Lee et al v. University Medical Center of Southern Nevada

Filing 18

ORDER Granting 10 Motion to Set Aside Default. University Medical Center of Southern Nevada answer due within 7 days. Signed by Judge James C. Mahan on 6/30/2014. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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MEDERICK LEE, et al.,

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2:14-CV-328 JCM (CWH)

Plaintiff(s),

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v.

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UNIVERSITY MEDICAL CENTER OF
SOUTHERN NEVADA,

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Defendant(s).

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ORDER

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Presently before the court is defendant University Medical Center of Southern Nevada’s

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motion to set aside clerk’s entry of default. (Doc. # 10). Plaintiffs have filed a response in opposition,

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(doc. # 15), and defendant filed a reply, (doc. # 16).

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I.

Background

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Plaintiffs filed a complaint against defendant on March 3, 2014. (Doc. # 1). Plaintiffs

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properly served the defendant on March 20, 2014. (Doc. # 6). Pursuant to Federal Rule of Civil

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Procedure 12(a), a defendant is allotted twenty-one days to file an answer or responsive pleading.

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Defendant did not file an answer or responsive pleading within twenty-one days of being

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served with the complaint. As a result, plaintiffs filed a motion for the entry of clerk’s default. (Doc.

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# 7). The clerk subsequently entered default against defendant. (Doc. # 9). Six days after the entry

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of clerk’s default, defendant filed the instant motion. (Doc. # 10).

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...

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James C. Mahan
U.S. District Judge

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II.

Legal Standard

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Federal Rule of Civil Procedure 55(c) states, “The court may set aside an entry of default for

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good cause . . . .” To determine if good cause exists, the court considers: “(1) whether the party

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seeking to set aside the default engaged in culpable conduct that led to the default; (2) whether it had

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no meritorious defense; or (3) whether reopening the default judgment would prejudice the other

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party.” United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091

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(9th Cir. 2010) (internal quotations omitted). “[J]udgment by default is a drastic step appropriate

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only in extreme circumstances; a case should, whenever possible, be decided on the merits.” Id.

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While the court considers the same factors prior to vacating an entry of default as it would

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a default judgment, the test is less stringent when a default judgment has not been entered. See

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Hawaii Carpenters' Trust Funds v. Stone, 794 F.2d 508, 513 (9th Cir. 1986). Indeed, “[t]he court’s

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

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default judgment.” Mendoza v. Wight Vineyard Mgmt., 783 F.2d 941, 945 (9th Cir. 1986).

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III.

Discussion

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The court will address each of the three factors in turn.

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A.

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“A defendant’s conduct is culpable if he has received actual or constructive notice of the

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filing and intentionally failed to answer.” Mesle, at 615 F.3d. at 1092. “[T]o treat a failure to answer

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as culpable, the movant must have acted with bad faith, such as an intention to take advantage of the

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opposing party, interfere with judicial decisionmaking, or otherwise manipulate the legal process.”

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Id.

Culpable Conduct

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The court finds that defendant was not culpable, nor did it intentionally fail to answer.

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Defendant’s counsel admits that due to a calendaring error, he failed to file a responsive pleading

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prior to the deadline. (Doc. # 10-1, p. 3). Defendant’s counsel made a procedural mistake, which he

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sought to remedy as soon as it was discovered. The court is not inclined to punish defendant with

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an adverse judgment due to an error of this degree.

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...

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James C. Mahan
U.S. District Judge

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B.

Meritorious Defense

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“A defendant seeking to vacate a default judgment must present specific facts that would

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constitute a defense. But the burden on a party seeking to vacate a default judgment is not

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extraordinarily high.” Mesle, 615 F.3d at 1094.

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Defendant has outlined numerous defenses that it intends to put forward in response to

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plaintiffs’ complaint, including exemptions arising under the Fair Labor Standards act and Nevada

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law. (Doc. # 16-1). Defendant has therefore met its minimal burden of demonstrating a potentially

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meritorious defense.
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Prejudice

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“To be prejudicial, the setting aside of a judgment must result in greater harm than simply

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delaying resolution of the case.” TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 700 (9th Cir.

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2001). It is obvious that “merely being forced to litigate on the merits cannot be considered

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prejudicial for purposes of lifting [an entry of default]. For had there been no default, the plaintiff

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would of course have had to litigate the merits of the case, incurring the costs of doing so.” Id.

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The court finds there would be no prejudice to plaintiffs by setting aside the default. At this

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early stage in the proceeding, plaintiffs have incurred minimal costs and expended minimal

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resources. By setting aside the default, plaintiffs are merely forced to litigate the lawsuit in the way

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they initially intended. Finally, there is a strong policy favoring the adjudication of claims on their

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merits instead of procedural technicalities.

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendant’s motion to set

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aside default (doc. # 10) be, and the same hereby is, GRANTED.

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IT IS FURTHER ORDERED that defendant file the proposed answer attached to its reply

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in support of the motion to set aside default (doc. # 16-1) within seven (7) days of the entry of this

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order.

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DATED June 30, 2014.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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