Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_07-cv-00367/USCOURTS-caed-1_07-cv-00367-21/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

CARL L. JIMENA, )

)

)

)

Plaintiff, )

)

vs. )

)

)

UBS AG BANK, et al., )

)

)

Defendants. )

)

)

No. CV-F-07-367 OWW/SKO

MEMORANDUM DECISION AND

ORDER DENYING PLAINTIFF'S

MOTION TO ENTER DEFAULT

AGAINST UBS AG AND UBS FS

(Doc. 170)

Plaintiff Carl L. Jimena, proceeding in pro per, has filed a

motion to enter default against Defendants UBS AG and UBS FS.

As to UBS FS, Plaintiff asserts that he considers “UBS FS

still a pary [sic] to this case as a temporary nominal party,

since the Court stated that if after discovery, UBS FS is

justified to be an alter ego, agent or liable under fraud theory,

the complaint would then be amended.” Plaintiff “inquires from

the Court if it agrees that UBS FS is a temporary nominal party

in this case until after discovery” but if not, Plaintiff

“request [sic] that the parties be informed of the current status

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of UBS FS.”

The Court is unaware of any authority providing for a

“temporary nominal party” in federal court. UBS FS is not a

party to this action, see “Memorandum Decision and Order Denying

in Part and Granting in Part Plaintiff’s Amended Motion to Admit

Third Amended Complaint, Striking Allegations Against UBS FS, and

Directing Clerk of Court to file Third Amended Complaint” filed

on October 6, 2009 (Doc. 155; “October 6, 2009 Memorandum”). A

default cannot be entered against a non-party. 

At the hearing, Plaintiff asserted that UBS AG’s Answer to

the Third Amended Complaint establishes that UBS FS cannot be

dismissed from this action because UBS AG’s Answer changes the

status of UBS FS. UBS AG’s Answer “denies that UBS AG is the

‘parent company’ of the three listed branches, as none of the

branches are subsidiaries of UBS AG or corporations of any kind,

but rather branch offices maintained by UBS AG or UBS Financial

Services Inc. (‘UBS FS’).” Because UBS AG had previously

admitted that UBS FS is a subsidiary of UBS AG, Plaintiff

contended that UBS FS is a proper party to this action. This

contention was raised for the first time at the hearing. 

Arguments raised for the first time in a reply brief or at the

hearing on a motion are disregarded as a general rule. See

United States v. Bohn, 956 F.2d 208, 209 (9 Cir.1992); United th

States v. Boyce, 148 F.Supp.2d 1069, 1085 (S.D.Cal.2001). In any

event, Plaintiff’s belated contention does not mandate entry of

default against UBS FS pursuant to Plaintiff’s motion. UBS FS

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has been dismissed from this case. Only if UBS FS is reinstated

as a defendant in this action by Court order upon motion and

fails to timely respond will a request for entry of default

against UBS FS be entertained.

Plaintiff’s motion to enter default against UBS FS is

DENIED.

As to UBS AG, Plaintiff asserts that he “filed” the Third

Amended Complaint on June 19, 2009. (Doc. 141). However,

Plaintiff also filed on June 19, 2009 a “motion to admit the

Third Amended Complaint.” Consequently, the Third Amended

Complaint was not “filed” but “lodged” on the docket. By Order

filed on June 19, 2009, Plaintiff was ordered to file a notice of

motion regarding his motion to admit the Third Amended Complaint,

setting the motion for hearing on the Court’s civil motion

calendar as required by Rule 78-230(b), Local Rules of Practice

(now Rule 230, Local Rules of Practice). (Doc. 142). Plaintiff

filed the notice of motion on June 23, 2009, setting the motion

to admit the Third Amended Complaint for hearing on July 22,

2009. (Doc. 145). By minute order filed on June 26, 2009, the

hearing on Plaintiff’s motion was continued to September 28,

2009. (Doc. 147). UBS AG timely filed an opposition to the

motion on September 11, 2009. (Doc. 150). The motion was heard

on September 28, 2009. (Doc. 153). The October 6, 2009

Memorandum was filed, (Doc. 154), directing the Clerk of the

Court to file the proposed Third Amended Complaint, after

striking the allegations in the proposed Third Amended Complaint

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as to the alter ego, fraud and agency liability of UBS FS for the

alleged actions of UBS AG. The Order regarding the October 6,

2009 Memorandum was filed on October 15, 2009 and the Third

Amended Complaint was filed on October 15, 2009. (Docs. 159 &

160). UBS AG filed an Answer to the Third Amended Complaint on

October 27, 2009. (Doc. 166). 

In seeking a default against UBS AG, Plaintiff relies on

Rule 15(a)(3), Federal Rules of Civil Procedure, as in effect

before its amendment on December 1, 2009:1

Unless the court orders otherwise, any

required response to an amended pleading must

be made within the time remaining to respond

to the original pleading or within 10 days

after service of the amended pleading,

whichever is later.

Plaintiff argues that the filing by UBS AG of its opposition to

Plaintiff’s motion to admit the Third Amended Complaint does not

toll the ten-day period set forth in Rule 15(a)(3). Plaintiff

relies on General Mills, Inc. v. Kraft Foods Global, Inc., 495

F.3d 1378 (Fed.Cir.2007).2

In General Mills, General Mills brought an action against

Kraft alleging infringement of its patent relating to rolled food

products. Kraft filed an answer and counterclaim, alleging that

General Mills breached a settlement agreement by bringing suit. 

General Mills replied to Kraft’s counterclaim and Kraft moved for

Effective December 1, 2009, Rule 15(a)(3) sets forth a 14-day 1

period to respond to an amended pleading.

Plaintiff’s citation to this case is “2006-1569, - 1606, 2

decided: July 31, 2007.”

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summary judgment. General Mills then filed an amended complaint

in which it reasserted the patent infringement claim from the

original complaint and asserted a new breach of contract claim on

the ground that Kraft breached the settlement agreement. Kraft

moved to dismiss both counts of the amended complaint. Kraft

never answered the amended complaint or reasserted its

counterclaim. The district court granted Kraft’s motion to

dismiss and dismissed General Mills’ patent infringement claim. 

Exercising its discretion under 28 U.S.C. § 1367(c)(3), the

district court then declined to exercise jurisdiction over

General Mills’ state-law contract claim and entered judgment for

Kraft. After entry of judgment, Kraft sought guidance by letter 

to the district court as to how to proceed with its counterclaim.

The district court treated Kraft’s letter as a motion to alter or

amend the judgment and denied the deemed motion, ruling that

because Kraft did not reassert its counterclaim in response to

the amended complaint, no counterclaim was pending when the

district court entered judgment. In General Mills, Inc. v. Kraft

Foods Global, Inc., 487 F.3d 1368 (Fed.Cir.2007), the Federal

Circuit addressed Kraft’s contention that its counterclaim

remained extant at least until the deadline for filing the

amended answer, and that deadline had not yet passed when the

district court entered judgment. Kraft argued that Kraft’s

timely filing of a motion to dismiss under Rule 12(b)(6), Federal

Rules of Civil Procedure, tolled the deadline for filing a

responsive pleading until 10 days after the motion was ruled

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upon. 487 F.3d at 1376. The Federal Circuit ruled:

The relevant tolling provision is found in

Fed.R.Civ.P. 12(a)(4)(A). Although neither

party cites authority that construes Rule

12(a)(4)(A) - and we have found none

ourselves - by the terms of that rule, the

filing of a motion to dismiss does not extend

the time for filing an answer to an amended

complaint, at least in the circumstances here

where the time for responding to the original

complaint has already run. Rule 12(a)(1)-(3)

sets forth the deadlines for answering

original complaints and cross-claims under

various circumstances. Rule 12(a)(4) then

provides that ‘[u]nless a different time is

fixed by court order, the service of a motion

permitted under this rule [including a Rule

12(b)(6) motion to dismiss] alters these

periods of time’ so as to extend the deadline

until a motion is ruled upon ... However, the

time for answering an amended complaint is

not one of ‘these periods of time.’ Rather,

the deadline for responding to an amended

complaint is established separately under

Rule 15: ‘A party shall plead in response to

an amended pleading within the time remaining

for response to the original pleading or

within 10 days after service of the amended

pleading, whichever period may be longer,

unless the court otherwise orders.’ ....

Thus, because no time ‘remain[ed] for

response to the original pleading’ when

General Mills filed its amended complaint,

Kraft had only 10 days after service of the

amended complaint - not 10 days after the

district court’s ruling on the motion to

dismiss - to file an answer and counterclaim

or take such other action as may have been

permitted to protect its interests. Because

Kraft did not do so before its deadline had

passed, the district court did not abuse its

discretion in finding that Kraft had

abandoned its counterclaim.

487 F.3d at 1376-1377. 

In the opinion relied upon by Plaintiff here, the Federal

Circuit clarified its ruling: 

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Kraft argues in its petition for rehearing

that our decision undermines the ‘clearly

expressed intent’ of Rule 12 - to permit

certain defenses, including failure to state

a claim upon which relief can be granted, to

be raised by motion instead of in a

responsive pleading. However, ‘[t]he Federal

Rules should be given their plain meaning.’ 

Walker v. Armco Steel Corp., 446 U.S. 740,

750 n.9 ... (1978). Here, where the meaning

of Rule 12 is unambiguous, we decline to

ignore the text of the rule in service of a

purported purpose.

As we previously explained, Rule 12(a)(4) by

its express terms only alters ‘these periods

of time.’ ..., where ‘these periods’ can only

refer to the periods of time enumerated

immediately before, in Rule 12(a)(1)-(3): 20

days after service of a summons and complaint

(Rule 12(a)(1)(A)); 60 or 90 days after a

request for waiver of process is sent (Rule

12(a)(1)(B)); 20 days after service of a

cross-claim or counterclaim (Rule 12(a)(2));

and 60 days after service of a pleading on

the United States or its agencies, officers,

or employees (Rule 12(a)(3)). The period of

time to answer an amended complaint is not

only missing from this list of affected

periods, but it is, in the relevant

circumstances, of a different length: ‘10

days after service of the amended pleading.’ 

See Fed.R.Civ.P. 15(a). The language of the

rule is unambiguous: Rule 12(a)(4) does not

extend the time for filing an answer to an

amended complaint when ‘the time remaining

for response to the original pleading’ has

elapsed ....

Our holding is narrower that Kraft’s petition

suggests. We did not and do not hold that

the tolling provision of Rule 12(a)(4)(A)

never applies to responses to amended

pleadings. This is because Rule 15(a), which

sets the deadline for answering an amended

pleading, has two prongs: ‘A party shall

plead in response to an amended pleading

[(1)] within the time remaining for response

to an amended pleading or [(2)] within 10

days after service of the amended pleading,

whichever period may be longer.’ ...

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Ordinarily, ‘the time remaining for response

to the original pleading’ will be defined by

one of the periods of time enumerated in Rule

12(a) and tolled by Rule 12(a)(4)(A). Thus,

when there is ‘time remaining for response to

the original pleading’ - for example, when a

plaintiff amends her complaint as a matter of

right before serving the defendant or before

the defendant answers - the first prong of

Rule 15(a) (which refers to a deadline that

is tolled by Rule 12(a)(4)(A)) becomes the

longer of the two prongs, and the extended

deadline of Rule 12(a)(4) controls.

495 F.3d at 1379. 

Relying on this Federal Circuit authority, Plaintiff

contends that UBS AG should have filed its Answer to the Third

Amended Complaint within 10 days from June 16, 2009, when UBS AG

was served with the Third Amended Complaint and that UBS AG’s

failure to do so results in its default.

However, Plaintiff’s motion to admit the Third Amended

Complaint prayed that “the attached Third Amended Complaint be

admitted on record upon receipt hereof.” In his motion to admit

the Third Amended Complaint, Plaintiff contended that he was in

full compliance with the Orders of the Court. As UBS AG

contends, the Third Amended Complaint was not then an operative

pleading because the Court had not yet granted leave to Plaintiff

to file it. When the Court directed the Clerk of the Court to

file the Third Amended Complaint on October 15, 2009, the ten-day

clock started to run and UBS AG’s Answer was filed within that

ten-day period, excluding intervening Saturdays and Sundays

pursuant to Rule 6, Federal Rules of Civil Procedure.

Plaintiff replies that the Clerk of the Court did not comply

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with Plaintiff’s request in the motion to admit the Third Amended

Complaint that the attached Third Amended Complaint be admitted

on the record, but rather lodged the Third Amended Complaint. 

Plaintiff asserts that the lodging of the Third Amended Complaint

by the Clerk was not in compliance with Local Rule 78-230(b),

Local Rules of Practice (now Rule 230(b)):

Motions defectively noticed shall be filed,

but not set for hearing; the Clerk shall

immediately notify the moving party of the

defective notice and of the next available

dates and times for proper notice, and the

moving party shall file and serve a new

notice of motion setting forth the proper

time and date.

Plaintiff asserts that, pursuant to this local rule, the Clerk

“has a duty to file the Third Amended Complaint, not merely

lodged it” and, therefore, the Third Amended Complaint was

operative as of June 15, 2009.

Plaintiff’s position is without merit. By Court Order,

following the Local Rule, Plaintiff was advised that the motion

to admit the Third Amended Complaint was defectively noticed and

ordered to file a notice of motion setting it for hearing. 

Because the motion prayed that the Third Amended Complaint be

“admitted,” the Clerk could only lodge the proposed Third Amended

Complaint pending a ruling by the Court on Plaintiff’s motion. 

Plaintiff further argues that he served a copy of the Third

Amended Complaint on UBS AG on June 15, 2007, referring to

Exhibit 1 to his motion for default. Exhibit 1 is a certified

receipt that Plaintiff mailed the “motion to admit 3 Amended rd

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Complaint with it attached” to UBS AG on June 15, 2009. However,

until leave to “admit” the Third Amended Complaint was ordered by

the Court, the Third Amended Complaint was not served.

Furthermore, entry of default is governed by Rule 55,

Federal Rules of Civil Procedure. Rule 55(a) provides:

When a party against whom a judgment for

affirmative relief is sought has failed to

plead or otherwise defend, and that failure

is shown by affidavit or otherwise, the clerk

must enter the party’s default.

The fact that Rule 55(a) gives the clerk authority to enter a

default is not a limitation on the power of the court to do so. 

Wright, Miller & Kane, Federal Practice and Procedure: Civil 3d §

2682, p. 19. Even if Plaintiff had established he is entitled to

entry of default against UBS AG, entry of default judgment

against UBS AG is governed by Rule 55(b)(2). The Court may set

aside an entry of default for good cause, Rule 55(c), and has

discretion to decline to enter a default judgment. Wright,

Miller & Kane, id., § 2693. Here, Plaintiff’s inconsistent

positions, continued refusal to timely comply with Court Orders,

failure to comply with the Federal Rules of Civil Procedure and

the Local Rules of Practice, and taking appeals from nonappealable orders caused or contributed to the present prolix 

procedural posture of this action. Plaintiff’s erratic conduct

continues to delay the progress of this case. Defaults and

default judgments are viewed with disfavor and UBS AG has

consistently opposed Plaintiff in this litigation. 

CONCLUSION

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For the reasons stated, Plaintiff’s motion to enter default

against UBS AG and UBS FS is DENIED.

IT IS SO ORDERED.

Dated: June 9, 2010 /s/ Oliver W. Wanger 

668554 UNITED STATES DISTRICT JUDGE

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