RE: LLS America LLC

Filing 96

ORDER Denying 54 Motion for Default Judgment Against Lois Bjarnason. Signed by Chief Judge Rosanna Malouf Peterson. (PL, Case Administrator) (cc: pro se parties via first class mail) Modified on 9/11/2014 (PL, Case Administrator).

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

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In Re:
NO: 13-CV-416-RMP

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LLS AMERICA, LLC,
Debtor,

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BRUCE P. KRIEGMAN, solely in his
capacity as court-appointed Chapter 11
Trustee for LLS America, LLC,

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Plaintiff,

Bankr. Case No. 09-06194-PCW11
(Consolidated Case)
Adv. Proc. No. 11-80296-PCW11
ORDER DENYING MOTION FOR
DEFAULT JUDGMENT AGAINST
LOIS BJARNASON

v.
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MATTHEW BOWOLIN, et al.,
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Defendants.
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Before the Court is Plaintiff’s Motion for Entry of Default Judgment Against

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Defendant Lois Bjarnason. ECF No. 54. The Court has reviewed the motion and

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the record. The Court is fully informed.

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In a declaration filed in support of the motion for entry of default against
Defendant, Plaintiff states that, at Plaintiff’s request, the Bankruptcy Court mailed

ORDER DENYING MOTION FOR DEFAULT JUDGMENT AGAINST LOIS
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copies of the summons and complaint to Defendant on August 4, 2011. ECF No.

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51 at 2. The documents were mailed to the address set forth in Defendant’s proof

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of claim. ECF No. 51 at 2. The envelope was returned as “unclaimed.” ECF No.

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51 at 2.

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Plaintiff further states that on June 22, 2012, again at Plaintiff’s request, the

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Bankruptcy Court mailed copies of the summons and complaint to two additional

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locations. ECF No. 51 at 2-3. Both copies were returned; one marked “no such

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addressee,” the other marked as “unclaimed.” ECF No. 51 at 3.

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On April 24, 2014, this Court received notice of change of address for

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Defendant. ECF No. 48. The notice states that Defendant’s address changed

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three-and-a-half years ago and that the request to change her address had been

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ignored in the past. ECF No. 48. The address included in the notice is different

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from the addresses to which Plaintiff states that the summons and complaint were

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sent. Compare ECF No. 48 with ECF No. 51. However, Plaintiff sent the motion

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for default judgment to the address provided in the notice of change of address.

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ECF No. 54 at 4.

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Plaintiff contends that “[b]y filing a Notice of Change of Address with this

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Court, it is clear that Defendant has knowledge of these proceedings but refuses to

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participate.” ECF No. 51 at 4. However, the notice indicates that it was signed by

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Defendant’s husband, not by Defendant herself. ECF No. 48.

ORDER DENYING MOTION FOR DEFAULT JUDGMENT AGAINST LOIS
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Default judgments generally are disfavored. Eitel v. McCool, 782 F.2d

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1470, 1472 (9th Cir. 1986) (“Cases should be decided upon their merits whenever

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reasonably possible.”). The factors that a court may consider when deciding

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whether to grant default judgment include:

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(1) the possibility of prejudice to the plaintiff, (2) the merits of
plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4)
the sum of money at stake in the action; (5) the possibility of a dispute
concerning material facts; (6) whether the default was due to
excusable neglect, and (7) the strong policy underlying the Federal
Rules of Civil Procedure favoring decisions on the merits.

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Id. at 1471-72. The decision whether to grant default judgment is left to the
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discretion of the district court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir.
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1980) (per curiam).
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The Court declines to grant Plaintiff’s motion for default judgment.
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Although Plaintiff declares that service of process was attempted at multiple
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mailing addresses, the record does not indicate that Plaintiff attempted to serve the
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summons and complaint on Defendant at the location written in the notice of
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change of address. Moreover, Plaintiff claims that the notice of change of address
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was written by Defendant herself, demonstrating that she “has knowledge of these
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proceedings but refuses to participate[,]” ECF No. 51 at 4, but the notice indicates
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that it was written by her husband, ECF No. 48. Service of process on Defendant
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was a difficult issue before the Bankruptcy Court as well. See Bankr. Adv. Proc.
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No. 11-80297-FPC, ECF No. 158 at 17-18 (Plaintiff’s motion to serve process on
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counsel for defendants). The issue of service of process relates to the Eitel factor

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regarding the merits of Plaintiff’s claim.

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Other Eitel factors also caution the Court against granting default judgment.

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Because Defendant is one of numerous transferees of fraudulent transactions in this

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cause number, which itself is one tendril of an expansive bankruptcy proceeding,

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the possibility of prejudice to Plaintiff is minimal. Trial will take place, and likely

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the same witnesses will be called, regardless of whether default judgment is

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granted against Defendant. Additionally, Plaintiff requests judgment in the amount

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of $61,615.55 CAD, ECF No. 54 at 2, which is a considerable sum of money for an

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individual to pay. Finally, the strong policy in favor of resolving cases on their

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merits guides the Court’s decision.

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Accordingly, IT IS HEREBY ORDERED that Plaintiff’s Motion for Entry

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of Default Judgment Against Defendant Lois Bjarnason, ECF No. 54, is DENIED.

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The District Court Clerk is directed to enter this Order and provide copies to

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counsel and pro se defendants.
DATED this 11th day of September 2014.

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s/ Rosanna Malouf Peterson
ROSANNA MALOUF PETERSON
Chief United States District Court Judge

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ORDER DENYING MOTION FOR DEFAULT JUDGMENT AGAINST LOIS
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