Wake Forest Acquisitions, L.P., et al., v. Vanderbilt Commercial Lending, Inc. et al

Filing 67

ORDER signed by Magistrate Judge Deborah Barnes on 12/21/2017 ORDERING 66 Plaintiffs' Motion for Default Judgment is CONTINUED to 2/2/2018 at 10:00 AM in Courtroom 27 (DB) before Magistrate Judge Deborah Barnes; on or before 1/19/2018, plaintiffs shall file a supplemental memorandum addressing the status of defendant Gregory Cook and plaintiffs' motion for leave to amend. (Reader, L)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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MARY SHAFFER, et al.,

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Plaintiffs,
v.

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Defendants.
VANDERBILT COMMERCIAL
LENDING, INC., et al.,

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ORDER

VANDERBILT COMMERCIAL
LENDING, INC., et al.,

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No. 2:15-cv-2167 KJM DB

Counterclaim-Plaintiffs,
v.

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WAKE FOREST ACQUISITIONS, L.P.,

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Countercl.-Defendants.

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On November 16, 2017, plaintiffs filed a motion for default judgment and noticed the

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motion for hearing before the undersigned on December 22, 2017. (ECF No. 66.) Plaintiffs’

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motion seeks entry of default judgment against defendant Vanderbilt Commercial Lending, Inc.

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(Id. at 2.) Plaintiffs’ motion, however, does not seek default judgment against defendant Gregory

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Cook.
Rule 54(b) of the Federal Rules of Civil Procedure provides in pertinent part:
... when multiple parties are involved, the court may direct entry of
a final judgment as to one or more, but fewer than all, claims or
parties only if the court expressly determines that there is no just
reason for delay.

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See also Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 8 (1980) (noting that the court

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has discretion to enter a default judgment as to less than all defendants); Shanghai Automation

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Instrument Co., Ltd. v. Kuei, 194 F. Supp.2d 995, 1010 (N.D. Cal. 2001) (“differing judgments

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against defendant Tsai and the defaulting defendants would not necessarily be illogical”).

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However, the Supreme Court warned that “absurdity might follow” in instances where a

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court “can lawfully make a final decree against one defendant . . . while the cause was proceeding

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undetermined against the others.” Frow v. De La Vega, 82 U.S. 552, 554 (1872). The Ninth

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Circuit has summarized the Frow standard as follows: “[W]here a complaint alleges that

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defendants are jointly liable and one of them defaults, judgment should not be entered against the

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defaulting defendant until the matter has been adjudicated with regard to all defendants.” In re

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First T.D. & Investment, 253 F.3d 520, 532 (9th Cir. 2001) (citing Frow, 82 U.S. at 554); see also

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Employee Painters’ Trust v. Cascade Coatings, No. C12-0101 JLR, 2014 WL 526776, at *3

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(W.D. Wash. Feb. 10, 2014) (“it would be an abuse of discretion for this court to grant Plaintiffs’

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motion for default judgment because Plaintiffs allege the same claims against Mr. Schlatter and

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the non-defaulted jointly and severally liable co-defendants, Mr. McLaughlin and Cascade

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Partnership. Supreme Court and Ninth Circuit precedent prohibit default judgment where a

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default judgment against one defendant could be inconsistent with a judgment on the merits in

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favor of other defendants”); Helton v. Factor 5, Inc., Case No: C 10-4927 SBA, 2013 WL

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5111861, at *6 (N.D. Cal. Sept. 12, 2013) (“In the present case, there is a serious risk of

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inconsistent judgments. Plaintiffs have alleged that Defendants all are jointly and severally liable

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for the 11 claims alleged in the First Amended Class Action Complaint.”).

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Moreover, on August 16, 2017, plaintiffs filed a motion for leave to file an amended
complaint. (ECF No. 57.) That motion is under submission before the assigned District Judge.
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(ECF No. 61.) If plaintiffs’ motion for leave to amend is granted, the amended complaint would

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supersede the original complaint filed in this action. See Loux v. Rhay, 375 F.2d 55, 57 (9th Cir.

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1967).

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Accordingly, IT IS HEREBY ORDERED that:

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1. The December 22, 2017 hearing of plaintiffs’ motion for default judgment (ECF No.

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66) is continued to Friday, February 2, 2018, at 10:00 a.m., at the United States District Court,

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501 I Street, Sacramento, California, in Courtroom No. 27, before the undersigned; and

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2. On or before January 19, 2018, plaintiffs shall file a supplemental memorandum

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addressing the status of defendant Gregory Cook and plaintiffs’ motion for leave to amend.

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DATED: December 21, 2017

/s/ DEBORAH BARNES
UNITED STATES MAGISTRATE JUDGE

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DLB:6
DB\orders\orders.civil\shaffer2167.hrg.cont.ord

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