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Jimena v. UBS AG Bank

June 9, 2010

CARL L. JIMENA, PLAINTIFF,
v.
UBS AG BANK, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

MEMORANDUM DECISION AND ORDER DENYING PLAINTIFF'S MOTION TO ENTER DEFAULT AGAINST UBS AG AND UBS FS

(Doc. 170)

Plaintiff Carl L. Jimena, proceeding in pro per, has filed a motion to enter default against Defendants UBS AG and UBS FS.

As to UBS FS, Plaintiff asserts that he considers "UBS FS still a pary [sic] to this case as a temporary nominal party, since the Court stated that if after discovery, UBS FS is justified to be an alter ego, agent or liable under fraud theory, the complaint would then be amended." Plaintiff "inquires from the Court if it agrees that UBS FS is a temporary nominal party in this case until after discovery" but if not, Plaintiff "request [sic] that the parties be informed of the current status of UBS FS."

The Court is unaware of any authority providing for a "temporary nominal party" in federal court. UBS FS is not a party to this action, see "Memorandum Decision and Order Denying in Part and Granting in Part Plaintiff's Amended Motion to Admit Third Amended Complaint, Striking Allegations Against UBS FS, and Directing Clerk of Court to file Third Amended Complaint" filed on October 6, 2009 (Doc. 155; "October 6, 2009 Memorandum"). A default cannot be entered against a non-party.

At the hearing, Plaintiff asserted that UBS AG's Answer to the Third Amended Complaint establishes that UBS FS cannot be dismissed from this action because UBS AG's Answer changes the status of UBS FS. UBS AG's Answer "denies that UBS AG is the 'parent company' of the three listed branches, as none of the branches are subsidiaries of UBS AG or corporations of any kind, but rather branch offices maintained by UBS AG or UBS Financial Services Inc. ('UBS FS')." Because UBS AG had previously admitted that UBS FS is a subsidiary of UBS AG, Plaintiff contended that UBS FS is a proper party to this action. This contention was raised for the first time at the hearing. Arguments raised for the first time in a reply brief or at the hearing on a motion are disregarded as a general rule. See United States v. Bohn, 956 F.2d 208, 209 (9th Cir.1992); United States v. Boyce, 148 F.Supp.2d 1069, 1085 (S.D.Cal.2001). In any event, Plaintiff's belated contention does not mandate entry of default against UBS FS pursuant to Plaintiff's motion. UBS FS has been dismissed from this case. Only if UBS FS is reinstated as a defendant in this action by Court order upon motion and fails to timely respond will a request for entry of default against UBS FS be entertained. Plaintiff's motion to enter default against UBS FS is DENIED. As to UBS AG, Plaintiff asserts that he "filed" the Third Amended Complaint on June 19, 2009. (Doc. 141). However, Plaintiff also filed on June 19, 2009 a "motion to admit the Third Amended Complaint." Consequently, the Third Amended Complaint was not "filed" but "lodged" on the docket. By Order filed on June 19, 2009, Plaintiff was ordered to file a notice of motion regarding his motion to admit the Third Amended Complaint, setting the motion for hearing on the Court's civil motion calendar as required by Rule 78-230(b), Local Rules of Practice (now Rule 230, Local Rules of Practice). (Doc. 142). Plaintiff filed the notice of motion on June 23, 2009, setting the motion to admit the Third Amended Complaint for hearing on July 22, 2009. (Doc. 145). By minute order filed on June 26, 2009, the hearing on Plaintiff's motion was continued to September 28, 2009. (Doc. 147). UBS AG timely filed an opposition to the motion on September 11, 2009. (Doc. 150). The motion was heard on September 28, 2009. (Doc. 153). The October 6, 2009 Memorandum was filed, (Doc. 154), directing the Clerk of the Court to file the proposed Third Amended Complaint, after striking the allegations in the proposed Third Amended Complaint as to the alter ego, fraud and agency liability of UBS FS for the alleged actions of UBS AG. The Order regarding the October 6, 2009 Memorandum was filed on October 15, 2009 and the Third Amended Complaint was filed on October 15, 2009. (Docs. 159 & 160). UBS AG filed an Answer to the Third Amended Complaint on October 27, 2009. (Doc. 166).

In seeking a default against UBS AG, Plaintiff relies on Rule 15(a)(3), Federal Rules of Civil Procedure, as in effect before its amendment on December 1, 2009:*fn1

Unless the court orders otherwise, any required response to an amended pleading must be made within the time remaining to respond to the original pleading or within 10 days after service of the amended pleading, whichever is later.

Plaintiff argues that the filing by UBS AG of its opposition to Plaintiff's motion to admit the Third Amended Complaint does not toll the ten-day period set forth in Rule 15(a)(3). Plaintiff relies on General Mills, Inc. v. Kraft Foods Global, Inc., 495 F.3d 1378 (Fed.Cir.2007).*fn2

In General Mills, General Mills brought an action against Kraft alleging infringement of its patent relating to rolled food products. Kraft filed an answer and counterclaim, alleging that General Mills breached a settlement agreement by bringing suit. General Mills replied to Kraft's counterclaim and Kraft moved for summary judgment. General Mills then filed an amended complaint in which it reasserted the patent infringement claim from the original complaint and asserted a new breach of contract claim on the ground that Kraft breached the settlement agreement. Kraft moved to dismiss both counts of the amended complaint. Kraft never answered the amended complaint or reasserted its counterclaim. The district court granted Kraft's motion to dismiss and dismissed General Mills' patent infringement claim. Exercising its discretion under 28 U.S.C. § 1367(c)(3), the district court then declined to exercise jurisdiction over General Mills' state-law contract claim and entered judgment for Kraft. After entry of judgment, Kraft sought guidance by letter to the district court as to how to proceed with its counterclaim. The district court treated Kraft's letter as a motion to alter or amend the judgment and denied the deemed motion, ruling that because Kraft did not reassert its counterclaim in response to the amended complaint, no counterclaim was pending when the district court entered judgment. In General Mills, Inc. v. Kraft Foods Global, Inc., 487 F.3d 1368 (Fed.Cir.2007), the Federal Circuit addressed Kraft's contention that its counterclaim remained extant at least until the deadline for filing the amended answer, and that deadline had not yet passed when the district court entered judgment. Kraft argued that Kraft's timely filing of a motion to dismiss under Rule 12(b)(6), Federal Rules of Civil Procedure, tolled the deadline for filing a responsive pleading until 10 days after the motion was ruled upon. 487 F.3d at 1376. The Federal Circuit ruled:

The relevant tolling provision is found in Fed.R.Civ.P. 12(a)(4)(A). Although neither party cites authority that construes Rule 12(a)(4)(A) - and we have found none ourselves - by the terms of that rule, the filing of a motion to dismiss does not extend the time for filing an answer to an amended complaint, at least in the circumstances here where the time for responding to the original complaint has already run. Rule 12(a)(1)-(3) sets forth the deadlines for answering original complaints and cross-claims under various circumstances. Rule 12(a)(4) then provides that '[u]nless a different time is fixed by court order, the service of a motion permitted under this rule [including a Rule 12(b)(6) motion to dismiss] alters these periods of time' so as to extend the deadline until a motion is ruled upon... However, the time for answering an amended complaint is not one of 'these periods of time.' Rather, the deadline for responding to an amended complaint is established separately under Rule 15: 'A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be longer, unless the court otherwise orders.'....

Thus, because no time 'remain[ed] for response to the original pleading' when General Mills filed its amended complaint, Kraft had only 10 days after service of the amended complaint - not 10 days after the district court's ruling on the motion to dismiss - to file an answer and counterclaim or take such other action as may have been permitted to protect its interests. Because Kraft did not do so before its deadline had passed, the district court did not abuse its discretion in finding that Kraft had abandoned its counterclaim.

487 F.3d at 1376-1377.

In the opinion relied upon by Plaintiff here, the Federal Circuit ...


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