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Duggan v. Kopriva

United States District Court, Ninth Circuit

July 8, 2013

ANDREW DUGGAN, an individual, Plaintiff,
v.
EARL KOPRIVA, et al., Defendants.

ORDER DENYING MOTION TO SET ASIDE DEFAULT JUDGMENT

BARRY TED MOSKOWITZ, Chief Judge.

Defendant Earl Kopriva ("Defendant" or "Kopriva") has filed a motion to set aside default judgment. For the reasons discussed below, Defendant's motion is DENIED.

I. BACKGROUND

This action arose out of an unsuccessful business venture. Plaintiff Andrew Duggan, one of the managing members of Causeway Ventures, LLC ("Causeway"), brought this action against Defendants, investors in the venture, seeking (1) a declaratory judgment that mutual releases that the investors signed were valid and effective; and (2) an injunction enjoining Defendants from filing any action against Plaintiff relating to their investments in Causeway.

On January 3, 2012, Plaintiff filed his initial complaint against defendants Paul Olson, John Scott, Lynn Scott, Jared Rothenberger, Charles Sorensen, and Jim Boo. On January 5, 2012, the Scotts, Rothenberger, Sorensen, and Boo were served with the Summons and Complaint via certified mail return receipt requested in compliance with Cal. Civ. Proc. Code § 415.40, governing service of persons outside of the state.

On January 25, 2012, Plaintiff filed his First Amended Complaint ("FAC"), adding Earl Kopriva as a defendant. Like the original complaint, the FAC asserted causes of action for (1) declaratory relief; and (2) preliminary and permanent injunction. On January 26, 2012, Plaintiff served Kopriva with the FAC and Summons via certified mail return receipt requested under Cal. Civ. Proc. Code § 415.40.

On March 9, 2012, the Court granted a joint motion to extend the time for Defendants to respond to the FAC to March 27, 2012. On April 2, 2012, the Court granted a joint motion to further extend the time for the Scotts, Olson, and Sorensen to respond to the FAC to May 11, 2012. On April 3, 2012, default was entered against defendants Boo and Rothenberger. On April 30, 2012, default was entered against Kopriva.

On July 10, 2012, Plaintiff voluntarily dismissed the Scotts, Olson, and Sorensen with prejudice.

On August 28, 2012, Plaintiff filed a motion for default judgment against Rothenberger, Boo, and Kopriva.

In an order filed on November 6, 2012, the Court granted in part and denied in part Plaintiff's motion for default judgment. The Court granted default judgment in favor of Plaintiff and against Jim Boo and Earl Kopriva on Plaintiff's declaratory relief claim. The Court denied default judgment with respect to Plaintiff's declaratory relief claim against Rothenberger and Plaintiff's claim for injunctive relief.

The instant motion to set aside default judgment was filed on April 16, 2013.

II. DISCUSSION

Kopriva moves to set aside the default judgment on the ground that the judgment was entered against him as a result of "mistake, inadvertence, surprise or excusable neglect." Fed.R.Civ.P. 60(b)(1). Upon review of the papers, however, it appears that "excusable neglect" is the only ground that arguably applies - i.e., Kopriva negligently failed to answer the FAC, even though he was served with the FAC, because he was busy in his role as CFO for an LLC (unrelated to Causeway). As discussed below, the Court is not convinced that there was excusable neglect. Moreover, Kopriva has failed to allege facts establishing a meritorious defense to Plaintiff's claim. Therefore, the Court denies Kopriva's motion.

Fed. R. Civ. P. 55(c) provides that a court may set aside the entry of default "for good cause shown." Factors to be considered when deciding whether to set aside an entry of default for "good cause" include: (1) whether the defendant's "culpable conduct" led to the default; (2) whether the plaintiff would be prejudiced by a set-aside; and (3) whether the defendant can present a meritorious defense to the claim. Falk v. Allen , 739 F.2d 46, 463 (9th Cir. 1984); American Ass'n of Naturopathic Physicians v. Hayhurst , 227 F.3d 1104, 1108 (9th Cir. 2000). If any one of these factors weighs against the defendant, the district court may refuse to set aside the default. Franchise Holding II v. Huntington Rests. Group, Inc. , 375 F.3d 922, 925-26 ...


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