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G & G Closed Circuit Events, LLC v. Victoria Elizabeth Juarez

July 7, 2011

G & G CLOSED CIRCUIT EVENTS, LLC, PLAINTIFF,
v.
VICTORIA ELIZABETH JUAREZ, INDIVIDUALLY AND D/B/A VICTORIA'S MEXICAN FOOD, DEFENDANT.



The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge

ORDER AND AMENDED FINDINGS AND RECOMMENDATIONS

On May 30, 2011, the undersigned issued an order and findings and recommendations, recommending that defendant's motion to set aside entry of default be granted. Plaintiff has filed objections to which defendant filed a reply. Based upon review of those filings, the findings and recommendations are now vacated, and replaced with the following amended findings and recommendations.*fn1

BACKGROUND

On August 11, 2010, plaintiff filed the underlying complaint in this action against defendant Juarez, alleging defendant unlawfully intercepted and exhibited a broadcast of a program entitled, "Strikeforce: Carano v. Cyborg," ("Program"), in her establishment for commercial advantage without obtaining a sublicense from plaintiff for its use, in violation of the Communications Act, 47 U.S.C. § 605, the Cable Communications Policy Act, 47 U.S.C. § 553, and state law. The complaint alleges defendant exhibited the Program on August 15, 2009. The summons and complaint were served on defendant Juarez by substituted service on August 23, 2010. Because defendant Juarez failed to file an answer or otherwise appear in this action, the clerk entered default against defendant Juarez on September 27, 2010.

Request for entry of default and the instant motion for default judgment and supporting papers were served by mail on defendant Juarez at her last known address. Defendant Juarez did not file an opposition to the motion for entry of default judgment. The undersigned issued findings and recommendations on February 2, 2011, recommending that default judgment be granted in the amount of $40,000. Juarez filed objections on February 15, 2011, to which plaintiff filed a reply. Upon order to file a motion to set aside entry of default, and after receiving an extension of time in which to do so, Juarez filed her motion to set aside entry of default on April 25, 2011. Plaintiff has filed an opposition.

PRELIMINARY MATTERS

Local Rule 302(c)(19) expressly refers to the magistrate judges Rule 55(b)(2) motions for the entry of default judgment. However, there is no similar provision in the Local Rules automatically referring to magistrate judges Rule 55(c) motions for setting aside default. Accordingly, the motion will be determined on findings and recommendations.

DISCUSSION

Default against defendant Juarez was entered by the Clerk of the Court on September 27, 2010, pursuant to plaintiff's request. Juarez now moves to set aside default due to a torn rotator cuff and reliance on an attorney who apparently did not follow through with representation in this case. Plaintiff opposes the motion, claiming that Juarez has failed to show good cause to set aside entry of default.

LEGAL STANDARDS

Federal Rule of Civil Procedure, 55(c) provides that a default may be set aside for "good cause." "Good cause" requires consideration of the following factors: (1) whether the defaulting party engaged in culpable conduct that led to the default; (2) whether there is a meritorious defense; or (3) whether setting aside default will prejudice the other party. Franchise Holding II, LLC. v. Huntington Restaurants Group, Inc., 375 F.3d 922, 926 (9th Cir. 2004), (quoting American Ass'n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1108 (9th Cir. 2000)); Mendoza v. Wight Vineyard Management, 783 F.2d 941, 945 (9th Cir. 1986). See also TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001).

These factors are disjunctive, and the court may deny the motion if any of the three factors is true. Franchise Holding II, LLC., 375 F.3d at 926 (quoting American Ass'n of Naturopathic Physicians, 227 F.3d at 1108). The party seeking to set aside the entry of default has the burden to show that these factors favor such relief. Franchise Holding II, 375 F.3d at 926. The Ninth Circuit Court of Appeals has recently stated that the rules in this regard are solicitous towards movants, especially those whose actions leading to the default were taken without the benefit of legal representation. United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010).

1. Good Cause The court's discretion to determine whether good cause has been shown is particularly generous where the motion seeks to set aside an entry of default, rather than a default judgment. Brady v. United States, 211 F.3d 499, 504 (9th Cir. 2000); Mendoza, 783 F.2d at 945. "[J]udgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits." Mesle, 615 F.3d at1091 (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir.1984).

Leniency in setting aside a default is especially appropriate if the attorney failed the client. Community Dental Services v. Tani, 282 ...


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