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Meeks v. Nutramax Laboratories Veterinary Sciences, Inc.

United States District Court, D. Montana, Missoula Division

December 12, 2019

MICHELLE MEEKS, Plaintiff,
v.
NUTRAMAX LABORATORIES VETERINARY SCIENCES, INC. d/b/a DASUQUIN; JACK VAUGHN d/b/a WINNING IMAGES, INC.; IPROMOTEU.COM, INC.; and JOHN DOES 1-10, Defendants.

          ORDER

          Dana L. Christensen, Chief Judge

         Before the Court is Defendant Jack Vaughn's Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 20) and Motion to Set Aside Default (Doc. 34). On August 15, 2019, the Clerk of Court entered default against Vaughn for failing to answer Meeks'Complaint (Doc. 1-1). (Doc. 11.) After receiving the notice of default, Vaughn hired local counsel who then filed a motion to dismiss for lack of personal jurisdiction, [1] represented Vaughn in the Court's Rule 26(f) conference, and then moved to set aside his default. For the reasons explained, the Court will grant the motion to set aside default and deny the motion to dismiss.

         Background

         In the spring of 2017, Plaintiff Michelle Meeks was an employee of the Missoula Veterinary Clinic. Through her work, Meeks won a solar charger as a promotional prize. For the next year, Meeks used her solar charger to charge her cell phone without incident and often left it on the dashboard of her 2007 Chevrolet Avalanche.

         On June 8, 2018, Meeks was at work when she noticed a flash in the parking lot. Upon second glance, Meeks noticed that her car was ablaze. Meeks immediately grabbed two nearby fire extinguishers. By the time she got outside, the flames had engulfed the front half of her vehicle. With the fire extinguisher, Meeks successfully put out the blaze but allegedly sustained personal injuries from smoke inhalation, stress, and vexation. When the Missoula Fire Department arrived on scene, its investigation determined that the probable cause of the fire was the solar charger.

         The solar charger ended up in Meeks' possession when four of these chargers were given to her employer, the Missoula Veterinary Clinic by Nutramax, a company that sells animal health products. Nutramax purchased these chargers from Defendant Jack Vaughn. Vaughn shipped the chargers directly to the vet clinic. Meeks now brings claims for strict products liability, negligence, breach of warranty, and punitive damages against Nutramax, Vaughn, and Vaughn's affiliate, IPU.

         Discussion

         I. Entry of Default

         Federal Rule of Civil Procedure 55(c) provides: "The court may set aside an entry of default for good cause." The party seeking relief bears a relatively light burden to show good cause, as "[j]udgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits." United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1089 (9th Cir. 2010) (citing Folk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)). To determine whether good cause exists, a court considers: "(1) whether [the party seeking to set aside the default] engaged in culpable conduct that led to the default; (2) whether [it] had [no] meritorious defense; or (3) whether reopening the default judgment would prejudice the other party." Id. at 1091.

         "A defendant's conduct is culpable if he has received actual or constructive notice of the filing of the action and intentionally failed to answer." Id. at 1092. Vaughn argues that his conduct was not culpable because he did not intentionally fail to answer the Complaint. Unfamiliar with litigation, Vaughn was under the misconception that contacting Meeks' counsel to dispute his involvement was a sufficient response to the summons. Vaughn insists that he "did not ignore the matter, but sent a letter to Ms. Meeks's attorneys explaining that he was in sales and had nothing to do with manufacturing the product." Vaughn claims this letter was sent on or about June 24, 2019. (Doc. 35 at 5-6.)

         Meeks' counsel insists that they never received this letter and that metadata on the copy of the letter submitted with Vaughn's motion to set aside default (Doc. 36-1) demonstrates that it was not created until August 19, 2019 (Doc. 39-3). In response, Vaughn explains that the metadata postdates the letter's origin because the copy he submitted was a reproduction of the original letter which was destroyed when his computer crashed. (Doc. 43 at 4-5.)

         On one hand, Vaughn swears that he contacted Meeks' counsel on or about June 24, 2019 and provides a plausible explanation for the metadata issue. (Doc. 45 at 2.) On the other hand, Marty Ohs, a paralegal and office manager at Meeks' counsel's firm swears that she never received this letter and that she is the person at her firm that collects the mail each day. (Doc. 39-1 at 2.) Taking both parties at their word, the letter was sent but never received. Based on these facts, the Court is not able to draw any inference that Vaughn engaged in culpable conduct.

         Next, "[a] defendant seeking to vacate a default... must present specific facts that would constitute a defense. But the burden on a party seeking to vacate a default judgment is not extraordinarily heavy." Id. at 1094. Vaughn generally argues that, if permitted to participate in the litigation, he will assert defenses such as unreasonable misuse or open and obvious danger, he will argue that the product adequately warned consumers of its danger, and he will assert that Meeks' damage claims are engorged. (Doc. 35 at 6-9.) These general denials do not support Vaughn's obligation to put forth "specific facts" that support a meritorious defense. Nevertheless, pertinent to Meeks' claim for punitive damages, Vaughn argues that he did not have any prior knowledge that the chargers had a history of causing fires. (Id. at 9.) By alleging this sole "specific fact," Vaughn has met his minimal burden to show that he has a meritorious defense.

         Finally, the Court must consider whether setting aside the default will result in prejudice to Meeks. "To be prejudicial, the setting aside of a judgment must result in greater harm than simply delaying resolution of the case. Rather, the standard is whether [plaintiffs] ability to pursue his claim will be hindered." TCI Grp. Life Ins. Plan v. Knoebber,244 F.3d 691, 701 (9th Cir. 2001), as amended on denial ofreh'g andreh'g en banc (May 9, 2001) (internal quotation marks omitted). Meeks claims that Vaughn's participation will prejudice her case because Vaughn has already indicated his willingness to misrepresent the truth. The Court has already determined that Vaughn's conduct was not culpable. Vaughn's intention in submitting a reproduction of a previously-destroyed letter without calling attention to this fact, while ...


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