Hadden v. Kidd et al

Filing 42

MEMORANDUM DECISION AND ORDER. IT IS HEREBY ORDERED: Defendant's Motion to Set Aside Default 38 is hereby GRANTED. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
TRACI HADDEN,
Case No. 4:12-cv-00029-BLW
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
RANDY KIDD, et. al.,
Defendant.

INTRODUCTION
The Court has before it Defendant John Ringle’s Motion to Set Aside Default.
(Dkt. 38). Having considered the record and pleadings, the Court will grant the motion
and set aside the entry of default.
BACKGROUND
Plaintiff Tracy Hadden filed her Complaint on January 20, 2012, asserting claims
against defendants Randy Kidd, Kevin Halverson, and John Ringle (Dkt. 1). A summons
was issued to each of the three defendants on May 31, 2012. Defendants Kidd and
Halverson waived service, filed their answers, and were later dismissed from the case
pursuant to stipulation of the parties. Defendant Ringle did not waive service, file an
answer, or make an appearance in the case.
On November 5, 2013, Hadden filed an affidavit of service indicating that Ringle
had been served over a year earlier, on June 21, 2012 (Dkt. 27). On the same day, she

MEMORANDUM DECISION AND ORDER - 1

filed a Motion for Entry of Default as to Ringle (Dkt. 28). Ringle filed his Answer to the
Complaint the following day (Dkt. 31). Ringle then filed an Objection to Motion for
Entry of Default and Hadden timely replied. The Court issued an Order on December 13,
2013, granting Hadden’s Motion for Entry of Default (Dkt. 36). The clerk entered a
default as to John Ringle on December 19, 2013, and the following day, Ringle filed a
Motion to Set Aside Default (Dkt. 38). Hadden timely replied. The issue is now ripe for
the Court’s consideration.
ANALYSIS
Rule 55(c) provides a court with discretion to set aside an entry of default for
“good cause.” Fed. R. Civ. P. 55(c). Courts look at the following three disjunctive factors
to determine if good cause exists: 1) whether the defendant’s culpable conduct led to the
default; 2) whether the defendant has a meritorious defense; or 3) whether setting aside
the default would prejudice the plaintiff. Brandt v. American Bankers Ins. Co. of Florida,
653 F.3d 1108, 1111 (9th Cir. 2011).
The party moving to set aside an entry of default must show that “the interest in
deciding the case on the merits should prevail over the very important interest in the
finality of judgments.” TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir.
2001). However, the Ninth Circuit instructs courts to consider the underlying policy that
“a case should, whenever possible, be decided on the merits.” Falk v. Allen, 739 F.2d
461, 463 (9th Cir. 1984).

MEMORANDUM DECISION AND ORDER - 2

1. Culpable Conduct
Regarding the first factor of the good cause determination, culpability may turn on
whether the conduct was intentional. See TCI Group Life Ins. Plan, 244 F.3d at 696. A
defendant’s neglectful failure to answer is not intentional if the defendant “offers a
credible, good faith explanation negating any intention to take advantage of the opposing
party, interfere with judicial decisionmaking, or otherwise manipulate the legal process.”
Id.
Here, Ringle contends that his failure to timely answer Hadden’s complaint was
not culpable conduct. He explains that his conduct reflected “simple carelessness.” Pl’s
Br. at 4, Dkt. 38. Additionally, there is no suggestion by Hadden that Ringle’s failure to
respond was a manipulative tactic. Under the facts presented, the Court concludes that
Ringle’s conduct is not culpable.
2. Meritorious Claim
Regarding the second factor of the good cause analysis, a defendant that seeks to
set aside a default entry must “present specific facts that would constitute a defense.” TCI
Group Life Ins. Plan, 244 F.3d at 700. However, the burden on the defendant is not
extraordinarily heavy, and the Court need not decide on the truthfulness of the allegations
to set aside a default. Id.
Here, Ringle alleges three plausible meritorious defenses. Ringle argues that 1) the
claim is barred by the statute of limitations; 2) Hadden failed to exhaust administrative
remedies; and 3) Hadden’s claims of sexual contact are unsupported by evidence.

MEMORANDUM DECISION AND ORDER - 3

Although the parties may disagree as to the merits of Ringle’s defense, it is clear that
Ringle has stated plausible meritorious defenses to Hadden’s claims.
3. Prejudice to the Plaintiff
The final factor of the good cause analysis is whether setting aside the default will
prejudice the plaintiff by hindering her ability to pursue her claim. Falk, 739 F.2d at 463.
Such prejudice requires more than a simple delay in the resolution of the case. TCI Group
Life Ins. Plan, 244 F.3d at 701. In an action to set aside a default, being forced to litigate
on the merits is not prejudicial. Id.
First, Hadden alleges she is prejudiced by Ringle’s attempt to avoid “full legal
process by trying the case piecemeal.” See Pl’s Resp. at 5, Dkt. 39. Hadden’s allegations
are purely speculative and based upon the fact that dismissed co-defendants and Ringle
are represented by the same counsel. She further asserts that she will be prejudiced “with
resulting delay.” Id. Establishing prejudice requires more than showing a delay will
occur.
Second, Hadden has not diligently pursued her own claims. She took over a year
to both file her affidavit of service on Ringle and to pursue an entry of default against
him. Although, as the Court stated in its earlier decision, failure to prove service does not
affect the validity of service, the extremely late-filed proof of service and request for
default does blunt Plaintiff’s claim that she is prejudiced by a delayed resolution of her
claims.

MEMORANDUM DECISION AND ORDER - 4

Third, because default judgment has not yet been entered, Hadden would be
required to proceed in additional hearings to establish damages. Hadden provides the
court with little evidence to show that her ability to pursue her claim will be hindered by
the Court setting aside the default.
The Court, as a matter of policy, prefers to decide this case on the merits of the
claims instead of procedural technicalities. Based upon the above analysis, the Court
concludes that each of the “good cause” factors favor setting aside the entry of default.
However, the Court advises both parties to strictly comply with all further deadlines,
orders, and rules applicable to this action.
ORDER
IT IS HEREBY ORDERED:
1. Defendant’s Motion to Set Aside Default (Dkt. 38) is hereby GRANTED.

DATED: June 24, 2014

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

MEMORANDUM DECISION AND ORDER - 5