Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_12-cv-05655/USCOURTS-cand-3_12-cv-05655-4/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BOARD OF TRUSTEES OF THE BAY 

AREA ROOFERS HEALTH & WELFARE 

TRUST FUND, et al.,

Plaintiffs,

v.

WESTECH ROOFING,

Defendant.

Case No. 12-cv-05655-JCS 

ORDER DENYING MOTION TO SET 

ASIDE DEFAULT AND FOR LEAVE TO 

FILE AN ANSWER

Re: Dkt. No. 37

I. INTRODUCTION

This action was filed on November 2, 2012. On November 24, 2012, the Complaint and 

summons were personally served on Laurin Hunt, the agent who is designated by law to accept 

service of process on behalf of Westech Roofing. See Docket No. 12. Defendant did not answer or 

appear and on May 1, 2013, the Clerk entered default against Defendant. Defendant now brings a 

Motion to Set Aside Default and for Leave to File Answer (“Motion”). Defendant asks the Court 

to set aside the default under Rule 55(c) of the Federal Rules of Civil Procedure. For the reasons 

stated below, the Motion is DENIED. The hearing noticed for January 17, 2014 is vacated.

II. ANALYSIS

Federal Rule of Civil Procedure 55(c) provides that a court “may set aside an entry of default 

for good cause, and it may set aside a default judgment under Rule 60(b).” Rule 60(b) lists the 

grounds on which a default judgment may be vacated and includes “mistake, inadvertence, 

surprise or excusable neglect.” The Ninth Circuit has held that the test that governs lifting entry of 

default for good cause under Rule 55(c) also governs the vacating of a default judgment under 

Rule 60(b)(1) for excusable neglect or mistake. TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 

691, 696–97 (9th Cir. 2001). In particular, courts must “consider[ ] three factors: (1) whether [the

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United States District Court

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party seeking to set aside the default] engaged in culpable conduct that led to the default; (2) 

whether [it] had [no] meritorious defense; or (3) whether reopening the default judgment would 

prejudice” the other party. U.S. v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 

1085, 1091 (9th Cir. 2010) (quoting Franchise Holding II, LLC. v. Huntington Restaurants Group, 

Inc., 375 F.3d 922, 925-926 (9th Cir. 2004)). The test is disjunctive, that is, a finding that any one 

of the three factors is met is sufficient reason for the district court to refuse to set aside the default. 

Id.

 “While the same test applies for motions seeking relief from default judgment under both 

Rule 55(c) and Rule 60(b), the test is more liberally applied in the Rule 55(c) context . . . because 

in the Rule 55 context there is no interest in the finality of the judgment with which to contend.” 

Id. at 1091 n. 1 (quoting Hawaii Carpenters' Trust Funds v. Stone, 794 F.2d 508, 513 (9th 

Cir.1986)). Further, the Ninth Circuit has cautioned that “judgment by default is a drastic step 

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

merits.” Id. (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)). 

Here, the Court declines to exercise its discretion to vacate the default entered against 

Defendant because Westech’s conduct is culpable. See Meadows v. Dominican Republic,

817 F.2d 517, 521 (9th Cir. 1987) (“A defendant’s conduct is culpable if he has received actual or 

constructive notice of the filing of the action and failed to answer”) (citation omitted). Westech 

failed to answer the complaint simply because the complaint, though personally served on 

Westech’s agent for service of process, Laurin Hunt, was misplaced or discarded. Westech does 

not even assert that it was unaware of the action against it – rather, it acknowledges that after it 

misplaced or threw away the complaint, it simply “forgot about it.” See Motion at 4. Even more 

troubling is the fact that Plaintiffs have had to repeatedly file actions in district court to enforce 

Defendant’s employee benefit obligations. See Declaration of Eileen M. Bissen in Support of 

Plaintiffs’ Opposition to Motion to Set Aside Default, ¶ 3 (listing eight separate actions prior to 

the instant action brought in this Court to enforce ERISA plan obligations, dating back to 1992). 

Further, the ongoing efforts by Plaintiffs to enforce Defendant’s contractual obligations

belie Defendant’s assertion that its long history of noncompliance has given rise to a defense of 

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estoppel. Even assuming such a defense may be asserted under ERISA, the facts here do not 

establish Defendant has a viable defense on that basis. Nor has Defendant pointed to any other 

viable defense in this action. Thus, this factor also supports the Court’s denial of Defendant’s 

request that the default against it be vacated. 

Finally, were the Court to vacate the default against Defendant it would prejudice Plaintiffs 

by encouraging a continued pattern of conduct that is a burden to Plaintiffs and the Court and is 

contrary to the purposes of ERISA. 

III. CONCLUSION

For the reasons stated above, the Motion is DENIED. The default against Defendant shall not 

be vacated and Defendant may not file an answer in this action.

IT IS SO ORDERED.

Dated: January 6, 2014

______________________________________

JOSEPH C. SPERO

United States Magistrate Judge

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