Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00028/USCOURTS-casd-3_11-cv-00028-0/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1444 Petition for Removal- Foreclosure

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1 Robert E. Weiss, Inc. (REW) filed a Declaration of Non-Monetary Status under

California Civil Code § 29241. Defendants contend REW is not required to participate in the

litigation and can be affected only by judgments associated with disposition of the real property

and not by any monetary award under California law. Under section 2924l (c) and (d), parties

have fifteen days to object to such a declaration and if there is no objection within that period, a

trustee is not required to participate in the litigation except for certain discovery requests and is

bound by any order relating to the deed of trust. Plaintiff has not filed objections to REW’s

declaration.

11cv28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CARLOS RESENDIZ,

Plaintiff,

v.

ROBERT E. WEISS, INC., et al.,

Defendants.

)

)

)

)

)

)

)

)

)

)

)

Civil No. 11cv28 L(BGS)

ORDER GRANTING MOTION TO

SET ASIDE CLERK’S ENTRY OF

DEFAULT [doc. #6]

This action was filed in the Superior Court for the State of California, County of San

Diego, on December 8, 2010. Defendants MERS and Aurora Loan Services, LLC removed the

action on January 6, 2011, and nominal defendant Robert E. Weiss, Inc., the foreclosure trustee,

consented to the removal of the action.1

 Defendants did not file a responsive pleading to the

complaint either prior to or after removal of the action. Nor did defendants file an extension of

time to respond to the pleading. Plaintiff sought entry of default against defendants MERS,

Case 3:11-cv-00028-L-BGS Document 12 Filed 10/11/11 Page 1 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2 11cv28

Aurora Loan Services, LLC and Robert E. Weiss, Inc., which was entered on March 9, 2011.

Defendants argue the Clerk’s entry of default should be set aside. “For good cause shown

the court may set aside an entry of default . . ..” FED. R. CIV. P. 55(c). “[D]efault judgments are

generally disfavored, and whenever it is reasonably possible, cases should be decided on upon

their merits.” In re Hammer, 940 F.2d 524, 525 (9th Cir. 1991) (internal quotation marks and

citation omitted). “[A] district court’s discretion is especially broad when, as in this case, it is

entry of default that is being set aside, rather than a default judgment.” Brady v. United States,

211 F.3d 499, 504 (9th Cir. 2000) (internal quotation marks omitted). 

The court analyzes the factors governing the lifting of entries of default under Rule 55(c).

See TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001). “Those factors

are: whether the defendant’s culpable conduct led to the default; whether the defendant has a

meritorious defense; and whether reopening the default . . . would prejudice the plaintiff.” Id.

The moving party “bears the burden of demonstrating that these factors favor” setting aside the

default. Id. 

A. Culpability

When a defendant fails to file responsive pleadings and “offers a credible, good faith

explanation negating any intention to interfere with judicial decisionmaking, or otherwise

manipulate the legal process” the failure to appear is not necessarily culpable. TCI Group Life

Ins. Plan, 244 F.3d at 697-98. In this case, counsel states that he inadvertently failed to calendar

his clients’ Rule 12(b)(6) motion. Plaintiff does not challenge this statement but argues that

defendants’ failure to respond to his complaint prevented plaintiff from filing a motion to

“consolidate the unlawful detainer action into the underlying civil state action.” (Opp. at 5.) But

as noted in their reply memorandum, none of the defendants in the present federal court

litigation are parties in the state court unlawful detainer action. Defendants therefore cannot use

the default to gain an advantage as plaintiff suggests.

B. Defense

A defendant seeking to vacate a default judgment must present specific facts that would

constitute a defense, however, the burden is not extraordinarily heavy. TCI Group Life Ins. Plan,

Case 3:11-cv-00028-L-BGS Document 12 Filed 10/11/11 Page 2 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3 11cv28

244 F.3d at 700 (citations omitted). All that is required is a “potentially meritorious defense.” Id.

at 699. At this stage, the court merely looks at factual allegations, and does not make findings

whether they are true. Id. at 700. Defendants point to a potentially meritorious defenses: the

declaratory relief plaintiff seeks has been mooted by the fact that the foreclosure has been

accomplished and the operative Deed of Trust has been extinguished. 

Plaintiff does not address defendants’ defense but instead contend that there are

irregularities with respect to the substitution of trustee and the assignments to the deed of trust

that call into question the veracity of these documents. This argument does not support a finding

that defendants do not have facts that constitute a defense to plaintiff’s claims.

C. Prejudice

The final factor to consider is whether setting aside the default would prejudice plaintiff.

Plaintiff argues he will be prejudiced because he will not have an opportunity to consolidate the

unlawful detainer action into the primary civil action, i.e. plaintiff does not have enough time to

properly defend himself against defendants’ attempt to evict him from his home. 

 “To be prejudicial, the setting aside of a judgment must result in greater harm than

simply delaying the resolution of the case. Rather, the standard is whether [the plaintiff’s] ability

to pursue his claim will be hindered.” TCI Group Life Ins. Plan, 244 F.3d at 701 (internal

quotation marks and citation omitted). “[M]erely being forced to litigate on the merits cannot be

considered prejudicial for purposes lifting a default judgment,” since a “default judgment gives

the plaintiff something of a windfall by sparing [it] from litigating the merits of [its] claim

because of [its] opponent’s failure to respond; vacating the default judgment merely restores the

parties to an even footing in the litigation.” Id. (internal citation omitted). 

Plaintiff’s claimed prejudice is that he was prevented from filing a consolidation of cases

in the state court and he was presented from filing a motion to remand. But plaintiff does not

contend his ability to pursue the claims will be hindered if the entry of default is set aside, or that

his position will be any different than it was at the outset of the case. Further, the validity of a

motion to remand is in no manner dependent upon the filing of a motion to dismiss. Either there

is a basis for remand or there is not. Accordingly, plaintiff’s claim of prejudice is insufficient

Case 3:11-cv-00028-L-BGS Document 12 Filed 10/11/11 Page 3 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4 11cv28

under Rule 55(c).

Based on the foregoing, IT IS ORDERED defendants’ motion to set aside default is

GRANTED. Defendants shall answer or otherwise respond to the complaint within ten days of

the filing of this Order. 

IT IS SO ORDERED. 

DATED: October 3, 2011

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. BERNARD G. SKOMAL

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

Case 3:11-cv-00028-L-BGS Document 12 Filed 10/11/11 Page 4 of 4