Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_07-cv-00367/USCOURTS-caed-1_07-cv-00367-4/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

EASTERN DISTRICT OF CALIFORNIA

CARL L. JIMENA, )

)

)

)

Plaintiff, )

)

vs. )

)

)

UBS AG BANK, INC., et al., )

)

)

Defendant. )

)

)

No. CV-F-07-367 OWW/GSA

ORDER DENYING PLAINTIFF'S

REQUEST FOR RECONSIDERATION

BY DISTRICT COURT OF

MAGISTRATE JUDGE'S RULING

(Doc. 99) AND DENYING

PLAINTIFF’S SECOND AMENDED

MOTION FOR ENTRY OF DEFAULT

AND DEFAULT JUDGMENT (Doc.

49)

On February 19, 2008, Plaintiff, proceeding in pro per,

timely filed a request for reconsideration by the District Court

of Magistrate Judge Austin’s “Order Denying Plaintiff’s Motion to

Set for Hearing (Document 94)”, filed on February 8, 2008.

A. BACKGROUND.

The Notice of Removal was filed on March 6, 2007. 

According to the Notice of Removal, Defendant UBS Financial

Services was served on February 5, 2007. UBS AG, assuming proper

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service, was served by mail on January 31, 2006, making service

by mail by complete on February 10, 2007 pursuant to California

Civil Code § 415.40. The action was removed to this Court on

March 6, 2007. Defendant UBS AG filed an Answer on March 13,

2007 (Doc. 5). Plaintiff filed a motion to remand the action to

the Kern County Superior Court on March 26, 2007, arguing that

the removal was not timely and that the Court lacked subject

matter jurisdiction. Plaintiff’s motion to remand was denied by

Memorandum Decision and Order filed on June 8, 2007 (Doc. 18). 

The June 8, 2007 Order also granted Defendants’ motion to dismiss

UBS FS from the Complaint with leave to amend. 

On July 30, 2007, Plaintiff filed an “Ex-Parte Amended

Motion for Default Under Oath”, asserting that UBS AG is in

default because its Answer was not timely filed as required by

Rule 81(c), Federal Rules of Civil Procedure, noticing the motion

for hearing before Magistrate Judge Goldner on August 6, 2007

(Doc. 43). The Magistrate Judge vacated the August 6, 2007

hearing because Plaintiff had not complied with the notice

requirements of Rule 78-230, Local Rules of Practice. On August

20, 2007, Plaintiff filed the second amended motion for entry of

default and default judgment, noticing the motion for hearing

before Magistrate Judge Goldner on September 18, 2007 (Doc. 49). 

By the second amended motion for entry of default and default

judgment, which is comprised of 201 pages, Plaintiff seeks “an

order to enter default and render default judgment on UBS AG,

(Zurich, Switzerland Headquarters and Manhattan, New York

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Branch)” ... on the ground that the named defendants failed to

answer the complaint within the number of days required under

Rule 81(c).” In the Memorandum of Points and Authorities in

support of this motion, Plaintiff also argues, even if UBS AG

Answer was timely, it should be stricken because “UBS AG’s

defenses that Standard Trust Bank PLC never wired 19 million

dollars to UBS AG and never received the 19 million dollars and

that Plaintiff is dealing with an imposter are sham and false;”

“UBS AG’s acceptance of the payment order by placing the funds

received in an account coded escrow created a special deposit

with an obligation to deliver to beneficiary within 96 hours and

failure to do so constitute [sic] constructive fraud which is

aggravated by making numerous promises and failed to deliver [and

is] aggravated by admitting all allegations of the First Cause of

Action [and] Plaintiff is entitled to punitive damages of another

19 million dollars;” “Even without the application of the escrow

laws of California, UBS AG, by its acceptance of the payment

order is automatically obligated to execute the payment order;”

“Even without applying the California Uniform Commercial Code,

UBS AG by its acceptance of the payment order, is a consent to a

contract to allow Standard Trust Bank’s programming of

automatically transferring the funds to Plaintiff’s account at

Washington Mutual Bank in California;” “UBS AG admitted all

allegations of the First Cause of Action by relying on its

affirmative defense that Plaintiff is dealing with an imposter;”

“UBS AG is liable to refund the $76,000 paid for the non-existent

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fee of anti-drug/terrorist clearance certificate based on

constructive and actual fraud and under § 2338, California Civil

Code with punitive damages and interest;” “Defendants are in

estoppel to raise any kind of defense, affirmative defense or

otherwise, to avoid payment of the 19 million dollars since

Defendants admitted liability to pay or wire transfer the 19

million dollars;” “UBS AG is liable for humiliation resulting

from fraud, services already rendered by Plaintiff and for lost

profits;” “Plaintiff is entitled to interest as damages due to

the presence of fraud;” “Plaintiff is entitled to punitive

damages;” “All emails attached to Plaintiff’s affidavit are

admissible in evidence.”

By Minute Order filed on August 27, 2007, Magistrate Judge

Goldner vacated the hearing because of Plaintiff’s pending appeal

to the Ninth Circuit (Doc. 50). UBS AG filed an opposition to

Plaintiff’s second amended motion for entry of default and

default judgment on October 19, 2007 (Doc. 64). Plaintiff’s

appeal to the Ninth Circuit was dismissed and by Minute Order

filed On September 26, 2007, Plaintiff’s second amended motion

for entry of default and default judgment was set for hearing on

November 5, 2007 before Magistrate Judge Goldner. By Order filed

on October 25, 2007, Magistrate Goldner recused herself from this

action and assigned the action to Magistrate Judge Austin. By

minute order filed on October 26, 2007, Magistrate Judge Austin

set the motion for hearing on November 16, 2007. The November

16, 2007 hearing was vacated by Order filed on November 9, 2007

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Docs. 80 and 81 filed by Plaintiff on November 13, 2007 1

appear to be identical to Docs. 76, 77, and 78. 

5

because of Plaintiff’s failure to timely file an Amended

Complaint as required by Court order (Doc. 70). On November 13,

2007, Plaintiff filed “Plaintiff’s Request for Ruling on Offer of

Evidence” (Doc. 76); an “Offer of Evidence With Annex ‘A’

Affidavit of Authentication” (Doc. 77); and “Plaintiff’s

Affidavit Autenticating [sic] His Exhibits, Annex ‘A’ to Offer of

Evidence” (Doc. 78). On January 31, 2008, Plaintiff filed a 1

motion to set for hearing “Doc. No. 80, 77, 78 and 49" (Doc. 94). 

On January 31, 2008, Plaintiff filed a “Motion to Correct ‘Offer

of Evidence’, Doc. No. 77" (Doc. 96). On February 6, 2008,

Plaintiff filed a “Motion to Correct Error on Plaintiff’s

Affidavit Authenticating His Exhibits, Annex ‘A’ to Offer of

Evidence (Doc. 78)” (Doc. 97).

On February 8, 2008, Magistrate Judge Austin denied

Plaintiff’s motion to set “Doc. No. 80, 77, 78 and 49" for

hearing, ruling in pertinent part:

Pursuant to Federal Rule of Civil Procedure

55, an order of default judgment may be

entered against a defendant who has been

defaulted for not appearing. In this

instance, there has been no entry of default

against Defendant UBS AG by the Clerk of the

Court pursuant to Federal Rule of Civil

Procedure 55(a). Accordingly, Plaintiff’s

motion for default judgment is not

appropriate for hearing at this time.

(Doc. 98). 

B. GOVERNING STANDARDS.

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Rule 72-303, Local Rules of Practice, governs requests for

reconsideration by the District Judge of a Magistrate Judge’s

ruling. “No oral argument shall be allowed in the usual civil

action unless the assigned Judge specifically calendars such

argument, either on request of a party or sua sponte.” Rule 72-

303(e). The standard of review is the “clearly erroneous or

contrary to law” standard set forth in 28 U.S.C. § 636(b)(1)(A). 

C. ANALYSIS.

Plaintiff argues that the Magistrate Judge erred because

entry of a default as a sanction is not governed by Rule 55,

Federal Rules of Civil Procedure. Plaintiff asserts: “If the

basis for default is time limitation, in removed actions it is

Rule 81(c), FRCP that applies. However, Plaintiff is applying to

the District Court for an order to enter a default on both UBS FS

and UBS AG as a sanction.” Plaintiff asserts that he is applying

for a default against UBS FS and UBS AG on the basis of three

violations:

a) failure to make initial disclosure of

Annex 15 and 16 of the amended complaint

(respectively remarked as Exhibit 15 and 16,

plaintiff), (See Exhibit 73, Rule 26(1)(a)

(first violation)

b) filing an answer which lacks meritorious

defense; (2 violation) nd

c) committing fraud, misrepresentation,

misconduct as detailed in plaintiff’s Doc.

93. (third violation). 

Plaintiff’s second amended motion for entry of default and

default judgment, (Doc. 49), “an order to enter default and

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render default judgment on UBS AG, (Zurich, Switzerland

Headquarters and Manhattan, New York Branch)” ... on the ground

that the named defendants failed to answer the complaint within

the number of days required under Rule 81(c)” and on the ground

that UBS AG’s Answer raised non-meritorious defenses. On October

19, 2007, UBS AG filed an opposition to this motion, addressing

these grounds. (Doc. 64). 

Plaintiff did not assert that Defendant did not make an

initial disclosure of Annex 15 and 16 of the amended complaint

until November 13, 2007. Plaintiff’s assertion that UBS FS

committed fraud, misrepresentation, and misconduct as detailed in

Doc. 93, refers to arguments and assertions made by Plaintiff in

his reply brief in support of Plaintiff’s motion to set aside the

order dismissing UBS FS and to enter a default against UBS FS

filed on January 25, 2008 (Doc. 93).

These two assertions in support of the second motion for

default judgment against UBS AG are procedurally improper. The

Court will not consider grounds for relief raised for the first

time after the opposing party has filed an opposition. Further,

there is no basis for a default sanction or any sanction against

UBS FS because it has been dismissed from and is no longer a

party to this action. 

With regard to Annex 15 and 16, Doc. 77 asserts:

At the joint scheduling conference held on

June 19, 2007, plaintiff demanded a copy of

Exh. 16, since it originated from UBS AG,

together with Exh. 15, the payment order

subject of acceptance, and in return will

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give him a copy of plaintiff’s exhibits by

way of initial disclosure. Atty. Jacob

Kreilllkamp refused. The exchange was a one

way traffic. Plaintiff therefore is

compelled to use his own comply Exh. 15 and

16. 

(Doc. 77, p.3)

There has been no scheduling conference in this action; no

Scheduling Conference Order has issued. This is because there is

no operative complaint on file. Plaintiff has not filed an 

Amended Complaint required by Court order. Consequently, formal

discovery has not commenced in this action. Further, sanctions

for failure to make disclosures or cooperate in discovery are

governed by Rule 37, Federal Rules of Civil Procedure. Rule

37(a)(2)(A) requires that the party seeking the nondisclosed

discovery move to compel the production of the non-disclosed

discovery. Rule 37(b) permits sanctions against the party

failing to comply with a court order compelling production of the

discovery. No motion to compel has been filed and no order

concerning discovery has been issued. No discovery sanctions can

be issued.

Plaintiff’s contention that the sanction of default should

be entered against UBS AG because the Answer “lacks meritorious

defense” is unsupported. Plaintiff cites Commercial Bank of

Kuwait v. Rafidain Bank, 15 F.3d 238, 244 (2 Cir.1994). That nd

case does not support the sanction of default based on the

defenses asserted by UBS AG in its Answer. At issue in the

Second Circuit decision was whether the granting of a default

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judgment was an abuse of discretion. Because the default was

willful and there was an absence of meritorious defenses, the

Second Circuit affirmed the district court. Plaintiff also cites

Hoxworth v. Blinder, Robinson & Co., Inc., 980 F.2d 912 (3rd

Cir.1992). Hoxworth addressed whether the district court abused

its discretion in entering a default as a sanction because of the

defendants’ repeated failures to comply with scheduling orders

and discovery. One of the factors discussed by the district

court in the exercise of its discretion was the relative merit of

plaintiff’s claims and the defendants’ defenses. 980 F.2d at

922. These cases do not stand for the proposition that a default

sanction can be imposed merely because it is argued that defenses

asserted in an Answer lack merit.

With regard to Plaintiff’s contention is his second amended

motion for entry of default and default judgment against UBS AG

that because the Answer was not filed within the time limits set

forth in Rule 81(c), Federal Rules of Civil Procedure, after

review of the papers, this matter is suitable for decision

without oral argument. Rule 78-230(h), Local Rules of Practice. 

Rule 81(c) provides in pertinent part:

In a removed action in which the defendant

has not answered, the defendant shall answer

or present the other defenses or objections

available under these rules within 20 days

after the receipt through service or

otherwise of a copy of the initial pleading

setting forth the claim for relief upon which

the action or proceeding is based, or within

20 days after the service of summons upon

such initial pleading, then filed, or within

five days after the filing of the petition

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for removal, whichever period is longest.

The Notice of Removal was filed on March 6, 2007. The Answer was

filed March 13, 2007. Rule 6(a), Federal Rules of Civil

Procedure, provides:

In computing any period of time prescribed by

these rules ..., the day of the act, event,

or default from which the designated period

of time begins to run shall not be included. 

The last day of the period so computed shall

be included, unless it is a Saturday, a

Sunday, or a legal holiday ... in which event

the period runs until the end of the next day

which is not one of the aforementioned days. 

When the period of time prescribed or allowed

is less than 11 days, intermediate Saturdays,

Sundays, and legal holidays shall be excluded

in the computation. 

Pursuant to the operation of Rule 6(a), the Answer filed on March

13, 2007 was timely filed under the requirements of Rule 81(c). 

 CONCLUSION 

For the reasons stated:

1. Plaintiff’s request for reconsideration by the District

Court of the Magistrate Judge’s ruling is DENIED;

2. Plaintiff’s second amended motion for entry of default

and default judgment is DENIED WITH PREJUDICE AND SHALL NOT BE

REASSERTED.

3. Plaintiff is advised that Rule 83-183(a), Local Rules of

Practice provides:

Any individual representing himself ...

without an attorney is bound by the Federal

Rules of Civil ... Procedure and by these

Local Rules. All obligations imposed on

‘counsel’ by these Local Rules apply to

individuals appearing in propria persona. 

Failure to comply therewith may be ground for

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dismissal ... or any other sanction

appropriate under these Rules. 

Plaintiff’s repeated improper filings in this action, including

his appeal to the Ninth Circuit, his failure to file the Amended

Complaint as required by order, his premature attempts to obtain

dispositive and/or evidentiary rulings even before a scheduling

conference has been held and a Scheduling Order issued, and the

raising of additional grounds for relief after a matter has been

opposed, have caused serious confusion and delay in the

prosecution of this action. Rule 83-183(a) makes clear that

Plaintiff’s pro per status will not be viewed as an excuse for

any further failures to comply with Court orders or the

applicable rules.

IT IS SO ORDERED.

Dated: February 27, 2008 /s/ Oliver W. Wanger 

668554 UNITED STATES DISTRICT JUDGE

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