Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_16-cv-01715/USCOURTS-azd-2_16-cv-01715-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1681 Fair Credit Reporting Act

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UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Christopher Hutchison, )

)

Plaintiff, ) 2:16-cv-1715 JWS

)

vs. ) ORDER AND OPINION

)

Experian Information Solutions, Inc, et al., ) [Re: Motion at docket 28]

)

Defendants. )

)

I. MOTION PRESENTED

At docket 28 defendant First Credit Union (“FCU”) moves to set aside the entry

of its default at docket 21. Plaintiff Christopher Hutchison (“Hutchison”) opposes at

docket 35, and FCU replies at docket 36. Oral argument was not requested and would

not be of assistance to the court.

II. BACKGROUND

Hutchison’s complaint sets out claims against six defendants. His claims against

FCU are found in Count III seeking recovery for negligent violation of the Fair Credit

Reporting Act, and Count IV seeking recovery for willful violation of the Fair Credit

Reporting Act. Process was served on FCU on June 28, 2016. On July 27, 2016, 

Case 2:16-cv-01715-JWS Document 40 Filed 09/24/16 Page 1 of 3
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Hutchison moved for entry of FCU’s default. The Clerk entered the requested default on

July 28, 2016. FCU’s motion to set aside the default was filed on August 8, 2016.

III. STANDARD OF REVIEW

Rule 55(c) provides that a “court may set aside an entry of default for good

cause.” The Ninth Circuit instructs that to decide whether there is good cause the trial

court must consider (1) whether a defaulted party’s culpable conduct led to the default,

(2) whether the defaulted party has a meritorious defense, and (3) whether setting

aside the default would prejudice the opposing party.

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 The defaulted party bears the

burden of proof with respect to each of these three considerations.2 If the court finds

culpable conduct, absence of a meritorious defense or prejudice, such a finding will

support a decision not to set aside the default,3 but because a default judgment is

appropriate only in extreme situations, cases should be decided on the merits when

possible.4 

IV. DISCUSSION

The delay in responding to the complaint resulted from the fact that FCU’s long

time in-house lawyer left FCU shortly before the lawsuit was filed. Hutchison contends

that personnel changes “routinely occur at companies,” and so the departure of the inhouse lawyer does not relieve FCU from a responsibility to “timely respond to the

1United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091

(9th Cir. 2010).

2Franchise Holding II, LLC v. Huntington Rests. Group, Inc., 375 F.3d 922, 926 (9th Cir.

2004).

3Signed Personal Check, 615 F.3d at 1091.

4

Id.

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complaint.”5

 Hutchison is correct to say that FCU had an obligation to timely respond

despite the lawyer’s departure, but that does not make the failure to do so “culpable” for

present purposes. Under the circumstances, the failure to timely respond is more

oversight than truly blameworthy behavior. Even if the behavior could be deemed

culpable, the policy favoring resolution of disputes on the merits weighs heavily against

denying the motion to set aside on the grounds of culpable conduct.

The parties disagree about whether FCU has a meritorious defense. Having

reviewed the motion papers, as well as FCU’s proposed answer lodged at docket 33,

the court concludes that FCU does have a meritorious defense.

Turning to the issue of prejudice to Hutchison, the court finds that because the

case is in the very early stages there is no prejudice to Hutchison flowing from setting

aside the default. It should be noted that the default was entered only one month after

service of process on FCU. Moreover, Hutchison is still pursuing claims of the very

same type against other defendants. 

V. CONCLUSION

For the reasons above, the motion at docket 28 is granted. The entry of default

at docket 21 is vacated. FCU shall immediately file its answer to Hutchison’s complaint.

DATED this 24th day of September 2016.

 /s/ JOHN W. SEDWICK

SENIOR JUDGE, UNITED STATES DISTRICT COURT

5Doc. 35 at p. 3.

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