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Brent Allan Winters, et al v. Delores Jordan

February 1, 2012

BRENT ALLAN WINTERS, ET AL., PLAINTIFFS,
v.
DELORES JORDAN, ET AL, DEFENDANTS.



The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS

Presently before the court are motions to dismiss plaintiffs' Third Amended Complaint filed by defendants Delores Jordan and David Silber (Dkt. Nos. 257, 258).*fn1 In addition to being named as a defendant in this action, Silber is also a private attorney who represents Jordan and two other defendants in this action, Virginia and Michael Armstrong. The court previously granted Jordan and Silber leave to file their motions to dismiss late, but also permitted plaintiffs to object to the court's grant of such leave. (Order, Feb. 18, 2011, Dkt. No. 256.) Accordingly, these findings and recommendations address the propriety of permitting to Jordan and Silber leave to file their motions to dismiss, as well as a motion for default judgment that plaintiffs filed in regards to Jordan.

The undersigned has considered the parties' submissions addressed to Jordan's and Silber's motions to dismiss, as well as those submissions pertaining to plaintiffs' objections to the grant of leave to file the motions. For the reasons that follow, the undersigned concludes that it is appropriate to consider Jordan's and Silber's motions to dismiss, which were filed late due to Silber's excusable neglect. Additionally, the undersigned recommends that Jordan's motion to dismiss be granted in part and denied in part, as explained below. The undersigned further recommends that Silber's motion to dismiss be granted and that all of plaintiff's claims alleged against Silber be dismissed with prejudice. Finally, the undersigned recommends that plaintiffs' motion for default judgment be denied as to Jordan.

I. CONSIDERATION OF JORDAN'S AND SILBER'S MOTIONS TO DISMISS

The court granted Jordan's and Silber's ex parte motions seeking leave to file late motions to dismiss, and plaintiffs object to the granting of such leave. Under the peculiar circumstances of this case, the relevant factors weighed to determine whether excusable neglect warrants relief from a filing deadline support a finding that Silber's failure to timely file the motions to dismiss was the result of excusable neglect. Accordingly, the undersigned concludes that Silber's excusable neglect supports the grant of leave to file those motions to dismiss pursuant to Federal Rule of Civil Procedure 6(b)(1)(B), and those motions will be considered on the merits. Due to the long and tortured history of this case, spanning over 300 docket entries to date, some relevant background is provided below.

On July 3, 2009, Silber appeared in this action on behalf of Jordan and filed Jordan's answer to plaintiffs' Second Amended Complaint (Dkt. No. 29). On July 6, 2009, Silber appeared on his own behalf and filed an answer to the Second Amended Complaint (Dkt. No. 30). Silber also filed answers to the Second Amended Complaint on behalf of his clients, defendants Virginia and Michael Armstrong (Dkt. Nos. 24, 28).

The court subsequently struck plaintiffs' Second Amended Complaint and ordered plaintiffs to file a further amended complaint, which would serve as "plaintiffs' last chance to comply" with the court's orders and relevant procedural rules. (Order, Aug. 24, 2009, Dkt. No. 56.) Plaintiffs subsequently filed their Third Amended Complaint (Dkt. No. 66).

In November 2009, Silber filed motions to dismiss the Third Amended Complaint on behalf of Virginia and Michael Armstrong (Dkt. Nos. 82-85).*fn2 However, Silber did not file motions to dismiss or answers to the Third Amended Complaint at that time. Plaintiffs did not seek a clerk's entry of default against Jordan or Silber, but filed a procedurally improper motion for default judgment that did encompass Jordan, among numerous other defendants (Dkt. No. 189).*fn3

On February 17, 2011, the undersigned held a hearing addressing numerous motions, including plaintiffs' motion for default judgment (Dkt. No. 255). Silber appeared at the hearing seeking leave to file motions to dismiss the Third Amended Complaint on his and Jordan's behalf, citing his excusable neglect. That same morning, Silber filed ex parte applications seeking leave to file the subject motions, which appended the proposed motions to dismiss (Dkt. Nos. 253, 254). Silber's declarations in support of his requests, signed under penalty of perjury, represent that Silber had "just discovered that [he] had not filed a Responsive Pleading in this matter for [his] case or for the case against Delores Jordan." (Silber Decl. In Supp. of Jordan's Ex Parte Appl. ¶ 3 ("Silber Decl.").)*fn4 Silber further declares that he had drafted responses to the Third Amended Complaint on Jordan's behalf and his own behalf, but that "[d]ue to the amount of pleadings filed and the number of defendants [he] lost track of the fact that [he] had not actually filed the pleadings despite the fact that [he] had drafted them at the end of November 2009." (Id. ¶5.) Moreover, Silber declares: "During the last year I have been through a series of personal problems that included divorce from my wife, moving from my house in Texas and a series of other unfortunate events that caused me to lose track of the events in this matter."*fn5 (Id. ¶ 6.)

Relevant here, Federal Rule of Civil Procedure 6(b) provides:

(b) Extending Time.

(1) In General. When an act may or must be done within a specified time, the court may, for good cause, extend the time:

(A) with or without motion or notice if the court acts, or if a request is made, before the original time or its extension expires; or

(B) on motion made after the time has expired if the party failed to act because of excusable neglect.

(2) Exceptions. A court must not extend the time to act under Rules 50(b) and (d), 52(b), 59(b), (d), and (e), and 60(b).

The undersigned concludes that although it presents a relatively close call, the peculiar circumstances of this case justify, on the basis of excusable neglect, relief pursuant to Rule 6(b)(1)(B). The undersigned considers the factors supporting such relief, and plaintiffs' primary objections, below.

Plaintiffs first object to the granting of any relief on the grounds that such relief would violate the limitation on extensions of time provided in Rule 6(b)(2). Plaintiffs appear to argue that Jordan's and Silber's requests for relief are premised on an assertion of "excusable neglect" and thus implicate Federal Rule of Civil Procedure 60(b)(1), which permits a court to "relieve a party or its legal representative from a final judgment, order, or proceeding for . . . mistake, inadvertence, surprise, or excusable neglect." In turn, Rule 60(c)(1) places a one-year time limit on motions made pursuant to Rule 60(b)(1), which runs from the date of entry of the subject judgment or order or the date of the subject proceeding. See Fed. R. Civ. P. 60(c)(1) ("A motion under Rule 60(b) must be made within a reasonable time--and for reasons (1), (2), and (3) no more than a year after the entry of the judgment or order or the date of the proceeding."). Plaintiffs appear to argue that because Silber filed the requests for relief more than one year after the deadline for his and Jordan's response to the Third Amended Complaint, Silber's requests for relief violate Rule 60(c)(1).

The undersigned finds plaintiffs' argument premised on the interplay between Rule 6(b)(2) and Rule 60(c)(1) unpersuasive. In short, Jordan's and Silber's requests for relief do not implicate Rule 60(b) and, accordingly, the restrictions set forth in Rules 6(b)(2) and 60(c)(1) do not apply here. Relief granted pursuant to Rule 60(b) is relief from a "final judgment, order, or proceeding." Fed. R. Civ. P. 60(b) (emphasis added). The term "final" modifies not only the term "judgment," but also the terms "order" and "proceeding." See Fed. R. Civ. P. 60(b) advisory committee's notes to 1946 amend. ("The addition of the qualifying word 'final' emphasizes the character of the judgments, orders or proceedings from which Rule 60(b) affords relief . . . ."); Kapco Mfg. Co. v. C & O Enters., Inc., 773 F.2d 151, 154 (7th Cir. 1985) (stating that "'final' in Rule 60(b) must modify 'order, or proceeding' as well as 'judgment,'" and that Rule 60(b) "is a method of reopening a closed case"). Here, neither Silber nor Jordan is seeking relief from a final judgment, final order, or final proceeding. Accordingly, the relief sought is not pursuant to Rule 60(b), and plaintiffs' argument premised on Rules 6(b)(2) and 60(c)(1) fails.

Plaintiffs also object on the grounds that Silber has not sufficiently demonstrated excusable neglect. "The test for whether neglect is excusable under Rule 6(b)(1)(B) is the same as under Rule 60(b)(1)." Molina v. Potter, No. 10-CV-454 JLS (BGS), 2011 WL 1261547, at *1 (S.D. Cal. Apr. 5, 2011) (unpublished) (citing Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 392-93 (1993); and Comm. for Idaho's High Desert, Inc. v. Yost, 92 F.3d 814, 825 n.4 (9th Cir. 1996)). The Ninth Circuit Court of Appeals has stated that:

In evaluating whether neglect is excusable, a district court must consider the four factors established by the Supreme Court in Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership, 507 U.S. 380, 113 S. Ct. 1489, 123 L.Ed.2d 74 (1993): "(1) the danger of prejudice to the non-moving party, (2) the length of delay and its potential impact on judicial proceedings, (3) the reason for the delay, including whether it was within the reasonable control of the movant, and (4) whether the moving party's conduct was in good faith."

Mendez v. Knowles, 556 F.3d 757, 765 (9th Cir. 2009) (quoting Pincay v. Andrews, 389 F.3d 853, 855 (9th Cir. 2004) (en banc) (citing Pioneer Inv. Servs. Co., 507 U.S. at 395)). These four factors are not the only ones the court may consider. The Supreme Court has noted that "[a]lthough inadvertence, ignorance of the rules, or mistakes construing the rules do not usually constitute 'excusable' neglect, it is clear that 'excusable neglect' under Rule 6(b) is a somewhat 'elastic concept' and is not limited strictly to omissions caused by circumstances beyond the control of the movant." Pioneer Inv. Servs. Co., 507 U.S. at 392 (footnotes omitted). "The determination of whether neglect is excusable 'is at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission.'" Lemoge v. United States, 587 F.3d 1188, 1192 (9th Cir. 2009) (quoting Pioneer Inv. Servs. Co., 507 U.S. at 395). Silber's failure to file already-prepared motions to dismiss is unfortunate at best.

However, upon consideration of all four factors identified above, the undersigned concludes that Silber has, even if barely so, demonstrated excusable neglect warranting relief under Rule 6(b)(1).

First, despite plaintiffs' generalized protests, there is an insufficient danger of prejudice to plaintiffs to preclude relief. This case is still at the pleading stage due to the sheer number of defendants, numerous pleadings-based motions filed by approximately 60 named defendants, and multiple amendments of complaints. At most, Silber's late-filed motions decreased plaintiffs' ability to default Jordan and Silber and obtain a quick victory-a potentially un-meritorious victory-which is not sufficient to support a finding of prejudice to the non-moving party. See, e.g., Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253, 1262 (9th Cir. 2010) (citing Bateman v. U.S. Postal Serv., 231 F.3d 1220, 1225 (9th Cir. 2000)). Moreover, as stated below, the undersigned recommends that any motion for default judgment be denied as to Jordan on procedural and substantive grounds.

Second, in terms of the length of delay and its potential impact on judicial proceedings, the length of the delay totaling over one year is quite substantial. However, that delay has not materially impacted these proceedings, which, as noted above, are still at the pleading stage. Over the course of nearly two years, the court has been addressing various pleadings-based motions filed by defendants and numerous other motions filed by plaintiffs. Moreover, there is no impending trial date or other deadlines that must be continued if relief is granted.

Third, the court considers the reason for the delay and whether it was in the reasonable control of the moving party. Silber's reasons are many and of a very "human" variety, and explain Silber's failure to act. Whatever those reasons, the delay was caused by Silber and was within his control. At bottom, Silber forgot to file two documents that he had already prepared, apparently due to the myriad number of filings and defendants in this action that confused Silber. The undersigned finds that this factor weighs against granting relief. However, such a finding is not dispositive of the inquiry into excusable neglect, which must consider all of the relevant factors and circumstances.

Fourth, the undersigned cannot conclude that Silber's acts or omissions were the result of bad faith. Silber has declared under penalty of perjury that his failures were a very unfortunate oversight, and that he did not "take the actions to interfere with the proceedings in this case or to cause any unnecessary delay, or to interfere with the plaintiff's [sic] rights." (E.g., Silber Decl. ¶ 8.) Even if Silber's declarations are viewed skeptically as containing self-serving representations, the undersigned finds no other evidence in the record suggesting that Silber acted in bad faith, especially where he actually filed two largely successful motions to dismiss on behalf of Virginia and Michael Armstrong.

Although Silber's actions clearly fell below the level of conduct expected of attorneys appearing before this court, the undersigned finds that the four relevant factors support, on balance, a finding of excusable neglect. Accordingly, the undersigned orders that Jordan and Silber are entitled to relief pursuant to Federal Rule of Civil Procedure 6(b)(1)(B). Accordingly, the undersigned will consider and address the merits of Jordan's and Silber's motions to dismiss plaintiffs' Third Amended Complaint.

Before turning to the motions to dismiss, the undersigned briefly addresses plaintiffs' motion for default judgment against Jordan (Dkt. No. 189). To the extent that the motion for default judgment is before the court, the undersigned recommends that it be denied on procedural and substantive grounds.

First, plaintiffs' motion for default judgment is procedurally improper, and thus subject to denial, because plaintiffs did not seek a clerk's entry of default prior to filing their motion for default judgment. Federal Rule of Civil Procedure 55 governs the entry of default by the clerk and the subsequent entry of default judgment by either the clerk or the district court. In relevant part, Rule 55 provides:

(a) Entering a Default. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.

(b) Entering a Default Judgment.

(1) By the Clerk. If the plaintiff's claim is for a sum certain or a sum that can be made certain by computation, the clerk--on the plaintiff's request, with an affidavit showing the amount due--must enter judgment for that amount and costs against a defendant who has been defaulted for not appearing and who is neither a minor nor an incompetent person.

(2) By the Court. In all other cases, the party must apply to the court for a default judgment. . . .

Fed. R. Civ. P. 55(a)-(b). The Ninth Circuit Court of Appeals has stated that Rule 55 requires a "two-step process" consisting of: (1) seeking a clerk's entry of default, and (2) filing a motion for the entry of default judgment. See Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986) ("Eitel apparently fails to understand the two-step process required by Rule 55."); accord Symantec Corp. v. Global Impact, Inc., 559 F.3d 922, 923 (9th Cir. 2009) (noting that Rules 55(a) and (b) provide a two-step process for obtaining a default judgment); see also Norman v. Small, No. 09cv2235 WQH , 2010 WL 5173683, at *2 (S.D. Cal. Dec. 14, 2010) (unpublished) (denying plaintiff's motion for default judgment because, in part, the clerk had not yet entered a default); Cramer v. Target Corp., No. 1:08-cv-01693-OWW-SKO, 2010 WL 2898996, at *1 (E.D. Cal. July 22, 2010) (unpublished) ("Obtaining a default judgment in federal court is a two-step process that includes: (1) entry of default and (2) default judgment."); Bach v. Mason, 190 F.R.D. 567, 574 (D. Idaho 1999) ("Plaintiffs have improperly asked this court to enter a default judgment without first obtaining an entry of default by the clerk. Since plaintiffs' motion for entry of default judgment is improper, it is denied."), aff'd, 3 Fed. Appx. 656 (9th Cir. 2001), cert. denied, 534 U.S. 1083 (2002).

Here, plaintiffs did not request or obtain a clerk's entry of default from the Clerk of Court upon a showing by affidavit or otherwise that defendants failed to plead or otherwise defend themselves. Instead, they simply filed their motion for default judgment. Accordingly, the undersigned recommends that plaintiffs' motion for default judgment be denied as to Jordan on procedural grounds.

Were the motion for default judgment properly before the court, the undersigned would further recommend that it be denied as a substantive matter. One of the factors to be considered in evaluating a motion for default judgment is "the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits." See Eitel, 782 F.2d at 1471-72. Moreover, defaults judgments are generally disfavored. See id. at 1472; United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) ("Crucially, . . . judgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits.") (citation and quotation marks omitted); Westchester Fire Ins. Co. v. Mendez, 585 F.3d 1183, 1189 (9th Cir. 2009) ("As a general rule, default judgments are disfavored; cases should be decided upon their merits whenever reasonably possible."). The undersigned concludes that these policies favor denying plaintiffs' motion for default judgment. Such a conclusion is warranted especially where Jordan had actually appeared in the action and answered the Second Amended Complaint.

Based on the foregoing, the undersigned affirms the grant of Jordan's and Silber's requests for extensions to file their motions to dismiss, and deems those motions timely filed. Additionally, the undersigned recommends that plaintiffs' motion for default judgment be denied as to Jordan to the extent it is properly before the court. The undersigned next addresses Jordan's and Silber's motions to dismiss.

II. BACKGROUND RE: MOTIONS TO DISMISS*fn6

Plaintiffs' operative complaint, the Third Amended Complaint,*fn7 is a wide-ranging, 25-page complaint that alleges, in eight-point font, over two dozen claims for relief against over 60 defendants. Several of plaintiffs' claims are alleged against "All Defendants," with no differentiation in regards to the alleged conduct of each defendant that supports each such claim. In dismissing plaintiffs' Second Amended Complaint (Dkt. No. 15), which spanned 163 pages and 607 numbered paragraphs, the court ordered that plaintiffs' Third Amended Complaint could not exceed 25 pages and must conform to Federal Rule of Civil Procedure 8(a), including the requirement that the pleading contain a short and plain statement of the claims alleged instead of recounting all of the evidence and arguments in support of those claims. (Order and Findings and Recommendations, Aug. 24, 2009, at 3.) The court stated that "[t]his will be plaintiffs' last chance to comply." (Id.)

The claims alleged in the Third Amended Complaint against Jordan and Silber arise from an underlying family dispute between plaintiffs, who are part of the Winters family, and defendant Virginia Armstrong. Virginia Armstrong is the mother ...


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