Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-00529/USCOURTS-azd-2_05-cv-00529-1/pdf.json

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

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

SIEMENS MEDICAL SOLUTIONS

USA, Inc., 

Plaintiffs, 

vs.

SEQUOIA TECHNOLOGIES, et al., 

Defendants. 

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No. CV-05-529-PHX-FJM

ORDER

On June 29, 2005, this court signed an order referring plaintiffs' motion for entry of

order awarding judgment by default and appointing receiver (doc. 61) to a magistrate judge

to conduct such proceedings as may have been necessary under Rule 55(b)(2), Fed. R. Civ.

P. We asked for a report and recommendation no later than September 15, 2005. 

On July 19, 2005, Magistrate Judge Anderson entered an order requiring briefs from

the parties (doc. 68). Plaintiff filed a memorandum entitled "Plaintiffs' Default Hearing

Memorandum" (doc. 72), and defendants filed a document entitled "Defendants'

Memorandum of Law Re: Defaulted Parties' Participation in Rule 55(b)(2) Damages

Hearing" (doc. 74).

Perhaps because neither defendants' opposition to plaintiffs' motion for entry of order

awarding judgment by default and appointing receiver (doc. 64), nor defendants'

Case 2:05-cv-00529-FJM Document 108 Filed 03/08/06 Page 1 of 4
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memorandum of law re: defaulted parties' participation in Rule 55(b)(2) damages hearing

(doc. 74) raised any real issues with respect to the entry of a default judgment, Magistrate

Judge Anderson signed an order on August 9, 2005 requiring the defendants to show cause

why judgment in favor of the plaintiffs should not be entered (doc. 77). Defendants then

filed their "Response to Order to Show Cause" (doc. 82) and plaintiffs filed their "Reply in

Opposition to Defendants' Response to Order to Show Cause" (doc. 86). 

Perhaps sensing the weakness of its position, while this was going on, defendants filed

a "Motion to Set Aside Entry of Default Pursuant to Rule 55(c)" on September 16, 2005

(doc. 80) and a "Motion for Leave to Conduct Limited Discovery" (doc. 89).

Because the motion to set aside (doc. 80) could have a critical effect on the motion

for default judgment (doc. 61), we signed an order on October 14, 2005 referring the

defendants' motion to set aside to Magistrate Judge Anderson for a second report and

recommendation (doc. 87). Judge Anderson then solicited further briefs and held an

evidentiary hearing on the motion to set aside. He deferred action on the original order of

reference pending resolution of the second order of reference.

We now have before us Magistrate Judge Anderson's report and recommendation on

the motion to set aside (doc. 98). No objections have been received. We have read the

defendants' motion to set aside (doc. 80), plaintiffs' response, and the report and

recommendation. No objections to the magistrate judge's factual findings having been made,

we adopt his factual findings as our own. Based upon those findings, we conclude as a

matter of law that no good cause has been shown to set aside entry of default within the

meaning of Rule 55(c), Fed. R. Civ. P. Accordingly, we accept the recommendation of the

magistrate judge (doc. 98), within the meaning of Rule 72(b), Fed. R. Civ. P., and

independently DENY defendants' motion to set aside entry of default pursuant to Rule 55(c)

(doc. 80). We also accept the magistrate judge's recommendation that defendants' motion for

leave to conduct limited discovery be denied on grounds of mootness. IT IS THEREFORE

FURTHER ORDERED DENYING defendants' motion for leave to conduct limited

discovery on grounds of mootness (doc. 89).

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Having resolved the motion to set aside, we are now back to where we started in

connection with a motion for default judgment. We now withdraw the reference to the

magistrate judge with respect to the motion for default judgment (doc. 61), because having

examined defendants' opposition to plaintiffs' motion for entry of default judgment (doc. 64),

defendants' memorandum of law (doc. 74), and defendants' response to order to show cause

(doc. 82), along with all of the plaintiffs' memoranda associated with these, we are now of

the view that there are no triable issues of fact under Rule 55(b)(2), Fed. R. Civ. P., which

originally formed the basis for the order of reference. Accordingly, IT IS ORDERED

GRANTING plaintiffs' motion for entry of order awarding judgment by default and

appointing receiver (doc. 61). Plaintiffs shall lodge with the court an appropriate form of

order along the lines originally proposed as refined through the filing of plaintiffs' reply in

opposition to defendants' response to order to show cause (doc. 86) and as may be further

refined to bring matters up to date. It will be the receiver's task to perform an accounting and

make recommendations to the court as to which assets are the subject of fraudulent

conveyances and which are not. 

Finally, the court has before it a motion to intervene filed by Gee, Maximillian Bittner,

and Sequoia Bittner, in order to assert a counterclaim (erroneously denominated as a crosscomplaint), against plaintiffs seeking to litigate matters foreclosed by the prior default and

seeking to assert their interest in trust assets (doc. 99). They also request a hearing (doc.

100). We have considered this along with plaintiffs' response and the reply and conclude that

it is too late in the day to reopen this litigation. Whatever interest the proposed intervenors

have in trust assets can be presented to the appointed receiver. Accordingly, IT IS

ORDERED DENYING the proposed intervenors motion to intervene (doc. 99) and

DENYING the request for hearing (doc. 100).

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While we have withdrawn the reference to the magistrate judge, we leave open the

possibility of future references in the event that they become warranted. For the clerk's

benefit, all matters on the motions report of March 8, 2006 have been resolved by this order.

DATED this 8th day of March, 2006.

Case 2:05-cv-00529-FJM Document 108 Filed 03/08/06 Page 4 of 4