Trustees of the Bricklayers & Allied Craftworkers Local 13 Defined Contribution Pension Trust For Southern Nevada et al v. G & J Flooring, Inc. et al

Filing 12

ORDER Denying 9 Motion to Set Aside Default. Signed by Judge Gloria M. Navarro on 10/14/11. (Copies have been distributed pursuant to the NEF - ASB)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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TRUSTEES OF THE BRICKLAYERS &
ALLIED CRAFTWORKERS LOCAL 13
DEFINED CONTRIBUTION PENSION
TRUST FOR SOUTHERN NEVADA, et al.,

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Plaintiffs,
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vs.
G&J FLOORING, INC., et al.,

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Defendants.
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Case No.: 2:11-cv-00818-GMN-PAL
ORDER

INTRODUCTION

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Before the Court is Defendants G&J Flooring, Inc., Christopher L. Jones, and Jose A.

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Gomez‟s Motion to Set Aside Default (ECF No. 9). Plaintiffs Trustees of the Bricklayers &

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Allied Craftworkers Local 13 Defined Contribution Pension Trust for Southern Nevada, et al.

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filed a Response (ECF No. 10) and Defendants filed a Reply (ECF No. 11).

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FACTS AND BACKGROUND
Plaintiffs filed the present suit on May 19, 2011 claiming breach of contract, breach of

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fiduciary duty and misappropriation of trust assets related to Defendants‟ failure to pay benefit

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contributions and to submit to an audit of Defendant G&J Flooring‟s payroll and related

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records as provided by collective bargaining agreements and related trust agreements. (Compl.,

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ECF No.1.) Defendants G&J Flooring and Christopher L. Jones were served with the summons

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and complaint on May 20, 2011. (Cert. of Service, Ex. 1; ECF No. 5, 5–1.) Defendant Jose A.

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Gomez was served with the summons and complaint on May 21, 2011. (Cert. of Service, Ex. 2,

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ECF No. 5–2.) When Defendants did not file an Answer, Plaintiffs filed a Motion for Entry of

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Clerk‟s Default on June 14, 2011. (ECF No. 6.) Clerk‟s Entry of Default was entered on June

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15, 2011. (ECF No. 7.) Defendants filed the instant motion to set aside entry of default on June

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28, 2011. (ECF No. 9.)
DISCUSSION

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A.

Legal Standard
Under Fed. R. of Civ. P. 55(c) the court may set aside an entry of default for good cause.

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The court looks at three factors to determine if there is “good cause” to lift the entry of default:

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(1) whether the defendant‟s culpable conduct led to the default; (2) whether the defendant has a

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meritorious defense; and (3) whether reopening the default judgment would prejudice plaintiff.

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TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691 (9th Cir. 2001) (citing Falk v. Allen, 739

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F.2d 461, 463 (9th Cir. 1984). “[T]he party seeking to vacate a default judgment bears the

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burden of demonstrating that these factors favor vacating the judgment.” Id. (citing Cassidy v.

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Tenorio, 856 F.2d 1412, 1415 (9th Cir. 1988).

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The three Falk factors are disjunctive, which means a motion to set aside default or

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vacate default judgment may be denied based on any one of the factors not weighing in favor of

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the default party. American Ass ‘n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104,

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1108 (9th Cir. 2000); see also, Meadows v. Dominican Republic, 817 F .2d 517, 521 (9th Cir.

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1987) (Where default judgment is entered as a result of a defendant‟s culpable conduct, a Court

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does not need to consider whether meritorious defense was shown or whether the plaintiff

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would suffer prejudice if the judgment were set aside.).

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The Court finds that Defendants have failed to demonstrate that they have a meritorious

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defense. “To justify vacating [a] default judgment, [the defendant] ha[s] to present the district

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court with specific facts that would constitute a defense.” Franchise Holding II, LLC. v.

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Huntington Restaurants Group, Inc., 375 F.3d 922, 926–27 (9th Cir. 2004). While Defendants

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have listed several affirmative defenses in their proposed answer, they do not list any specific

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facts to support the defenses.

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Defendants argue that their defenses “may be somewhat broadly stated” but that “is only

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because Plaintiffs‟ substantive claims of breach of contract, breach of fiduciary duty, and

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misappropriation are based entirely on „information and belief‟ allegations.” (Reply 4:11–13,

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ECF No. 11.) However, a review of the complaint shows that Plaintiffs allege specific facts

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regarding a Labor Agreement and related Trust Agreements that obligated Defendants to pay

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contributions, complete contribution reports, maintain adequate records and permit Trusts to

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conduct audits of G&J Flooring payroll and related records. Plaintiffs allege that Defendants

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did not abide by the terms of the agreements and allege that they did not pay contributions and

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did not permit an audit of their records. These facts are enough to satisfy the Rule 8 pleading

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requirements. Defendants on the other hand provide no facts to support their asserted defenses.

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While the burden is not high, Defendants have still failed to demonstrate that they have a

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meritorious defense. Accordingly, Defendants‟ motion to set aside default is denied.
CONCLUSION
IT IS HEREBY ORDERED that Defendants G&J Flooring, Inc., Christopher L. Jones,
and Jose A. Gomez‟s Motion to Set Aside Default (ECF No. 9) is DENIED.
DATED this 14th day of October, 2011.

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________________________________
Gloria M. Navarro
United States District Judge

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