United States of America v. Clauer
Filing
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FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Allison Claire on 12/27/17 Recommending that Plaintiff's 19 Motion for Default Judgment be DENIED. These Findings and Recommendations are submitted to U.S. District Judge William B. Shubb; Objections to these F&Rs due within twenty-one days. (Mena-Sanchez, L)
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UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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UNITED STATES OF AMERICA,
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No. 2:17-cv-01933 WBS AC
Plaintiff,
v.
FINDINGS AND RECOMMENDATIONS
JOHN BRUCE CLAUER,
Defendant.
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This matter is before the court on plaintiff’s motion for default judgment. ECF No. 19.
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The motion was referred to the undersigned pursuant to E.D. Cal. R. 302(c)(19). For the reasons
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set forth below, the undersigned recommends plaintiff’s motion be DENIED.
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I.
Background
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Plaintiff’s complaint was filed on September 18, 2017. ECF No. 1. A notice of summons
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returned executed was filed on October 17, 2917. ECF No. 14. Plaintiff seeks to recover
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Department of Veterans Affairs (“VA”) service-connected disability benefit overpayments that
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were made to defendant. ECF No. 1 at 1. Plaintiff alleges that defendant was overpayed because
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the VA failed to make a required 10% reduction in defendant’s benefits due to defendant’s
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incarceration. Id. at 2. On November 21, 2017, the Clerk of Court issued pre-judgment writs of
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garnishment for defendant’s bank accounts and his inmate trust account. ECF Nos. 8 and 9.
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Certificates of service for the pre-judgment writs were filed. ECF Nos. 10 and 11.
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On October 27, 2017, plaintiff requested the Clerk’s entry of default. ECF No. 15. This
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request was served on defendant. ECF No. 17. The Clerk entered default on October 30, 2017.
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ECF No. 18. Plaintiff moved for default judgment on October 30, 2017. ECF No. 19. The
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motion was initially set for hearing on November 22, 2017. Id. On November 16, 2017, the court
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noted that the motion for default judgment had not been served on defendant, vacated the hearing,
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served the motion, and ordered that it would be heard on the papers. ECF No. 20. The court
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notified defendant that he had 21 days to file an opposition to the motion, if he wished to do so.
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Id. at 2. On December 5, 2017, defendant filed an opposition. ECF No. 21. Plaintiff field a reply
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on December 14, 2017. ECF No. 23.
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II.
Analysis
Default judgment is not appropriate in this case, where defendant has appeared and
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indicated that he wishes to defend or settle this lawsuit on the merits. “[A] defendant’s default
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does not automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal.
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Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915,
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924-25 (9th Cir. 1986)); see Fed. R. Civ. P. 55(b) (governing the entry of default judgments).
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Instead, the decision to grant or deny an application for default judgment lies within the district
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court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this
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determination, the court will consider the following factors:
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(1) the possibility of prejudice to the plaintiff; (2) the merits of
plaintiff's substantive claim; (3) the sufficiency of the complaint;
(4) the sum of money at stake in the action; (5) the possibility of a
dispute concerning material facts; (6) whether the default was due
to excusable neglect; and (7) the strong policy underlying the
Federal Rules of Civil Procedure favoring decisions on the merits.
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Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily
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disfavored. Id. at 1472.
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As a preliminary matter, the undersigned rejects plaintiff’s suggestion that defendant’s
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opposition to the motion for default judgment need not be considered at all because notice for a
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motion for default is only required when a defendant has “appeared” in an action by filing an
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answer or making another kind of formal appearance. ECF No. 23 at 2. Whether or not the court
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is required to consider it, the court declines to simply disregard a responsive pleading that it
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specifically asked for and then received.
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The undersigned also disagrees with plaintiff’s argument that the Eitel factors favor entry
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of default judgment in this case. Plaintiff argues that “[t]he United States will be prejudiced
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because the Defendant failed to appear or respond in this action and the United States will likely
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be unable to have a final resolution on its overpayment claims without a default judgment.” ECF
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No. 23 at 3. This is inaccurate; plaintiff has paths available in this suit beyond entry of default
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judgment, such as a dispositive motion on the merits. To support its argument, plaintiff relies on
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a case where, unlike here, the defendant failed to oppose entry of default judgment. Id. (citing
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United States v. Sundberg, No. C-09-4085 EMC, 2011 WL 3667458, at *1 (N.D. Cal. Aug. 22,
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2011)). In the present case, where defendant has opposed the entry of default judgment and made
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some argument as to the merits of plaintiff’s claims, the seventh Eitel factor is dispositive. In
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light of “the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on
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the merits,” entry of default judgment should be denied.
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III.
Conclusion
For the reasons set forth above, IT IS HEREBY RECOMMENDED that plaintiff’s motion
for default judgment (ECF No. 19) be DENIED.
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These findings and recommendations are submitted to the United States District Judge
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assigned to this case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within twenty-one
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(21) days after being served with these findings and recommendations, any party may file written
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objections with the court. Such document should be captioned “Objections to Magistrate Judge’s
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Findings and Recommendations.” Local Rule 304(d). Failure to file objections within the
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specified time may waive the right to appeal the District Court’s order. Martinez v. Ylst, 951
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F.2d 1153 (9th Cir. 1991).
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DATED: December 27, 2017
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