Knapps, Ph.D. v. Education & Training Resources (ETR)

• Court: District Court, N.D. California
• Decided: May 20, 2024
• Docket: 3:24-cv-00893
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 UGANDA KNAPPS, Case No. 24-cv-00893-SK

8 Plaintiff, ORDER REGARDING MOTION TO 9 v. SET ASIDE DEFAULT AND MOTION FOR DEFAULT JUDGMENT 10 EDUCATION & TRAINING RESOURCES (ETR), et al., 11 Regarding Docket Nos. 35, 36 Defendants. 12 13 The matter comes before the Court upon consideration of the motion to set aside default 14 filed by Defendant Minact, Inc. (“Minact”) and the motion for default judgment against Minact 15 filed by Plaintiff Uganda Knapps (“Plaintiff”). The Court finds these motions are suitable for 16 disposition without oral argument and, thus, VACATES the hearings scheduled for June 3, 2024. 17 See N.D. Civ. L.R. 7-1(b). HAVING carefully considered the parties’ papers, relevant legal 18 authority, and the record in the case, the Court GRANTS Minact’s motion and DENIES Plaintiff’s 19 motion for the reasons set forth below. 20 Pursuant to Federal Rule of Civil Procedure 55(c), a court may set aside entry of default 21 for good cause. The district court has discretion to determine whether a party demonstrates “good 22 cause.” Madsen v. Bumb, 419 F.2d 4, 6 (9th Cir. 1969). The Court’s discretion is particularly 23 broad where a party seeks to set aside an entry of default rather than a default judgment. Mendoza 24 v. Wight Vineyard Mgmt., 783 F.2d 941, 945 (9th Cir. 1986). In evaluating whether a party has 25 demonstrated good cause, a district court may consider the following factors: (1) whether the 26 defendant’s culpable conduct led to the default; (2) whether the defendant has a meritorious 27 defense; and (3) whether setting aside the default would prejudice the plaintiff. TCI Grp. Life Ins. 1 Egelhoff ex rel. Breiner, 532 U.S. 141 (2001). Whenever “timely relief is sought . . . and the 2 movant has a meritorious defense,” a court must resolve any doubt in favor of setting aside the 3 default. Mendoza, 783 F.2d at 945-46. As the Ninth Circuit has made clear, “judgment by default 4 is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be 5 decided on the merits.” United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 6 1085, 1091 (9th Cir. 2010). The party seeking to vacate the entry of default bears the burden of 7 demonstrating that these factors favor doing so. TCI, 244 F.3d at 696. 8 With respect to the first factor, “a defendant’s conduct is culpable if he has received actual 9 or constructive notice of the filing of the action and intentionally failed to answer.” TCI Grp., 244 10 F.3d at 697 (emphasis in original) (citation omitted). In this context, “intentionally” means that “a 11 movant cannot be treated as culpable simply for having made a conscious choice not to answer; 12 rather, to treat a failure to answer as culpable, the movant must have acted with bad faith, such as 13 an intention to take advantage of the opposing party, interfere with judicial decision-making, or 14 otherwise manipulate the legal process.” Mesle, 615 F.3d at 1092-93 (citation and quotation 15 marks omitted); see also TCI Grp., 244 F.3d at 698 (the Ninth Circuit has “typically held that a 16 defendant’s conduct was culpable for purposes of the [good cause] factors where there is no 17 explanation of the default inconsistent with a devious, deliberate, willful, or bad faith failure to 18 respond.”) 19 Here, Minact explained that it thought that the other defendant, Educational & Training 20 Resources, LLC. (“ETR”), was planning to prepare a response to Plaintiff’s complaint on behalf of 21 both of them. (Dkt. No. 35-1 (Declaration of Kebah Ealy), ¶¶ 7, 8, 10.) However, on April 8, 22 2024, Minact learned that counsel for ETR would not respond on behalf of Minact as well. (Id., ¶ 23 14.) Minact then sought to retain counsel for itself but was not able to respond to the complaint 24 before default was entered. (Id., ¶¶ 15-17.) There is no evidence that Minact’s delay in obtaining 25 counsel and responding to the complaint was done in bad faith. Accordingly, the Court finds 26 Minact’s conduct was not culpable. 27 Minact is also not devoid of a potentially meritorious defense. To satisfy the meritorious 1 facts that would constitute a defense.” See Mesle, 615 F.3d at 1094. However, “the burden on a 2 party seeking to vacate a default judgment is not extraordinarily heavy.” See TCI Group, 244 F.3d 3 at 700 (citing In re Stone, 588 F.2d 1316, 1319 n. 2 (10th Cir. 1978) (explaining that the movant 4 need only demonstrate facts or law showing the trial court that “a sufficient defense is 5 assertible”)). Minact need only “allege sufficient facts that, if true, would constitute a defense . . 6 .”. See Mesle, 615 F.3d at 1094. Furthermore, the meritorious defense requirement is also more 7 liberally applied on a Rule 55(c) motion to set aside entry of default than on a Rule 60(b) motion 8 to set aside default judgment. See id. at 1091 n. 1. Here, liberally construed, the Court finds that 9 Minact raises several potentially meritorious defenses. 10 Finally, the Court finds there is no undue prejudice to Plaintiff that results from setting 11 aside the default. “To be prejudicial, the setting aside of a judgment must result in greater harm 12 than simply delaying resolution of the case. Rather, ‘the standard is whether [plaintiff’s] ability to 13 pursue his claim will be hindered.’” TCI Grp., 244 F.3d at 701 (quoting Falk v. Allen, 739 F.2d 14 461, 463 (9th Cir. 1984) (citing Thompson v. Amer. Home. Assur. Co., 95 F.3d 429, 433-34 (6th 15 Cir. 1996) (to be considered prejudicial, “the delay must result in tangible harm such as loss of 16 evidence, increased difficulties of discovery, or greater opportunity for fraud or collusion”)). 17 Notably, Plaintiff has not responded to the motion to set aside default and, thus, does not even 18 argue that he would be prejudiced. Moreover, it is not clear how Plaintiff could make such an 19 argument. Minact filed its motion to set aside on the same day that default was entered against it. 20 No dates or deadlines have been set in this case. 21 Therefore, the Court GRANTS Defendant’s motion to set aside default. 22 Moreover, because Minact’s default has been set aside, the Court DENIES Plaintiff’s 23 motion for default judgment. 24 The Court notes that mail sent by the Court to Plaintiff has been returned undeliverable on 25 April 19, 2024, and May 1, 2024, respectively. (Dkt. Nos. 29, 40.) Pursuant to Civil Local Rule 26 3-11, “a party proceeding pro se whose address changes while an action is pending must promptly 27 file with the Court and serve upon all opposing parties a Notice of Change of Address specifying 1 complaint or strike an answer when: (1) Mail directed to the [...] pro se party by the Court has 2 been returned to the Court as not deliverable; and (2) The Court fails to receive within 60 days of 3 || this return a written communication from the [...] pro se party indicating a current address.” 4 || Plaintiff admonished that he must promptly inform the Court of any change of address and that 5 || failure to do so may result in dismissal of this action. 6 IT IS SO ORDERED. 7 Dated: May 20, 2024 + 3 Athen vw SALLIE KIM 9 United States Magistrate Judge 10 11 a 12

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