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Martin Delgado; Ricardo Delgado; Angel Martinez; and Adrain v. Maria Deanda and Ruben Deanda Dba Guadalajara Market

December 18, 2012


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


United States District Court For the Northern District of California

Before the Court is Defendants Maria DeAnda and Ruben DeAnda's ("Defendants") motion to 20 set aside the default judgment under Federal Rule of Civil Procedure 60(b). Pursuant to Civil 21

Local Rule 7--1(b), the Court deems this motion appropriate for determination without oral 22 argument and vacates the hearing set for January 3, 2013. Having considered the parties' 23 submissions and the relevant law, the Court GRANTS Defendants' motion to set aside the default 24 judgment. Defendants' motion in the alternative to stay the execution of judgment, ECF No. 28, is 25 denied as moot. The parties' request to continue the hearing, ECF No. 39, is also denied as moot. 26


Plaintiffs Martin Delgado, Ricardo Delgado, Angel Martinez, and Adrian Acolzi ("Plaintiffs") 28 filed this action on June 25, 2010, alleging violation of state and federal employment laws. ECF No. 1. Plaintiffs filed a proof of service on September 2, 2012. ECF No. 5. Having received no 2 response from Defendants, Plaintiffs requested entry of default on November 8, 2010, ECF No. 12, 3 and the Clerk entered default on November 10, 2010, ECF No. 14. There were no further 4 developments until July 11, 2011, when Magistrate Judge Howard Lloyd, to whom the case was 5 assigned, issued an Order to Show Cause why the case should not be dismissed for failure to 6 prosecute. ECF No. 15. Plaintiffs' attorney appeared at the hearing on the Order to Show Cause 7 on August 30, 2011, and the Order to Show Cause was discharged. ECF No. 17. Plaintiffs then 8 filed a motion for default judgment on October 24, 2011, ECF No. 18. On November 23, 2011, 9

Judge Lloyd issued a report and recommendation that the Court grant the motion for default 10 judgment, and ordered that the case be assigned to a District Judge. ECF No. 23. On November ECF No. 25, and the Clerk entered judgment for the Plaintiffs the next day. ECF No. 26. Thirteen 14 days later, on June 7, 2012, Defendants filed a motion for relief from that judgment ("Mot.") and a 15 motion for a stay of the judgment. ECF Nos. 27-28. Plaintiffs filed an opposition on June 22, 16 2012, ECF No. 31, and Defendants filed a reply on July 6, 2012. ECF No. 32. 17 (1) mistake, inadvertence, surprise or excusable neglect; (2) newly discovered evidence which by 21 due diligence could not have been discovered before the court's decision; (3) fraud by the adverse 22 party; (4) the judgment is void; (5) the judgment has been satisfied; (6) any other reason justifying 23 relief. Fed.R.Civ.P. 60(b); School Dist. 1J v. ACandS Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). This 24 Circuit recognizes a "long-standing principle that default judgments are disfavored." TCI Group 25

"Where there has been no merits decision, appropriate exercise of district court discretion under 27 Rule 60(b) requires that the finality interest should give way fairly readily, to further the competing 28 interest in reaching the merits of a dispute." TCI Group, 244 F.3d at 696. The party seeking to 23, 2011, the case was reassigned to the undersigned Judge. ECF No. 24. On May 24, 2012, the undersigned judge issued an Order adopting Magistrate Judge Lloyd's report and recommendation, 13


A.Legal Standard

Rule 60(b) allows a court to set aside a judgment where one or more of the following is shown: 20 Life Ins. Plan v. Knoebber, 244 F.3d 691, 694 (9th Cir. 2001). 26

vacate the default judgment bears the burden of establishing that three factors favor vacating the 2 judgment: whether the plaintiff will be prejudiced; whether the defendant's default is due to 3 culpable conduct; and whether the defendant has a meritorious defense. Id. The Court will 4 consider each of these three factors in turn. 5

Defendants did not receive notice of the lawsuit. Defendants have also alleged that Plaintiffs' 8 proof of service was improper, both because the requirements for substituted service were not 9 satisfied and because the individual with whom the papers were allegedly left, a "Mariah Deanda," 10 does not ...

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