Uribe v. Broadway Enterprises Two Incorporated ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Jessie Uribe, No. CV-20-01978-PHX-GMS 10 Plaintiff, ORDER 11 v. 12 Broadway Enterprises Two Incorporated, et al., 13 Defendants. 14 15 16 Before the Court is Plaintiff Jessie Uribe’s (“Plaintiff”) Motion for Entry of Default 17 Judgment, (Doc. 12), and Defendants Broadway Enterprises Two, Inc. dba Thrifty Car 18 Sales Gilbert, and Red Mountain Funding, Inc. (“Defendants”) Motion to Set Aside Entry 19 of Default, (Doc. 17). For the following reasons, Plaintiff’s Motion is Denied, and 20 Defendants’ Motion is granted. 21 BACKGROUND 22 On May 7, 2020, Plaintiff purchased a vehicle from Defendant Thrifty Car Sales 23 Gilbert (“Defendant Thrifty”). (Doc. 1 at 5.) Plaintiff alleges that, at the time of signing, 24 the agreement called for monthly payments of $192.92. Id. at 6. Thereafter, Defendant 25 Thrifty assigned the agreement to Defendant Red Mountain Funding, Inc. (“Defendant 26 RM”). Plaintiff claims that, prior to assignment, Defendant Thrifty altered the terms of the 27 agreement to require bi-monthly, rather than monthly, payments of $192.92, effectively 28 doubling the price of the vehicle. Id. 1 Plaintiff filed suit on October 9, 2020. She served Defendants on November 5, 2020 2 and November 8, 2020. (Doc. 6); (Doc. 7). Because Defendants had not answered the 3 Complaint or otherwise appeared in this action, the Clerk of the Court entered default 4 against Defendants on January 7, 2021. (Doc. 11.) Plaintiff sought entry of default 5 judgment from this Court on February 16, 2021. (Doc. 12.) Defendants entered an 6 appearance and moved to set aside the Clerk’s entry of default on May 19, 2021. (Doc. 17) 7 DISCUSSION 8 I. Legal Standard 9 Federal Rule of Civil Procedure 55(c) allows courts to set aside entry of default for 10 “good cause.” Courts are given broad discretion when considering whether to set aside 11 entry of default. O’Connor v. Nevada, 27 F.3d 357, 364 (9th Cir. 1994). In making its 12 determination, courts consider “(1) whether the party seeking to set aside the default 13 engaged in culpable conduct that led to the default; (2) whether it had no meritorious 14 defense; or (3) whether reopening the default judgment would prejudice the other party.” 15 United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th 16 Cir. 2010) (internal quotation marks and alterations omitted). Generally, default judgments 17 are strongly disfavored. Meadows v. Dominican Republic, 817 F.2d 517, 521 (9th Cir. 18 1987). 19 II. Analysis 20 The factors favor setting aside default. Although Defendants failed to answer or 21 appear before their Motion to Set Aside, they have demonstrated that they may have a 22 meritorious defense to Plaintiff’s claims. Defendants assert that the agreement executed 23 with Plaintiff contained a handwritten alteration providing for biweekly payment and that 24 Plaintiff signed a separate agreement to that effect. (Doc. 17 at 11–13.) If Defendants’ 25 assertions are accepted, they constitute a defense to Plaintiff’s claims. Plaintiff’s qualms 26 with the authenticity and credibility of the documentation present disputes to be resolved 27 by a finder of fact, rather than reasons that default judgment is appropriate. 28 Moreover, “[t]o prevent setting aside default, prejudice to a non-moving party must result in greater harm than simply delaying resolution of the case, rather, the standard is || whether the non-movant’s ability to pursue his claim will be hindered.” FOC Fin. Ltd. P’ship v. Nat’l City Com. Cap. Corp., 612 F. Supp. 2d 1080, 1084 (D. Ariz. 2009) (internal 4|| quotations, alterations, and citation omitted). The Court is mindful that Plaintiff has 5 || continued to pay the disputed bimonthly payments while waiting for resolution of this case. || However, although these payments may create hardship, they do not demonstrate the kind 7\| of damage to Plaintiff's legal claim that courts understand as prejudicial. The factors 8 || therefore favor Defendants, and the motion to set aside default is granted. 9 CONCLUSION 10 For the reasons set forth above, Defendants have shown good cause for setting aside default. 12 IT IS THEREFORE ORDERED that Defendants’ Motion to Set Aside Entry of 13 || Default (Doc. 17) is GRANTED. 14 IT IS FURTHER ORDERED that Plaintiff's Motion for Entry of Default 15 || Judgment (Doc. 12) is DENIED as moot. 16 Dated this 25th day of May, 2021. 17 W, 18 A Whacrsay Fotos 19 Chief United States District Judge 20 21 22 23 24 25 26 27 28 -3-