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Eulalia C. Vann v. Aurora Loan Services LLC

March 21, 2011

EULALIA C. VANN,
PLAINTIFF,
v.
AURORA LOAN SERVICES LLC,
DEFENDANT.



The opinion of the court was delivered by: Lucy H. Koh United States District Court

United States District Court For the Northern District of California

ORDER GRANTING MOTION TO SET ASIDE ENTRY OF DEFAULT

Defendant Aurora Loan Services, LLC moves to set aside the Clerk's entry of default.

Pursuant to Civil Local Rule 7-1(b), the Court concludes that this motion is appropriate for 17 determination without oral argument and vacates the hearing set for March 24, 2011. Having 18 considered the parties' submissions and the relevant law, the Court GRANTS Defendant's motion 19 to set aside the default. Because the Court has determined that the entry of default should be set 20 aside, the Court also DENIES as moot Plaintiff's motion for default judgment and vacates the 21 hearing on default judgment scheduled for April 21, 2011.

I.Background

Plaintiff initiated this action on October 20, 2010 by filing a Complaint and Petition for Preliminary Injunction with the district court. The Court construed Plaintiff's petition as a request 25 for a temporary restraining order to prevent Defendant from foreclosing on, selling, or evicting Plaintiff from her home. In an order dated November 3, 2010, the Court denied Plaintiff's request 27 for a TRO without prejudice on grounds that Plaintiff had not provided notice to the Defendant and had not made the showing required for issuance of a TRO without notice to the opposing party.

On December 23, 2010, Plaintiff filed a motion requesting that the Clerk of the Court enter default against Defendant. Req. for Entry of Default, ECF No. 8. Plaintiff attached proof of 5 service to the motion, indicating that Defendant was served on November 9, 2010. Proof of Service, attached to Proposed Order re: Mot. for Entry of Default, ECF No. 9. The Clerk entered 7 default on January 4, 2011, and Plaintiff filed a motion for entry of default judgment on January 14, 2011. Approximately one week later, on January 21, 2011, Defendant filed a motion to set 9 aside the entry of default.

See Order Denying Pl.'s Pet. for Prelim. Inj. & TRO, ECF No. 7.

In its motion, Defendant claims that it defaulted due to the untimely referral of the case to outside counsel. Counsel representing Defendant submitted a declaration explaining that his firm received an initial email referral from Defendant's in-house counsel on December 8, 2010. Decl. 13 of Charles Bell in Supp. of Mot. to Set Aside Default ("Bell Decl.") ¶ 4, ECF No. 12-2.

Apparently, however, Defendant's in-house counsel subsequently ceased to work for Defendant 15 and therefore did not follow-up on the referral. Id. Counsel claims that new in-house counsel 16 followed up on December 29, 2010 and provided the pertinent documents to his firm for review.

Id. ¶ 5. Only on January 7, 2011, when counsel reviewed the Court's docket, did he become aware 18 of the default. Id. ¶ 6. Counsel claims that he attempted to contact Plaintiff at that point, but was 19 unable to do so because Plaintiff had not listed a telephone number on the Complaint. Id.

Defendant claims that its delay was not intentional and that the internal situation with in-house 21 counsel has been addressed to ensure future compliance with filing deadlines. Defendant claims, in 22 addition, that Plaintiff previously filed a complaint containing the same allegations in state court, 23 and that the state court sustained Defendant's demurrer in that case without leave to amend.

Finally, Defendant notes that it moved to set aside the default only 17 days after default was 26 entered and asserts that Plaintiff will not suffer prejudice if the default is set aside. Plaintiff 27 opposes Defendant's motion, noting that Defendant was properly served and nonetheless chose to 28 ignore its responsibility to respond.

Defendant also submits a proposed Motion to Dismiss detailing its defenses ...


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