United States District Court, D. Montana, Butte Division
FINDINGS & RECOMMENDATION
JEREMIAH C. LYNCH, UNITED STATES MAGISTRATE JUDGE.
Launa Lynn Roque and Jauhlee Murie Bornff have moved under
Federal Rule of Civil Procedure 55(c) to set aside the
default entered against them on January 23, 2018. Because
Roque and Bornff have established good cause for setting
aside the entry of default, their motion should be granted.
Richard Charles Lussy, appearing pro se, commenced this
action by filing a complaint on October 23, 2017. (Doc. 1).
On November 8, 2017, Lussy filed an amended complaint and had
summonses issued with respect to all Defendants. (Doc. 8). On
December 11, 2017, Lussy filed a document titled
“Unopposed Default Motion Affidavit Against Launa Lynn
Roque and Juahlee Murie Bornff by Plaintiff Pro Se for Final
Judgment.” (Doc. 11). Attached to the motion were
summonses and proofs of service for both Roque and Bornff.
(Doc. 11-1). On December 15, 2017, Lussy filed a document
titled “Amended Unopposed Default Motion” against
Roque and Bornff. (Doc. 15). The undersigned construed the
referenced documents as requests for the entry of default as
against Roque and Bornff.
December 20, 2017, Roque and Bornff appeared in the case by
way of a motion to dismiss for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6). (Doc. 18). The next
day, Roque and Bornff filed a response to Lussy's amended
motion for entry of default, and argued their appearance in
the case was timely because they had not been properly served
until December 2, 2017. (Doc. 20).
January 23, 2018, the undersigned entered an order directing
the Clerk of Court to enter default against Roque and Bornff.
The undersigned further found that the proper procedural
vehicle for Roque and Bornff to pursue at that juncture was a
motion to set aside the entry of default pursuant to Rule
55(c), and recommended that recommended their Rule 12(b)(6)
motion to dismiss for failure to state a claim be denied on
that basis. (Doc. 30).
January 23, 2018 the Clerk of Court entered default against
Roque and Bornff pursuant to Rule 55(a) (doc.31), and on
February 7, 2018, presiding United Stated District Court
Judge Brian Morris issued an order denying their Rule
12(b)(6) motion to dismiss for failure to state claim. (Doc.
the entry of default, Lussy filed a motion for default
judgment against Roque and Bornff pursuant to Rule 55(b)(2).
(Doc. 37). Roque and Bornff have in turn moved under Rule
55(c) to set aside the default entered against them on
January 23, 2018. (Doc. 39).
55(c) provides that “[t]he court may set aside an entry
of default for good cause....” Fed.R.Civ.P. 55(c).
Whether to set aside the entry of default is within the
court's discretion. See O'Connor v. State of
Nev., 27 F.3d 357, 364 (9thCir. 1994). In
determining whether “good cause” is present, the
court considers the same three factors its weighs in deciding
whether to grant relief from default judgment under Rule
60(b): “‘(1) whether the plaintiff will be
prejudiced, (2) whether the defendant has a meritorious
defense, and (3) whether culpable conduct of the defendant
led to the default.” Brandt v. American Bankers
Ins. Co. of Florida, 653 F.3d 1108, 1111
(9th Cir. 2011) (quoting Falk v. Allen,
739 F.2d 461, 463 (9th Cir. 1984)). This test is
applied more liberally in the Rule 55(c) context than it is
in the context of a motion to set aside a default judgment
under Rule 60(b). United States v. Signed Personal Check
No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 n.1
(9th Cir. 2011).
three factors are disjunctive, which means that the court may
deny a motion to set aside an entry of default “if any
of the three factors [is] true.” Franchise Holding
II, LLC v. Huntington Restaurants Group, Inc., 375 F.3d
922, 925-26 (9th Cir. 2004). The court is not
required to do so, however, and may, in the exercise of its
discretion, set aside a default even if it finds that one of
the “good cause” factors is true.
Brandt, 653 F.3d at 1111-12 (setting aside default
notwithstanding fact that defendant acted culpably).
“judgment by default is a drastic step, ” and one
that the Ninth Circuit cautions is “appropriate only in
extreme circumstances.” Mesle, 615 F.3d at
1091 (quoting Falk, 789 F.2d at 463). As a general
rule, “a case should, whenever possible, be decided on
the merits.” Mesle, 615 F.3d at 1091 (quoting
Falk, 789 F.2d at 463). “Where timely relief
is sought from a default...and the movant has a meritorious
defense, doubt, if any, should be resolved in favor of the
motion to set aside the default....”
O'Connor, 27 F.3d at 364 (quoting Mendoza v.
Wight Vineyard Management, 783 F.2d 941, 945
(9th Cir. 1986)). Nonetheless, the party seeking
to set aside the entry of default bears the burden of showing
that the “factors favor vacating the judgment.”
TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691,
696 (9th Cir. 2001) (overruled on other grounds,
Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141,
exists when a “plaintiff's ability to pursue his
claim will be hindered” if the court sets aside the
entry of default. TCI Group, 244 F.3d at 701.
Prejudice does not exist if the only harm is “simply
delaying resolution of the case.” TCI Group,
244 F.3d at 701. Nor is a plaintiff prejudiced by losing a
“quick victory” and being forced ...