Tang et al v. California Reconveyance Company et al

Filing 101

ORDER Granting 78 Motion to Set Aside Default; Denying 83 Motion for Default Judgment. Signed by Judge Koh on 5/17/2011. (Attachments: # 1 certificate of mailing) (lhklc3, COURT STAFF) (Filed on 5/17/2011)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

United States District Court
For the Northern District of California

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VINCENT AND LIEN TANG,

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Plaintiffs,
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v.
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CALIFORNIA RECONVEYANCE CO., et al., )
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Defendants.
)
)

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Case No.: 10-CV-03333-LHK
ORDER GRANTING MOTION TO SET
ASIDE ENTRY OF DEFAULT AND
DENYING MOTION FOR ENTRY OF
DEFAULT JUDGMENT
(re: docket #78 and #83)

Defendant Bank of America, N.A., has moved to set aside entry of default against non-party

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Bank of America Corporation. See Dkt. #78. Defendant Bank of America, N.A., attempted to

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notice its motion for a hearing on June 2, 2011, but does not appear to have actually noticed its

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motion on the Court’s calendar. Plaintiffs have moved for entry of default judgment against non-

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party Bank of America Corporation, but did not notice their motion for a hearing. See Dkt. #83.

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Pursuant to Civil Local Rule 7-1(b), the Court concludes that these motions are appropriate for

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determination without oral argument and vacates the June 2, 2011 motion hearing. Having

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considered the parties’ submissions and the relevant law, the Court GRANTS the motion to set

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aside entry of default against Bank of America Corporation and DENIES the motion for entry of

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default judgment against Bank of America Corporation. The May 26, 2011 motion hearing, which

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centers on various motions to dismiss by Defendants, and case management conference remain as

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set.

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Case No.: 10-CV-03333-LHK
ORDER GRANTING MOTION TO SET ASIDE DEFAULT AND DENYING MOTION FOR ENTRY OF
DEFAULT JUDGMENT

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I. BACKGROUND
Pro se Plaintiffs Vincent and Lien Tang filed their initial Complaint on July 29, 2010,

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naming as Defendants California Reconveyance Company, JP Morgan Chase Bank, N.A., Chase

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Home Finance LLC, and Washington Mutual. See Dkt. #1. The Court granted Defendants’ motion

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to dismiss the Complaint with leave to amend on December 22, 2010. See Dkt. #40. On January

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24, 2011, Plaintiffs filed a First Amended Complaint (“FAC”), naming as Defendants California

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Reconveyance Company, Bank of America, N.A., Washington Mutual Bank, and the Federal

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Deposit Insurance Corporation (“FDIC”). See Dkt. #42 (emphasis added). At no time has Bank of

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America Corporation, a separate entity than Bank of America, N.A., been named as a Defendant in

United States District Court
For the Northern District of California

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this action.

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On April 1, 2011, Plaintiffs filed a motion for entry of default against Bank of America

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Corporation. See Dkt. #69. On April 7, 2011, counsel for Bank of America, N.A., erroneously

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filed a Notice of Appearance as counsel of record for Bank of America Corporation. See Notice of

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Appearance at 2 [dkt. #70]. On April 18, 2011, the Clerk of the Court entered default against Bank

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of America Corporation. See Dkt. #76. On April 25, 2011, Plaintiffs filed a “Notice to Correct

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Typographical Error,” clarifying that they intended to seek default against Defendant Bank of

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America, N.A., but had mistakenly sought default against non-party Bank of America Corporation.

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See Dkt. #85.

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Defendant Bank of America, N.A., has appeared in this action, and filed a motion to

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dismiss on April 12, 2011. On April 20, 2011, Defendant Bank of America, N.A., also filed a

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motion to set aside entry of default against non-party Bank of America Corporation. Although

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Plaintiffs have acknowledged mistakenly seeking default against a non-party, Plaintiffs have filed

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an opposition. In addition, Plaintiffs have also moved for entry of default judgment against Bank

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of America Corporation. Finally, Plaintiffs also sought, and were denied, entry of default with

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respect to Defendant Bank of America, N.A. See May 6, 2011 Clerk’s Notice Declining Default as

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to Bank of America, N.A. [dkt. #91].

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Case No.: 10-CV-03333-LHK
ORDER GRANTING MOTION TO SET ASIDE DEFAULT AND DENYING MOTION FOR ENTRY OF
DEFAULT JUDGMENT

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Now before the Court are: (1) the motion to set aside entry of default with respect to non-

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party Bank of America Corporation; and (2) Plaintiffs’ motion for entry of default judgment with

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respect to non-party Bank of America Corporation.

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II. DISCUSSION
Under Federal Rule of Civil Procedure 55(a): “[w]hen 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.” Fed. R. Civ. P. 55(a) (emphasis

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added). In addition, a “court may set aside an entry of default for good cause.” Fed. R. Civ. P.

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55(c). To determine whether good cause exists to set aside entry of default, the court considers

United States District Court
For the Northern District of California

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three factors: (1) whether the defendant’s culpable conduct led to the default; (2) whether the

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defendant has a meritorious defense; or (3) whether reopening the default (or in this case, setting

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aside entry of default) would prejudice the plaintiff. Id. at 1091; see also TCI Group Life Ins. Plan

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v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001). “Crucially, however, ‘judgment by default is a

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drastic step appropriate only in extreme circumstances; a case should, whenever possible, be

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decided on the merits.’” See Mesle, 615 F.3d at 1091 (quoting Falk v. Allen, 739 F.2d 461, 463

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(9th Cir. 1984)).

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Here, default was mistakenly entered against non-party Bank of America Corporation, and

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must be set aside. See Fed. R. Civ. P. 55(a) (discussing default with respect to a “party” to an

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action). Bank of America Corporation is not, and has never been, a party to this action. Moreover,

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Plaintiffs have acknowledged their mistake in seeking default against Bank of America

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Corporation. The actual named Defendant in this action, Bank of America, N.A., has appeared and

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responded to Plaintiffs’ FAC. Accordingly, good cause exists to set aside default against Bank of

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America Corporation. As the Court is setting aside entry of default against Bank of America

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Corporation, Plaintiffs’ motion for entry of default judgment must also be denied. See Fed. R. Civ.

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P. 55(b) (default judgment is only appropriate for defendants who have “defaulted”).

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Case No.: 10-CV-03333-LHK
ORDER GRANTING MOTION TO SET ASIDE DEFAULT AND DENYING MOTION FOR ENTRY OF
DEFAULT JUDGMENT

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III. CONCLUSION
For the reasons stated above, the motion to set aside entry of default against Bank of

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America Corporation [dkt. #78] is GRANTED. The motion for entry of default judgment against

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Bank of America Corporation [dkt. #83] is DENIED. The Clerk shall set aside default against

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Bank of America Corporation. The May 26, 2011 motion hearing and case management

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conference remain as set.

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IT IS SO ORDERED.

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Dated: May 17, 2011

_________________________________
LUCY H. KOH
United States District Judge

United States District Court
For the Northern District of California

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Case No.: 10-CV-03333-LHK
ORDER GRANTING MOTION TO SET ASIDE DEFAULT AND DENYING MOTION FOR ENTRY OF
DEFAULT JUDGMENT