Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-02744/USCOURTS-casd-3_15-cv-02744-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7401 IRS: Tax Liability - Authorization to collect via civil action

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

Case No. 15-cv-2744-BAS-BGS

ORDER GRANTING MOTION 

TO SET ASIDE DEFAULT

v.

ARTHUR W. KRIEGSMANN; 

JPMORGAN CHASE BANK N.A.,

Defendants.

On March 23, 2016, the Clerk of the Court entered default against Defendant 

Arthur Kriegsmann. (ECF No. 11.) On April 15, 2016, Kriegsmann moved to set 

aside the entry of default. (ECF No. 15.) In response, Plaintiff United States of 

America (“United States” or “Government”) has filed a statement of non-opposition. 

(ECF No. 16.)

The Court finds this motion suitable for determination on the papers submitted 

and without oral argument. See Civ L.R. 7.1(d)(1). For the following reasons, the 

Court GRANTS Kriegsmann’s Motion to set aside the default.

I. BACKGROUND

The Government commenced this civil action on December 8, 2015, seeking 

to reduce to judgment outstanding federal tax liabilities of approximately $1.3 

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million assessed and accrued against Kriegsmann and to foreclose federal tax liens 

on real property. (ECF No. 1.) Kriegsmann was served with the Government’s 

complaint on January 23, 2016. (ECF No. 5.) On February 1, 2016, Kriegsmann 

responded to the complaint by filing an “Ex Parte Letter Requesting Dismissal of 

Case,” which the Court rejected as an improper ex parte communication. (ECF No. 

3.) On March 10, 2016, Kriegsmann filed an answer to the complaint that was 

rejected by the Court on March 21, 2016 for failure to meet formatting requirements.

(ECF No. 6.) On March 22, 2016, the Government requested the Clerk of the Court 

to enter default against Kriegsmann (ECF No. 8), which the Clerk did on March 23, 

2016 (ECF No. 11).

Kriegsmann now moves to set aside the default. He also has filed nunc pro 

tunc to April 4, 2016 another answer to the Government’s complaint. (ECF No. 13.) 

The Government affirmatively states that it does not oppose Kriegsmann’s motion to 

set aside the default. (ECF No. 16.)

II. LEGAL STANDARD

If a complaint is properly served, failure to make a timely answer or otherwise 

defend will justify entry of default. Fed. R. Civ. P. 55(a). Under Rule 55(c) of the 

Federal Rules of Civil Procedure, the court “may set aside an entry of default for 

good cause.” Fed. R. Civ. P. 55(c). The court’s good cause analysis considers the 

following three so-called “Falk factors”: “(1) whether the plaintiff will be prejudiced, 

(2) whether the defendant has [no] meritorious defense, and (3) whether culpable 

conduct of the defendant led to the default.” Brandt v. Am. Bankers Ins. Co. of Fla., 

653 F.3d 1108, 1111 (9th Cir. 2011) (quoting Falk v. Allen, 739 F.2d 461, 463 (9th 

Cir. 1984)). These factors are disjunctive and a district court may deny a motion to 

set aside default if any of the three factors is true. Franchise Holding II, LLC v. 

Huntington Rests. Grp., Inc., 375 F.3d 922, 926 (9th Cir. 2004). Nonetheless, a 

district court is not, as a matter of law, required to deny a motion to set aside entry of 

default upon a finding of any of the factors. See Brandt, 653 F.3d at 1111. The 

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defendant moving to set aside default bears the burden of showing that any of these 

factors favor setting aside default. Id. 

III. DISCUSSION

Here, the balance of the Falk factors weighs in favor of setting aside the entry 

of default. First, there is no indication that setting aside the default will prejudice the 

United States’ ability to pursue its claim. Indeed, the United States has expressly 

indicated it does not oppose Kreigsmann’s motion. (ECF No. 16.) Second, although 

the strength of Kreigsmann’s defense may be an open question, it does not appear 

frivolous. If anything, the Court finds this factor to be neutral. Third, Kreigsmann did 

not “intentionally” fail to answer the complaint, as required for finding his failure to 

file to be culpable conduct under the Falk standard. See TCI Grp. Life Ins. Plan v. 

Knoebber, 244 F.3d 691 (9th Cir. 2001) (citation omitted), overruled in part on other 

grounds by Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141 (2001). Indeed, the 

record indicates that Kreigsmann attempted to timely answer the complaint on two

occasions prior to the Government’s request for default, but had those filings rejected 

for formatting and other discrepancies. (ECF Nos. 3, 6.) Kriegsmann did not act “with 

bad faith, such as an intention to take advantage of the opposing party . . . or otherwise 

manipulate the legal process.” United States v. Signed Pers. Check No. 730 of Yubran 

S. Mesle, 615 F.3d 1085, 1092 (9th Cir. 2010) (internal quotations omitted). Thus, 

taking into account the circumstances presented, the Court finds it appropriate to set 

aside the default.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS Kreigsmann’s Motion to set 

aside the entry of default. (ECF No. 15.) Kreigsmann’s answer filed nunc pro tunc 

to April 4, 2016 is the operative answer.

//

//

//

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//

IT IS SO ORDERED.

DATED: June 9, 2016

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