1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 FERARRI FINANCIAL SERVICES, Case No.: 3: 24-cv-01704-H-KSC INC., 11 ORDER GRANTING Plaintiff, 12 DEFENDANT RYAN C. v. USREY’S MOTION TO SET 13 ASIDE DEFAULT RYAN C. USREY and ROLL EM UP 14 FRANCHISE GROUP, LLC, a California 15 limited liability company, [Doc. No. 26] 16 Defendants. 17 On September 24, 2024, Plaintiff Ferrari Financial Services, Inc. filed a complaint 18 against Defendants Ryan C. Usrey (“Usrey”) and Roll Em Up Franchise Group, LLC 19 (“REU”), alleging causes of action for claim and delivery and breach of contract. (Doc. 20 No. 1, Compl.) On April 1, 2025, Plaintiff filed a request for entry of clerk default against 21 Defendants because it had failed to plead or otherwise respond to the complaint within he 22 time prescribed by the Federal Rules of Civil Procedure. (Doc. No. 9.) On April 2, 2025, 23 the Clerk entered default against Defendants. (Doc. No. 10.) On September 2, 2025, 24 Plaintiff filed a motion for default judgment against Defendants. (Doc. No. 15.) A hearing 25 on Plaintiff’s motion was held on Monday, October 6, 2025 at 10:30 a.m. Mr. Green 26 appeared on behalf of Plaintiff. Mr. Usrey appeared on behalf of himself. 27 On October 10, 2025, Defendant Usrey filed a motion to set aside the Clerk’s default. 28 1 (Doc. No. 26.) On October 27, 2025, Plaintiff filed an opposition to Defendant Usrey’s 2 motion. (Doc. No. 29.) On November 3, 2025, Defendant Usrey filed his reply. (Doc. 3 No. 31.) The Court, pursuant to its discretion under Civil Local Rule 7.1(d)(1), determines 4 the matter is appropriate for resolution without oral argument and submits the motion on 5 the parties’ papers. 6 DISCUSSION 7 Defendant Usrey asks this Court to set aside his default pursuant to Federal Rule of 8 Civil Procedure 55(c). (Doc. No. 26 at 1.) Rule 55(c) states: “The court may set aside an 9 entry of default for good cause, and it may set aside a default judgment under Rule 10 60(b).” Fed. R. Civ. P. 55(c). The good cause analysis under Rules 55(c) and 11 60(b) “considers three factors: ‘(1) whether [the defendant] engaged in culpable conduct 12 that led to the default; (2) whether [the defendant] had a meritorious defense; or (3) whether 13 reopening the default judgment would prejudice [the plaintiff].’” Franchise Holding II, 14 LLC v. Huntington Restaurants Group, Inc., 375 F.3d 922, 925-26 (9th Cir. 15 2004) (quoting Am. Ass'n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1008 16 (9th Cir. 2000)). The defendant bears “the burden of showing that any of these factors 17 favor[s] setting aside the default.” Id. at 926. Crucially, however, “judgment by default is 18 a drastic step appropriate only in extreme circumstances; a case should, whenever possible, 19 be decided on the merits.” Falk v. Allen, 739 F.2d 461, 463 (9th Cir.1984) 20 Here, Defendant Usrey asserts that each of the factors warrants setting aside the 21 default. The Court will address each factor in turn. 22 A. Defendant’s Culpable Conduct 23 The Ninth Circuit has held “that the defendant's conduct is culpable if he has 24 received actual or constructive notice of the filing of the action and intentionally failed to 25 answer.” Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1989); 26 see also Direct Mail Specialists, Inc. v. Eclat Computerized Technologies, Inc., 840 F.2d 27 685, 690 (9th Cir. 1988); Meadows v. Dominican Republic, 817 F.2d 517, 521 (9th Cir. 28 1987) (same). The standard on culpability depends on whether the party is “legally 1 sophisticated.” United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 2 F.3d 1085, 1093 (9th Cir. 2010). Where a party is not legally sophisticated, the Ninth 3 Circuit has “held that a defendant's conduct was culpable ... where there is no explanation 4 of the default inconsistent with a devious, deliberate, willful, or bad faith failure to 5 respond.” TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 698 (9th Cir. 2001). 6 In this case, Plaintiff provided the Court with proof that unsuccessful attempts were 7 made by process servers to serve Defendant Usrey at his place of residence on October 1, 8 2, 3, 4, 7, 10, 13, 16, 19, 21, and 24, 2024. (Doc. No. 4-1, Wittenberg Decl. ¶¶ 8, Ex. 2.) 9 Counsel for Plaintiff also requested via email that Defendant Usrey waive service of the 10 Complaint and Summons on multiple occasions. (Id. at ¶ 3, 10, 12, Exs. 1, 4, 5.) Despite 11 responding to other content within the emails, Defendant Usrey never responded to 12 Plaintiff’s request to waive service. (Id.) On December 10 and 17, 2024, Plaintiff directed 13 process servers to stakeout Defendant Usrey’s place of residence to serve Defendant. (Id. 14 at ¶ 13.) These attempts were also unsuccessful. (Id.) On December 20, 2024, Plaintiff 15 filed a motion for an order authorizing service by publication on Defendants and extending 16 the time limit to effect service. (Doc. No. 4.) On January 6, 2026, the Court granted 17 Plaintiff’s motion and authorized Plaintiff to accomplish service of summons on 18 Defendants by publication in the San Diego Daily Transcript and Riverside Business 19 Journal. (Doc. No. 6.) Plaintiff provided the Court with proof of service, showing that it 20 served Defendants through publication on January 14, 21, and 28, 2025 and February 4, 21 2025. (Doc. No. 8; Doc. No. 8-1.) As such, Plaintiff has demonstrated proper service 22 pursuant to Federal Rules of Civil Procedure 4(h) and 4(e)(1) and California Civil 23 Procedure Code § 415.50. Indeed, Defendant does not contest that service was improper 24 in his response. From these efforts, it is reasonable to conclude that Plaintiff made 25 reasonably diligent attempts to serve Defendant Usrey, and Defendant Usrey had actual or 26 constructive notice of the filing of the action. 27 Defendant Usrey is not, however, a legally sophisticated party as he is representing 28 himself pro se. Under the standard for parties lacking legal sophistication, the Court finds 1 Defendant not culpable. While Defendant Usrey should have communicated with 2 Plaintiff’s counsel or sought leave of Court if he needed additional time to respond to the 3 Complaint, Defendant Usrey did not provide an explanation of the default that suggested a 4 devious, deliberate, willful, or bad faith failure to respond. Defendant Usrey also appeared 5 at the October 6, 2025 default hearing on behalf of himself and promptly drafted and filed 6 a motion to set aside default thereafter. In light of these circumstances, the Court does not 7 find Defendant Usrey's failure to respond to be deliberate, willful, or in bad faith. Thus, 8 this factor weighs in favor of setting aside the default. 9 B. Meritorious Defense 10 “A defendant seeking to vacate a default judgment must present specific facts that 11 would constitute a defense,” but “the burden on a party seeking to vacate 12 a default judgment is not extraordinarily heavy.” TCI Grp., 244 F.3d at 700 (citations 13 omitted). “Defendants' allegations are meritorious if they contain even a hint of a 14 suggestion which, proven at trial, would constitute a complete defense.” Johnson v. 15 Barlow, 2007 WL 214603, slip op.
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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 FERARRI FINANCIAL SERVICES, Case No.: 3: 24-cv-01704-H-KSC INC., 11 ORDER GRANTING Plaintiff, 12 DEFENDANT RYAN C. v. USREY’S MOTION TO SET 13 ASIDE DEFAULT RYAN C. USREY and ROLL EM UP 14 FRANCHISE GROUP, LLC, a California 15 limited liability company, [Doc. No. 26] 16 Defendants. 17 On September 24, 2024, Plaintiff Ferrari Financial Services, Inc. filed a complaint 18 against Defendants Ryan C. Usrey (“Usrey”) and Roll Em Up Franchise Group, LLC 19 (“REU”), alleging causes of action for claim and delivery and breach of contract. (Doc. 20 No. 1, Compl.) On April 1, 2025, Plaintiff filed a request for entry of clerk default against 21 Defendants because it had failed to plead or otherwise respond to the complaint within he 22 time prescribed by the Federal Rules of Civil Procedure. (Doc. No. 9.) On April 2, 2025, 23 the Clerk entered default against Defendants. (Doc. No. 10.) On September 2, 2025, 24 Plaintiff filed a motion for default judgment against Defendants. (Doc. No. 15.) A hearing 25 on Plaintiff’s motion was held on Monday, October 6, 2025 at 10:30 a.m. Mr. Green 26 appeared on behalf of Plaintiff. Mr. Usrey appeared on behalf of himself. 27 On October 10, 2025, Defendant Usrey filed a motion to set aside the Clerk’s default. 28 1 (Doc. No. 26.) On October 27, 2025, Plaintiff filed an opposition to Defendant Usrey’s 2 motion. (Doc. No. 29.) On November 3, 2025, Defendant Usrey filed his reply. (Doc. 3 No. 31.) The Court, pursuant to its discretion under Civil Local Rule 7.1(d)(1), determines 4 the matter is appropriate for resolution without oral argument and submits the motion on 5 the parties’ papers. 6 DISCUSSION 7 Defendant Usrey asks this Court to set aside his default pursuant to Federal Rule of 8 Civil Procedure 55(c). (Doc. No. 26 at 1.) Rule 55(c) states: “The court may set aside an 9 entry of default for good cause, and it may set aside a default judgment under Rule 10 60(b).” Fed. R. Civ. P. 55(c). The good cause analysis under Rules 55(c) and 11 60(b) “considers three factors: ‘(1) whether [the defendant] engaged in culpable conduct 12 that led to the default; (2) whether [the defendant] had a meritorious defense; or (3) whether 13 reopening the default judgment would prejudice [the plaintiff].’” Franchise Holding II, 14 LLC v. Huntington Restaurants Group, Inc., 375 F.3d 922, 925-26 (9th Cir. 15 2004) (quoting Am. Ass'n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1008 16 (9th Cir. 2000)). The defendant bears “the burden of showing that any of these factors 17 favor[s] setting aside the default.” Id. at 926. Crucially, however, “judgment by default is 18 a drastic step appropriate only in extreme circumstances; a case should, whenever possible, 19 be decided on the merits.” Falk v. Allen, 739 F.2d 461, 463 (9th Cir.1984) 20 Here, Defendant Usrey asserts that each of the factors warrants setting aside the 21 default. The Court will address each factor in turn. 22 A. Defendant’s Culpable Conduct 23 The Ninth Circuit has held “that the defendant's conduct is culpable if he has 24 received actual or constructive notice of the filing of the action and intentionally failed to 25 answer.” Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1989); 26 see also Direct Mail Specialists, Inc. v. Eclat Computerized Technologies, Inc., 840 F.2d 27 685, 690 (9th Cir. 1988); Meadows v. Dominican Republic, 817 F.2d 517, 521 (9th Cir. 28 1987) (same). The standard on culpability depends on whether the party is “legally 1 sophisticated.” United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 2 F.3d 1085, 1093 (9th Cir. 2010). Where a party is not legally sophisticated, the Ninth 3 Circuit has “held that a defendant's conduct was culpable ... where there is no explanation 4 of the default inconsistent with a devious, deliberate, willful, or bad faith failure to 5 respond.” TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 698 (9th Cir. 2001). 6 In this case, Plaintiff provided the Court with proof that unsuccessful attempts were 7 made by process servers to serve Defendant Usrey at his place of residence on October 1, 8 2, 3, 4, 7, 10, 13, 16, 19, 21, and 24, 2024. (Doc. No. 4-1, Wittenberg Decl. ¶¶ 8, Ex. 2.) 9 Counsel for Plaintiff also requested via email that Defendant Usrey waive service of the 10 Complaint and Summons on multiple occasions. (Id. at ¶ 3, 10, 12, Exs. 1, 4, 5.) Despite 11 responding to other content within the emails, Defendant Usrey never responded to 12 Plaintiff’s request to waive service. (Id.) On December 10 and 17, 2024, Plaintiff directed 13 process servers to stakeout Defendant Usrey’s place of residence to serve Defendant. (Id. 14 at ¶ 13.) These attempts were also unsuccessful. (Id.) On December 20, 2024, Plaintiff 15 filed a motion for an order authorizing service by publication on Defendants and extending 16 the time limit to effect service. (Doc. No. 4.) On January 6, 2026, the Court granted 17 Plaintiff’s motion and authorized Plaintiff to accomplish service of summons on 18 Defendants by publication in the San Diego Daily Transcript and Riverside Business 19 Journal. (Doc. No. 6.) Plaintiff provided the Court with proof of service, showing that it 20 served Defendants through publication on January 14, 21, and 28, 2025 and February 4, 21 2025. (Doc. No. 8; Doc. No. 8-1.) As such, Plaintiff has demonstrated proper service 22 pursuant to Federal Rules of Civil Procedure 4(h) and 4(e)(1) and California Civil 23 Procedure Code § 415.50. Indeed, Defendant does not contest that service was improper 24 in his response. From these efforts, it is reasonable to conclude that Plaintiff made 25 reasonably diligent attempts to serve Defendant Usrey, and Defendant Usrey had actual or 26 constructive notice of the filing of the action. 27 Defendant Usrey is not, however, a legally sophisticated party as he is representing 28 himself pro se. Under the standard for parties lacking legal sophistication, the Court finds 1 Defendant not culpable. While Defendant Usrey should have communicated with 2 Plaintiff’s counsel or sought leave of Court if he needed additional time to respond to the 3 Complaint, Defendant Usrey did not provide an explanation of the default that suggested a 4 devious, deliberate, willful, or bad faith failure to respond. Defendant Usrey also appeared 5 at the October 6, 2025 default hearing on behalf of himself and promptly drafted and filed 6 a motion to set aside default thereafter. In light of these circumstances, the Court does not 7 find Defendant Usrey's failure to respond to be deliberate, willful, or in bad faith. Thus, 8 this factor weighs in favor of setting aside the default. 9 B. Meritorious Defense 10 “A defendant seeking to vacate a default judgment must present specific facts that 11 would constitute a defense,” but “the burden on a party seeking to vacate 12 a default judgment is not extraordinarily heavy.” TCI Grp., 244 F.3d at 700 (citations 13 omitted). “Defendants' allegations are meritorious if they contain even a hint of a 14 suggestion which, proven at trial, would constitute a complete defense.” Johnson v. 15 Barlow, 2007 WL 214603, slip op. at *3 (E.D.Cal., 2007) (citations and internal quotation 16 marks omitted). 17 Here, Defendant Usrey contests the extent of the deficiency owed and attorney’s 18 fees. Usrey asserts that substantial questions remain regarding “the reasonableness of 19 Plaintiff’s attorney fee demand,” “the calculation of the alleged deficiency balance[,] and 20 whether the vehicle sale was commercially reasonable under applicable law.” (Doc. No. 21 31 at 2.) As such, there is reason to believe that the result after a determination on the 22 merits may differ from the judgment by default. As the burden to show the existence of a 23 potentially meritorious defense, “is not extraordinarily heavy,” TCI Group, 244 F.3d at 24 700, this factor also weighs in favor of granting defendants' motion. 25 C. Prejudice to Plaintiff 26 Finally, Defendant Usrey maintains that Plaintiff will not suffer any prejudice as 27 there is no loss of evidence or diminished ability to defend on the part of Plaintiff. (Doc. 28 1 No. 31 at 2.) Plaintiff asserts that if the default is set aside it will be prejudiced in having 2 to expend even more time, effort, and attorney fees litigating this case. (Doc. No. 29 at 5.) 3 “To be prejudicial, the setting aside of a judgment must result in greater harm than 4 simply delaying resolution of the case.” Mesle, 615 F.3d at 1095. Mere delay and 5 litigation costs are not sufficient prejudice to justify refusing to set aside a default. See TCI 6 Group, 244 F.3d at 701 (finding the Plaintiff suffered no cognizable prejudice merely by 7 incurring costs in litigating the default). “The standard is whether his ability to pursue his 8 claim will be hindered”, Falk, 739 F.2d at 463, such as by “loss of evidence” or “increased 9 difficulties of discovery,” TCI Grp., 244 F.3d at 701. 10 Here, Plaintiff’s concerns about delaying resolution of the case and incurring more 11 attorney’s fees does not demonstrate prejudice. To date, the pleadings and briefs in this 12 case have been fairly straightforward and formal discovery has yet to begin. The Court has 13 not issued a scheduling order setting deadlines for pre-trial motions or trial and related 14 dates. Under these circumstances, this factor also weighs in favor of 15 setting aside the defaults. 16 CONCLUSION 17 For the above reasons, the Court grants Defendant Usrey’s motion to set aside 18 default. The Court sets aside the Clerk’s default as to Defendant Usrey and orders 19 Defendant Usrey to submit an answer or otherwise respond by November 28, 2025. 20 Additionally, as noted in the Court’s prior order, Defendant REU is a must make a 21 motion to set aside the default by counsel. (Doc. No. 28 at 2.) Civil Local Rule 83.3 (j) 22 provides: 23 Only natural persons representing their individual interest in propria persona may appear in court without representation by an attorney 24 permitted to practice pursuant to Civil Local Rule 83.3. All other 25 parties, including corporations, partnerships and other legal entities, may appear in court only through an attorney permitted to practice 26 pursuant to Civil Local Rule 83.3. 27 28 1 || See also Rowland v. Cal. Men’s Colony, 606 U.S. 194, 202-03 (1993) (“a corporation may 2 ||appear in federal courts only through licensed counsel’); D-Beam, Ltd. P’ship v. Roller 3 || Derby Skates, Inc., 366 F.3d 972, 973-74 (9th Cir. 2004) (“It is a longstanding rule that 4 ||‘corporations and other unincorporated associations must appear in court through an 5 || attorney.’”); C.E. Pope Equity Trust v. United States, 818 F.2d 696, 697 (9th Cir. 1987) 6 || (“Although a non-attorney may appear in propria persona in his own behalf, that privilege 7 personal to him. He has no authority to appear as an attorney for others than himself.”). 8 || Accordingly, the Court directs Defendant REU to retain counsel to represent it in this case 9 ||on or before November 21, 2025. The Court cautions Defendant REU that failure to retain 10 || counsel may result in sanctions, including the entry of default judgment against it. 1] IT IS SO ORDERED. - 12 |} DATED: November 5, 2025 IAA B ¢ HUFF, ude. UNITED STATES DISTRICT COURT 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28