Ewing v. Freedom Forever, LLC

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ANTON A. EWING, Case No.: 23-CV-1240 JLS (AHG)

12 Plaintiff, ORDER DENYING DEFENDANT’S 13 v. APPLICATION FOR DEFAULT JUDGMENT 14 FREEDOM FOREVER, LLC; and

BRETT BOUCHY, an individual, 15 (ECF No. 79) Defendants. 16 17 Presently before the Court is Defendant Freedom Forever, LLC’s (“Freedom 18 Forever”) Application for Default Judgment (“Appl.,” ECF No. 79). For the reasons that 19 follow, the Application is DENIED. 20 On September 4, 2024, Defendant filed First Amended Counterclaims against 21 Plaintiff Anton A. Ewing (“Am. CC,” ECF No. 73). Under Federal Rule of Civil 22 Procedure 15(a)(3), Plaintiff was required to answer or otherwise respond to the Amended 23 Counterclaims by September 18, 2024. Plaintiff failed to do so. On October 24, 2024, 24 Defendant filed the instant Motion which, though entitled “Application for Default 25 Judgment,” merely asks the Clerk of the Court to enter default in favor of Defendant.1 26 27 28 1 For clarity’s sake, the entry of default is distinct from the entry of default judgment. See Fed. R. Civ. 1 Appl. at 2. That same day, Plaintiff filed an Answer to Amended Counter Claims (“CC 2 Answer,” ECF No. 80). Defendant has not objected to Plaintiff’s Answer. See generally 3 Docket. 4 Despite the careless whim with which Plaintiff responded to the Amended 5 Counterclaims, the Court finds good cause to deny Defendant’s Application. In contrast 6 to Plaintiff’s filing of an Answer devoid of any explanation as to why he was delayed by 7 over one month, Plaintiff’s proper course of action would have been to request leave to file 8 an untimely response for good cause. See Fed. R. Civ. P. 6(b)(1)(B) (“When an act may 9 or must be done within a specified time, the court may, for good cause, extend the 10 time . . . on motion made after the time has expired if the party failed to act because of 11 excusable neglect.”). The Court cannot conduct an analysis under Rule 6 because Plaintiff 12 declined to provide any justification for his tardy filing. 13 Nevertheless, “some courts have considered ‘the filing of a late 14 answer . . . analogous to a motion to vacate a default,’ because ‘the party filing the late 15 answer receives “the same opportunity to present mitigating circumstances that [it] would 16 have had if a default had been entered and [it] had moved under Rule [55(c)] to set it 17 aside.”’” Tabari v. Kane, No. CV-10-2419-PHX-DGC (LOA), 2011 WL 2533512, at *2 18 (D. Ariz. Apr. 26, 2011) (quoting John v. Sotheby’s, Inc., 141 F.R.D. 29, 35 (S.D.N.Y. 19 1992)). As just explained, Plaintiff failed to present mitigating circumstances. But the 20 Court will proceed to analyze Defendant’s Application under Federal Rule of Civil 21 Procedure 55(c), which allows the Court to “set aside an entry of default for good cause.” 22 “The court examines three factors when determining whether there is good cause: 23 (1) whether the defendant’s culpable conduct led to the default; (2) whether defendant has 24 a meritorious defense; and (3) whether setting aside the default will prejudice the plaintiff.” 25 First Direct Payment Servs. v. Real Time Care LLC, No. 22-cv-1599-MMA (DEB), 26 2023 WL 6131081, at *2 (S.D. Cal. Sept. 19, 2023) (citing Franchise Holding II, LLC v. 27 Huntington Rests. Grp., Inc., 375 F.3d 922, 926 (9th Cir. 2004)). 28 Plaintiff failed to identify any justification for his delay, but the Court does not detect 1 nor does Defendant contend that the delay evinces bad faith. Thus, the first factor weighs 2 against entering default because there is no evidence that Plaintiff “intentionally failed to 3 answer.” TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691 (9th Cir. 2001) (emphasis in 4 original), overruled on other grounds by Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141 5 (2001); see also Stebbins v. Polano, No. 21-CV-04184-JSW, 2021 WL 8532699, at *2 6 (N.D. Cal. Oct. 28, 2021) (“[W]hen [the defendant] received [p]laintiff’s motion for entry 7 of default, it acted quickly in responding, making clear it was not willing to forfeit its 8 rights.”). 9 Further, the burden of satisfying the “meritorious defense” factor “is not 10 extraordinarily heavy.” United States v. Signed Personal Check No. 730 of Yubran S. 11 Mesle, 615 F.3d 1085, 1094 (9th Cir. 2010). Indeed, “[a]ll that is necessary to satisfy the 12 ‘meritorious defense’ requirement is to allege sufficient facts that, if true, would constitute 13 a defense.” Id. (quoting TCI Grp., 244 F.3d at 700). Plaintiff’s Answer raises several 14 affirmative defenses, including failure to state a claim and breach of contract by Defendant 15 prior to bringing its own breach of contract claim. See Answer at 5. The Court finds 16 Plaintiff’s allegations sufficient to satisfy the low threshold of establishing a potentially 17 meritorious defense for purposes of setting aside a default. See, e.g., J & J Sports Prods., 18 Inc. v. Nguyen, No. 5:11-CV-01166 EJD, 2011 WL 6294332, at *1 (N.D. Cal. Dec. 14, 19 2011) (finding challenge to allegations of complaint on its merits in motion to set aside a 20 legally cognizable defense for failure to state a claim). Accordingly, this factor, too, 21 weighs in favor of denying Defendant’s Application. 22 Finally, “[t]o be prejudicial, the setting aside of a judgment must result in greater 23 harm than simply delaying resolution of the case.” TCI Grp., 244 F.3d at 697. The Court 24 does not find Plaintiff’s one-month delay in responding to the Amended Counterclaims to 25 constitute sufficient harm to Defendant such that it overcomes the strong preference for 26 deciding cases “on their merits whenever reasonably possible.” Eitel v. McCool, 27 782 F.2d 1470, 1472 (9th Cir. 1986); see also Veracity Wireless, Inc. v. Virtual Fleet 28 Mgmt., LLC, No. 17-CV-295 JLS (BLM), 2019 WL 4266550, at *7 (S.D. Cal. Feb. 26, 1 |}2019) (‘When, as here, a defendant’s response is filed within a month of the entry of 2 default, prejudice to the plaintiff as a consequence of setting aside entry of default is 3 unlikely.” (citing Canfield v. VSH Rest. Corp., 162 F.R.D. 431, 434 (N.D.N.Y. 1995))). 4 || The third factor, therefore, also weighs against entering default. 5 “

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