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United Stated of America v. Assorted Firearms

February 21, 2013


The opinion of the court was delivered by: David O. Carter United States District Judge



Before the Court is a Motion for Default Judgment filed by Plaintiff United States of America (Dkt. 580). After considering the moving papers and oral argument, the Court GRANTS Plaintiff's Motion.


This action arose from the Verified Complaint for Forfeiture ("Complaint") filed on May 8, 2009. Plaintiff states that notice of this action has been given in the manner required by law. With respect to the defendant assets listed in Exhibit "M" to the Motion for Default Judgment filed on December 3, 2012, Plaintiff asserts that (1) no potential claimant or lienholder has sought to contest the forfeiture of the asset by filing a timely Statement identifying its rights or interests (a "claim") with this Court; or (2) any claim filed with respect to the asset has been stricken or withdrawn. Further, no potential claimant or lienholder has filed an Answer to the Complaint or otherwise defended his interest, if any, in the defendants listed in Exhibit "M" or, if an answer was filed, it has been stricken or withdrawn. The defendant assets listed in Exhibit "N" to the government's default motion are subject to orders previously entered by this Court recognizing the liens of those lienholders listed in Exhibit "N."

Ten claimants against whom default was entered, nine filing together and one objecting separately, have opposed Plaintiff's motion. Jay Aguallo, Jose Borboa, Gary Guerrero, Mark Luttrell, Robert Medrano, Jose Padilla, Gerald Pontod, Harry Reynolds II, and Frederick Widmayer filed their Opposition (Dkt. 589) on January 14, 2013. Juan Gonzalez, acting pro se, filed his Objection in Opposition (Dkt. 582) on December 10, 2012.

At oral arguments on February 14, 2013, claimants Harry Reynolds II, Gary Guerrero, Jay Aguallo, Jose Borboa, Robert Medrano, Jose Padilla, and Gerald Pontod were present with their counsel. In addition, Moises Aragon, a former claimant whose claim and answer were struck on May 16, 2012, and who had not participated in nor filed any documents related to this proceeding, appeared before the Court pro se and asked that his claim be revived as well.

Legal Standard

Federal Rule of Civil Procedure 55 provides that the Court may, in its discretion, order default judgment following the entry of default by the Clerk. Fed. R. Civ. P. 55(b). Local Rule 55 sets forth procedural requirements that must be satisfied by a party moving for default judgment. Upon entry of default, the well-pleaded allegations of the complaint are taken as true, with the exception of allegations concerning the amount of damages. See, e.g., Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977). However, "necessary facts not contained in the pleading, and claims which are legally insufficient, are not established by default." Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992). Where the pleadings are insufficient, the Court may require the moving party to produce evidence in support of the motion for default judgment. See TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). A court may not enter a default judgment against an unrepresented minor, incompetent person, or person in military service. Fed. R. Civ. P. 55(b)(2); 50 App. U.S.C. § 520.

When a party applies for default judgment, "the court may conduct hearings or make referrals -- preserving any federal statutory right to a jury trial -- when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter." Fed. R. Civ. P. 55(b)(2).


Here, claimants' opposition to Plaintiff's Motion for Default Judgment requires first that they be granted leave to pursue their claims in the form of relief from an entry of default or permission to file exceedingly late claims.

a.Standards for Relief from Default

Requests for relief from the entry of default are governed by Federal Rule of Civil Procedure 55(c), and should be granted only upon a showing of good cause by the party seeking relief. Fed. R. Civ. Proc. Rule 55(c). A district court has broad discretion to grant such relief. Brady v. United States, 211 F.3d 499, 504 (9th Cir. 2000). While a party seeking relief from entry of default need only establish "good cause," the factors generally considered in determining whether relief is appropriate are the same as those required to be shown for relief from default judgment under Rule 60(b)(1): mistake, inadvertence, surprise or excusable neglect. Chrysler Credit Corp. v. Macino, 710 F.2d 363, 368 (7th Cir. 1983). "Neglect" generally means carelessness or negligence, and whether such neglect is "excusable" is an equitable determination that takes into account all of the relevant circumstances surrounding the omission, including prejudice to the plaintiff, the length of the delay and its impact on judicial proceedings, the reason for the delay (i.e., whether it was in the party's control), and whether the party acted in good faith. Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380, 395 (1993).

Respondents rely heavily on the opinions in Signed Personal Check and TCI Group Life Ins. Plan v. Knoebbler, 244 F.3d 691 (9th Cir. 2001), but are selective about the holdings they quote from those opinions and silent on the underlying facts in those cases. The facts in this case bear no similarities at all to the facts in Signed Personal Check, and the procedural posture of this four year-old case in which the trial, had there been one, would have occurred nearly four months ago, could not be more different than the cited case, in which no claims were filed and the government moved promptly for default judgment. Those differences account for the failure of the court in Signed Personal Check to discuss the other factors to be considered by the Court in deciding whether to grant relief from entry of default. As the TCI Group court stated, the equitable doctrine of excusable neglect (on which the respondents here base their claims), includes consideration of four factors identified by the Supreme Court: (1) prejudice ...

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