact with his attorney’s

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office, who assured him the complaint would be responded to and the default addressed. When

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this did not happen within the time defendant Berg was comfortable with, he sought out new

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counsel who proceeded to file the instant motion. While defendant Berg could be found

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negligent in his failure to insure a timely response was filed, there does not appear to the court

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any culpable conduct to support a denial of his motion. In addition, defendant Berg sets forth the

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possibility of a meritorious defense, including a statute of limitations issues, as well as res

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judicata and collateral estoppel stemming from prior actions between the parties. Finally, the

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court sees no prejudice to plaintiff in that there has been no significant delay. A plaintiff is not

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prejudiced simply because it is denied a swift victory and must litigate its claims on their merits.

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See Bateman v. United States Postal Service, 231 F.3d 1220, 1225 (9th Cir. 2000).

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Accordingly, IT IS HEREBY ORDERED that:

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Defendant Berg’s motion to set aside default (Doc. 47) is granted; and

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2.

Defendant Berg shall file a response to the second amended complaint

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within 14 days of the date of this order.

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DATED: December 17, 2012
______________________________________
CRAIG M. KELLISON
UNITED STATES MAGISTRATE JUDGE

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