Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_14-cv-02291/USCOURTS-azd-2_14-cv-02291-1/pdf.json

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

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

ThermoLife International, LLC, an Arizona 

limited liability company, 

Plaintiff, 

v. 

Sechel Holdings, Inc. , a Delaware 

corporation, and Ergogenix, Inc., a 

Delaware corporation, 

Defendants.

No. CV 14-2291-PHX-JAT

ORDER 

 Pending before the Court are three interrelated motions: Plaintiff ThermoLife 

International, LLC’s Rule 55(b)(1) Request for Default Judgment Against Sechel 

Holdings, Inc. and Ergogenix, Inc. (Doc. 16); Defendant Ergogenix, Inc.’s Motion to Set 

Aside Entry of Default (Doc. 19); and Defendant Ergogenix, Inc.’s Motion for Leave to 

File Answer to Plaintiff’s Complaint (Doc. 22). The Court now rules on the motions. 

I. Background 

 On October 15, 2014, Plaintiff filed its original complaint. (Doc. 1). Service was 

executed on Ergogenix two days later on October 17, 2014. (Doc. 8). On November 13, 

2014, the Clerk of Court, upon Plaintiff’s request, entered default against Sechel 

Holdings and Ergogenix pursuant to Federal Rule of Civil Procedure 55(a) (“Rule”). 

(Doc. 10). Due to a pleading deficiency in Plaintiff’s complaint, the Court ordered 

Plaintiff to “file a supplement to the complaint properly alleging federal subject matter 

jurisdiction.” (Doc. 11). Instead of filing a supplement, Plaintiff filed its Amended 

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Complaint on December 30, 2014. (Doc. 12). Plaintiff properly served the Amended 

Complaint by electronic service via the Clerk’s Office. (Id.)

1

 On January 9, 2015, 

Plaintiff filed its motion for default judgment. (Doc. 16).2

 The Court subsequently found 

that the Amended Complaint adequately pleads jurisdiction. (Doc. 26). 

II. Effect of the Amended Complaint 

 The Court ordered Plaintiff to file a “supplement” to its original complaint due to 

Plaintiff’s failure to adequately plead subject matter jurisdiction. (Doc. 11). Rather than 

file a supplement, Plaintiff filed its Amended Complaint. (Doc. 12). “As a general rule, 

when a plaintiff files an amended complaint, ‘the amended complaint supersedes the 

original, the latter being treated thereafter as non-existent.’” Rhodes v. Robinson, 621 

F.3d 1002, 1005 (9th Cir. 2010) (quoting Loux v. Rhay, 375 F.2d 55, 57 (9th Cir. 1967)).3

 

 Consequently, when Plaintiff filed the Amended Complaint its original complaint 

became ineffectual. See Ferdik v. Bonzelet, 963 F.2d 1258, 1262 (9th Cir. 1992) (noting 

that an “amended pleading supersedes the original pleading” such that “after amendment 

the original pleading no longer performs any function and is treated thereafter as non-

 

1

 “The amended complaint in this case qualifies as a ‘pleading subsequent to the original complaint,’ thus allowing it to be served in any manner prescribed in Rule 5(b).” Emp. Painters’ Trust v. Ethan Enters., Inc., 480 F.3d 993, 1000 (9th Cir. 2007) (citing Fed. R. Civ. P. 5(a)(1)(B). One permitted manner is the use of court facilities “if a local 

rule so authorizes.” Fed. R. Civ. P. 5(b)(3). Pursuant to Local Rule 5.5, “[r]egistration as an ECF user constitutes consent to the electronic service of all documents through the Court’s transmission facilities for purposes of Rule 5(b)(3) of the Federal Rules of Civil 

Procedure.” LRCiv 5.5(f). Ergogenix’s counsel is registered as an ECF user. (Doc. 17 at 

2). Service of the Amended Complaint, therefore, was properly executed. 

Service pursuant to Rule 4 was not required because the Amended Complaint does not assert a “new claim for relief.” Fed. R. Civ. P. 5(a); see Ethan Enters., 480 F.3d at 

999 (noting that an amended complaint need only be served in the manner provided by Rule 4 when (1) “a pleading that asserts a new claim for relief” is made against (2) “a party who is in default for failing to appear.” (quoting Fed. R. Civ. P. 5(a))). 

2

 Plaintiff’s motion (Doc. 16) and reply (Doc. 29) are both silent as to whether 

Plaintiff seeks an entry of default judgment on its original complaint or on the Amended Complaint. The Court will consider both options. 

3

 As some courts have admonished, “[a]n original complaint is only superseded . . . when the amended complaint is properly served, not when it is filed.” Rolle v. Law 

Office of Samuel Streeter, PLLC, 2010 WL 729022, at *4 (D. Ariz. Mar. 2, 2010) 

(citation omitted). As noted, Plaintiff properly served the Amended Complaint using the Court’s electronic filing system. 

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existent” (quotations omitted) (emphasis added)). Because Plaintiff’s original complaint 

“no longer performs any function,” a default based on the original complaint must also be 

rendered ineffectual and non-existent. See Best W. Int’l, Inc. v. Melbourne Hotel 

Investors, LLC, 2007 WL 2990132, at *1 (D. Ariz. Oct. 11, 2007) (noting that the filing 

of an amended complaint subsequent to a motion for default judgment “mooted” the 

default judgment motion); Ogunsalu v. Nair, 264 F. App’x 672, 674 (9th Cir. 2008) 

(unpublished) (noting that motions directed at superseded pleadings are to be denied as 

moot); Nelson v. Nationwide Mortg. Corp., 659 F. Supp. 611, 615 (D.D.C. 1987) (“In 

light of [the plaintiff’s] filing of an amended complaint, her [previous] motions for entry 

of default judgments against [the defendants] must be denied as moot.”). 

 In this case, the Clerk of Court entered default on Plaintiff’s original complaint. 

At this time, default has not been entered on Plaintiff’s Amended Complaint. 

Consequently, default judgment on the Amended Complaint would be improper because 

no default has been entered on the Amended Complaint. See Eitel v. McCool, 782 F.2d 

1470, 1471 (9th Cir. 1986) (discussing the two-step process under Rule 55). 

 For these reasons, the Court will deny Plaintiff’s motion for default judgment 

(Doc. 16) as moot. Furthermore, Ergogenix’s Motion to Set Aside Entry of Default (Doc. 

19) is also moot because Plaintiff’s original complaint “no longer performs any function” 

making the entry of default on the original complaint “non-existent.” If Plaintiff wishes to 

pursue an entry of default judgment based on the Amended Complaint, it must first 

obtain an entry of default from the Clerk of Court pursuant to Rule 55(a). 

III. Ergogenix’s Motion to Set Aside Entry of Default 

As discussed, the Court holds that Ergogenix’s Motion to Set Aside Entry of 

Default (Doc. 19) was rendered moot by the filing of Plaintiff’s Amended Complaint. 

Nonetheless, assuming arguendo that the Amended Complaint merely supplemented 

Plaintiff’s original complaint, the Clerk of Court’s entry of default on the original 

complaint would remain operative. Consequently, if the entry of default were to be set 

aside as Ergogenix requests, default judgment would be improper. See Eitel, 782 F.2d at 

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1471 (discussing the two-step process under Rule 55). The Court, therefore, will consider 

whether the entry of default could be set aside pursuant to Rule 55(c). 

 A. Legal Standard 

 The Court may set aside an entry of default if good cause is shown. Fed. R. Civ. P. 

55(c). In determining whether good cause has been shown, the Court considers: 1) 

whether there was culpable conduct on the part of the defendant; 2) whether any 

meritorious defenses are available, and 3) whether there is any prejudice to the plaintiff. 

United States v. Signed Personal Check No. 730 of Yubran S. Mesle (“Mesle”), 615 F.3d 

1085, 1091 (9th Cir. 2010). “[T]he party seeking to vacate a default judgment bears the 

burden of demonstrating that these factors favor vacating the judgment.” TCI Grp. Life 

Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001). This burden, however, is not 

“extraordinarily heavy.” Id. at 700. Notably, “judgment by default is a drastic step 

appropriate only in extreme circumstances; a case should, whenever possible, be decided 

on the merits.” Mesle, 615 F.3d at 1091. 

 1. Culpable Conduct 

 “A defendant’s conduct is culpable if he has received actual or constructive notice 

of the filing of the action and intentionally failed to answer.” Knoebber, 244 F.3d at 697 

(emphasis added). Intentional conduct, in this context, must rise to the level of conduct 

which is willful, deliberate, or done in bad faith. Id. at 697–98; see Mesle, 615 F.3d at 

1091 (“[I]n this context the term ‘intentionally’ means that a movant cannot be treated as 

culpable simply for having made a conscious choice not to answer; rather, to treat a 

failure to answer as culpable, the movant must have acted with bad faith, such as an 

intention to take advantage of the opposing party, interfere with judicial decision making, 

or otherwise manipulate the legal process.”). 

 Here, Ergogenix’s failure to file a timely answer was not culpable conduct. 

Initially, there is no evidence that Ergogenix “acted in bad faith” when it failed to timely 

respond to Plaintiff’s original complaint. Ergogenix did not receive actual notice of 

Plaintiff’s initial complaint from its registered agent but learned of the lawsuit on the 

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Internet. (Doc. 20-1 at 2). As soon as Ergogenix’s President made this discovery, he 

began gathering money in order to hire an attorney. (Id.) Moreover, as soon as 

Ergogenix’s counsel discovered the entry of default and Plaintiff’s motion for default 

judgment, he took reasonably prompt action to remedy the error by filing a motion for 

extension of time to respond to the default judgment motion (Doc. 16) and a motion to set 

aside entry of default (Doc. 19). In short, Ergogenix’s actions were not in “bad faith 

[with] an intention to take advantage of the opposing party, interfere with judicial 

decision making, or otherwise manipulate the legal process.” Mesle, 615 F.3d at 1091. 

This factor, therefore, weighs in favor of setting aside default. 

 2. Meritorious Defense 

 Second, the Court considers whether Ergogenix has an available “meritorious 

defense.” Knoebber, 244 F.3d at 697. To establish that a meritorious defense exists, 

Ergogenix must allege specific facts that would constitute a defense. Id. at 700. The 

Court need not conclude that Ergogenix will prevail on the defense to determine that this 

factor weighs in favor of setting aside default. See Apache Nitrogen Prods., Inc. v. 

Harbor Ins. Co., 145 F.R.D. 674, 682 (D. Ariz. 1993). Instead, the Court need only find 

that after a trial on the merits, the defense may cause a different result than default. Id. 

 In this case, Ergogenix affirmatively asserts it will show that Sechel Holdings was 

forced to “shut down under an avalanche of debt” caused by its “primary creditor” 

demanding repayment of a secured loan. (Doc. 20). Ergogenix claims it will show that all 

vendor accounts were opened with Ergogenix because it was a “new, distinct corporate 

entity . . . and the various retailers and distributors had to set up new accounts for this 

new entity.” (Id.) The Court finds that these specific facts “may cause a different result 

than default” after a full trial on the merits. Apache Nitrogen Prods., 145 F.R.D. at 682. 

This factor, therefore, weighs in favor of setting aside default. 

 3. Prejudice to the Plaintiff 

 Lastly, the Court considers whether setting aside the entry of default would be 

prejudicial to Plaintiff. “To be prejudicial, the setting aside of a judgment must result in 

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greater harm than simply delaying resolution of the case. Rather, the standard is whether 

[Plaintiff’s] ability to pursue [its] claim will be hindered.” Knoebber, 244 F.3d at 701 

(quotation omitted). “[D]elay alone does not constitute the sort of prejudice cognizable 

upon a Rule 55(c) motion: it must be shown that delay will result in the loss of evidence, 

create increased difficulties of discovery, or provide greater opportunity for fraud and 

collusion.” Apache Nitrogen Prods., 145 F.R.D. at 682 (citation omitted). 

 In this case, no evidence suggests that Plaintiff’s ability to pursue its claim will be 

hindered. Rather, all that will result is a minimal delay which is not cognizable as 

sufficient prejudice. This factor, therefore, weighs in favor of setting aside default. 

 4. Conclusion 

Accordingly, even assuming that Plaintiff’s Amended Complaint was merely a 

supplement to its original complaint, the Court finds that based on these three factors, and 

the general preference for resolving cases on their merits, Mesle, 615 F.3d at 1091, the 

entry of default should be set aside. 

IV. Motion for Default Judgment 

 Plaintiff seeks a default judgment against Sechel Holdings and Ergogenix pursuant 

to Rule 55(b)(1). (Doc. 16). As discussed, this motion became moot when Plaintiff filed 

its Amended Complaint. Moreover, even if Plaintiff’s original complaint remained 

effectual, the Court would set aside the entry of default pursuant to Rule 55(c), thereby 

mooting this motion. See Eitel, 782 F.2d at 1471 (discussing the two-step process under 

Rule 55). Accordingly, the Court will deny Plaintiff’s motion for default judgment as 

moot. 

V. Motion for Leave to File Answer 

On February 12, 2015, Ergogenix filed a Motion for Leave to File an Answer to 

Plaintiff’s Complaint. (Doc. 22). To its motion, Ergogenix attached Defendant’s Original 

Answer and Affirmative Defenses to Plaintiff’s Original Complaint. (Doc. 22-1). This 

proposed answer is now lodged in the Court’s file. (Doc. 25). In its response, Plaintiff 

contends that “Ergogenix should not be permitted to answer the Complaint.” (Doc. 29). 

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As noted, Plaintiff’s original complaint was rendered “non-existent” by the filing of the 

Amended Complaint. For that reason, the Court will construe Ergogenix’s Motion for 

Leave to File an Answer to Plaintiff’s Complaint as a motion for leave to file an answer 

to Plaintiff’s Amended Complaint. 

 The Amended Complaint was filed and served on December 30, 2014. (Doc. 12). 

Upon being served, Ergogenix should have responded within fourteen days. Fed. R. Civ. 

P. 15(a)(3). Consequently, the time for Ergogenix to respond expired long ago. 

 The Federal Rules of Civil Procedure govern whether a court may extend a 

specified time for a party to act. According to Rule 6: 

When an act may or must be done within a specified time, the court may, 

for good cause, extend the time: 

(A) with or without motion or notice if the court acts, or if a 

request is made, before the original time or its extension 

expires; or 

(B) on motion made after the time has expired if the party 

failed to act because of excusable neglect. 

Fed. R. Civ. P. 6(b)(1) (emphasis added). Because Ergogenix’s time to respond has 

expired, the Court must determine whether such failure was due to “excusable neglect.”4

 Without mentioning Rule 6, Ergogenix offers one sentence for why it should 

receive an extension: “The late filing of the Answer will not unduly prejudice the 

Plaintiff.” (Doc. 22 at 2). The court cannot accept this bald assertion at face value. In this 

Circuit, “[t]o determine whether a party’s failure to meet a deadline constitutes 

‘excusable neglect,’ courts must apply a four-factor equitable test” based on Pioneer Inv. 

 

4

 The Court notes that, generally, “Rule 6 allows for an enlargement of the prescribed amount of time to file, but it does not allow a party to file an answer after the clerk of court has entered default against the party.” Ariz. Opera Co. v. AZ Opera Co., 2007 WL 1958779, at *2 (D. Ariz. July 2, 2007). In this case, Plaintiff’s Amended 

Complaint made the entry of default on Plaintiff’s original complaint non-existent. The Court, therefore, will consider Ergogenix’s motion. 

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Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993). Ahanchian v. Xenon 

Pictures, Inc., 624 F.3d 1253, 1261 (9th Cir. 2010). While Pioneer involved Federal Rule 

of Bankruptcy Procedure 9006(b)(1), the Ninth Circuit has held that the four-factor test 

applies to determinations of what constitutes “excusable neglect” under other rules 

containing that term, including Rule 6(b). See In re Veritas Software Corp. Secs. Litig., 

496 F.3d 962, 973 (9th Cir. 2007) (applying the four factor test to Rule 6(b)). “Th[e] 

four-factor [Pioneer] equitable test requires, at a minimum, examination of: (1) the 

danger of prejudice to the opposing party; (2) the length of the delay and its potential 

impact on judicial proceedings; (3) the reason for the delay; and (4) whether the movant 

acted in good faith.” Trueman v. Johnson, 2011 WL 6721327, at *6 (D. Ariz. Dec. 21, 

2011) (citing Ahanchian, 624 F.3d at 1261). 

 With regard to the first factor, the Court previously discussed the potential danger 

of prejudice to Plaintiff and found any prejudice to be minimal. Secondly, the length of 

delay is short and, at most, will cause a slight interruption on judicial proceedings. As to 

the third factor, the Court notes that its earlier analysis regarding “culpable conduct” is 

helpful. Ergogenix did not receive actual notice of this lawsuit from its designated agent 

and acted reasonably prompt after it obtained counsel. Moreover, the parties’ briefing 

failed to discuss the fact that Plaintiff’s Amended Complaint superseded its original 

complaint. This lack of discussion infers that neither party expected that Ergogenix 

would be required to respond to the Amended Complaint and not the original complaint.5

As to the fourth factor, there is no evidence in the record that Ergogenix did not act in 

good faith. Accordingly, based on these four factors, the Court finds that Ergogenix failed 

to timely respond to Plaintiff’s Amended Complaint due to “excusable neglect.” 

 While the Court construes Ergogenix’s motion to refer to Plaintiff’s Amended 

Complaint, the Court cannot construe Ergogenix’s “Original Answer and Affirmative 

Defenses to Plaintiff’s Original Complaint” in the same manner. Ergogenix clearly 

 

5

 In fact, Ergogenix’s lodged answer is entitled “Defendant’s Original Answer and 

Affirmative Defenses to Plaintiff’s Original Complaint.” (Doc. 25) (emphasis added). 

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desired this response to be its answer to Plaintiff’s original complaint. Ergogenix’s 

motion for leave, therefore, is granted to the extent that Ergogenix has leave to file an 

answer to Plaintiff’s Amended Complaint. Ergogenix’s lodged answer is ineffectual. 

Ergogenix must file its answer to Plaintiff’s Amended Complaint within ten days from 

the date of this Order. 

VI. Conclusion 

 Accordingly, 

 IT IS ORDERED that Ergogenix’s Motion to Set Aside Entry of Default 

(Doc. 19) is DENIED as moot. The Court holds that the default entered on Plaintiff’s 

original complaint was rendered non-existent as the result of Plaintiff filing its Amended 

Complaint. 

IT IS FURTHER ORDERED that the Clerk of Court shall VACATE the entry 

of default (Doc. 10). 

 IT IS FURTHER ORDERED that Plaintiff’s motion for default judgment 

(Doc. 16) is DENIED as moot. 

IT IS FURTHER ORDERED that Ergogenix’s Motion for Leave to File Answer 

to Plaintiff’s Complaint (Doc. 22) is GRANTED. The Court construes the motion to 

pertain to Plaintiff’s Amended Complaint and grants Ergogenix leave to file its answer 

within ten days from the date of this Order.

 IT IS FURTHER ORDERED that the Clerk of Court shall STRIKE 

Ergogenix’s lodged answer (Doc. 25). 

 Dated this 3rd day of April, 2015. 

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