(PC) Gonzalez v. James ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 JAIME CESAR GONZALEZ, No. 1:23-cv-01505-JLT-SAB (PC) 12 Plaintiff, FINDINGS AND RECOMMENDATION RECOMMENDING DEFENDANTS’ 13 v. MOTION TO SET ASIDE ENTRY OF DEFAULT BE GRANTED 14 JOON KEE JAMES, et al. (ECF No. 22) 15 Defendants. 16 17 Plaintiff is proceeding pro se and in forma pauperis in this action filed pursuant to 42 18 U.S.C. § 1983. 19 Currently before the Court is Defendants’ motion to set aside the entry of default, filed 20 August 20, 2024. (ECF No. 22.) 21 I. 22 BACKGROUND 23 This action is proceeding against Defendants Joon Kee James, Sabrina M. Kurezeski, and 24 Gerald Edwards for deliberate indifference to Plaintiff’s serious medical need.1 25 On March 29, 2024, the summons were returned executed as to Defendants Joon Kee 26 James, Sabrina M. Kurczeski (erroneously sued as Sabrina M. Kurezeski), and Gerald Edwards. 27 (ECF No. 14.) These Defendants did not timely respond to the complaint, despite being 28 1 On August 15, 2024, the Court granted Defendant Vu Quang Huynh’s motion to dismiss. (ECF No. 21.) 1 personally served with process. (ECF No. 14.) Therefore, on July 2, 2024, the Court entered 2 default as to these Defendants. (ECF No. 17.) 3 On August 20, 2024, Defendants Kurczeski and Edwards filed a motion to set aside the 4 entry of default. (ECF No. 21.) Plaintiff has not filed an opposition and the time to do so has 5 passed. Local Rule 230(l). 6 II. 7 DISCUSSION 8 Federal Rule of Civil Procedure Rule 55(c) provides that a “court may set aside an entry 9 of default for good cause.” Fed. R. Civ. P. 55(c). “The ‘good cause’ standard that governs 10 vacating an entry of default under Rule 55(c) is the same standard that governs vacating a default 11 judgment under Rule 60(b).” Franchise Holding II, LLC. v. Huntington Rests. Grp., Inc., 375 12 F.3d 922, 925 (9th Cir. 2004). In analyzing “good cause,” the Court considers three factors: “(1) 13 whether the party seeking to set aside the default engaged in culpable conduct that led to the 14 default; (2) whether it had no meritorious defense; or (3) whether reopening the default would 15 prejudice the other party.” United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 16 F.3d 1085, 1091 (9th Cir. 2010) (alterations and internal quotation marks omitted) (quoting 17 Franchise Holding II, 375 F.3d at 925-26). This standard “is disjunctive, such that a finding that 18 any one of these factors is true is sufficient reason for the district court to refuse to set aside the 19 default.” Id. The moving party bears the burden of demonstrating that these factors favor setting 20 aside the default. See Franchise Holding II, 375 F.3d at 926. 21 “[D]efault judgments are generally disfavored; whenever it is reasonably possible, cases 22 should be decided on their merits.” Schwab v. Bullock’s Inc., 508 F.2d 353, 355 (9th Cir. 1974). 23 See also Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984) (“[J]udgment by default is a drastic step 24 appropriate only in extreme circumstances; a case should, whenever possible, be decided on the 25 merits.”). 26 Defendants argue that their failure to timely respond to the first amended complaint is not 27 the product of willful or culpable conduct, they have a meritorious defense to the allegations 28 made against them in this action, and Plaintiff will not be prejudiced by an order setting aside the 1 entry of default. (ECF No. 21 at 2.) The Court agrees. 2 A. Defendants’ Conduct 3 A “defendant’s conduct is culpable if he has received actual or constructive notice of the 4 filing of the action and intentionally failed to answer.” Alan Neuman Productions, Inc. v. 5 Albright, 862 F.2d 1388, 1392 (9th Cir. 1988). “Neglectful failure to answer as to which the 6 defendant offers a credible, good faith explanation negating any intention to take advantage of the 7 opposing party, interfere with judicial decision making, or otherwise manipulate the legal process 8 is not ‘intentional[.]’ ” TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 697 (9th Cir. 2001), 9 overruled on other grounds by Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 147-50 (2001). 10 Defendants submit that they were notified in or around the end of March 2024 that AHTV 11 had accepted service of the summons and first amended complaint on their behalf. (Declaration of 12 Rachelle Roach (“Roach Decl.”), ¶ 4; Declaration of Gerald Edwards (“Edwards Decl.”), ¶ 3; 13 Declaration of Sabrina M. Kurczeski (“Kurczeski Decl.”), ¶ 3.) At that time, the Defendants were 14 advised by AHTV Risk Management that they did not need to do anything further until they were 15 contacted by a lawyer. (Roach Decl., ¶ 4; Edwards Decl., ¶ 3; Kurczeski Decl., ¶ 3.) Defendants 16 assumed that steps were taken to file their response to the first amended complaint, as they did 17 not hear anything further about the lawsuit. (Edwards Decl., ¶ 3; Kurczeski Decl., ¶ 3.) However, 18 due to an internal miscommunication, AHTV did not retain legal counsel until July 2024. (Roach 19 Decl., ¶ 4.) Defendants discovered on or about July 31, 2024 that a default had been entered 20 against them and steps were taken by Adventist Health Tehachapi Valley (“AHTV”) Risk 21 Management to investigate the circumstances leading to the failure to file the responsive 22 pleading, and to work with counsel in the preparation and filing of a motion to set aside the entry 23 of default. (Roach Decl., ¶ 4.) Based on Defendants’ submission, made under penalty of perjury, 24 the Court finds that they did not intentionally fail to file a response to the operative complaint. 25 B. Meritorious Defense 26 “[T]he burden on a party seeking to vacate a default judgment is not extraordinarily 27 heavy.” TCI Group Line Ins. Plan v. Knoebber, 244 F.3d 691, 700 (9th Cir. 2001). “All that is 28 necessary to satisfy the ‘meritorious defense’ requirement is to allege sufficient facts that, if true, 1 would constitute a defense[.]” U.S. v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 2 F.3d 1085, 1094 (9th Cir. 2010) (quoting TCI, 244 F.3d at 700); see also In re Stone, 588 F.2d 3 1316, 1319 n.2 (10th Cir. 1978) (“the purpose of the requirement is to show the trial court that a 4 sufficient defense is assertible”). “[T]he question whether the factual allegation [i]s true' is not to 5 be determined by the court when it decides the motion to set aside the default. Rather, that 6 question ‘would be the subject of the later litigation.’” Mesle, 615 F.3d at 1094 (quoting TCI, 244 7 F.3d at 700). 8 Here, although Defendants have not yet filed an answer to the operative complaint, they 9 submit that they are not government actors under section 1983 and they did not deny 10 refused to provide medical treatment to Plaintiff, but rather provided appropriate care and 11 treatment to Plaintiff. (Edwards Decl., ¶ 5; Kurczeski Decl., ¶ 5.) Rule 8 of the Federal Rules of 12 Civil Procedures allow that a “party that intends in good faith to deny all the allegations of a 13 pleading--including the jurisdictional grounds--may do so by a general denial.” Fed. R. Civ. P. 14 8(b)(3); see also Sanchez v. Hacienda Records and Recording Studio Inc., No. H–11–3855, 2013 15 WL 3457072, at *2 (S.D. Tex. July 9, 2013) (“Quiroz's statement that he is not liable for any of 16 the damages alleged by Sanchez is in the nature of a general denial.”). 17 C. Prejudice to Plaintiff 18 “To be prejudicial, the setting aside of a judgment must result in greater harm than simply 19 delaying resolution of the case. Rather, ‘the standard is whether [plaintiff's] ability to pursue his 20 claim will be hindered.’ ” TCI, 244 F.3d at 701 (quoting Falk 739 F.2d at 463). “[T]he delay must 21 result in tangible harm such as loss of evidence, increased difficulties of discovery, or greater 22 opportunity for fraud or collusion.” Thompson v. American Home Assur. Co., 95 F.3d 429, 433- 23 34 (6th Cir. 1996). 24 Here, Plaintiff did not file an opposition and there is nothing in the record to indicate that 25 the Plaintiff would be prejudiced if the entry of default was set aside. Indeed, there is no basis to 26 find that there would be any loss of evidence and the only harm in setting aside the judgment is a 27 mere delay in the resolution of the case. The minimal delay in this action does not outweigh the 28 public policy of resolving actions on the merits. 1 Accordingly, Defendants have shown that all of the relevant factors weigh in favor of 2 | setting aside default, and the motion to set aside entry of default should be granted. 3 Il. 4 RECOMMENDATION 5 Based on the foregoing, it is HEREBY RECOMMENDED that Defendants’ motion to set 6 | aside the entry of default be granted. 7 This Findings and Recommendation will be submitted to the United States District Judge 8 || assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(). Within fourteen (14) 9 | days after being served with this Findings and Recommendation, the parties may file written 10 | objections with the Court. The document should be captioned “Objections to Magistrate Judge’s 11 | Findings and Recommendation.” The parties are advised that failure to file objections within the 12 | specified time may result in the waiver of rights on appeal. Wilkerson v. Wheeler, 772 F.3d 834, 13 | 838-39 (9th Cir. 2014) (citing Baxter v. Sullivan, 923 F.2d 1391, 1394 (9th Cir. 1991)). 14 15 IT IS SO ORDERED. FA. ee 16 | Dated: _ September 27, 2024 UNITED STATES MAGISTRATE JUDGE 18 19 20 21 22 23 24 25 26 27 28