Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02918/USCOURTS-caed-2_06-cv-02918-6/pdf.json

Parties Involved:
Rachel Billini
Defendant
Monique Diaz
Defendant
Nicole Diaz
Defendant
Pablo Diaz
Defendant
Regina Diaz
Defendant
Tiara Diaz
Defendant
Metropolitan Life Insurance Company
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

METROPOLITAN LIFE INSURANCE

COMPANY,

NO. CIV. S-06-02918 WBS KJM

Plaintiff-in-Interpleader,

v. ORDER RE: MOTION TO SET ASIDE

DEFAULT JUDGMENT

RACHEL BILLINI; MONIQUE DIAZ;

NICOLE DIAZ; PABLO DIAZ; REGINA

DIAZ; TIARA DIAZ; and DOES 1

through 10, inclusive,

Defendants-in-Interpleader.

----oo0oo----

On January 15, 2008, this court ordered that default be

entered against defendant-in-interpleader Rachel Billini and,

upon entry of her default, that default judgment be entered in

favor of defendants-in-interpleader Monique Diaz, Nicole Diaz,

Pablo Diaz, Regina Diaz, and Tiara Diaz (“decedent’s children”). 

Billini now moves to set aside the default judgment. 

///

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I. Factual & Procedural Background

The factual and procedural background in this case

remains the same as in this court’s November 27, 2007 and January

15, 2008 Orders. Metropolitan Life Ins. Co. v. Billini, No.

06-2918, 2007 WL 4209405, at *1-*2 (E.D. Cal. Nov. 27, 2007);

Metropolitan Life Ins. Co. v. Billini, No. 06-2918, 2008 WL

150538, at *1 (E.D. Cal. Jan. 15, 2008). As explained in this

court’s January 15, 2008 Order, default judgment was entered

against Billini because she was personally served on April 9,

2007 and never filed an answer or made an appearance, either in

response to the complaint or at the scheduled Status Conference

on January 14, 2008. Metropolitan Life Ins. Co., 2008 WL 150538,

at *1. 

After receiving evidence and testimony at the Status

Conference, the court concluded that decedent’s children were

entitled to a default judgment. Id. at *2. Pursuant to the

January 15, 2008 Order, the Clerk of this court has disbursed the

plan benefits. See id. (detailing the distribution of the

funds). 

On January 23, 2008, Billini attempted to make her

first appearance in this action when she filed a motion to set

aside the default judgment pursuant to Federal Rule of Civil

Procedure 60(b)(1). Billini’s counsel, who was not counsel of

record until January 23, 2008, explains that the sole reason

supporting his client’s motion is his own negligence:

I failed to file a response to the Complaint-inInterpleader for the following reasons: My negligence in

not assuring that the hearing date of January 14, 200[8],

in the above referenced matter were logged in my tickler

system. I must respectfully admit that I was previously

Case 2:06-cv-02918-WBS -KJM Document 33 Filed 01/29/08 Page 2 of 8
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1 Although this court’s docket and decedent’s children’s

appearance at the Status Conference indicate that they were not

represented by counsel, Billini’s counsel also states that he had

communicated with their counsel via email and “with [the hope of

settlement] in mind, [he] simply didn’t pay enough attention to

the court time-lines and [] inadvertently and negligently, let

the case get by [him].” (Jensen Decl. at ¶ 3.) 

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aware that a hearing was set in January, 2008. On

January 14, 2008, I opened the file for the purpose of

drafting an answer to the complaint and drafting and

filing whatever documents were required for the pretrial

conference. Unfortunately, I opened the file one hour

after the hearing. 

(Jensen Decl. ¶ 2 (emphasis in original).)1 

II. Discussion

Pursuant to Federal Rule of Civil Procedure 60(b)(1), a

court may set aside a default judgment for “mistake,

inadvertence, surprise, or excusable neglect.” Fed. R. Civ. P.

60(b)(1). “Rule 60(b)(1) guides the balance between the

overriding judicial goal of deciding cases correctly, on the

basis of their legal and factual merits, with the interest of

both litigants and the courts in the finality of judgments.” TCI

Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 695 (9th Cir.

2001). A district court should decline to set aside a default

judgment only in “extreme circumstances” because “a case should,

whenever possible, be decided on the merits.” Falk v. Allen, 739

F.2d 461, 463 (9th Cir. 1984).

“In this circuit, a trial court has discretion to deny

a Rule 60(b) motion to vacate a default judgment” for excuseable

neglect if (1) the moving party’s “culpable conduct led to the

default;” (2) the non-moving party “would be prejudiced if the

judgment is set aside;” or (3) the moving party lacks a

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“meritorious” claim. In re Hammer, 940 F.2d 524, 525-26 (9th

Cir. 1991) (internal citations omitted). The burden is on the

moving party to show that all three factors warrant setting aside

the default judgment. TCI Group Life Ins. Plan, 244 F.3d at 696;

see also Info. Sys. & Networks Corp. v. U.S., 994 F.2d 792, 796

(Fed. Cir. 1993) (explaining that most circuits balance the three

factors, but that the Ninth Circuit treats them in the

disjunctive); In re Hammer, 940 F.2d at 526 (“[T]he trial court’s

denial of a motion to vacate a default judgment will be affirmed

if the defendant’s own culpable conduct prompted the default.”)

(citations omitted). 

When a party moves to set aside a default judgment

based on “excusable neglect,” the court must also consider the

above factors in light of overlapping equitable considerations.

Specifically, the court must consider “prejudice [to the nonmoving party], the length of the delay and impact on judicial

proceedings, the reason for the delay, including whether it was

within the reasonable control of the movant, and whether the

movant acted in good faith.” TCI Group Life Ins. Plan, 244 F.3d

at 696 (citing Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.

P’ship, 507 U.S. 380, 395 (1993)) (additional citations omitted).

A. Billini’s Culpable Conduct

Billini’s culpable conduct precludes this court from

exercising its discretion to set aside the default judgment. 

“‘[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.’” TCI Group Life Ins. Plan, 244

F.3d at 697 (quoting Alan Neuman Prods., Inc. v. Albright,

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862 F.2d 1388, 1392 (9th Cir. 1988)). To negate a finding of

culpable conduct when a defendant has neglected to file an

answer, the defendant must provide “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.” Id. at 698-99. Absent

an understandable explanation, “it is fair to expect that

individuals who have . . . consulted with a lawyer appreciate the

consequences of failing to answer and do so only if they see some

advantage to themselves.” Id. at 699 n.6.

Billini does not dispute that she received actual

notice of this action when she was personally served. After

being personally served, Billini had twenty days to file an

answer pursuant to Federal Rule of Civil Procedure 12(a)(1)(A). 

Fed. R. Civ. P. 12(a)(1)(A). Billini fails to offer any

explanation as to why she did not file, or at least seek an

extension of time to file, any response to the complaint. 

Failure to provide an explanation, let alone an understandable

one, constitutes sufficiently culpable and intentional conduct to

deny Billini’s motion because “it is fair to expect that

[Billini] . . . appreciate[d] the consequences of failing to

answer and [did] so only” to advantage herself. TCI Group Life

Ins. Plan, 244 F.3d at 699 n.6. 

Billini’s counsel’s purported explanations do not even

offer any insight as to why Billini failed to take any action in

response to the complaint. First, Billini’s counsel explains

that he chose not to file an answer in the hopes that he could

settle the case. However, counsel did not purportedly begin

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pursuing a settlement until October of 2007, which was over seven

months after the answer was due. Similarly, counsel’s negligence

in calendaring the Status Conference fails to explain why counsel

did not draft an answer in the nine months prior to the Status

Conference. In short, nothing in Billini’s counsel’s declaration

illuminates Billini’s decision not to file an answer or other

responsive pleading.

Billini’s failure to provide a single explanation for

her choice not to respond to the complaint amounts to “culpable

conduct [by Billini that] led to the default” and, therefore,

justifies denial of her Rule 60(b)(1) motion. TCI Group Life

Ins. Plan, 244 F.3d at 696, 698; see also United States v. Reed,

No. 05-0431, 2007 U.S. Dist. Lexis 11291, at *8-*12 (E.D. Cal.

2007) (denying a Rule 60(b)(1) motion when the defendant did not

explain his failure to file an answer); United States v. $32,000

in U.S. Currency, No. 05-5167, 2006 U.S. Dist. Lexis 46133, at

*13 (N.D. Cal. July 6, 2006) (denying a Rule 60(b)(1) motion when

the defendant did not explain his “failure to meet any of the

filing deadlines” and citing two other decisions reaching the

same conclusion). 

B. Prejudice to Decedent’s Children

While Billini’s culpable conduct, in itself, is

sufficient to deny her motion, the prejudice to decedent’s

children also weighs heavily against setting aside the judgment. 

Specifically, “if reopening the judgment would actually prejudice

the plaintiff who has diligently pursued her claim, then the

interest in finality should prevail.” TCI Group Life Ins. Plan,

244 F.3d at 697. At the Status Conference on January 14, 2008,

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decedent’s children, who have diligently pursued their claim pro

se, understandably believed they had finally reached closure to a

dispute that arose after their father died two-and-a-half years

ago. They would be greatly prejudiced by having to return the

money which has now already been distributed to them and begin

litigating the case all over again. The fact that the Clerk of

this court had disbursed the benefits at dispute in this case

prior to this court’s consideration of Billini’s motion

strengthens the court’s interest in upholding the finality of its

executed judgments. See Pioneer Inv. Servs. Co. v. Brunswick

Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993) (courts must also

consider the “impact on judicial proceedings” that setting aside

a default judgment will cause).

C. Meritorious Claim

After receiving testimony and evidence at the Status

Conference, this court concluded that the facts alleged in the

pleadings, when taken as true, establish that decedent’s children

are entitled to the disputed benefits. Metropolitan Life Ins.

Co. v. Billini, No. 06-2918, 2008 WL 150538, at *1 (E.D. Cal.

Jan. 15, 2008). Billini’s counsel claims that Billini “has a

good and viable position” based on the fact that MetLife stamped

decedent’s third beneficiary form as received one day after

decedent’s death. (Jensen Decl. 2:11-12.) Billini’s position--

which directly contradicts decedent’s clear intent and the

evidence this court examined at the Status Conference--does not

persuade this court that the default judgment should be set

aside. 

If Billini’s position is as “good and viable” as her

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counsel suggests, her remedy, if any, must lie against her

attorney’s malpractice insurance carrier. See, e.g., Nichols v.

Keller, 15 Cal. App. 4th 1672, 1682, 1687 (1993) (explaining that

a plaintiff can prove the requisite damage element of a

malpractice claim only if the plaintiff lost a valid claim

because of the attorney’s negligent act or omission).

Accordingly, because Billini’s culpable conduct led to

the default judgment and decedent’s children would be seriously

prejudiced by setting the it aside, this court will deny

Billini’s motion to set aside the default judgment. 

IT IS THEREFORE ORDERED that Billini’s motion to set

aside the default judgment be, and the same hereby is, DENIED. 

DATED: January 28, 2008

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