United States District Court, D. Nevada
DANIEL HARRINGTON and PAMELA HARRINGTON, Husband and Wife, Plaintiffs,
DAVID TACKETT, an individual, and DOES 1-10, inclusive, Defendants.
ORDER RE: ECF NO. 8
WILLIAM G. COBB, UNITED STATES MAGISTRATE JUDGE
the court is defendant David Tackett's Motion to Set
Aside Entry of Default. (ECF Nos. 8, 8-1 to 8-3.) Plaintiffs
Daniel Harrington and Pamela Harrington filed a response.
(ECF Nos. 13, 13-1 to 13-7.) Tackett filed a reply. (ECF No.
Harringtons, initially representing themselves, filed their
complaint against Tackett for breach of contract on January
17, 2018, based on diversity jurisdiction. (ECF No. 1.) The
complaint alleges that the parties met in Crescent Valley,
Nevada, on August 25, 2017, to negotiate a contract for the
purchase of turquoise ore, with ownership of the turquoise
claimed by each party. The meeting culminated in the parties
executing a handwritten agreement. According to the
Harringtons, Tackett agreed to pay the them $300, 000 for all
of the turquoise in their possession, and then he would make
payments of ten percent of total ore sales at a rate of $20
per pound, as sales occurred. They allege that Tackett
immediately transferred possession of the turquoise to three
semi-tractors. A payment of $20, 000 was made the following
day. The Harringtons claim Tackett failed to pay the
remaining amount due. They estimate the current market value
of the turquoise to be $1, 300, 000. The Harringtons request
$1, 300, 000, or alternatively, that Tackett return the full
amount of turquoise removed from their possession.
summons and complaint were served on Tackett on January 19,
2018. (ECF No. 4.) Under Federal Rule of Civil Procedure 12,
Tackett had twenty-one days, or until February 9, 2018, to
file and serve an answer. Fed.R.Civ.P. 12(a)(1)(A)(i).
March 2, 2018, the Harringtons filed an application for entry
of default against Tackett. (ECF No. 5.) The Clerk entered
default on March 2, 2018. (ECF No. 6.) The Harringtons filed
a certificate of service on March 14, 2018, indicating that
the filing was personally served on Tackett, on March 2,
2018. (ECF No. 7.)
March 23, 2018, Tackett filed his motion to set aside the
entry of default through counsel, Nathan J. Aman, Esq., and
Jeremy B. Clark, Esq., of the Reno law firm Fahrendorf,
Viloria, Oliphant & Oster L.L.P. (ECF No. 8.) Kenneth K.
Ching entered a notice of appearance on behalf of the
Harringtons on April 3, 2018 (ECF No. 12), and filed their
response to the motion the following day (ECF No. 13).
Tackett filed his reply brief on April 13, 2018. (ECF No.
court held a hearing on the motion on April 24, 2018, where
argument was heard from counsel. The court took the matter
under submission, and issues the instant Order.
Rule of Civil Procedure 55(a) provides that “[w]hen a
party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defendant, and that
failure is shown by affidavit or otherwise, the clerk must
enter the party's default.” Fed.R.Civ.P. 55(a).
This was done here.
court may set aside an entry of default for good
cause….” Fed.R.Civ.P. 55(c). “To determine
‘good cause, ' a court must ‘consider[ ]
three factors: (1) whether [the party seeking to set aside
the default] engaged in culpable conduct that led to the
default; (2) whether [it] had [no] meritorious defense; or
(3) whether reopening the default judgment would
prejudice' the other party.” U.S. v. Signed
Personal Check No. 730 of Yubran S. Mesle, 615 F.3d
1085, 1091 (9th Cir. 2010) (citation omitted, alteration
original) (Mesle). “A finding that any one of
these factors is true is sufficient reason for the district
court to refuse to set aside the default.” Id.
(citation omitted). That said, the “rules for
determining when a default should be set aside are solicitous
towards movants, especially those whose actions leading to
the default were taken without the benefit of legal
representation.” Id. at 1089 (citations
by default is a drastic step appropriate only in extreme
circumstances; a case should, whenever possible, be decided
on the merits.” Id. (citations omitted).
does not dispute that he failed to timely respond to the
complaint, but contends that good cause exists to set aside
the Clerk's entry of default because: his failure to
respond was not the result of culpable or intentional
conduct; he has meritorious defenses to the complaint; and,
the Harringtons will not be prejudiced by the setting aside
of the default. The court will address each of these factors,
defendant's conduct is culpable if he has received actual
or constructive notice of the filing of the action and
intentionally failed to answer.”
Mesle, 615 F.3d at 1092 (citations omitted, emphasis
original). “[I]n this context the term
‘intentionally' means that a movant cannot be
treated as culpable simply for having made a conscious choice
not to answer; rather, to treat a failure to answer as
culpable, the movant must have acted with bad faith, such as
an ‘intention to take advantage of the opposing party,
interfering with judicial decisionmaking, or otherwise
manipulate the legal process.'” Id.
(citation omitted). Courts have “‘typically held
that a defendant's conduct was culpable for purposes of
the [good cause] factors where there is no explanation of the
default inconsistent with a devious, deliberate, willful, or
bad faith failure to respond.'” Id.
(citation omitted). “[S]imple carelessness” is
typically not sufficient. Id. (citations omitted).
If the party failing to respond is a legally sophisticated
party, “an understanding of the consequences of [the