Lindblad v. Bolanos

6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA ROBERT LINDBLAD, Case No. 21-cv-06606-SI 10 Plaintiff, ORDER GRANTING MOTION TO SET 11 v. ASIDE DEFAULT AND DENYING SUCCESSIVE MOTION TO COMPEL 12 CARLOS G. BOLANOS, et al., ENTRY OF DEFAULT 13 Defendants. Re: Dkt. No. 38, 41 15 Before the Court is defendants’ motion to set aside a default entered by the Clerk on January 7, 2022. Dkt. No. 38 (filed January 10, 2022). Also before the Court is plaintiff’s successive motion to compel entry of default, in which plaintiff alleges the Clerk committed error by finding moot another motion for default submitted by plaintiff on January 7—the same day in which the Clerk entered the default which is now being challenged by defendants. Having carefully considered the papers submitted by the parties and the arguments contained therein, the Court finds it appropriate to resolve the matter without oral argument and hereby VACATES the hearing scheduled for March 4, 2022.

For the reasons explained below, the Court GRANTS defendants’ motion to set aside default and DENIES plaintiff’s motion to compel entry of default.

BACKGROUND Defendants’ motion to set aside default presents two arguments. First, defendants assert that of Default. Dkt. No. 38.1 Second, defendants argue that—assuming service was complete previously—their failure to submit a timely response was due to honest mistake and confusion. Id. 3 This is not the first time that defendants remark on alleged deficiencies in plaintiff’s service of the summons and complaint. In a case management statement filed one week prior to a scheduled initial case management conference, defendants stated that they have not been served and the documents were not appropriately forwarded to legal counsel 7 until November 2, 2021 and did not reach the assigned attorney until mid-November. The undersigned has reached out to the U.S. Marshall service regarding correction of service but 8 personal service has not yet been effectuated. In order to prevent more complication on this matter, Defendants propose acceptance of service as of November 23, 2021 and setting 9 Defendants’ answer date as December 15, 2021.

10 Dkt. No. 24 at 6 (filed November 24, 2021). The Court held the initial case management conference on December 3, 2021. However, plaintiff did not show up. Due to plaintiff’s absence, the Court continued the initial case management conference to February 4, 2022.

13 In a subsequent order filed on December 13, 2022, the Court directly addressed the issue of deficient service. Dkt. No. 31. That order arose from a motion for default judgment filed by plaintiff one month prior. Dkt. No. 19. In denying plaintiff’s motion for default, the Court referred directly to defendants’ stipulated date of completed service: Further, defendants assert in their Case Management Conference Statement that proper 18 service has never been effected. In light of this confusion, defendants have proposed, and the Court directs, that service shall be deemed complete by November 23, 2021. Thus 19 responses are not due until December 15, 2021. The grant or denial of default judgment is “entirely within the court’s discretion.” PepsiCo, Inc. v. California Sec. Cans, 238 F. Supp. 20 2d 1172, 1174 (C.D. Cal. 2002). Because plaintiff’s motion is premature given the date of service, the Court DENIES plaintiff’s motion. Id. There was nothing ambiguous about the Court’s order. Per defendant’s own proposal, the Court deemed service complete on November 23 and set a response deadline consistent with Rule 12(a)(1)(A)(i). Defendants failed to file a timely response. Plaintiff moved for entry of default on December 23, 2021. Dkt. No. 34. Defendant did not file an opposition.

1 In particular, defendants assert plaintiff had previously tried to personally deliver service in contravention of Rule 4(c)(2)’s requirement that a non-party effectuate service. Defendants also claim that 1 The Clerk entered default on January 7, 2022. Dkt. No. 36. That same day, plaintiff filed another motion for default, requesting a “sum certain” of three million dollars. Dkt. No. 37 ¶ 21.

3 The Clerk declined this subsequent motion as moot given the January 7 entry of default. Dkt. No. 40.

5 Defendants filed the instant motion on January 10, 2022. Dkt. No. 38. In addition to arguing that proper service was not complete until January 10, 2022, defendants also argue that the Court’s continuance of the initial case management conference to February 4, 2022, as well as the lack of proper service as of the December 3, 2021 hearing, led them to believe that response deadlines were “inapplicable.” Dkt. No. 38 at 2.

10 On January 18, 2022, one week after defendants moved to set aside the default, plaintiff filed a “motion to compel entry and default judgment,” arguing that the Clerk’s declination of his successive motion for default “was an incorrect Moot declaration that was done in error of the interest of the plaintiff.” Dkt. No. 41. “[O]ut of an abundance of caution,” defendants filed an opposition to plaintiff’s successive motion to compel entry of default. Dkt. No. 49.

15 On January 31, 2022, defendants filed a motion to dismiss the complaint. Dkt. No. 46. If, as defendants put it, service was not properly complete until January 10, the motion to dismiss was filed within 21 days of the date of service.

19 LEGAL STANDARD 20 “Judgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits.” Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). Excusable errors and ignorance of the law do not amount to “extreme circumstances,” particularly where a party against whom default is entered promptly responds with a motion to set aside the default. United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 25 1085, 1091 (9th Cir. 2010).

26 Accordingly, the Federal Rules of Civil Procedure grant the district courts authority to “set aside an entry of default for good cause.” Fed. R. Civ. Pro. 55(c). To determine whether good cause default,” (2) whether the movant lacks meritorious defenses, or (3) whether “reopening the default judgment would prejudice the other party.” Signed Personal, 615 F.3d at 1091. “A finding that any one of these factors is true is sufficient reason for the district court to refuse to set aside the default.”

4 Id. 5 Under the first of these factors, a “movant cannot be treated as culpable simply for having made a conscious choice not to answer.” Id. at 1092. Rather, the “movant must have acted with bad faith, such as an ‘intention to take advantage of the opposing party, interfere with judicial decisionmaking, or otherwise manipulate the legal process.” Id. As to the second factor, a defendant “seeking to vacate a default judgment must present specific facts that would constitute a defense,” a burden which is “not extraordinarily heavy.” Id. at 1093 (“All that is necessary to satisfy the ‘meritorious defense’ requirement is to allege sufficient facts that, if true, would constitute a defense”). As to the third factor, prejudice to the nonmovant, the “the setting aside of a judgment” must “result in greater harm than simply delaying resolution of the case.” Id. at 1095.

15 DISCUSSION 16 Both parties are culpable in impeding the timely and seamless administration of this case.

17 Plaintiff repeatedly failed to effectuate proper service through the fall of 2021 and has now filed several duplicative requests for default. Defendant failed to file a timely response to the complaint notwithstanding the Court’s unambiguous December 15, 2022 deadline, set per defendant’s own proposed date for rendering service complete. However, the Court finds that these are not “extreme circumstances” that will justify depriving defendants of the opportunity to respond to plaintiff’s claims on the merits.

23 First, the Court finds no evidence that defendant’s failure to file a response by December 15, 2021 was driven by bad faith. Defendant’s moving papers and correspondence with this Court indicate confusion and, at worst, excusable neglect – but not an intention to take advantage of plaintiff, interfere with judicial decisionmaking, and manipulate the legal process. Second, the Court has been repeatedly made aware of defendant’s asserted defenses, which, if true, could constitute a meritorious defense. See Dkt. No. 24 at 2-3 (CMC Nov. 24, 2021).? Third, the Court || does not identify any cognizable prejudice that would befall plaintiff—other than delay—were the Court to set aside the default. Accordingly, the Court finds it appropriate to set aside the default.

4 For these same reasons, and due to a lack of extreme circumstances, the Court finds it inappropriate to grant plaintiff's successive motion to compel entry of default, notwithstanding any assumed errors in the clerk’s “declination of default as moot.”

8 CONCLUSION 9 For the foregoing reasons, the Court GRANTS defendants’ motion to set aside the default || entered on January 7, 2022, Dkt. No. 38, and DENIES plaintiffs successive motion to compel entry 11 of default. Dkt. No. 41.

IT IS SO ORDERED.

14 || Dated: February 28, 2022 Site WU te 2 SUSAN ILLSTON a 16 United States District Judge = 17 Z 18 > The Court does not identify a requirement in the case law that the meritorious defenses appear in the motion to set aside default itself, rather than in other papers previously submitted.