Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00717/USCOURTS-caed-2_05-cv-00717-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1332 Diversity-Personal Injury

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

VOULA PAPPAS AND CHRISA PAPPAS, 

Plaintiffs,

v.

STARWOOD HOTELS & RESORTS

WORLDWIDE, INC., a Maryland

corporation doing business as

HOTEL GRANDE BRETAGNE, and DOE

I through DOE L, inclusive, 

Defendants. 

 CIV-S-05-0717 DFL/GGH

ORDER

Plaintiffs filed the current complaint in April 2005,

claiming theft and negligent infliction of emotional distress. 

Defendant Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”)

failed to timely answer the complaint, and plaintiffs moved for

entry of default on May 26, 2005. The clerk entered default on

July 5, 2005, retroactive to the date of plaintiffs’ motion. In

the meantime, on June 24, 2005, Starwood filed a motion to set

aside the clerk’s entry of default. 

In order to prevail on its motion to set aside the entry of

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default, Starwood must show good cause under Fed.R.Civ.P. 55(c),

a standard which is less rigorous than that required under

Fed.R.Civ.P. 60(b) to set aside a default judgment. See Haw.

Carpenters’ Trust Funds v. Stone, 794 F.2d 508, 513 (9th Cir.

1986). The court has broad discretion in deciding whether to set

aside an entry of default; however, the factors articulated under

Rule 60(b) cases provide helpful guidance. Under Rule 60(b), a

default judgment should not be set aside if one of the following

factors applies: (1) plaintiff would suffer prejudice; (2)

defendant has no meritorious defense; or (3) defendant’s culpable

conduct led to the default. In re Hammer, 940 F.2d 524, 525-26

(9th Cir. 1991). 

None of these factors is present here. Plaintiffs have not

articulated any reason why they will suffer prejudice if

Starwood’s motion is granted. Starwood also establishes that it

has multiple possibly meritorious defenses, including plaintiffs’

alleged failure to state a claim upon which relief can be

granted, venue and jurisdiction issues, and questions as to

whether Starwood is a proper defendant. Finally, Starwood argues

that its mistake was excusable neglect. See TCI Group Life Ins.

Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001) (the concepts

of “excusable neglect” and “culpable conduct” are interchangeable

in default analysis). Starwood’s claims office made an

administrative error in failing to properly forward the complaint

to its insurance carrier. (Mot. at 2.) There is no indication

that Starwood’s failure to respond to the complaint was done

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wilfully or in bad faith. This error hardly rises to the level

of culpable conduct, especially in the context of the other

equitable factors already considered. TCI, 244 F.3d at 697

(error not culpable or inexcusable where “defendant offers a

credible, good faith explanation negating any intention to take

advantage of the opposing party, interfere with judicial

decisionmaking, or otherwise manipulate the legal process”). 

Therefore, Starwood’s motion to set aside the entry of default is

GRANTED. 

IT IS SO ORDERED.

Dated: 8/25/2005

DAVID F. LEVI

United States District Judge

Case 2:05-cv-00717-DFL-GGH Document 29 Filed 08/26/05 Page 3 of 3