Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_14-cv-01299/USCOURTS-azd-2_14-cv-01299-0/pdf.json

Parties Involved:
Universal American Mortgage Company LLC
Defendant
Michelle Whitmore
Plaintiff

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Michelle Whitmore, 

Plaintiff, 

v. 

Universal American Mortgage Company 

LLC, 

Defendant. 

No. CV-14-01299-PHX-DGC

ORDER 

 Defendant Universal American Mortgage Company LLC has filed motions to set 

aside entry of default and compel arbitration. Doc. 17; Doc. 18. Pro se Plaintiff Michelle 

Whitmore opposes both motions. Doc. 22. The Court will grant both motions. 

I. Background. 

 Defendant employed Plaintiff between October 15, 2012 and August 12, 2013. 

Doc. 1, ¶ 5. As a condition of employment, Defendant requires all current and 

prospective employees to agree to the terms of Defendant’s employee handbook, styled 

the Associate Reference Guide (“ARG”). Doc. 18-1 at 2. One such term is a mandatory 

employment dispute resolution procedure.1

 Doc. 18-1 at 5. On October 12, 2012, 

 

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 “This dispute resolution procedure is a condition of employment with [Defendant]. . . . If a dispute arises relating to your employment by [Defendant] . . . that cannot be resolved informally after consultation with Human Resources, we require any such dispute to be resolved and/or determined through the dispute resolution procedures set forth in this policy.” Doc. 18-1, at 5. “If the dispute is not resolved through mediation, Associate and [Defendant] agree to resolve the dispute exclusively by confidential binding arbitration under the Federal Arbitration Act (‘FAA’) and this 

policy.” Id. at 6. 

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Plaintiff acknowledged in writing she had been given an opportunity to read the ARG and 

agreed to the policies, guidelines, and statements it contained. Id. at 10. On October 15, 

2012, Plaintiff agreed once more to the arbitration agreement after she completed an 

online training program regarding the ARG and its policies. Id. at 17. Plaintiff does not 

dispute these agreements. See Doc. 22. 

 Plaintiff’s employment with Defendant ended on August 12, 2013. Doc. 1, ¶ 5. 

On February 6, 2014, Plaintiff and Defendant participated in a mediation facilitated by 

the Equal Employment Opportunity Commission (“EEOC”), but did not reach a 

settlement. Doc. 18-1 at 2. Plaintiff alleges that Defendant did not attend mediation to 

reach an agreement, but rather to engage in further retaliatory conduct against Plaintiff 

and to scare her into “signing under duress a release of claims with the EEOC.” Doc. 22, 

¶ 7. Following mediation, Plaintiff did not seek to pursue arbitration as provided in the 

ARG. Doc. 18-2, at 2. Instead, Plaintiff brought this action on June 11, 2014, after 

receiving a “right to sue” letter from the EEOC on April 30, 2014. Doc. 1, ¶ 11. On 

July 10, 2014, Defendant was served with a summons and complaint regarding Plaintiff’s 

lawsuit. Doc. 14 at 2. On August 21, 2014, Plaintiff asked the Clerk to enter default 

against Defendant pursuant to Rule 55(a) for failing to answer or otherwise defend. Id., 

¶ 4. The Clerk entered default on August 25, 2014. Doc. 15. No motion for default 

judgment has been filed. 

 Defendant filed its motion to set aside default on September 10, 2014. Doc. 17. 

According to the motion, Defendant learned on June 11, 2014, that Plaintiff might have 

filed a lawsuit against it. Id. at 3. Defendant immediately contacted Defendant’s 

Counsel and asked that he investigate the matter. Id. Counsel checked the Court’s 

database and discovered that Plaintiff had indeed filed a lawsuit. Id. Defendant and 

Counsel then made the strategic decision to respond to Plaintiff’s complaint, once served, 

with a motion to compel arbitration. Id. Over the next few weeks, Counsel drafted the 

motion to compel. Id. Counsel asked Defendant about the status of the service at least 

once between June 12 and July 9, 2014. Id. 

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 On July 9, 2014, Counsel’s father passed away unexpectedly, leaving Counsel to 

handle family matters. Id. On July 10, 2014, Defendant was served with Plaintiff’s 

complaint. Id. On July 14, 2014, Defendant sent an e-mail to Counsel notifying him of 

the service, anticipating that Counsel would then file the motion to compel. Id. at 4. But 

Defendant’s e-mail was addressed to a personal e-mail of Counsel that is no longer used. 

Id. Defendant believed the response and motion would be filed, while Counsel remained 

unaware that Defendant had been served. Id. The miscommunication was discovered on 

September 9, 2014, during a face to face meeting between Defendant and Counsel. Id. 

Counsel checked the Court’s docket, discovered the entry of default, and proceeded to 

draft the motion to set aside the default. Id. at 5. On September 10, 2014, Counsel filed 

the motions to set aside default and compel arbitration. Docs. 17, 18. 

II. Motion to Set Aside Default. 

 Federal Rule of Civil Procedure 55(c) allows a court to “set aside an entry of 

default for good cause[.]” Fed. R. Civ. P. 55(c). Courts consider three factors in 

deciding whether good cause exists: (1) whether the moving party engaged in culpable 

conduct, (2) whether the moving party has a meritorious defense, and (3) whether setting 

aside the default will prejudice the non-moving party. United States v. Signed Pers. 

Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010). The moving 

party bears the burden of proving that the three factors weigh in favor of setting aside 

default. Franchise Holding II, LLC. v. Huntington Rest. Grp., 375 F.3d 922, 926 (9th 

Cir. 2004). This burden, however, is not extraordinarily heavy, and “judgment for default 

is a drastic step appropriate only in extreme circumstances[.]” Mesle, 615 F.3d at 1091. 

“A defendant’s conduct is culpable if he has received actual or constructive notice 

of the filing of the action and intentionally failed to answer.” Id. at 1092 (emphasis in 

original). Intentional conduct must rise to the level of conduct that is willful, deliberate, 

or done in bad faith. Id. Defendant asserts that a miscommunication between Defendant 

and Counsel, while Counsel was in the midst of a family emergency, was the cause of 

their failure to answer. Doc. 17 at 2. Nothing in Defendant’s conduct suggests a 

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“devious, deliberate, willful, or bad faith failure to respond.” Mesle, 615 F.3d at 1092. 

Defendant’s conduct was not culpable for purposes of the good cause factors. 

“All that is necessary to satisfy the ‘meritorious defense’ requirement is to allege 

sufficient facts that, if true, would constitute a defense[.]” Mesle, 615 F.3d at 1094. 

Plaintiff alleges that Defendant engaged in discriminatory and retaliatory conduct based 

on her relationship with her disabled son. Doc. 1, ¶ 8. These allegations are 

undisputedly an employment-related dispute within the bounds of the ARG’s mutually 

binding dispute resolution policy, and Defendant’s request to compel arbitration is a 

defense sufficient to satisfy the meritorious defense requirement. 

 “To be prejudicial, the setting aside of a judgment must result in greater harm than 

simply delaying resolution of the case.” Mesle, 615 F.3d at 1095 (citation omitted). 

“[T]he standard is whether [Plaintiff’s] ability to pursue [her] claim will be hindered.” 

Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). Plaintiff asserts that Defendant’s 

Counsel lied to the Court regarding the death of his father.2

 Doc. 22, ¶ 4. Plaintiff also 

seems to claim that Defendant surreptitiously gathered information and evidence of 

Plaintiff’s claim through a “legal consultant who betrayed the plaintiff,” and intentionally 

stalled proceedings as a tactic because Defendant knew Plaintiff could not afford legal 

counsel. Id., ¶ 6. Even if taken as true, these allegations do not show that setting aside 

default would prejudice Plaintiff in any way other “than simply delaying resolution of the 

case,” and do not warrant the Court’s refusal to allow this case be decided on the merits. 

Mesle, 615 F.3d at 1095. 

 This Circuit’s “rules for determining when a default should be set aside are 

solicitous towards movants[.]” Mesle, 615 F.3d at 1089. Whenever possible, a case 

should be decided on the merits and judgment by default is “appropriate only in extreme 

circumstances[.]” Id. The Court will set aside default in this case. 

 

2

 In Defendant’s initial motion to set aside default was a copy of Mr. Meyer’s death certificate. Doc. 17-1 at 13. The website to which Plaintiff cites as listing the “actual date of death” is the online obituary for a man with a different name, in a different 

state, who died on a different day. Plaintiff should rely on more accurate evidence when 

making assertions to the Court. 

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III. Motion to Compel Arbitration. 

 Under the Federal Arbitration Act, “[a] written provision in . . . a contract 

evidencing a transaction involving commerce to settle by arbitration a controversy 

thereafter arising out of such contract or transaction, or the refusal to perform the whole 

or any part thereof, . . . shall be valid, irrevocable, and enforceable[.]” 9 U.S.C. § 2; see, 

e.g., Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 113-19 (2001) (holding that FAA 

applies to employment contracts except those of transportation workers) (citing 9 

U.S.C. §§ 1-2); Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th 

Cir. 2000); Tracer Research Corp. v. Nat’l Envtl. Servs. Co., 42 F.3d 1292, 1294 

(9th Cir. 1994), cert. dismissed, 515 U.S. 1187 (1995). 

 “Notwithstanding the federal policy favoring it, ‘arbitration is a matter of contract 

and a party cannot be required to submit to arbitration any dispute which he has not 

agreed so to submit.’” Tracer Research Corp, 42 F.3d at 1294 (quoting United 

Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)). 

Where the arbitrability of a dispute is in question, a court must look to the terms of the 

contract. See Chiron Corp., 207 F.3d at 1130. “‘Any doubts concerning the scope of 

arbitrable issues should be resolved in favor of arbitration.’” Simula, 175 F.3d at 719 

(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 20 (1983)). 

 The dispute resolution procedure in the ARG states that “[i]f the dispute is not 

resolved through mediation, Associate and [Defendant] agree to resolve the dispute 

exclusively by confidential binding arbitration under the Federal Arbitration Act (‘FAA’) 

and this policy.” Doc. 18-1 at 6. Plaintiff does not dispute that she read, understood, and 

agreed to the terms of the arbitration policy. Doc. 18-1 at 10, 17. Plaintiff does not 

contend that the terms were unclear, unexplained, or waived. Nor does she allege that 

she was deceived or pressured into accepting the terms. 

 The ARG’s mutually binding arbitration agreement covers all employment related 

disputes. Doc. 18-1 at 5. Because Plaintiff’s claim under the ADA is an employmentrelated dispute, it is covered by the dispute resolution procedure in the ARG. 

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 Plaintiff has offered no argument that would enable the Court to deny Defendant’s 

motion. Defendant’s motion to compel arbitration will be granted.3

IV. Dismissal. 

 “If the court finds that an arbitration clause is valid and enforceable, the court 

should stay or dismiss the action to allow the arbitration to proceed.” Kam-Ko BioPharm Trading Co. Ltd-Australasia v. Mayne Pharma (USA) Inc., 560 F.3d 935, 940 (9th 

Cir. 2009). In its discretion, the Court will dismiss this action to permit arbitration to 

proceed. Because Plaintiff is proceeding pro se, the Court will require Defendant, within 

seven days of this order, or provide a written explanation to Plaintiff concerning the 

precise procedures she must follow to commence arbitration. Defendant shall provide 

whatever assistance is necessary to assist Plaintiff in commencing arbitration. Once 

arbitration is completed, the parties can seek judicial enforcement, if necessary, under 

applicable law. 

 IT IS ORDERED: 

 1. Defendant’s motion to set aside default (Doc. 17) is granted. 

 2. Defendant’s motion to compel arbitration (Doc. 18) is granted. The parties 

shall proceed to arbitration in accordance with the terms of the ARG. 

 3. Plaintiff’s request for damages (Doc. 22, ¶¶ 10-11) is denied. 

 4. The Clerk shall terminate this action. 

 Dated this 27th day of October, 2014. 

 

3

 Because the Court has granted Defendant’s motion to compel arbitration, Plaintiff’s request for damages in her response will not be addressed. Doc. 24, ¶10-11. 

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