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Rouse v. Law Offices of Rory Clark

December 12, 2006


The opinion of the court was delivered by: Honorable Larry Alan Burns United States District Judge

ORDER EXCUSING DEFAULT [Dkt Nos. 33, 34, 35, 36]

On September 26, 2006, the court entered an Order denying defendants' anti-SLAPP special motions to dismiss four of six causes of action alleged in this Fair Debt Collection Practices matter. Defendants filed no timely Answer thereafter. On November 2, 2006, plaintiff filed requests for entry of default against each defendant.*fn1 On November 3, 2006, defendants filed an Answer to the Complaint, one day later than the date plaintiff's counsel had indicated he was willing to forego default requests and days after the responsive pleading was due under the federal rules.*fn2

In consideration of the strong policy preference to decide cases on their merits, the court entered an Order To Show Cause ("OSC") on November 17, 2006, instructing defendants to file an explanation showing good cause why the default should be excused and the late Answer accepted. Plaintiff was thereafter to file a statement of non-opposition to the denial of his default requests, or to file opposition adequate to persuade the court to strike the Answer and to enter the defaults.

The defendants had already appeared in this action through the timely filing of anti-SLAPP motions. The denial of those motions on September 26, 2006 triggered the Answer deadline clock, a deadline defendants acknowledge they missed. Defendants have responded to the OSC with a request to discharge the OSC and to deny plaintiff's requests for entry of default, supported by sworn Declarations. As pertinent to this decision, they make the following persuasive showings: (1) counsel June D. Coleman, Esq. avers she changed law firms in late September 2006, with a transition agreement with her former firm about the processing of all communications about her pending cases that apparently broke down with respect to notice of this court's decision on the anti-SLAPP motions; (2) Ms. Coleman was out of her office for portions of the first week of October due to her own illness, an on-going family medical emergency, and Northern California appearances in other cases during that month; (3) she first became aware of the court's September 26, 2006 ruling on October 23, 2006; (4) Ms. Coleman spoke with opposing counsel, M. David Meagher, Esq., on November 1, 2006, after learning he had contacted her old firm regarding the filing of an Answer, and they discussed issues related to the need to file a substitution of attorney, among other things, during which conversation Ms. Coleman committed to file an Answer by November 2, 2006 on behalf of all defendants, timing Mr. Meagher agreed would avoid his filing of requests for entry of default; (5) Ms. Coleman electronically filed the Answer shortly after midnight on November 2-3, 2006, the lateness occasioned by a family medical emergency and difficulties with the new e-filing process; and (6) the chain of events supports a finding of inadvertence caused by a combination of factors beyond Ms. Coleman's control rather than lack of diligence.

The Declaration of William A. Munoz, Esq., an attorney in Ms. Coleman's former firm, substantiates that firm's responsibility to forward incoming mail to her, as well as the results of an unsuccessful search for the September 26, 2006 Order or anyone who recalls seeing that Order. The Declaration of Mark E. Ellis, co-counsel with Ms. Coleman in this case, substantiates the move to their new firm, beginning the week of September 25, 2006, was characterized by misplaced mail, temporarily lost files, delayed filings of substitutions of attorney and the like,*fn3 and confirms defense counsel's intention to "zealously defend the action." All the declarations provided in support of defendants' response to the OSC by persons in both firms responsible for receiving and reviewing court Orders state none of those individuals recalls seeing the September 26, 2006 Order denying the anti-SLAPP motions.

Plaintiff filed opposition to defendants' motion for relief from default in response to the OSC. He makes two arguments, both going to the merits of the action. He alleges he owed no money to the defendants (a fact essentially conceded by defendants in the parties' presentations in support of and in opposition to the anti-SLAPP motions), and that defendants allegedly committed numerous violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. On the strength of his argument defendants purportedly lack a meritorious defense to the "strict liability" Act, plaintiff urges relief from the default be denied. The court deems such arguments are appropriately considered in fully-briefed summary judgment motions rather than informing the narrow decision before the court here: whether to accept the late Answer based on a satisfactory showing of excusable neglect and to permit defendants to defend this action. Contrary to plaintiff's characterization, the court finds defendants' conduct does not support a finding of "deliberate failure to respond." Defendants timely filed motions in response to the Complaint, and their counsel declare their intention to zealously defend the action. No prejudice appears from the short delay beyond the time plaintiff's counsel appears to have promised he would not to seek entry of default. The court finds the default is excusable.

The court further finds plaintiff's request to recovery attorneys' fees should be denied. Plaintiff's reliance on authority dealing with recovery of attorneys' fees incurred in obtaining a default judgment -- in circumstances where the court had previously set aside several defaults and in the context of sanctions for misbehavior in the discovery process -- is misplaced. See Nilsson, Robbins et al. v. Louisiana Hydroelectric, 854 F.2d 1538 (9th Cir. 1988). Without reaching the issue of the reasonableness of his attempted recovery of $6,175.50 for 17.90 hours counsel represents he has spent "related to the Default," his authority is inapposite to the procedural posture of this case and to the conduct of defendants associated with the timing of the filing of their Answer. . For all the foregoing reasons,


1. Plaintiff's requests to enter defendants' defaults are DENIED.

2. To the extent the filing of the requests for entry of default may be construed as entries of default, the defaults are hereby excused and set aside, with defendants' Answer deemed timely filed.

3. Plaintiff's request for an award of attorneys' fees associated with his pursuit of the defaults is DENIED.

IT IS SO ...

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