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Jacquot v. Sunset Square

United States District Court, E.D. California

November 3, 2017

DIEDRE JACQUOT and ROBERT JACQUOT, Plaintiffs,
v.
SUNSET SQUARE, a General Partnership; FANACOLE, INC. doing business as LIMON RESTAURANT, Defendants.

          FINDINGS AND RECOMMENDATIONS GRANTING DEFENDANT'S MOTION TO SET ASIDE DEFAULT (Doc. 13)

          BARBARA A. MCAULIFFE UNITED STATES MAGISTRATE JUDGE.

         Currently pending before the Court is Defendant Fanacole, Inc., dba Limon Restaurant's (“Limon Restaurant”) Motion to Set Aside Default. (Doc. 12.) The Court found the motion suitable for decision without oral argument and vacated the hearing scheduled for November 3, 2017. Local Rule 230(g).

         I. BACKGROUND

         Plaintiffs Deirdre and Robert Jacquot (“Plaintiffs”) initiated the instant action on July 19, 2017, and filed the operative complaint on July 20, 2017. In the complaint, Plaintiffs allege that they are disabled within the meaning of the Americans with Disabilities Act. Plaintiffs further allege that on December 6, 2017, they drove their 2013 Dodge Truck to the Sunset Square shopping center with the intent to enter and have lunch on Limon Restaurant's outdoor patio before patronizing other Sunset Square facilities. Upon arrival in the parking lot, Plaintiffs allegedly encountered a variety of barriers to access in connection with parking, signage, aisles, and curbs. Plaintiffs contend that they intend to go back to Limon Restaurant when the barriers are removed. Plaintiffs assert that the lack of handicap accessible parking is easily remedied by the placement of signage, correct paint striping the surface of the parking lot, correct parking space and access aisle widths and slopes, and correct access ramps and slopes. Plaintiffs further assert that they suffered injury when they were denied full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of Limon Restaurant, which is a place of public accommodation.

         Defendant Sunset Square returned a waiver of service signed on August 17, 2017, by counsel Sean T. O'Rouke. (Doc. 7). Limon Restaurant was served with the Summons and Complaint on July 25, 2017, by delivery to the agent designated by law to accept service of process. (Doc. 6.) Limon Restaurant did not answer the complaint, and the Clerk of the Court entered default against Limon September 5, 2017. (Doc. 10.) On September 13, 2017, Plaintiffs voluntarily dismissed Defendant Sunset Square from this action. (Docs. 11, 12.)

         On September 20, 2017, Limon Restaurant, through counsel Sean T. O'Rourke, filed the instant motion to set aside default. (Doc. 13.) Limon Restaurant argues that its counsel announced his representation of both defendants in this action and asked for proofs of service, but Plaintiffs did not provide the proofs of service or provide notice of the intent to seek default. Based on the conduct of Plaintiffs' counsel, Limon Restaurant now seeks to set aside entry of its default.

         In support of the motion, Limon Restaurant explains that Plaintiffs have filed six lawsuits, Nos. 00943, 00945, 00946, 00953, 00970 and 01090, claiming that on December 6, 2016, they were going to visit the Sunset Square shopping center and patronize the following businesses: SaveMart, DaVinci's Pizza, Subway, Pack and Ship, Limon Restaurant, State Farm, Martinizing Dry Cleaning, Asuka Japanese Restaurant and Elite Liquors. (Doc. 13-2, Declaration of Sean T. O'Rourke (“O'Rourke Decl.”) at ¶ 4.) The allegations in this case, and in every other case, involve handicapped parking space signage and configuration at the Sunset Square shopping center. (Id.) As early as July 31, 2017, eleven days after the complaint was filed, counsel Sean O'Rourke, announced his representation of Sunset Square, and indicated his intent to either represent the interests of the individual tenants (such as Limon Restaurant) or otherwise have them dismissed or have the action stayed as to them. (Id. at ¶ 5.) Thereafter, counsel requested proofs of service from Plaintiffs' counsel on August 4 and August 10, 2017, and on August 17, 2017, expressly asked Plaintiffs' counsel to have certain of the Sunset Square tenants, including Limon Restaurant, dismissed from the action. (Id. at ¶¶ 6-8.) Subsequently, on August 18, 2017, Mr. O'Rourke spoke with Plaintiffs' counsel and advised that he was representing the interests of the minor tenants, again asked about proofs of service, and asked when a response would be due or if they could be dismissed. (Id. at ¶ 9.) On August 23, 2017, Plaintiffs' counsel revealed that he had requested defaults against some minor tenants. (Id. at ¶ 10.) Plaintiffs' counsel later requested default against Limon Restaurant on September 1, 2017. (Id. at ¶ 11; Doc. 9.) On the same date, Mr. O'Rourke wrote to Plaintiffs' counsel and indicated that he should be filing answers for all minor tenants the following week. He also noted that defaults were requested as to DaVinci's and Subway and asked to set them aside via stipulation. Mr. O'Rourke also inquired about what Plaintiffs' counsel wanted to do procedurally about the six cases pending cases. Mr. O'Rourke received no response. (Id. at ¶¶13, 14.) On September 13, 2017, Mr. O'Rourke then wrote to Plaintiffs' counsel to request availability regarding meet and confer in advance of the scheduling conferences for the various cases. (Id. at ¶ 15.) On the same day, after beginning to prepare a Joint Scheduling Conference Statement and noting that Plaintiffs had taken more defaults, Mr. O'Rourke again wrote to Plaintiffs' counsel asking whether counsel would stipulate to set aside the defaults or if he would need to file a motion. (Id. at ¶ 16.)

         Plaintiffs filed an opposition to Limon Restaurant's motion on September 28, 2017, arguing that Plaintiffs' counsel did not receive documentation stating that Mr. O'Rourke represented Limon Restaurant until the instant motion to set aside default was filed. (Doc. 15 at ¶ 16.) Plaintiffs' counsel then contacted Mr. O'Rourke on September 23, 2017, asking if he would agree to set aside the voluntary dismissal of Sunset Square. However, Mr. O'Rourke reportedly responded that he would work with Plaintiffs' counsel so long as his client got something out of it. Plaintiffs' counsel reportedly responding that he was not seeking a quid pro quo, but was only attempting to assist Mr. O' Rourke in eliminating the prejudice he caused to the Plaintiffs by his delay in representation Limon Restaurant. Plaintiffs' counsel reports that Mr. O'Rourke had not yet responded. (Doc. 15 at ¶ 17.) Plaintiffs believe that if the default against Limon Restaurant is set aside, then the dismissal against Sunset Square also must be set aside otherwise prejudice will result when Limon Restaurant blames the architectural barriers on Sunset Square. (Id. at ¶ 18.) Plaintiffs further argue that Limon Restaurant has not demonstrated excusable neglect in failing to respond, has not offered a meritorious defense and setting aside the default will result in prejudice to Plaintiffs.

         Limon Restaurant filed a reply on October 11, 2017, arguing that settlement negotiations between counsel encompassed settlement of all claims and actions, even actions which had not been filed. (Doc. 16 at pp. 1-2 and Exs. A, B.) Further, Mr. O'Rourke represents that he responded to Plaintiffs' counsel on September 26, 2017, indicating that what made the most sense was “to stipulate to set both the dismissals and defaults aside” and would be happy to meet to discuss the issues. (Id. at ¶ 3-4 and Ex. C.) Limon Restaurant also argues that it has a meritorious defense and that Plaintiffs have caused prejudice to themselves by delay and dismissal of the owner of the shopping center. (Doc. 16.)

         Having reviewed the parties' filings, and for the reasons stated below, the Court recommends that Limon Restaurant's request to set aside the clerk's entry of default should be GRANTED.

         II. LEGAL STANDARD

         The Federal Rules of Civil Procedure govern the entry of default. Once default has been entered, “[t]he court may set aside an entry of default for good cause.” Fed.R.Civ.P. 55(c). In evaluating whether good cause exists, the court may consider “(1) whether the party seeking to set aside the default engaged in culpable conduct that led to the default; (2) whether it had no meritorious defense; or (3) whether reopening the default judgment would prejudice the other party.” United States v. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (citing Franchise Holding II, LLC v. Huntington Restaurants Group, Inc., 375 F.3d 922, 925-26 (9th Cir. 2004). The standard for good cause, “which is the same as is used to determine whether a default judgment should be set aside under Rule 60(b), is disjunctive, such that a finding that any one of these factors is true is sufficient reason for the district court to refuse to set aside the default.” Id.

         On the other hand, when the moving party seeks timely relief from default “and the movant has a meritorious defense, doubt, if any, should be resolved in favor of the motion to set aside the default so that cases may be decided on their merits.” Mendoza v. Wight Vineyard Mgmt., 783 F.2d 941, 945-46 (9th Cir. 1986). Moreover, the Ninth Circuit has opined “judgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits.” Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984).

         III. ...


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