Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-00291/USCOURTS-caed-1_05-cv-00291-11/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 18:1962 Racketeering (RICO) Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

JOE FLORES, an individual;

and CONNIE FLORES, an

individual, 

 Plaintiffs,

v. 

EMERICH & FIKE, a

professional corporation, et

al.

 Defendants.

1:05-CV-0291 OWW DLB

ORDER RE STATUS OF STAY OF

ACTION

There has been considerable confusion regarding the

procedural status of this case. Among other things, a stay was

entered in this case as to all claims against all parties in May

and June of 2005 because a number of the Defendants had filed for

bankruptcy protection. (See Docs. 72 & 82.) Shortly thereafter,

on July 5, 2006, the stay was lifted as to certain claims against

the Fike Defendants, but the stay remained in place as to other

claims against the Fike Defendants. (Doc. 89.) That order

provided that the stay remained in place and as to all claims

against the other, non-Fike defendants. (Doc. 89 at 7.) 

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Subsequently, after reviewing a report from the bankruptcy

trustee, in a minute order entered on September 16, 2005, the

district court indicated that “the stay is vacated as to all

claims in this case.” (Doc. 92.) The remaining, non-Fike

Defendants interpreted this minute order to apply only to the

claims against the Fike Defendants. (See Doc. 212.) In fact,

during a recent hearing, held May 12, 2007, Plaintiffs indicated

a similar understanding of the September 16, 2007 order (i.e.,

that the stay as to the non-Fike Defendants remained in place). 

(See Doc. 189 at 3 n.1.) Without the benefit of briefing or

argument on the issue, the district court attempted to clarify

this procedural situation in its March 29, 2007 order, indicating

that, according to the plain language of the September 16, 2005,

minute order, the stay had been lifted as to all defendants. 

(Id.) 

Less than a week later, on April 2, 2007, relying on the

district court’s March 29, 2007 order, Plaintiffs requested that

the Clerk of Court enter default against the remaining, non-Fike

Defendants. (Docs. 192-210.) 

Having reviewed the record again, the district court

recognizes that the September 16, 2005 minute order is subject to

the interpretation advanced by Defendants. The general rule is

that default judgments are “appropriate only in extreme

circumstances; a case should, whenever possible, be decided on

the merits.” Latshaw v. Trainer Wortham & Co., Inc., 452 F.3d

1097, 1103 (9th Cir. 2006). Given the confusion over the

applicability of the stay, shared by Plaintiffs, Defendants, and

the Court, the entry of default by the Clerk of Court is

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inappropriate and inequitable under the circumstances. No

defaults shall be entered at this time.

There is also potential for uncertainty regarding which

complaint is operative. For the purposes of proceedings against

the remaining, non-Fike Defendants, the First Amended Complaint

(Doc. 113) is the operative complaint. 

All non-Fike Defendants shall have through May 5, 2007 to

respond to the First Amended Complaint.

IT IS SO ORDERED.

Dated: April 13, 2007 /s/ Oliver W. Wanger 

b2e55c UNITED STATES DISTRICT JUDGE

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