Pruco Life Insurance Company v. California Energy Development, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PRUCO LIFE INSURANCE Case No.: 18cv2280 DMS (AHG) COMPANY, an Arizona Corporation, 12 ORDER GRANTING CALIFORNIA Plaintiff, 13 ENERGY DEVELOPMENT, INC.’S v. MOTION TO SET ASIDE ENTRY OF 14 DEFAULTS CALIFORNIA ENERGY 15 DEVELOPMENT, INC., a dissolved 16 California Corporation, TIMOTHY BRYSON, an individual, MICKEY 17 NICHOLSON, an individual, JOHN J. 18 WALSH, an individual, EDWARD SPOONER, trustee of the LIVING 19 TRUST OF EDWARD SPOONER, LIFE 20 ADVANCE, LLC, a Nevada corporation, DOES 1-10,, 21 Defendants. 22 23 AND ALL RELATED CROSS CLAIMS AND THIRD PARTY CLAIMS. 24 25 26 This case comes before the Court on California Energy Development, Inc.’s motion 27 to set aside the defaults entered on its behalf on Pruco’s Complaint and Life Advance’s 28 Crossclaim. Mickey Nicholson and Jason Voelker filed a joint statement of non-opposition 1 to California Energy’s motion, Life Advance filed an opposition to the motion, and 2 California Energy filed a reply. For the reasons set out below, the motion is granted. 3 I. 4 DISCUSSION 5 California Energy asks this Court to set aside its defaults pursuant to Federal Rule 6 of Civil Procedure 55(c). This Rule states: “The court may set aside an entry of default for 7 good cause, and it may set aside a default judgment under Rule 60(b).” Fed. R. Civ. P. 8 55(c). The good cause analysis under Rules 55(c) and 60(b) “considers three factors: ‘(1) 9 whether [the defendant] engaged in culpable conduct that led to the default; (2) whether 10 [the defendant] had a meritorious defense; or (3) whether reopening the default judgment 11 would prejudice [the plaintiff].’” Franchise Holding II, LLC v. Huntington Restaurants 12 Group, Inc., 375 F.3d 922, 925-26 (9th Cir. 2004) (quoting Am. Ass’n of Naturopathic 13 Physicians v. Hayhurst, 227 F.3d 1104, 1008 (9th Cir. 2000)). The defendant bears “the 14 burden of showing that any of these factors favor[s] setting aside the default.” Id. at 926. 15 Here, California Energy asserts that each of the factors warrants setting aside its 16 defaults. The first factor is culpable conduct. The Ninth Circuit has held “that the 17 defendant’s conduct is culpable if he has received actual or constructive notice of the filing 18 of the action and intentionally failed to answer.” Alan Neuman Productions, Inc. v. 19 Albright, 862 F.2d 1388, 1392 (9th Cir. 1989). See also Direct Mail Specialists, Inc. v. 20 Eclat Computerized Technologies, Inc., 840 F.2d 685, 690 (9th Cir. 1988); Meadows v. 21 Dominican Republic, 817 F.2d 517, 521 (9th Cir. 1987) (same). In this case, it is unclear 22 whether California Energy was properly served with Life Advance’s Crossclaim. The 23 proof of service states the Crossclaim was served on Timothy Bryson at his personal 24 address, (see ECF No. 20 at 2), but at the time of service (February 8, 2019), Bryson was 25 not California Energy’s agent for service of process. Rather, James Roberts was the last 26 person to be identified as the agent for service of process on California Energy. See July 27 19, 2016 Statement of Information filed by California Energy with the California Secretary 28 1 || of State. In light of this record, the first factor, culpable conduct, weighs in favor of setting 2 || aside the defaults. 3 On the second factor, California Energy has made a sufficient showing that it has a 4 ||meritorious defense to Life Advance’s Crossclaim. Specifically, California Energy, like 5 Nicholson and Voelker, alleges that Life Advance was not a bona fide purchaser of the 6 || Pruco Policy. Thus, this factor also weighs in favor of setting aside the defaults. 7 The third and final factor is prejudice, and here, California Energy asserts Life 8 || Advance will not suffer any prejudice if the defaults are set aside. Specifically, California 9 || Energy states its defense to Life Advance’s Crossclaim is the same as that alleged by 10 || Nicholson and Voelker, and that it will use discovery taken on their defense to support its 11 || own defense in this case. Life Advance does not address that argument, or otherwise show 12 || how it would be prejudiced if California Energy’s default is set aside. Accordingly, this 13 factor also weighs in favor of setting aside the defaults. 14 Il. 15 CONCLUSION 16 Considering the factors set out above, the Court grants California Energy’s motion 17 || to set aside its defaults. 18 IT IS SO ORDERED. 19 ||Dated: December 21, 2020 20 ns my. L4\ Hon. Dana M. Sabraw 21 United States District Judge 22 23 24 25 26 27 28