1 2 3 4 UNITED STATES DISTRICT COURT 5 SOUTHERN DISTRICT OF CALIFORNIA 6 7 ROBERT RAYA, Case No.: 18-cv-2643-WQH-BGS
8 Plaintiff, ORDER 9 v. 10 CALBIOTECH, 11 Defendant. 12
13 CALBIOTECH, 14 Counterclaimant, 15 v. 16 ROBERT RAYA, 17 Counterdefendant. 18 HAYES, Judge: 19 The matter before the Court is the Motion for Dismissal Sanctions and Monetary 20 Sanctions filed by Defendant Calbiotech, Inc. (ECF No. 21). 21 I. BACKGROUND 22 On November 19, 2018, Plaintiff Robert Raya, proceeding pro se, initiated this 23 action by filing a Complaint against Defendant Calbiotech, Inc. (“Calbiotech”). (ECF No. 24 1). In the Complaint, Raya, a former employee of Calbiotech, alleges that Calbiotech 25 violated the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 26 1132, by failing or refusing to provide Raya with a summary plan description of 27 Calbiotech’s 401(k) profit sharing plan within thirty days of Raya’s request. Raya seeks 28 1 On May 21, 2019, Calbiotech filed a Counterclaim against Raya. (ECF No. 14). 2 Calbiotech alleges that by filing the Complaint, Raya breached a separation agreement 3 Raya signed when he terminated his employment with Calbiotech. Calbiotech seeks 4 declaratory relief, an order requiring Raya to pay back $12,500 in severance pay Raya 5 received from Calbiotech, and attorneys’ fees and costs. 6 On June 13, 2019, Raya filed a Motion to Dismiss Calbiotech’s Counterclaim. (ECF 7 No. 15). On August 15, 2019, the Court denied Raya’s Motion to Dismiss. (ECF No. 17). 8 On September 10, 2019, Calbiotech filed 1) a Motion to Compel Responses to Discovery 9 and for Sanctions (ECF No. 20); and 2) the Motion for Dismissal Sanctions and Monetary 10 Sanctions currently before the Court (ECF No. 21). In the Motion for Dismissal Sanctions, 11 Calbiotech requests the Court dismiss Raya’s Complaint and order monetary sanctions 12 pursuant to Federal Rule of Civil Procedure 37(d)(3) for Raya’s failure to respond to 13 Calbiotech’s Interrogatories. Calbiotech further requests the Court enter default judgment 14 against Raya for Raya’s failure to file an answer to Calbiotech’s Counterclaim. 15 On October 2, 2019, Raya filed an Answer to Calbiotech’s Counterclaim. (ECF No. 16 26). On October 4, 2019, Raya filed a Response in Opposition to Calbiotech’s Motion for 17 Dismissal Sanctions. (ECF No. 28). In the Response, Raya requests the Court deny 18 Calbiotech’s Motion for Dismissal Sanctions and grant Raya leave to file his Answer to 19 Calbiotech’s Counterclaim. Raya contends that he believed an August 19, 2019, email from 20 Calbiotech’s attorney, Corey Schechter, stating that Schechter planned to file an ex parte 21 motion seeking a two-month discovery deadline extension, meant that the case was in “a 22 two-month delay.” (Id. at 2). Based on this mistaken belief, Raya “took the opportunity to 23 focus on some personal matters that he could no longer neglect” and did not check his 24 email until September 4, 2019. (Id.) Raya contends: 25 Mr. Raya opened his mail after 1 ½ weeks to find 2 messages from Mr. Schechter, 1 email from Judge Skomal’s Chambers, 2 new Orders from the 26 court, 1 Failure to Appear, and 1 new deadline[.] In the confusion and panic 27 that ensued, Mr. Raya missed the Sep 9th deadline to Answer Calbiotech’s Counterclaim. 28 1 (Id.). 2 On October 8, 2019, Magistrate Judge Allison H. Goddard issued an Order granting 3 in part and denying in part Calbiotech’s Motion to Compel. (ECF No. 29). Judge Goddard 4 ordered Raya to serve responses to Calbiotech’s Interrogatories, Requests for Admission, 5 and Requests for Production of Documents by November 5, 2019. Judge Goddard extended 6 the fact discovery deadline as to Raya’s responses until November 27, 2019. 7 On October 10, 2019, Calbiotech filed a Reply in support of its Motion for Dismissal 8 Sanctions. (ECF No. 30). Calbiotech withdrew its request for dismissal and monetary 9 sanctions pursuant to Rule 37(d)(3). In the Reply, Calbiotech opposes Raya’s request for 10 leave to file his Answer to Calbiotech’s Counterclaim. Calbiotech contends that Raya fails 11 to show good cause for granting Raya’s request to file his Answer. Calbiotech contends 12 that Raya’s failure to check his email until September 4, 2019, does not explain why Raya 13 missed the September 9, 2019, deadline to answer the Counterclaim by more than three 14 weeks. Calbiotech contends that, absent an extension of time, Raya’s Answer is untimely 15 and should be stricken. Calbiotech maintains its request the Court enter default judgment 16 on the Counterclaim against Raya. 17 II. DISCUSSION 18 Rule 12 of the Federal Rules of Civil Procedure governs the deadlines to file 19 responsive pleadings. Rule 12(a)(4)(A) provides that, if the court denies a pre-answer 20 motion, then the answering party must serve a responsive pleading “within 14 days after 21 notice of the court’s action.” Rule 55 sets forth a two-step process for obtaining default 22 judgment against a non-responsive party. Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 23 1986). First, the clerk must enter a party’s default. Id.; Fed. R. Civ. P. 55(a). An entry of 24 default is appropriate “when a party against whom a judgment for affirmative relief is 25 sought has failed to plead or otherwise defend, and that failure is shown by affidavit or 26 otherwise.” Fed. R. Civ. P. 55(a). Once a party’s default has been entered, provided certain 27 28 1 conditions are met, the court has discretion to enter a default judgment. Eitel, 782 F.2d at 2 1471-72; Fed. R. Civ. P. 55(b). 3 Rule 12(f) of the Federal Rules of Civil Procedure provides that a court may “strike 4 from a pleading an insufficient defense or any redundant, immaterial, impertinent, or 5 scandalous matter.” A district court further has “inherent power” to sanction a party by 6 striking an answer. McCabe v. Arave, 827 F.2d 634, 639 n. 5, 640 (9th Cir. 1987). District 7 courts have “inherent equitable powers to dismiss actions or enter default judgments for 8 failure to prosecute, contempt of court, or abusive litigation practices.” TeleVideo Sys., Inc. 9 v. Heidenthal, 826 F.2d 915, 916 (9th Cir. 1987). Issuing a terminating sanction is “very 10 severe.” Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091, 1096 (9th 11 Cir. 2007) (quotation omitted). Striking an untimely answer or entering default judgment 12 as a sanction is justified only where a party has exhibited “willfulness, bad faith, or fault.” 13 McCabe, 827 F.2d at 640; Estrada v. Speno & Cohen, 244 F.3d 1050, 1055 (9th Cir. 2001).
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1 2 3 4 UNITED STATES DISTRICT COURT 5 SOUTHERN DISTRICT OF CALIFORNIA 6 7 ROBERT RAYA, Case No.: 18-cv-2643-WQH-BGS
8 Plaintiff, ORDER 9 v. 10 CALBIOTECH, 11 Defendant. 12
13 CALBIOTECH, 14 Counterclaimant, 15 v. 16 ROBERT RAYA, 17 Counterdefendant. 18 HAYES, Judge: 19 The matter before the Court is the Motion for Dismissal Sanctions and Monetary 20 Sanctions filed by Defendant Calbiotech, Inc. (ECF No. 21). 21 I. BACKGROUND 22 On November 19, 2018, Plaintiff Robert Raya, proceeding pro se, initiated this 23 action by filing a Complaint against Defendant Calbiotech, Inc. (“Calbiotech”). (ECF No. 24 1). In the Complaint, Raya, a former employee of Calbiotech, alleges that Calbiotech 25 violated the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 26 1132, by failing or refusing to provide Raya with a summary plan description of 27 Calbiotech’s 401(k) profit sharing plan within thirty days of Raya’s request. Raya seeks 28 1 On May 21, 2019, Calbiotech filed a Counterclaim against Raya. (ECF No. 14). 2 Calbiotech alleges that by filing the Complaint, Raya breached a separation agreement 3 Raya signed when he terminated his employment with Calbiotech. Calbiotech seeks 4 declaratory relief, an order requiring Raya to pay back $12,500 in severance pay Raya 5 received from Calbiotech, and attorneys’ fees and costs. 6 On June 13, 2019, Raya filed a Motion to Dismiss Calbiotech’s Counterclaim. (ECF 7 No. 15). On August 15, 2019, the Court denied Raya’s Motion to Dismiss. (ECF No. 17). 8 On September 10, 2019, Calbiotech filed 1) a Motion to Compel Responses to Discovery 9 and for Sanctions (ECF No. 20); and 2) the Motion for Dismissal Sanctions and Monetary 10 Sanctions currently before the Court (ECF No. 21). In the Motion for Dismissal Sanctions, 11 Calbiotech requests the Court dismiss Raya’s Complaint and order monetary sanctions 12 pursuant to Federal Rule of Civil Procedure 37(d)(3) for Raya’s failure to respond to 13 Calbiotech’s Interrogatories. Calbiotech further requests the Court enter default judgment 14 against Raya for Raya’s failure to file an answer to Calbiotech’s Counterclaim. 15 On October 2, 2019, Raya filed an Answer to Calbiotech’s Counterclaim. (ECF No. 16 26). On October 4, 2019, Raya filed a Response in Opposition to Calbiotech’s Motion for 17 Dismissal Sanctions. (ECF No. 28). In the Response, Raya requests the Court deny 18 Calbiotech’s Motion for Dismissal Sanctions and grant Raya leave to file his Answer to 19 Calbiotech’s Counterclaim. Raya contends that he believed an August 19, 2019, email from 20 Calbiotech’s attorney, Corey Schechter, stating that Schechter planned to file an ex parte 21 motion seeking a two-month discovery deadline extension, meant that the case was in “a 22 two-month delay.” (Id. at 2). Based on this mistaken belief, Raya “took the opportunity to 23 focus on some personal matters that he could no longer neglect” and did not check his 24 email until September 4, 2019. (Id.) Raya contends: 25 Mr. Raya opened his mail after 1 ½ weeks to find 2 messages from Mr. Schechter, 1 email from Judge Skomal’s Chambers, 2 new Orders from the 26 court, 1 Failure to Appear, and 1 new deadline[.] In the confusion and panic 27 that ensued, Mr. Raya missed the Sep 9th deadline to Answer Calbiotech’s Counterclaim. 28 1 (Id.). 2 On October 8, 2019, Magistrate Judge Allison H. Goddard issued an Order granting 3 in part and denying in part Calbiotech’s Motion to Compel. (ECF No. 29). Judge Goddard 4 ordered Raya to serve responses to Calbiotech’s Interrogatories, Requests for Admission, 5 and Requests for Production of Documents by November 5, 2019. Judge Goddard extended 6 the fact discovery deadline as to Raya’s responses until November 27, 2019. 7 On October 10, 2019, Calbiotech filed a Reply in support of its Motion for Dismissal 8 Sanctions. (ECF No. 30). Calbiotech withdrew its request for dismissal and monetary 9 sanctions pursuant to Rule 37(d)(3). In the Reply, Calbiotech opposes Raya’s request for 10 leave to file his Answer to Calbiotech’s Counterclaim. Calbiotech contends that Raya fails 11 to show good cause for granting Raya’s request to file his Answer. Calbiotech contends 12 that Raya’s failure to check his email until September 4, 2019, does not explain why Raya 13 missed the September 9, 2019, deadline to answer the Counterclaim by more than three 14 weeks. Calbiotech contends that, absent an extension of time, Raya’s Answer is untimely 15 and should be stricken. Calbiotech maintains its request the Court enter default judgment 16 on the Counterclaim against Raya. 17 II. DISCUSSION 18 Rule 12 of the Federal Rules of Civil Procedure governs the deadlines to file 19 responsive pleadings. Rule 12(a)(4)(A) provides that, if the court denies a pre-answer 20 motion, then the answering party must serve a responsive pleading “within 14 days after 21 notice of the court’s action.” Rule 55 sets forth a two-step process for obtaining default 22 judgment against a non-responsive party. Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 23 1986). First, the clerk must enter a party’s default. Id.; Fed. R. Civ. P. 55(a). An entry of 24 default is appropriate “when a party against whom a judgment for affirmative relief is 25 sought has failed to plead or otherwise defend, and that failure is shown by affidavit or 26 otherwise.” Fed. R. Civ. P. 55(a). Once a party’s default has been entered, provided certain 27 28 1 conditions are met, the court has discretion to enter a default judgment. Eitel, 782 F.2d at 2 1471-72; Fed. R. Civ. P. 55(b). 3 Rule 12(f) of the Federal Rules of Civil Procedure provides that a court may “strike 4 from a pleading an insufficient defense or any redundant, immaterial, impertinent, or 5 scandalous matter.” A district court further has “inherent power” to sanction a party by 6 striking an answer. McCabe v. Arave, 827 F.2d 634, 639 n. 5, 640 (9th Cir. 1987). District 7 courts have “inherent equitable powers to dismiss actions or enter default judgments for 8 failure to prosecute, contempt of court, or abusive litigation practices.” TeleVideo Sys., Inc. 9 v. Heidenthal, 826 F.2d 915, 916 (9th Cir. 1987). Issuing a terminating sanction is “very 10 severe.” Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091, 1096 (9th 11 Cir. 2007) (quotation omitted). Striking an untimely answer or entering default judgment 12 as a sanction is justified only where a party has exhibited “willfulness, bad faith, or fault.” 13 McCabe, 827 F.2d at 640; Estrada v. Speno & Cohen, 244 F.3d 1050, 1055 (9th Cir. 2001). 14 In this case, neither Party has complied with the procedural rules. Raya failed to 15 respond to the Counterclaim by the September 9, 2019, deadline.1 Raya then failed to seek 16 an extension of time from the Court before filing the Answer. Calbiotech failed to seek 17 entry of default before requesting the Court enter default judgment. Calbiotech improperly 18 moves to strike Raya’s Answer in its Reply. 19 Courts in this circuit regularly deny motions for default judgment where default has 20 not been previously entered. See, e.g., Arunachalam v. Stanford Health Care, No. 18-cv- 21 13995-TSH, 2018 U.S. Dist. LEXIS 155780, at *1 (N.D. Cal. Sep. 12, 2018) (holding that 22 motion for default judgment is “improperly before this Court” because default had not been 23 entered); Marty v. Green, No. 2:10-cv-01823 KJM KJN PS, 2011 U.S. Dist. LEXIS 11180, 24 at *3 (E.D. Cal. Jan. 28, 2011) (“Plaintiff’s motion for default judgment is denied because 25 plaintiff did not follow the procedural steps required to properly file a motion for default 26
27 1 The Court issued an Order denying Raya’s Motion to Dismiss Counterclaims on August 15, 2019. (ECF 28 1 judgment. Specifically, plaintiff failed to seek a clerk’s entry of default from the Clerk of 2 Court prior to filing his motion for default judgment.”); Norman v. Small, No. 09cv2235 3 WQH (NLS), 2010 U.S. Dist. LEXIS 133507, at *6 (S.D. Cal. Dec. 14, 2010) (denying 4 motion for default judgment where “the clerk has not entered default”). Calbiotech failed 5 to follow the “two-step process.” Eitel, 782 F.2d at 1471. Raya’s default has not been 6 entered. Calbiotech’s request the Court enter default judgment against Raya is not properly 7 before this Court. 8 Calbiotech further fails to provide a basis for the Court to exercise its inherent power 9 to sanction Raya by entering default judgment. Raya filed an Answer and has demonstrated 10 an intent to defend the Counterclaim against him. Raya did not intentionally fail to answer 11 the Counterclaim. The Court cannot conclude that Raya has demonstrated willfulness, bad 12 faith, or fault sufficient to impose the “severe” sanction of default judgment. Conn. Gen. 13 Life Ins. Co., 482 F.3d at 1096. Calbiotech’s request for default judgment is denied. 14 Calbiotech fails to provide a basis for the Court to strike Raya’s Answer. Calbiotech 15 does not contend the Answer contains any insufficient defense or any redundant, 16 immaterial, impertinent, or scandalous matter pursuant to Rule 12(f). Calbiotech fails to 17 provide a basis for the Court to conclude Raya exercised bad faith such that the Court 18 should exercise its inherent power to strike the Answer. McCabe, 827 F.2d at 640; see 19 Wynes v. Kaiser Permanente Hosps., No. 2:10-cv-00702-MCE, 2013 U.S. Dist. LEXIS 20 79235, at *4-5 (E.D. Cal. Jun. 5, 2013) (citing cases and explaining that “federal courts in 21 this and other circuits generally hold that the untimeliness of an answer, even if extreme . 22 . . is not, by itself, a sufficient reason for granting a motion to strike”). 23 Raya’s failure to timely respond to the Counterclaim was not intentional. See U.S. v. 24 Mesle, 615 F.3d 1085, 1091-92 (9th Cir. 2010) (setting aside default for good cause where 25 the defendant did not “intentionally fail to answer” or act with “bad faith, such as an 26 intention to take advantage of the opposing party, interfere with judicial decisionmaking, 27 or otherwise manipulate the legal process”) (quotation omitted). Raya has demonstrated an 28 intent to defend the claim against him and has proffered facts that, if true, constitute a 1 || defense that his waiver of his right to sue was not “knowing and voluntary.” Mesle, 615 2 at 1094; Gonda v. Permanente Med. Grp. Inc., 691 Fed. App’x 397, 399 (9th Cir. 3 ||2017); see Rombiero v. Unum Life Ins. Co. of Am., 761 F. Supp. 2d 862, 869 (N.D. Cal. 4 ||2010) (explaining that waivers of ERISA claims require a “heightened scrutiny” such that 5 ||“courts are obligated to ‘scrutinize an ostensible waiver with care in order to ensure that it 6 ||reflects the purposeful relinquishment of an employee’s rights’”) (quoting Morais v. 7 || Central Beverage Corp. Union Employees’ Supplemental Retirement Plan, 167 F.3d 709, 8 Uist Cir. 1999)). Calbiotech is not prejudiced by the untimely Answer. Judge Goddard 9 extended the deadline for Raya to respond to Calbiotech’s written discovery requests until 10 || November 5, 2019, and extended the fact discovery deadline as to Plaintiff's responses 11 |}/through November 27, 2019. Calbiotech propounded written discovery on both the 12 ||Complaint and Counterclaim and seeks responses related to the defenses raised in Raya’s 13 || Answer. Good cause exists for the Court to accept the late filing of Raya’s Answer. 14 || Calbiotech’s request the Court strike Raya’s Answer to the Counterclaim is denied. 15 CONCLUSION 16 IT IS HEREBY ORDERED that Motion for Dismissal Sanctions and Monetary 17 || Sanctions filed by Defendant Calbiotech, Inc. (ECF No. 21) is DENIED. 18 || Dated: November 4, 2019 BME: ie Z. A a 19 Hon. William Q. Hayes 0 United States District Court 21 22 23 24 25 26 27 28