(PS) Castro et al v. Castilo et al

Filing 28

ORDER signed by Magistrate Judge Carolyn K. Delaney on 11/14/2023 SETTING ASIDE 19 Clerk's Entry of Default and DENYING 26 Motion for Default Judgment as moot. Defendant Castillo shall file response to 1 Complaint within 21 days of this order. (Clemente Licea, O)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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LOVETTE CASTRO, et al.,

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Plaintiffs,

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No. 2:23–cv–00448-TLN-CKD PS
ORDER

v.
MIGUEL CASTILO, et al.,

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Defendants.

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In this action initially filed on March 10, 2023, plaintiffs Lovette Castro and Malo

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Corporate Enterprises (MCE) allege that defendants infringed their band’s registered trademark,

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an image of a stylized dragon, to promote other groups. (ECF No. 1.) On September 21, 2023,

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the Clerk of Court, upon plaintiff’s request, entered default against defendant Miguel Castilo

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(ECF No. 19), but declined to enter default against the other named defendants. (ECF Nos. 20 &

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21.)
Presently pending before the court is plaintiff’s motion for default judgment against

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Castilo. (ECF No. 26.) However, Castilo has made an appearance in this action, first by filing a

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motion to dismiss the complaint on June 8, 2023 (ECF No. 9), and again on September 28, 2023,

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opposing the Clerk’s entry of default. (ECF No. 23.)

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Rule 55 1 governs the entry of default by the clerk and the subsequent entry of default

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judgment by either the clerk or the district court. “When a party against whom a judgment for

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affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by

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affidavit or otherwise, the clerk must enter the party’s default.” Rule 55(a). Obtaining a default

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judgment is a “two-step process,” consisting of: (1) seeking a clerk’s entry of default, and (2)

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filing a motion for the entry of default judgment. See Eitel v. McCool, 782 F.2d 1470, 1471 (9th

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Cir. 1986); accord Symantec Corp. v. Global Impact, Inc., 559 F.3d 922, 923 (9th Cir. 2009).

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A court may set aside an entry of default for good cause. Rule 55(c). A court considers
three factors when examining good cause: “(1) whether [the party seeking to set aside the

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default] engaged in culpable conduct that led to the default; (2) whether [it] had [no] meritorious

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defense; or (3) whether reopening the default judgment would prejudice the other party.” United

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

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2010) (quoting Franchise Holding II, LLC, 375 F.3d at 925-26).
Under this disjunctive standard, “a finding that any one of these factors is true is sufficient

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reason for the district court to refuse to set aside the default.” Brandt v. Am. Bankers Ins. Co.,

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653 F.3d 1108, 1111 (9th Cir. 2011). However, a court may within its discretion grant relief from

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default even after finding one of the “good cause” factors to be true. See, e.g., id. at 1112 (“A

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district court may exercise its discretion to deny relief to a defaulting defendant based solely upon

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a finding of defendant’s culpability, but need not.”) (emphasis added). “The court’s discretion is

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especially broad where . . . it is entry of default that is being set aside, rather than a default

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judgment.” O’Connor v. State of Nev., 27 F.3d 357, 364 (9th Cir. 1994). The factors are more

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liberally applied with respect to a request to set aside the entry of default, because “there is no

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interest in the finality of the judgment with which to contend.” Mesle, 615 F.3d at 1091 n.1.

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Additionally, the Ninth Circuit has emphasized that resolution of a motion to set aside the

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entry of default is necessarily informed by the well-established policies favoring resolution of

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cases on their merits and generally disfavoring default judgments. See Mesle, 615 F.3d at 1091

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Citation to the “Rule(s)” are to the Federal Rule of Civil Procedure unless otherwise noted.
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(“Crucially,...judgment by default is a drastic step appropriate only in extreme circumstances; a

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case should, whenever possible, be decided on the merits”) (citations and quotation marks

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omitted); Westchester Fire Ins. Co. v. Mendez, 585 F.3d 1183, 1189 (9th Cir. 2009) (“As a

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general rule, default judgments are disfavored; cases should be decided upon their merits

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whenever reasonably possible”). Moreover, the Ninth Circuit’s “rules for determining when a

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default should be set aside are solicitous towards movants, especially those whose actions leading

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to the default were taken without the benefit of legal representation.” Mesle, 615 F.3d at 1089.

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Here, good cause exists for setting aside the Clerk’s entry of default. Defendant Castilo,

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proceeding pro se, filed a pleading in this action prior to the entry of default and later argued for

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the reversal of the entry of default. Moreover, the prejudice factor favors setting aside the default.

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“To be prejudicial, the setting aside of a judgment [or clerk’s entry of default] must result in

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greater harm than simply delaying resolution of the case.” Mesle, 615 F.3d at 1095. In this case,

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there is no indication that plaintiffs’ ability to pursue their claim will be hindered by the delay

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from setting aside the Clerk’s entry of default. In light of the longstanding policy favoring

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resolution on the merits, the undersigned will set aside the default and order defendant Castilo to

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respond to the complaint.
ORDER

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Accordingly, IT IS HEREBY ORDERED that:

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1. The Clerk’s entry of default as to Castilo (ECF No. 19) is SET ASIDE;

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2. Within 21 days of this order, defendant Castilo shall file his response to the March 10,

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2023 complaint; and
3. Plaintiff’s motion for default judgment (ECF No. 26) is DENIED as moot.
Dated: November 14, 2023
_____________________________________
CAROLYN K. DELANEY
UNITED STATES MAGISTRATE JUDGE

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2/castro443.setasidedefault

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