Enpac, LLC v. Lucas et al

Filing 45

ORDER by Judge Benjamin H Settle granting 40 Motion to Set Aside Default; and denying 33 Motion for Judgment as to CB Stormwater. (TG; cc mailed to defendants)

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1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 6 7 8 ENPAC, LLC, Plaintiff, 9 v. 10 11 CASE NO. C11-37BHS CHASSIDY F. LUCAS and CB STORMWATER1, 12 Defendants. 13 14 ORDER GRANTING STORMWATER’S MOTION TO SET ASIDE DEFAULT AND DENYING PLAINTIFF’S MOTION FOR JUDGMENT BY DEFAULT AS TO CB STORMWATER 15 16 This matter comes before the Court on Defendant CB Stormwater’s 17 (“Stormwater”) motion to set aside default (Dkt. 40) and on Plaintiff Enpac, LLC’s 18 (“Enpac”) motion for judgment by default (Dkt. 33). The Court has reviewed the briefs 19 filed in support of and in opposition to the motions and the remainder of the file and 20 hereby grants the motion to set aside default and denies Enpac’s motion as to Stormwater 21 for the reasons stated herein. 22 23 I. PROCEDURAL HISTORY On May 31, 2011, Stormwater filed a motion to set aside default (Dkt. 40). On 24 June 1, 2011, the Court granted Defendants’ motion to set aside default as to Lucas. Dkt. 25 38. On June 8, 2011, Defendants filed a notice of appearance on behalf of Stormwater. 26 27 1 28 While the motion was originally filed on behalf of CB Stormwater LLC, CB Stormwater has reorganized as a sole proprietorship. ORDER - 1 1 Dkt. 41. For a more detailed discussion of the procedural history see the Court’s prior 2 order. Dkt. 38. 3 4 II. DISCUSSION A. 5 1. 6 7 8 Motion To Set Aside Default Standing A business entity, except a sole proprietorship, must be represented by counsel. Local Rules W.D. Wash. GR 2(g)(4)(b); see also Rowland v. California Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 202 (1993)(holding that artificial entities 9 such as corporations, partnerships or associations may appear in the federal courts only 10 11 through licensed counsel). Here, in order to comply with this rule, Defendants filed a notice of appearance on 12 13 behalf of Stormwater and indicated that the business is now registered as a sole 14 proprietorship. Dkt. 41. Therefore, according to Local General Rule 2(g), Stormwater 15 may proceed pro se, and the Court will now consider its motion to set aside default. Dkt. 16 40. 17 2. Rule 55(c) Analysis 18 An entry of default may be set aside for good cause. Fed. R. Civ. P. 55 (c). “To 19 determine good cause, a court must ‘consider three factors: (1) whether the party seeking 20 to set aside the default engaged in culpable conduct that led to the default; (2) whether it 21 had no meritorious defense; or (3) whether reopening the default judgment would 22 prejudice’ the other party.” Id. at 1091 (quoting Franchise Holding II v. Huntington 23 Rests. Group, Inc., 375 F.3d 922, 925-26 (9th Cir. 2004)). 24 25 26 As Stormwater is proceeding pro se, the Court may now consider its motion to set aside default (Dkt. 40) and Enpac’s motion for default judgment (Dkt. 33) as it pertains to Stormwater. Accordingly, for the reasons set out in its prior order, the Court finds that all 27 28 ORDER - 2 1 three factors in the “good cause” analysis for setting aside a default under Rule 55(c) 2 equally favor Stormwater. See Dkt. 38 at 3-6. 3 4 B. Motion for Judgment by Default Judgment by default is appropriate only in extreme circumstances because a case 5 should, whenever possible, be decided on the merits. United States v. Signed Personal 6 Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1089 (9th Cir. 2010). 7 Because the Court has set aside the default as to Stormwater, granting judgment 8 by default would be improper. Therefore, the Court concludes that the motion for default 9 judgment as to Stormwater should be denied. 10 11 III. ORDER Therefore, it is hereby ORDERED that: 12 (1) Stormwater’s motion to set aside the default (Dkt. 40) against it is 13 GRANTED; and 14 15 (2) prejudice as to Stormwater. 16 17 Enpac’s motion for default judgment (Dkt. 33) is DENIED without DATED this 30th day of June, 2011. 18 19 A BENJAMIN H. SETTLE United States District Judge 20 21 22 23 24 25 26 27 28 ORDER - 3

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