Sustainable Pavement Technologies, LLC v. Holiday et al

Filing 35

ORDER signed by Senior Judge William B. Shubb on 8/2/18 DENYING 28 Motion to Set Aside Default. (Kaminski, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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SUSTAINABLE PAVEMENT
TECHNOLOGIES, LLC,

Civ. No. 2:17-2687 WBS KJN

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ORDER RE: MOTION TO SET ASIDE
DEFAULT

Plaintiff,
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v.
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RICH HOLIDAY, RYAN (TIM) BONARI,
JPMORGAN CHASE BANK, N.A., and
BANK OF AMERICA, N.A.,

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Defendants.
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On December 26, 2017, plaintiff Sustainable Pavement
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Technologies filed this action against defendants Rich Holiday
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(“Holiday”), Ryan Bonari (“Bonari”), JPMorgan Chase Bank, N.A.,
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and Bank of America, N.A (collectively “defendants”) arising out
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of Holiday and Bonari’s alleged wrongful embezzlement and receipt
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of money belonging to plaintiff.

On January 15, 2018, the

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summons and complaint were served on Holiday via substituted
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service by leaving copies with Jamie Holiday at 2212 Sombrero Ct,
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Auburn, CA 95603, the same address that Holiday listed as his
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address on the first page of his Motion to Set Aside the

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Default.1

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on January 20, 2018, and acknowledges that he received the

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Summons and Complaint in the mail.

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Defendant’s answer was due on February 5, 2018, but no answer was

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filed.

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defendant Holiday.2

Defendant learned about the lawsuit

(Def.’s Mot. at 4.)

On February 16, 2018, the clerk entered default against

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(Docket No. 7.)

At the April 23, 2018 scheduling conference, Holiday
appeared by phone and the court gave Holiday thirty days to

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retain counsel and file a motion to set aside the default.

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May 21, 2018, Holiday filed a Motion to Set Aside the Judgment,

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and explained that he intended but was unable to retain an

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attorney.

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additional 45 days to retain counsel.

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is defendant’s pro se Motion to Set Aside the Default under

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California Code of Civil Procedure 473(b)).3

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On

On May 25, 2018, the court gave defendant an
Presently before the court

(Docket No. 28.)

A court may set aside an entry of default for good

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In a letter attached to his motion, Holiday claims that
he no longer resided at that address and that he was in Florida
working on a disaster at the time process was served. However,
he acknowledged at the scheduling conference that he received the
papers in Florida a few weeks later.
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On February 22, 2018, the clerk entered default against
Ryan Bonari. (Docket No. 17.)
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Pursuant to California Civil Procedure § 473(b) “[t]he
court may, upon any terms as may be just, relieve a party or his
or her legal representative from a judgment, dismissal, order, or
other proceeding taken against him or her through his or her
mistake, inadvertence, surprise, or excusable neglect.” However,
in federal court, a court may set aside an entry of default for
good cause, and the court treats the motion as one brought under
Rule 55. Fed. R. Civ. P. 55(c).
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cause.

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exists, the court will examine: (1) whether the defendant’s

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culpable conduct led to the default; (2) whether the defendant

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has a meritorious defense; and (3) whether reopening the default

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would prejudice the plaintiff.

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Knoebber, 244 F. 3d 691, 696 (9th Cir. 2001).

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. is disjunctive, such that a finding that any one of these

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factors is true is sufficient reason for the district court to

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refuse to set aside the default.”

Fed. R. Civ. P. 55(c).

In determining whether good cause

TCI Grp. Life Ins. Plan v.
“This standard . .

United States v. Signed Pers.

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Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir.

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2010).

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burden of demonstrating that these factors favor vacating the

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default.

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The party seeking to vacate an entry of default bears the

Knoebber, 244 F. 3d at 696.
The court must observe that Holiday’s motion falls far

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short of showing a meritorious defense.

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did not wrongfully take money belonging to SPT and that the funds

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he allegedly took were his authorized commissions, that amounts

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to nothing more than a general denial of the claims against him.

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A mere general denial without specific facts is insufficient to

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justify setting aside a default.

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However, the court need not decide the motion on that ground,

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because the court finds that it was Holiday’s own culpable

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conduct which led to the default.

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Although he claims he

Knoebber, 244 F. 3d at 700.

A defendant’s conduct is deemed culpable “if he has

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received actual or constructive notice of the filing of the

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action and intentionally failed to answer.”

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at 697.

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explanation of the default inconsistent with a devious,

Knoebber, 244 F. 3d

A party’s conduct is culpable “where there is no

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deliberate, willful or bad faith failure to respond.”

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698.

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commonly, omissions caused by carelessness” do not equate to “an

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intentional failure to answer.”

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credible, good faith explanation negating any intention to take

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advantage of the opposing party, interfere with judicial

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decision-making, or otherwise manipulate the legal process is not

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intentional.”

Id. at 244

“Neglect [or] simple, faultless omissions to act and, more

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Id. (citations omitted).

“[A]

Id. at 698.

Here, Holiday contends that he failed to respond to the

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lawsuit because of his “inexperience.”

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No. 28).)

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was serious.

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defendant explains that he thought plaintiff’s claim was “so

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farfetched [he] didn’t originally believe it was legitimate.”

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Most defendants who are served in a lawsuit are inexperienced in

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litigation.

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action in response to the service of summons.

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explanation that he ignored the summons and complaint because he

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did not think the lawsuit was serious amounts to “an intentional

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failure to answer,” and he is therefore not entitled to have his

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default set aside.

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(Def.’s Mot. at 4 (Docket

He further states that he did not think the lawsuit
(Id. at 5.)

In a letter attached to his motion,

That does not justify their failure to take any
Holiday’s

IT IS THEREFORE ORDERED that defendant Holiday’s Motion

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to Set Aside Default (Docket No. 28) be, and the same hereby is,

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DENIED.

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Dated:

August 2, 2018

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