Ronald Cupp v. TA Fintech, Inc.

• Court: District Court, N.D. California
• Decided: January 30, 2026
• Docket: 3:25-cv-07479
• Status: Unknown

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 RONALD CUPP, Case No. 25-cv-07479-TSH

10 Plaintiff, ORDER GRANTING MOTION TO SET 11 v. ASIDE DEFAULT

12 TA FINTECH, INC., Re: Dkt. No. 24 13 Defendant.

14 15 I. INTRODUCTION 16 Plaintiff Ronald Cupp brings this case against Defendant TA Fintech, Inc. for violations of 17 the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, et seq. Pending before the 18 Court is Defendant’s Motion to Set Aside Default. ECF No 24. Plaintiff filed an opposition (ECF 19 No. 25) and Defendant filed a reply (ECF No. 26). The Court finds this matter suitable for 20 disposition without oral argument and VACATES the February 12, 2026 hearing. Civ. L.R. 7- 21 1(b). For the reasons stated below, the Court GRANTS the motion. 22 II. BACKGROUND 23 Plaintiff is a resident of Rohnert Park, California. Compl. ¶ 3, ECF No. 1. Defendant is a 24 Delaware corporation, and its registered agent is Spiegel & Utrera, P.A., located at 9 East 25 Loockerman St., Ste. 202, Dover, Delaware 19901. Cruz Decl. ¶ 2, ECF No. 24-1. Defendant is a 26 national sales organization of securities trading and training for others under the name of Trade 27 Algo and Trade GPT. Compl. ¶ 6. Its primary business is selling memberships for themselves 1 Plaintiff alleges that from April 20 through May 16, 2024, Defendant violated the TCPA 2 by texting and calling him “97 times using automatic telephone dialing system on Plaintiffs [sic] 3 emergency cell phone 707-318-9929, with no prior express consent or permission given by 4 Plaintiff.” Id. ¶ 8; Cupp Decl. ¶ 3, ECF No. 11. Plaintiff “immediately revoked any perceived 5 consent, thru emails, calls, and texts from Defendant, plaintiff has instructed (Luke Russell) 6 through Email, phone (Rob, Seth, and another man), and by calling Corporate Office in New York 7 and the Agent in DE. to stop calling and texting.” Compl. ¶ 9. He states he “was told verbally and 8 through text messages that he would be removed from the ‘call list’. But call/text continued to 9 bombard Plaintiff.” Id. 10 On May 6, 2024, Plaintiff sent to Defendant “via certified mail a notice of intention to 11 commence action,” but Defendant did not respond. Id. ¶ 14. Plaintiff filed this case on September 12 4, 2025. He brings one claim for violation of the TCPA, 47 U.S.C. § 227(b). Compl. ¶¶ 19-25. 13 On September 8, 2025, Plaintiff filed a certificate of service, indicating Defendant had 14 been served at its 9 East Loockerman Street address in Delaware. ECF No. 5. After Defendant 15 failed to respond, Plaintiff moved for entry of default, ECF No. 6, and the Clerk entered 16 Defendant’s default on October 15, 2025, ECF No. 7. On October 17, 2025, Plaintiff filed a 17 motion for default judgment, which remains pending. ECF No. 11. 18 Defendant filed the present motion on January 2, 2026. 19 III. LEGAL STANDARD 20 Federal Rule of Civil Procedure 55(c) provides that a court may set aside an entry of 21 default for good cause. “To determine ‘good cause’, a court must consider three factors: (1) 22 whether the party seeking to set aside the default engaged in culpable conduct that led to the 23 default; (2) whether it had no meritorious defense; or (3) whether reopening the default judgment 24 would prejudice the other party.” United States v. Signed Pers. Check No. 730 of Yubran S. 25 Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (cleaned up). This standard is disjunctive and a 26 “finding that any one of these factors is true is sufficient reason for the district court to refuse to 27 set aside the default.” Id. “Crucially, however, judgment by default is a drastic step appropriate 1 (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)). 2 IV. DISCUSSION 3 A. Culpable Conduct 4 “A defendant’s conduct is culpable if he has received actual or constructive notice of the 5 filing of the action and intentionally failed to answer.” Mesle, 615 F.3d at 1092 (cleaned up, 6 emphasis in original). In this context, “intentionally” means that “a movant cannot be treated as 7 culpable simply for having made a conscious choice not to answer; rather, to treat a failure to 8 answer as culpable, the movant must have acted with bad faith, such as an intention to take 9 advantage of the opposing party, interfere with judicial decisionmaking, or otherwise manipulate 10 the legal process.” Id. at 1092-93 (cleaned up); see also TCI Grp. Life Ins. Plan v. Knoebber, 244 11 F.3d 691, 698 (9th Cir. 2001) (The Ninth Circuit has “typically held that a defendant’s conduct 12 was culpable for purposes of the [good cause] factors where there is no explanation of the default 13 inconsistent with a devious, deliberate, willful, or bad faith failure to respond.”), overruled on 14 other grounds, Egelhoff v. Egelhoff ex. rel. Breiner, 532 U.S. 141 (2001)). 15 Plaintiff argues Defendant’s culpable conduct caused the default because he served 16 Defendant’s registered agent in Delaware and Defendant’s officer in New York, yet Defendant 17 failed to respond. Opp’n at 3-4. However, even assuming service was proper, Rule 55(c) 18 culpability still turns on whether Defendant intentionally failed to respond. Defendant admits its 19 registered agent was served on September 8, 2025, and the agent forwarded the summons and 20 complaint by regular U.S. mail to its forwarding address in Los Angeles, California. Cruz Decl. 21 ¶¶ 2, 5. Around that time, however, the office administrator who normally checked and routed the 22 Los Angeles office mail had moved from a full-time position to a remote, part-time position. Id. ¶ 23 3. As a result, Defendant’s registered agent forwarded the complaint and subsequent court notices 24 in the mail, but none were opened or reviewed internally, and they were not escalated to 25 Defendant’s legal department in time to respond. Id. ¶¶ 2–4. 26 Defendant states it first learned of this case on December 3, 2025, when its legal 27 department discovered it while reviewing the online docket for an unrelated matter. Id. ¶ 5. That 1 backlog of unopened mail was discovered, including the summons, complaint, and subsequent 2 court notices in this matter. Id. ¶ 4. These materials were then forwarded for legal review. Id. 3 Defendant states it has updated its registered agent’s forwarding instructions and address to 4 prevent this process breakdown from recurring. Id. ¶¶ 7, 11. 5 The Court finds this evidence establishes that Defendant’s conduct was not culpable, as its 6 failure to respond resulted from a breakdown in mail forwarding and review, not a “devious, 7 deliberate, willful, or bad faith failure to respond.” Mesle, 615 F.3d at 1092; see also Smith v. 8 Santa Cruz Cnty., 2023 WL 3688096, at *3 (N.D. Cal. May 26, 2023) (“There is no evidence here 9 that Defendant’s neglect—for there was clearly neglect—was the result of a malicious effort to 10 thwart Plaintiffs’ prosecution of this case or the judicial process more generally.”). Accordingly, 11 given that “judgment by default is a drastic step appropriate only in extreme circumstances,” 12 Mesle, 615 F.3 at 1091, the Court finds Defendant’s conduct was not culpable. 13 B. Meritorious Defense 14 “A defendant seeking to vacate a default judgment must present specific facts that would 15 constitute a defense. But the burden on a party seeking to vacate a default judgment is not 16 extraordinarily heavy.” Mesle, 615 F.3d at 1094 (quoting TCI Group, 244 F.3d at 700). “All that 17 is necessary to satisfy the ‘meritorious defense’ requirement is to allege sufficient facts that, if 18 true, would constitute a defense: the question whether the factual allegation is true is not to be 19 determined by the court when it decides the motion to set aside the default. Rather, that question 20 would be the subject of the later litigation.” Id. (cleaned up). This test is to be liberally construed 21 under Rule 55(c). Id. at 1091 n.1. 22 For the purpose of setting aside default, the Court finds Defendant has shown it has 23 potentially meritorious defenses, including whether Plaintiff provided permission to be contacted, 24 whether it contacted Plaintiff using an automatic telephone dialing system, and whether it 25 implemented reasonable practices and procedures to effectively prevent telephone solicitations in 26 violation of the regulations. See Mot. at 6-7. Plaintiff contends Defendant’s arguments have no 27 merit because his version of the facts show otherwise. Opp’n at 4-5. However, Plaintiff’s position 1 of the later litigation.” Mesle, 615 F.3d at 1094 (cleaned up). In view of the minimal burden 2 facing Defendant at this stage, the Court finds it has satisfied this factor. 3 C. Prejudice 4 Prejudice results when the “plaintiff’s ability to pursue his claim will be hindered.” Smith, 5 2023 WL 3688096, at *3 (quotations and citation omitted). It “must result in greater harm than 6 simply delaying resolution of the case.” Mesle, 615 F.3 at 1095 (quoting TCI Group, 244 F.3d at 7 701). 8 Plaintiff argues Defendant’s delay prejudiced him because “[a]s pro se, I incurred $502 9 costs (filing/service) and hours preparing filings. Reopening forces merits litigation, delaying 10 remedy for invasions of privacy.” Opp’n at 5. However, Plaintiff would have incurred these costs 11 regardless of whether Defendant appeared prior to entry of default, and the cost of litigating “is 12 simply not cognizable under [the] prejudice factor.” TCI Group, 244 F.3d at 701. While Plaintiff 13 argues he faces prejudice because “[r]eopening forces merits litigation,” Opp’n at 5, “merely being 14 forced to litigate on the merits cannot be considered prejudicial” because a plaintiff would have 15 had to do so anyway had there been no default. TCI Group, 244 F.3d at 701; see also Yan v. Gen. 16 Pot, Inc., 78 F. Supp. 3d 997, 1005 (N.D. Cal. 2015) (“[T]he fact that a party may be denied a 17 quick victory is not sufficient to deny relief from entry of default.”) (citing Bateman v. U.S. Postal 18 Serv., 231 F.3d 1220, 1225 (9th Cir. 2000)). Rather, the delay “must result in tangible harm such 19 as loss of evidence, increased difficulties of discovery, or greater opportunity for fraud or 20 collusion.” TCI Group, 244 F.3d at 701 (quoting Thompson v. Am. Home Assurance Co., 95 F.3d 21 429, 433–34 (9th Cir. 1996)). None of these have been shown here. 22 Given the balance of factors and the importance of resolving a case on its merits, the Court 23 finds that prejudice would be minimal in this case. As Defendant has now appeared and is ready 24 to proceed with litigating the merits of the case, the Court finds this factor weighs in favor of 25 setting aside default. 26 V. CONCLUSION 27 For the reasons stated above, the Court GRANTS Defendants’ motion to set aside default. ] PREJUDICE. Defendant shall file its responsive pleading by February 13, 2026. 2 IT IS SO ORDEED. 3 4 || Dated: January 30, 2026

THOMAS S. HIXSON 6 United States Magistrate Judge 7 8 9 10 1] a 12

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