United States of America v. Kriegsmann et al

Filing 17

ORDER granting Defendant's 15 Motion to Set Aside Default. Dft Kreigsmann's 13 Answer filed nunc pro tunc to 4/4/2016 is the operative answer. Signed by Judge Cynthia Bashant on 6/9/2016. (All non-registered users served via U.S. Mail Service) (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,

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Case No. 15-cv-2744-BAS-BGS

Plaintiff,

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ORDER GRANTING MOTION
TO SET ASIDE DEFAULT

v.

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ARTHUR W. KRIEGSMANN;
JPMORGAN CHASE BANK N.A.,

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Defendants.

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On March 23, 2016, the Clerk of the Court entered default against Defendant

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Arthur Kriegsmann. (ECF No. 11.) On April 15, 2016, Kriegsmann moved to set

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aside the entry of default. (ECF No. 15.) In response, Plaintiff United States of

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America (“United States” or “Government”) has filed a statement of non-opposition.

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(ECF No. 16.)

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The Court finds this motion suitable for determination on the papers submitted

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and without oral argument. See Civ L.R. 7.1(d)(1). For the following reasons, the

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Court GRANTS Kriegsmann’s Motion to set aside the default.

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I.

BACKGROUND

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The Government commenced this civil action on December 8, 2015, seeking

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to reduce to judgment outstanding federal tax liabilities of approximately $1.3
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million assessed and accrued against Kriegsmann and to foreclose federal tax liens

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on real property. (ECF No. 1.) Kriegsmann was served with the Government’s

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complaint on January 23, 2016. (ECF No. 5.) On February 1, 2016, Kriegsmann

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responded to the complaint by filing an “Ex Parte Letter Requesting Dismissal of

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Case,” which the Court rejected as an improper ex parte communication. (ECF No.

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3.) On March 10, 2016, Kriegsmann filed an answer to the complaint that was

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rejected by the Court on March 21, 2016 for failure to meet formatting requirements.

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(ECF No. 6.) On March 22, 2016, the Government requested the Clerk of the Court

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to enter default against Kriegsmann (ECF No. 8), which the Clerk did on March 23,

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2016 (ECF No. 11).

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Kriegsmann now moves to set aside the default. He also has filed nunc pro

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tunc to April 4, 2016 another answer to the Government’s complaint. (ECF No. 13.)

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The Government affirmatively states that it does not oppose Kriegsmann’s motion to

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set aside the default. (ECF No. 16.)

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II.

LEGAL STANDARD

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If a complaint is properly served, failure to make a timely answer or otherwise

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defend will justify entry of default. Fed. R. Civ. P. 55(a). Under Rule 55(c) of the

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Federal Rules of Civil Procedure, the court “may set aside an entry of default for

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good cause.” Fed. R. Civ. P. 55(c). The court’s good cause analysis considers the

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following three so-called “Falk factors”: “(1) whether the plaintiff will be prejudiced,

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(2) whether the defendant has [no] meritorious defense, and (3) whether culpable

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conduct of the defendant led to the default.” Brandt v. Am. Bankers Ins. Co. of Fla.,

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653 F.3d 1108, 1111 (9th Cir. 2011) (quoting Falk v. Allen, 739 F.2d 461, 463 (9th

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Cir. 1984)). These factors are disjunctive and a district court may deny a motion to

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set aside default if any of the three factors is true. Franchise Holding II, LLC v.

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Huntington Rests. Grp., Inc., 375 F.3d 922, 926 (9th Cir. 2004). Nonetheless, a

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district court is not, as a matter of law, required to deny a motion to set aside entry of

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default upon a finding of any of the factors. See Brandt, 653 F.3d at 1111. The
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defendant moving to set aside default bears the burden of showing that any of these

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factors favor setting aside default. Id.

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III.

DISCUSSION

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Here, the balance of the Falk factors weighs in favor of setting aside the entry

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of default. First, there is no indication that setting aside the default will prejudice the

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United States’ ability to pursue its claim. Indeed, the United States has expressly

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indicated it does not oppose Kreigsmann’s motion. (ECF No. 16.) Second, although

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the strength of Kreigsmann’s defense may be an open question, it does not appear

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frivolous. If anything, the Court finds this factor to be neutral. Third, Kreigsmann did

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not “intentionally” fail to answer the complaint, as required for finding his failure to

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file to be culpable conduct under the Falk standard. See TCI Grp. Life Ins. Plan v.

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Knoebber, 244 F.3d 691 (9th Cir. 2001) (citation omitted), overruled in part on other

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grounds by Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141 (2001). Indeed, the

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record indicates that Kreigsmann attempted to timely answer the complaint on two

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occasions prior to the Government’s request for default, but had those filings rejected

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for formatting and other discrepancies. (ECF Nos. 3, 6.) Kriegsmann did not act “with

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bad faith, such as an intention to take advantage of the opposing party . . . or otherwise

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manipulate the legal process.” United States v. Signed Pers. Check No. 730 of Yubran

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S. Mesle, 615 F.3d 1085, 1092 (9th Cir. 2010) (internal quotations omitted). Thus,

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taking into account the circumstances presented, the Court finds it appropriate to set

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aside the default.

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IV.

CONCLUSION

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For the foregoing reasons, the Court GRANTS Kreigsmann’s Motion to set

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aside the entry of default. (ECF No. 15.) Kreigsmann’s answer filed nunc pro tunc

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to April 4, 2016 is the operative answer.

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//

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//

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//
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//
IT IS SO ORDERED.

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DATED: June 9, 2016

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