Opinion
No. CIV.S-02-0041 MLS DAD
July 23, 2002
ORDER
This matter came before the court on July 19, 2002 for hearing on defendants Lonnie Glenn Schmidt, Connie Jo Schmidt, Deborah Arlene Manzer, Daniel Glenn Schmidt, and Donna Jo Maria's motions to set aside entry of default. Rex Lee appeared on behalf of plaintiff. Defendants Lonnie Glenn Schmidt and Daniel Glenn Schmidt, proceeding pro se, appeared on their own behalf. Defendants Connie Jo Schmidt, Deborah Arlene Manzer, and Donna Jo Maria, also proceeding pro se, did not appear as each of them filed a statement that she wished to submit her motion on the papers. There was no appearance on behalf of the "Cunningham group" of defendants. For the reasons set forth below, defendants' motions are granted.
These defendants are represented by Clifford B. Malone, Jr. and include Clyde R. Cunningham; Marialice Cunningham; Harvey Chin; Christal Chin; Elizabeth G. Austin; John Parson; Betty Parson; Lawrence Cordell; Lidy Boogaard; Abraham Endicter; Estate of Evea Ring; Johannes H. Van der Kuil; Petronella Van der Kuil; Ida F. DiMartino; Zona C. Noren; Herbert James Schaus; Joyce Schaus; William Hausman; Ronald Hays; Doris Dean Henderson; George Thall; Dorothy Hall; Sam W. Kelly; Natalia Kelly; and Donald A. Dineen.
Federal Rule of Civil Procedure 55(a) provides as follows: "When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party's default." Rule 55(c) provides: "For good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b)."
"Absent an abuse of discretion, there is no error in setting aside a default where the judge finds good cause to do so." Mendoza v. Wright Vineyard Mgmt., 783 F.2d 941, 945 (9th Cir. 1986) (quoting Curry v. Jensen, 523 F.2d 387, 388 (9th Cir. 1975)) (internal quotations omitted). "The court's discretion is especially broad where, as here, it is entry of default that is being set aside, rather than a default judgment." Id. (citing Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981)). "A decision on a motion to set aside a default is not an abuse of discretion unless the court is `clearly wrong' in its determination of good cause." Id. (citingProvident Security Life Insurance Co. v. Gorsuch, 323 F.2d 839, 842 (9th Cir. 1963)); see also O'Connor v. State of Nev., 27 F.3d 357, 364 (9th Cir. 1994).
Finally, when determining whether to set aside entry of default pursuant to Rule 55(c), the court should weigh the factors considered when determining whether to set aside a default judgment pursuant to Rule 60(b). Those factors are (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. See Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984); O'Connor, 27 F.3d at 364; Mendoza, 783 F.2d at 945-46; Hawaii Carpenters' Trust Funds v. Stone, 794 F.2d 508, 513 (9th Cir. 1986).
In finding that the entries of default should be set aside, the undersigned is largely persuaded by each defendant's argument that the filing, or attempted filing, of a motion to dismiss was an attempt to "otherwise defend" this action within the meaning Rule 55(a). The United States initiated this action by filing its complaint on January 8, 2002. Defendants Connie Jo Schmidt and Lonnie Glenn Schmidt filed a motion to dismiss on January 31, 2002, as did defendant Donna Jo Maria. Defendant Daniel Glenn Schmidt lodged a motion to dismiss on February 5, 2002, and defendant Deborah Arlene Manzer claims to have filed a motion to dismiss on the same day, although the court file does not support this contention. While the defendants attempted to file their motions to dismiss with the court with varying success, it is undisputed that the United States received a copy of each motion. The United States also filed written opposition to those motions. Thus, at an early stage in the proceedings, the United States had notice of the defendants' intention to defend. By the time United States filed its opposition, the court also had notice of defendants' attempts to defend. These efforts constitute good cause for setting aside the entry of default as to each defendant.See Reiffin v. Microsoft Corp., 158 F. Supp.2d 1016, 1031-32 (N.D. Cal. 2001) (recognizing that motion to dismiss pursuant to Rule 12(b) is one way defendant can "otherwise defend" under Rule 55(a)"; Martin v. Spitzer, 1997 WL 931272, *3 (E.D. Cal. 1997) (Schwartz, J.) (same); Hudson v. State of N.C., 158 F.R.D. 78, 80 (E.D.N.C. 1994)(same); Wickstrom v. Ebert, 101 F.R.D. 26, 33 (D.C. Wis. 1984) (same).
The court never received a copy of Ms. Manzer's motion dismiss, and it ultimately struck the motions submitted by the other four defendants due to improper service and failure to notice the motions for hearing.
Consideration of the possible prejudice to plaintiff, the defenses asserted by defendants, and the culpability of defendants' conduct also supports setting aside the entries of default. There has been no showing of prejudice to plaintiff. This action is relatively new, and plaintiff is free to continue to prosecute it. Also, defendants have asserted that plaintiff's attempts to collect the taxes owed have violated certain provisions of the Fair Debt Collection Practices Act ("FDCPA") as well as due process. These defenses are asserted in defendants' motions, but plaintiff has not responded to them. Thus, while the court may have some questions as to the strength of the defenses, it cannot say at this time that they totally lack merit. Finally, while defendants' conduct to date has not been procedurally perfect, it has not been so culpable as to warrant the denial of their motions. The court also takes note of defendants' pro se status, and the representations at the hearing that defendants have no intention to delay this matter, and every intention to comply with the applicable Federal Rules of Civil Procedure and Local Rules of Practice.
Accordingly, defendants' motions to set aside entry of default are granted, and the defaults entered against Lonnie Glenn Schmidt, Connie Jo Schmidt, Deborah Arlene Manzer, Daniel Glenn Schmidt, and Donna Jo Maria are hereby set aside.
IT IS SO ORDERED.