UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
October 6, 2011
ANTHONY ORMESHER AND JOSE ALVES, PLAINTIFFS,
ROGER RASKIN, ET AL. DEFENDANTS.
The opinion of the court was delivered by: Honorable Ronald S.W. Lew Senior, U.S. District Court Judge
ORDER Re: Defendant Carlos Villalobos, Jr.'s Motion to Vacate Default and Set Aside Judgment 
On October 4, 2011, Defendant Carlos Villalobos Jr.'s ("Defendant Villalobos") Motion to Vacate Default and Set Aside Judgment came on for regular calendar before this Court. The Court having reviewed all papers submitted pertaining to this Motion and having considered all arguments presented to the Court, NOW FINDS AND RULES AS FOLLOWS:
Defendant Villalobos's Motion to Vacate Default and Set Aside Judgment is GRANTED.
As a preliminary matter, the Court finds that this Motion is timely as Defendant Villalobos filed within the one-year time limit of Federal Rule of Civil Procedure 60(c). Fed. R. Civ. P. 60(c). This Motion was also filed within a "reasonable time" as required by Rule 60(c), considering that Defendant Villalobos was not notified of the default judgment against him until March 11, 2011. See Falk v. Allen, 739 F.2d 461, 464 (9th Cir. 1984) (holding that a five-month delay in filing a motion to vacate default judgment was reasonable).
Considering the strong preference for deciding cases on the merits, the Court finds that the factors relevant in determining good cause for vacating default and default judgment weigh in favor of Defendant Villalobos. Specifically, the three factors required to show good cause for setting aside both a default and a default judgment are, "whether the defendant's culpable conduct led to the default; whether the defendant has a meritorious defense; and whether reopening the default judgment would prejudice the plaintiff." TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001) (citing Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)).
In regard to the first factor, the Court finds that Defendant Villalobos's failure to appear in this case did not rise to the level of culpable conduct pursuant to the standard set forth by the Ninth Circuit. Defendant Villalobos received service of the Complaint on August 28, 2009, yet failed to make any appearance in this case prior to the present Motion. While Defendant Villalobos's failure to appear was likely negligent, there is no evidence that he "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.'" United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1092-93 (9th Cir. 2010) (quoting TCI Group, 244 F.3d at 697). This is supported by Defendant Villalobos's Declaration, as well as Plaintiffs' own admission that Defendant Villalobos was never served with notice of the default or default judgment entered against him.
The next factor, Defendant Villalobos's meritorious defense, also weighs in favor of vacating default judgment. Taking all allegation as true, Defendant Villalobos has alleged sufficient facts to constitute a meritorious defense against Plaintiffs' copyright infringement claim.
In addition, Plaintiffs have presented almost no evidence of prejudice beyond having to prove up their case against Defendant Villalobos. This is not sufficient to show prejudice. Lacy v. Sitel Corp., 227 F.3d 290, 293 (5th Cir. 2000) (holding that prejudice was not shown where the only harm to the plaintiff was requiring it to prove its case).
Accordingly, the Court finds that good cause is shown to vacate default and set aside the default judgment. However, the Court finds that setting aside the default judgment against Defendant Villalobos could potentially inhibit Plaintiffs' ability to collect the outstanding amount of the final judgment, which is currently $32,555.02. Thus, the Court finds that vacating the default judgment against Defendant Villalobos should be contingent on the satisfaction of conditions pursuant to Federal Rule of Civil Procedure 60(b).
Therefore, Defendant Villalobos's Motion to Vacate Default and Set Aside Default Judgment is hereby GRANTED upon the condition that Defendant Villalobos post a bond in the amount of $32,555.02 within 45 days of issuance of this Order. The default judgment is vacated once Defendant Villalobos complies with such condition, and Defendant Villalobos's time to respond to the Complaint is extended 10 days from such date of compliance.
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