Cruz v. Cuper Electric LLC ( 2023 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Brigido Cruz, No. CV-23-01677-PHX-ROS 10 Plaintiff, ORDER 11 v. 12 Cuper Electric LLC, et al., 13 Defendants. 14 15 Plaintiff has filed a Motion for Default Judgment against Defendants (Doc. 12). 16 Defendants have not filed a response, but instead filed a “Motion to Vacate,” which the 17 Court construes as a Motion to Vacate Entry of Default (Doc. 13). For the following 18 reasons, the Court will grant Defendants’ Motion to Vacate (Doc. 13), set aside the entry 19 of default against Defendants (Doc. 11), and deny the Motion for Default Judgment (Doc. 20 12) as moot. 21 BACKGROUND 22 Plaintiff filed this action for the recovery of unpaid wages under the Fair Labor 23 Standards Act (“FLSA”), the Arizona Minimum Wage Act (“AMWA”), and the Arizona 24 Wage Act (“AWA”) on August 17, 2023. (Doc. 1, “Compl.”). Defendants are an 25 electrician company and two individuals alleged to be owners and managers thereof. Id. 26 at ¶¶ 9-11. Plaintiff asserts Defendants did not pay him any wages during the final eight 27 weeks of his employment with Defendants as an electrician. Id. at ¶¶ 33-37. Defendant 28 Cuper Electric LLC was served on August 22, 2023, (Doc. 7) and Defendants Cupertino 1 Montejo Silvestre and Dawn Jones (identified in the Complaint as “Jane Doe Silvestre”) 2 were served on October 11, 2023 (Docs. 8 and 9). Defendants did not file an answer or 3 otherwise participate in the action and default was entered against Defendants pursuant to 4 Fed. R. Civ. P. 55(a) on November 7, 2023. (Doc. 11). On November 8, 2023, Plaintiff 5 filed a motion for default judgment pursuant to Fed. R. Civ. P. 55(b)(2). (Doc. 12, “Mot.”). 6 Defendants then filed a “Motion to Vacate” on November 16, 2023 seemingly 7 seeking to set aside their default, stating they were not “aware [they] needed to respond by 8 a certain date” and “asking for more time.” (Doc. 13). 9 MOTION TO VACATE ENTRY OF DEFAULT 10 Defendants move to vacate the entry of default against them. (Doc. 13). Plaintiff 11 responds arguing Defendants fail to meet their burden to show good cause for setting aside 12 an entry of default. (Doc. 14). 13 A court may set aside an entry of default for “good cause shown.” Fed. R. Civ. P. 14 55(c). The Ninth Circuit’s “good cause” standard for vacating an entry of default under 15 Rule 55(c) considers three factors: (1) whether the defaulting party engaged in culpable 16 conduct that led to the default; (2) whether the defaulting party had a meritorious defense; 17 or (3) whether reopening the default would prejudice the non-defaulting party. United 18 States v. Signed Pers. Check No. 730 of Yubran S. Mesle (“Mesle”), 615 F.3d 1085, 1091 19 (9th Cir. 2010). Default judgment “is a drastic step appropriate only in extreme 20 circumstances,” and the “rules for determining when a default should be set aside are 21 solicitous toward movants, especially those whose actions leading to the default were taken 22 without the benefit of legal representation.” Id. at 1989. 23 A. Culpable Conduct 24 In assessing whether defendant’s conduct leading to default was culpable, courts 25 look to whether the failure to answer was in bad faith. Id. at 1092. A defendant’s conduct 26 if culpable if the defendant “has received actual or constructive notice of the filing and 27 intentionally failed to answer” in order to “take advantage of the opposing party, interfere 28 with judicial decision making, or otherwise manipulate the legal process.” Id. A failure to 1 respond is never assumed to be intentional unless “the moving party is a legally 2 sophisticated entity or individual.” Id. at 1093. Merely failing to respond is not sufficient 3 to establish culpable conduct. 4 In the Motion to Vacate (Doc. 13), Defendants explain they were not aware they 5 “needed to respond by a certain date.” Plaintiff argues Defendants were properly served 6 and on notice that a lawsuit had been filed against them with a response due within 21 days. 7 Doc. 14 at 3. Plaintiff further alleges Plaintiff’s counsel spoke with Defendant Silvestre 8 on several occasions about the lawsuit, the applicable 21-day deadline to answer the 9 complaint, and that Plaintiff would seek default judgment if Defendants did not timely 10 respond. Id. 11 Defendants’ conduct was not culpable. Defendants are not lawyers and were not 12 represented by counsel at the time of the default, meaning Defendants are not “legally 13 sophisticated” for the purposes of this analysis. There is no showing of any bad faith 14 related to Defendants’ failure to respond or that the circumstances of this case are 15 sufficiently extreme to justify default judgment. Plaintiff argues only that Defendants 16 knew of the deadline to answer and chose not to. This is not sufficient to establish culpable 17 conduct. 18 B. Meritorious Defenses 19 To justify vacating an entry of default based on a meritorious defense, a defendant 20 must present the Court “with specific facts that would constitute a defense.” Mesle, 615 21 F.3d at 1094. Defendants’ Motion only offers that they were not aware they needed to 22 respond by a certain date. (Doc. 13). This is not a cognizable defense. Since Defendants 23 did not offer specific facts related to any other potential defenses, this factor will not serve 24 as a basis for setting aside the entry of default. 25 C. Prejudice 26 To be considered prejudicial, vacating a default “must result in greater harm than 27 simply delaying resolution of the case.” Mesle, 615 F.3d at 1096. Here, Plaintiff does not 28 argue that granting Defendants’ Motion to Vacate (Doc. 13) would be prejudicial or result || in any harm to Plaintiffs ability to pursue his claim. There is no indication that allowing 2|| Defendants to participate in this action will result in anything more than a simple delay. || Thus, Plaintiff will not be prejudiced by setting aside the entry of default. 4 D. Conclusion 5 The Court finds that two of the three “good cause” factors under Rule 55(c) are met. || Since Defendants did not engage in culpable conduct and Plaintiff will not be prejudiced || by setting aside the default, the Court will grant Defendants’ Motion. 8 DEFAULT JUDGMENT 9 Since the Court will set aside the entry of default against Defendants, □□□□□□□□□□□ || Motion for Default Judgment is now moot and will be denied. 11 x x x 12 Accordingly, 13 IT IS ORDERED Defendants’ Motion to Vacate Entry of Default (Doc. 13) is GRANTED. The Clerk of Court shall set aside the default entered at Doc. 11 as to all 15 || Defendants. 16 IT IS FURTHER ORDERED Defendants shall answer or otherwise respond to 17 || the complaint by January 5, 2024. If Defendants do not wish to retain counsel in this action, they may reference the United States District Court for the District of Arizona’s 19 || website for information on proceeding without an attorney: https://www.azd.uscourts.gov/proceeding-without-attorney-0. This guide also contains information regarding free clinics where Defendants may be able to obtain advice. 22 IT IS FURTHER ORDERED Plaintiff's Motion for Default Judgment (Doc. 12) 23 || 1s DENIED as moot. 24 Dated this 13th day of December, 2023. fo `` = 25 — 26 Senior United States District Judge 28 -4-