1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 United States of America, No. CV-20-08072-PCT-JAT
10 Plaintiff, ORDER
11 v.
12 Jeffrey S Page,
13 Defendant. 14 15 Pending before the Court is Defendant Jeffrey Page’s motion to set aside default, 16 (Doc. 48). The Government responded, (Doc. 49). For the following reasons, the Court will 17 deny Defendant’s motion. 18 I. BACKGROUND 19 In short summary, the Government sent Defendant an erroneous tax refund and 20 Defendant wrongly retained $277,641.01. (See generally Doc. 1; Doc. 46 at 1-2 (prior 21 Order with more detailed factual and procedural background)). In a previous Order dated 22 April 15, 2025, the Court granted the Government’s motion for default judgment. (Doc. 46 23 at 2-6). The Court also explained why Defendant’s motion to dismiss, (Doc. 40), did not 24 change the outcome of default judgment. (Doc. 46 at 7-8). Defendant now asks the Court 25 to set aside default judgment under Federal Rule of Civil Procedure 55(c). (See generally 26 Doc. 48). 27 II. LEGAL STANDARD 28 “Pursuant to Rule 55(c), a district court may set aside the entry of default upon a 1 showing of good cause. Once default judgment has been entered, relief is governed by Rule 2 60(b).” Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108, 1110 (9th Cir. 2011) 3 (emphasis added). Rule 60(b) sets forth six grounds for relief: “(1) mistake, surprise, or 4 excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment; (5) a 5 satisfied or discharged judgment; or (6) ‘extraordinary circumstances’ which would justify 6 relief.” School Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1263 (9th 7 Cir. 1993) (citation omitted). The moving party bears the burden of proving the existence 8 of a basis for Rule 60(b) relief. Cassidy v. Tenorio, 856 F.2d 1412, 1415 (9th Cir. 1988). 9 Although the moving party’s factual allegations are to be accepted as true, mere legal 10 conclusions, general denials, or simple assertions are insufficient to justify overturning the 11 underlying judgment. Id. 12 III. DISCUSSION 13 a. Rule 60(b)(1) 14 Defendant argues “good cause exists to set aside default.” (Doc. 48 at 1). “Good 15 cause” is the standard under Rule 55(c). However, as discussed above, Rule 55(c) does not 16 apply after default judgment has been entered, as it has been in this case, (Doc. 46). Rule 17 60(b) is therefore the governing rule. Although Defendant does not reference a subsection 18 of Rule 60(b), or any caselaw, his argument loosely tracks the three-factor test for relief 19 under Rule 60(b)(1).1 Thus, the Court will liberally construe Defendant’s motion to set 20 aside default judgment and address Defendant’s theory of relief under Rule 60(b)(1). 21 “Where a defendant seeks relief under Rule 60(b)(1) based upon ‘excusable 22 neglect,’ the court applies the same three factors governing the inquiry into ‘good cause’ 23 under Rule 55(c).” Brandt, 653 F.3d at 1110. “Those factors, which courts consistently 24 refer to as the ‘Falk factors,’ are: (1) whether the plaintiff will be prejudiced, (2) whether 25 the defendant has a meritorious defense, and (3) whether culpable conduct of the defendant 26 led to the default.” Id. (citing Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)). 27 Here, the Falk factors favor the Government. First, the Government would be
28 1 This makes sense because, as discussed below, the factors for Rule 55(c) and Rule 60(b)(1) are the same. 1 prejudiced if default was set aside. Even though the Government recovered $210,000, 2 Defendant kept $277,641.01 of the Government’s money. If default was set aside, the 3 Government would have to restart its efforts to recover this money, in 2025, in a case that 4 was filed in 2020. Moreover, the Government has already given Defendant numerous 5 opportunities to voluntarily return the remaining money. Defendant has not done so, which 6 suggests that the Government’s only recourse is through litigation. 7 Second, Defendant has not presented a meritorious defense. In fact, Defendant 8 admits that he “receiv[ed] an erroneous refund and acknowledges the obligation to resolve 9 the remaining balance.” (Doc. 48 at 2). And although Defendant “strongly disputes the 10 accumulation of interest” during the appeal, as discussed below, such is not a meritorious 11 defense. 12 Defendant also argues that his absence from this case is excused by “poor legal 13 guidance.” (Doc. 48 at 1). As the Court previously explained, “[w]hile this may be a reason 14 to pursue a separate legal action against the unnamed individual who allegedly gave this 15 legal advice, the existence of bad legal advice, or regret about a prior decision, does not, 16 and cannot, undo the entry of default.” (Doc. 46 at 5 n. 4). 17 Finally, while a closer call, Defendant’s culpable conduct at least arguably led to 18 the default. Defendant does not dispute the Government’s assertion that he has been aware 19 of this case from the beginning. Instead, Defendant argues that he did not appear for a 20 variety of other reasons, many of which have already been considered by the Court. (See, 21 e.g., Doc. 46 at 5-6). Here, Defendant again says that he “believed in good faith that the 22 case was closed and that no further action was required” while the case was on appeal. 23 (Doc. 48 at 1). However, as the Government notes, Defendant was represented by counsel 24 during the appeal to the Ninth Circuit. (Doc. 49 at 2). It is therefore extremely unlikely that 25 Defendant was unaware of the case’s ongoing nature at that time. In conclusion, Defendant 26 is not entitled to relief under Rule 60(b)(1). 27 b. Amount of Interest 28 Defendant also asks the Court to “[r]ecalculate the judgment amount” to “exclude[e] 1 || interest accrued between October 25, 2021 and September 24, 2024, when this case was 2|| dismissed.” (Doc. 48 at 2). In other words, Defendant asks the Court to “abate,” or 3|| “remove,” the interest that accrued while Defendant’s case was being appealed.” 4 An erroneous tax refund that is recoverable by suit pursuant to 26 U.S.C. § 7405, 5 || like the erroneous refund here is, “shall bear interest . . . from the date of the payment of || the refund.” 26 U.S.C. § 6602 (emphasis added). As the Ninth Circuit held in this case, 7\| “the date of the payment of the refund” is the date that the refund check cleared. (Doc. 33- || 1 at 8). Put together, the following is clear: interest on an erroneous refund accrues from the date that the refund check cleared. The Court? does not have discretion under the statute to “pause” interest accrual or to remove interest already accrued.* 11 IV. CONCLUSION 12 Accordingly, 13 IT IS ORDERED that Defendant’s motion to set aside default, (Doc. 48), is DENIED. 15 Dated this 2nd day of May, 2025. 16 17 18 James A. Teilborg 19 Senior United States District Judge 20 21 ? October 25, 2021 is the date that the Court dismissed this case with prejudice as untimely 22|| and barred by the statute of limitations. (See generally Doc. 23). September 24, 2024 is the date that the Court ordered Plaintiff to either file a motion for default judgment or a status 23 report regarding how the case should proceed. (See generally Doc. 34). In between October 25, 2021 and eptember 24, 2024, the Government appealed. (See generally Doc.
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 United States of America, No. CV-20-08072-PCT-JAT
10 Plaintiff, ORDER
11 v.
12 Jeffrey S Page,
13 Defendant. 14 15 Pending before the Court is Defendant Jeffrey Page’s motion to set aside default, 16 (Doc. 48). The Government responded, (Doc. 49). For the following reasons, the Court will 17 deny Defendant’s motion. 18 I. BACKGROUND 19 In short summary, the Government sent Defendant an erroneous tax refund and 20 Defendant wrongly retained $277,641.01. (See generally Doc. 1; Doc. 46 at 1-2 (prior 21 Order with more detailed factual and procedural background)). In a previous Order dated 22 April 15, 2025, the Court granted the Government’s motion for default judgment. (Doc. 46 23 at 2-6). The Court also explained why Defendant’s motion to dismiss, (Doc. 40), did not 24 change the outcome of default judgment. (Doc. 46 at 7-8). Defendant now asks the Court 25 to set aside default judgment under Federal Rule of Civil Procedure 55(c). (See generally 26 Doc. 48). 27 II. LEGAL STANDARD 28 “Pursuant to Rule 55(c), a district court may set aside the entry of default upon a 1 showing of good cause. Once default judgment has been entered, relief is governed by Rule 2 60(b).” Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108, 1110 (9th Cir. 2011) 3 (emphasis added). Rule 60(b) sets forth six grounds for relief: “(1) mistake, surprise, or 4 excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment; (5) a 5 satisfied or discharged judgment; or (6) ‘extraordinary circumstances’ which would justify 6 relief.” School Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1263 (9th 7 Cir. 1993) (citation omitted). The moving party bears the burden of proving the existence 8 of a basis for Rule 60(b) relief. Cassidy v. Tenorio, 856 F.2d 1412, 1415 (9th Cir. 1988). 9 Although the moving party’s factual allegations are to be accepted as true, mere legal 10 conclusions, general denials, or simple assertions are insufficient to justify overturning the 11 underlying judgment. Id. 12 III. DISCUSSION 13 a. Rule 60(b)(1) 14 Defendant argues “good cause exists to set aside default.” (Doc. 48 at 1). “Good 15 cause” is the standard under Rule 55(c). However, as discussed above, Rule 55(c) does not 16 apply after default judgment has been entered, as it has been in this case, (Doc. 46). Rule 17 60(b) is therefore the governing rule. Although Defendant does not reference a subsection 18 of Rule 60(b), or any caselaw, his argument loosely tracks the three-factor test for relief 19 under Rule 60(b)(1).1 Thus, the Court will liberally construe Defendant’s motion to set 20 aside default judgment and address Defendant’s theory of relief under Rule 60(b)(1). 21 “Where a defendant seeks relief under Rule 60(b)(1) based upon ‘excusable 22 neglect,’ the court applies the same three factors governing the inquiry into ‘good cause’ 23 under Rule 55(c).” Brandt, 653 F.3d at 1110. “Those factors, which courts consistently 24 refer to as the ‘Falk factors,’ are: (1) whether the plaintiff will be prejudiced, (2) whether 25 the defendant has a meritorious defense, and (3) whether culpable conduct of the defendant 26 led to the default.” Id. (citing Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)). 27 Here, the Falk factors favor the Government. First, the Government would be
28 1 This makes sense because, as discussed below, the factors for Rule 55(c) and Rule 60(b)(1) are the same. 1 prejudiced if default was set aside. Even though the Government recovered $210,000, 2 Defendant kept $277,641.01 of the Government’s money. If default was set aside, the 3 Government would have to restart its efforts to recover this money, in 2025, in a case that 4 was filed in 2020. Moreover, the Government has already given Defendant numerous 5 opportunities to voluntarily return the remaining money. Defendant has not done so, which 6 suggests that the Government’s only recourse is through litigation. 7 Second, Defendant has not presented a meritorious defense. In fact, Defendant 8 admits that he “receiv[ed] an erroneous refund and acknowledges the obligation to resolve 9 the remaining balance.” (Doc. 48 at 2). And although Defendant “strongly disputes the 10 accumulation of interest” during the appeal, as discussed below, such is not a meritorious 11 defense. 12 Defendant also argues that his absence from this case is excused by “poor legal 13 guidance.” (Doc. 48 at 1). As the Court previously explained, “[w]hile this may be a reason 14 to pursue a separate legal action against the unnamed individual who allegedly gave this 15 legal advice, the existence of bad legal advice, or regret about a prior decision, does not, 16 and cannot, undo the entry of default.” (Doc. 46 at 5 n. 4). 17 Finally, while a closer call, Defendant’s culpable conduct at least arguably led to 18 the default. Defendant does not dispute the Government’s assertion that he has been aware 19 of this case from the beginning. Instead, Defendant argues that he did not appear for a 20 variety of other reasons, many of which have already been considered by the Court. (See, 21 e.g., Doc. 46 at 5-6). Here, Defendant again says that he “believed in good faith that the 22 case was closed and that no further action was required” while the case was on appeal. 23 (Doc. 48 at 1). However, as the Government notes, Defendant was represented by counsel 24 during the appeal to the Ninth Circuit. (Doc. 49 at 2). It is therefore extremely unlikely that 25 Defendant was unaware of the case’s ongoing nature at that time. In conclusion, Defendant 26 is not entitled to relief under Rule 60(b)(1). 27 b. Amount of Interest 28 Defendant also asks the Court to “[r]ecalculate the judgment amount” to “exclude[e] 1 || interest accrued between October 25, 2021 and September 24, 2024, when this case was 2|| dismissed.” (Doc. 48 at 2). In other words, Defendant asks the Court to “abate,” or 3|| “remove,” the interest that accrued while Defendant’s case was being appealed.” 4 An erroneous tax refund that is recoverable by suit pursuant to 26 U.S.C. § 7405, 5 || like the erroneous refund here is, “shall bear interest . . . from the date of the payment of || the refund.” 26 U.S.C. § 6602 (emphasis added). As the Ninth Circuit held in this case, 7\| “the date of the payment of the refund” is the date that the refund check cleared. (Doc. 33- || 1 at 8). Put together, the following is clear: interest on an erroneous refund accrues from the date that the refund check cleared. The Court? does not have discretion under the statute to “pause” interest accrual or to remove interest already accrued.* 11 IV. CONCLUSION 12 Accordingly, 13 IT IS ORDERED that Defendant’s motion to set aside default, (Doc. 48), is DENIED. 15 Dated this 2nd day of May, 2025. 16 17 18 James A. Teilborg 19 Senior United States District Judge 20 21 ? October 25, 2021 is the date that the Court dismissed this case with prejudice as untimely 22|| and barred by the statute of limitations. (See generally Doc. 23). September 24, 2024 is the date that the Court ordered Plaintiff to either file a motion for default judgment or a status 23 report regarding how the case should proceed. (See generally Doc. 34). In between October 25, 2021 and eptember 24, 2024, the Government appealed. (See generally Doc. 25 24 (notice of appca dated December 20, 2021); Doc. 33 (Ninth Circuit mandate dated September 23, 2024)). | 3 On the other hand, it appears that the Secretary of the Treasury has the ability to abate the accrual of interest in some, limited circumstances. See, e.g., 26 U.S.C. § 6404. Nonetheless, 26|| because the statute permits the Secretary, not the Court, to grant an abatement, it is not for this Court to opine on whether those limited circumstances are present here. 4 For this reason, courts have advised recipients of erroneous refund checks to “retain[] the erroneous refund check while inquiring about its validity. or [] return[] it to the IRS uncashed.” United States v. Lasbury, No. CIV 82-1212-PHX-VAC, 1983 WL 1682, at *3 (D. Ariz. Nov. 22, 1983). -4-