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Michael Mccune v. Satnam Singh

January 26, 2012

MICHAEL MCCUNE, PLAINTIFF,
v.
SATNAM SINGH DEFENDANT.



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

ORDER

Previously pending on this court's law and motion calendar for January 26, 2012, was defendant's motion to set aside entry of default, filed December 23, 2011. Plaintiff filed objections on December 27, 2011, and an opposition on January 11, 2012. Plaintiff was represented by Daniel Watts.*fn1 Moton Holt appeared telephonically for defendant. Having reviewed the papers and heard oral argument, the court now issues the following order. BACKGROUND

On August 17, 2010, plaintiff filed the underlying complaint in this action against defendant Singh, alleging defendant violated his rights under the Americans with Disabilities Act and state law, in failing to provide full and equal access to his shopping facility by neglecting to remove architectural barriers and provide an accessible facility. By scheduling order of June 13, 2011, plaintiff's motion to amend was granted, and defendant was directed to file an answer to the amended complaint within twenty-eight days. On June 20, 2011, plaintiff filed an amended complaint. Defendant did not file a response. On September 19, 2011, this court issued an order to show cause for defendant's failure to file an answer. Defendant was warned at that time that failure to comply with the order would "result in sanctions, including the possibility of default." Defendant did not respond to that order. Accordingly, on November 17, 2011, plaintiff was ordered to move for entry of default, and thereafter for default judgment. Unbeknownst to the undersigned, defendant had obtained counsel, who had filed proposed substitutions of attorney on September 16 and December 23, 2011. After default was entered and motion for default judgment was filed, defendant filed the instant motion to set aside default.

PRELIMINARY MATTERS

Defendant has filed two proposed substitutions of counsel. In light of the fact that the instant motion was properly noticed before the magistrate judge, the undersigned has considered it. However, as both parties are now appearing by counsel, the referral to the magistrate judge is withdrawn for any future matters. The magistrate judge shall continue to perform all duties described in Local Rule 302(c)(1)-(20).

As the scheduling order issued June 13, 2011, was vacated by minute order of January 18, 2012, the case should be rescheduled by the district judge.

The motion to be relieved of entry of default, a non-dispositive matter, was properly set before the undersigned pursuant to Eastern District Local Rule 302 (c)(21). Therefore, the undersigned will rule on this last matter under the auspices of the above cited local rule.

DISCUSSION

Default against defendant Singh was entered by the Clerk of the Court on November 28, 2011, pursuant to plaintiff's request. Defendant now moves to set aside default, claiming that he was out of the country during the time of service of the default notices and did not receive any of the notices. Defendant has attached an answer to his motion to set aside entry of default. Plaintiff opposes the motion, arguing that Singh 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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