United States District Court, D. Alaska
ORDER AND OPINION [RE: MOTION AT DOCKET 13]
W. SEDWICK SENIOR JUDGE.
docket 13 defendant Jason Bowman (“Bowman”) moves
to set aside his default which was entered by the Clerk on
April 26, 2018, at docket 11. The motion is supported by the
Declaration of Bradley Jameson (“Jameson”) at
docket 14. At docket 15 plaintiffs Aaron Gustafson and Gary
Gustafson (“Plaintiffs”) oppose the motion. The
opposition is supported by the Declaration of John Joseph
Turri (“Turri”) at docket 16 and the Declaration
of Brandon C. Marx (“Marx”) at docket 17. Bowman
replies at docket 21. Oral argument was not requested and
would not assist the court.
sued Bowman seeking a declaration that Bowman is required by
contract to execute an authorization allowing Plaintiffs to
commence mining on a placer mining claim known as Claim #
611836 which he had purchased from Subsistence Placers LLC.
Plaintiffs also seek compensatory damages from Bowman in an
amount exceeding $150, 000. Plaintiffs named Subsistence
Placers LLC as a co-defendant but to date have not served
process on that entity.
complaint was filed on March 2, 2018. Bowman was served in
person on April 3, 2018, in Napa, California. Bowman's
answer to the complaint was due April 24, 2018. He did not
file an answer. Plaintiffs moved for the entry of
Bowman's default on April 25, 2018. The Clerk entered
Bowman's default the next day.
similar lawsuit was filed by Gary Gustafson, one of the
Plaintiffs here, against Bowman in 2015 in California. In
that case Gary Gustafson was represented by Turri, a
California lawyer who is one of the lawyers representing
Plaintiffs in this case. Bowman was represented in the
California case by Jameson, another California lawyer. After
being served in the case at bar, Bowman contacted Jameson who
helped find an Alaska lawyer for Bowman. Apparently
unfamiliar with the Federal Rules of Civil Procedure, Jameson
assumed that Bowman had 30 days in which to respond to the
complaint, which would have been May 2, 2018. On April 27,
Jameson contacted Turri seeking an extension of time in which
to respond to the complaint because Bowman still had not
retained an Alaska lawyer. Turri responded on April 28, 2018,
advising that Bowman's default had already been entered.
Jameson suggested that the parties stipulate to set aside the
default. On April 30, 2018, Turri advised Jameson that he
would encourage his clients to agree to set aside the default
if Bowman paid the sum of $700. Jameson neither accepted nor
rejected the $700 payment Turri suggested. By May 3, 2018,
Turri had his clients' consent to set aside the default
in exchange for the $700, but was unable to promptly
communicate that information to Jameson as a result of
circumstances beyond Turri's control.
district court may set aside a default pursuant to
Fed.R.Civ.P. 55(c) for good cause. When evaluating a motion
to set aside default, the district court should consider: (1)
whether the movant engaged in culpable conduct leading to the
entry of movant's default; (2) whether the movant
possesses a meritorious defense; and (3) whether granting the
motion will prejudice the plaintiff.
contend that because Bowman knew he had been sued but did not
timely respond to the complaint, his conduct was culpable.
The situation is more nuanced than Plaintiffs suggest. The
Ninth Circuit has explained: “The usual articulation of
the governing standard, oft repeated in our cases, is that
‘a defendant's conduct is culpable if he has
received actual or constructive notice of the filing of an
action and intentionally failed to
answer.'” Elaborating, the appellate court wrote:
“A neglectful failure to answer as to which a defendant
offers a credible, good faith explanation negating any
intention to take advantage of the opposing party, interfere
with judicial decision-making, or otherwise manipulate the
legal process is not ‘intentional' . . . -although
it certainly may be, once the equitable factors are
considered-culpable or inexcusable.”
there is no evidence that Bowman intended to take advantage
of Plaintiffs, interfere with this court's
decision-making, or manipulate the judicial process. To the
contrary, the purpose of his actions was to afford the court
an opportunity to decide the parties' dispute on the
merits. There are no equitable considerations which operate
to convert Bowman's purpose into a culpable one.
rely on Speiser, Krause & Modol PC v.
Ortiz to support their argument that
Bowman's conduct was culpable. In Speiser, the
defendant, Ortiz, was a lawyer who had been sued in state
court in a dispute about the division of attorneys' fees
between the plaintiff law firm and Ortiz. The plaintiff sent
a letter to Ortiz advising that it intended to seek the entry
of default if Ortiz did not timely answer the complaint.
Thereafter, Ortiz removed the case to federal court. The time
for Ortiz to respond to the complaint in the removed case was
governed by Fed.R.Civ.P. 81(c). Ortiz did not timely respond;
the law firm moved for entry of default; and the clerk
entered Ortiz's default. Ortiz admitted he did not read
Rule 81(c) well enough to understand it. The district court
held that Ortiz's failure to timely respond to the
complaint was culpable and entered a default judgment.
appeal, the Ninth Circuit observed: “Ortiz briefly
alludes to the good cause standard regarding defaults. . . .
That standard is less rigorous than excusable neglect. . . .
The distinction, however, is one of degree, which might make
a difference at the margin. But the failure of this lawyer,
who was the removing party, to properly read the clear
language of Rule 81(c) does not amount to good cause
either.” The appellate court then affirmed the
district court's decision, but also noted: “Here
the district court would not necessarily have ...