Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00701/USCOURTS-caed-2_05-cv-00701-2/pdf.json

Parties Involved:
Robert Brannen
Defendant
Deborah Correll
Defendant
Gary Ervin
Plaintiff
Farmers Insurance Exchange
Defendant
James S. McWhorter
Defendant

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

GARY ERVIN, No. CIV.S-05-0701 MCE DAD PS

Plaintiff,

v. FINDINGS AND RECOMMENDATIONS

FARMERS INSURANCE EXCHANGE,

et al.,

Defendants.

__________________________/

This matter came before the court on October 14, 2005, for

hearing on defendant Farmers Insurance Exchange’s (“Farmers”) motion

to set aside entry of default pursuant to Federal Rule of Civil

Procedure 55(c). Plaintiff, proceeding pro se, appeared on his own

behalf. David B. Owen appeared on behalf of defendant Farmers. 

Following a June 17, 2005, hearing, this matter also was

submitted for decision on defendants Robert Brannen, James S.

McWhorter and Deborah Correll’s motion to dismiss pursuant to Federal

Rule of Civil Procedure 12(b)(6). Plaintiff appeared on his own

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1 Following the hearing on defendants’ motion to dismiss,

plaintiff filed a request that the court convert defendants’ motion

to dismiss to a motion for summary judgment. That request is denied

as unnecessary. In light of the recommendations herein, plaintiff’s

additional request that the undersigned “appoint himself Settlement

Judge” also is denied as unnecessary.

2

behalf at that hearing. Mr. Owen appeared on behalf of the moving

defendants. There was no appearance on behalf of defendant Farmers,

Farmers maintaining at that time, as it does now, that it had not

been served with process.

Having considered all written materials filed in connection

with the motions before this court, and after hearing oral argument,

the undersigned will recommend that defendant Farmers’ motion to set

aside entry of default be granted and that the motion to dismiss be

granted as to all defendants.1

I. MOTION TO SET ASIDE ENTRY OF DEFAULT

A. Applicable Legal Standards

Federal Rule of Civil Procedure 55(c) governs the setting

aside of an entry of default and states, in relevant part: “For good

cause shown the court may set aside an entry of default ....” The

Ninth Circuit has indicated that a district court’s discretion is

“especially broad where ... it is entry of default that is being set

aside, rather than a default judgment.” Mendoza v. Wight Vineyard

Mgmt., 783 F.2d 941, 945 (9th Cir. 1986)(citation omitted). See also

Brady v. United States, 211 F.3d 499, 504 (9th Cir. 2000). “A

decision on a motion to set aside a default is not an abuse of

discretion unless the court is ‘clearly wrong’ in its determination

of good cause.” Mendoza, 783 F.2d at 945 (citation omitted). "Where

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timely relief is sought from a default ... and the movant has a

meritorious defense, doubt, if any, should be resolved in favor of

the motion to set aside the default so that cases may be decided on

their merits." Id. at 945-46 (internal quotations, citations and

brackets omitted). See also O’Connor v. State of Nevada, 27 F.3d

357, 364 (9th Cir. 1994).

B. Analysis

Farmers argues that the entry of default should be set

aside because it has never been served with a summons along with

plaintiff’s complaint. Plaintiff maintains that service of process

has been properly effected. While the parties have submitted

conflicting declarations in this regard, even assuming that Farmers

was properly served with process, the undersigned will recommend that

the entry of default be set aside.

Applying the applicable legal standards set forth above,

the undersigned finds that Farmers has sought relief from the entry

of default in a timely fashion. The Clerk of the Court entered

default at plaintiff’s request on August 9, 2005, and Farmers

immediately moved to set it aside, filing its initial notice of

motion and motion in this regard on August 17, 2005 -- only eight

days later.

The undersigned also finds that Farmers has a meritorious

defense. As explained below with respect to the motion to dismiss,

Farmers, like the other named defendants, is not subject to liability

under Title III of the ADA in light of the nature of the allegations

in plaintiff’s amended complaint. Under Ninth Circuit authority,

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neither Farmers nor the other defendants are a “place of public

accommodation” under 42 U.S.C. § 12182(a).

For these reasons, good cause exists for setting aside the 

default entered against Farmers. The undersigned therefore will

recommend that Farmers’ motion be granted.

II. MOTION TO DISMISS

A. Applicable Legal Standards

Pursuant to Federal Rule of Civil procedure 12(b)(6) a

complaint, or portion thereof, should only be dismissed for failure

to state a claim upon which relief can be granted if it appears

beyond doubt that the plaintiff can prove no set of facts in support

of the claim or claims that would entitle him to relief. Hishon v.

King & Spalding, 467 U.S. 69, 73 (1984) (citing Conley v. Gibson, 355

U.S. 41 (1957)); Palmer v. Roosevelt Lake Log Owners Ass'n, 651 F.2d

1289, 1294 (9th Cir. 1981). In reviewing a complaint under this

standard, the court must accept as true the allegations of the

complaint. Hosp. Bldg. Co. v. Rex Hosp. Trs., 425 U.S. 738, 740

(1976). Furthermore, the court must construe the pleading in the

light most favorable to the plaintiff, and resolve all doubts in the

plaintiff's favor. See Jenkins v. McKeithen, 395 U.S. 411, 421

(1969). In a case where the plaintiff is pro se, the court has an

obligation to construe the pleadings liberally. Bretz v. Kelman, 773

F.2d 1026, 1027 n.1 (9th Cir. 1985) (en banc). However, the court’s

liberal interpretation of a pro se complaint may not supply essential

elements of a claim that are not pled. Pena v. Gardner, 976 F.2d

/////

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469, 471 (9th Cir. 1992); Ivey v. Bd. of Regents of Univ. of Alaska,

673 F.2d 266, 268 (9th Cir. 1982).

B. Analysis

This case arises from a motor vehicle accident that

resulted in a state court personal injury action in which plaintiff

Gary Ervin was the named defendant. In that state court case, Mr.

Ervin, a Farmers insured, was represented by the defense firm Correll

& Associates. As set forth above, Robert Brannen, James S. McWhorter

and Deborah Correll, all attorneys with Correll & Associates, are the

defendants named by plaintiff Ervin in this federal action along with

Farmers.

According to his amended complaint before this court, Mr.

Ervin became greatly dissatisfied with the legal representation he

received in state court, including but not limited to the manner in

which defense counsel conducted discovery and the decision to settle

the property damage and personal injury claims against him. 

According to his amended complaint, Mr. Ervin suffers from ElectroImpulse Cardiovascular Disease for which he allegedly was

discriminated against by Correll & Associates and Farmers in the

state court action. Among other things, the amended complaint

alleges that defendants incorrectly perceived the nature of

plaintiff’s alleged disability and maliciously characterized

plaintiff’s heart condition as “insanity.” (Am. Compl. filed April

29, 2005, at 3-4.) The amended complaint sets forth three causes of

action: (1) “Insurer’s Concealment of Facts;” (2) “Malpractice by

Insurer’s In-house Counsel;” and (3) “Discrimination and Retaliation

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under the ADA.” The amended complaint prays for $5 million in

general damages and punitive damages.

As observed during the hearing on the motion to dismiss,

the only federal claim presented by the amended complaint is the

asserted claim under the ADA. While neither the amended complaint

nor plaintiff Ervin’s written opposition to defendants’ motion

specifies the nature of that ADA claim, plaintiff maintained at oral

argument that the claim is properly brought under Title III of the

ADA. However, as explained below, Title III of the ADA does not

apply to the named defendants. Therefore, plaintiff’s lone federal

cause of action must be dismissed.

Title III of the ADA provides that "[n]o individual shall

be discriminated against on the basis of disability in the full and

equal enjoyment of the goods, services, facilities, privileges,

advantages, or accommodations of any place of public accommodation by

any person who owns, leases (or leases to), or operates a place of

public accommodation." 42 U.S.C. § 12182(a). Thus, the issue is

whether defendants Brannen, McWhorter, Correll and Farmers are places

of public accommodation. The Ninth Circuit addressed this issue in

Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104 (9th Cir.

2000). In that case, a former employee brought an action alleging

that her former employer and the administrator of its disability plan

violated the ADA because they offered a group disability insurance

policy as a fringe benefit that provided greater benefits for

physical disabilities than for mental disabilities. The Ninth

Circuit held that “an insurance company administering an employerCase 2:05-cv-00701-MCE -DAD Document 34 Filed 10/19/05 Page 6 of 11
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provided disability policy is not a ‘place of public accommodation’

under Title III.” Weyer, 198 F.3d at 1115. In so holding the Ninth

Circuit followed the lead of the Third and Sixth Circuits and

explained, in relevant part:

Title III provides an extensive list of "public

accommodations" in § 12181(7), including such a

wide variety of things as an inn, a restaurant, a

theater, an auditorium, a bakery, a laundromat, a

depot, a museum, a zoo, a nursery, a day care

center, and a gymnasium. All the items on this

list, however, have something in common. They

are actual, physical places where goods or

services are open to the public, and places where

the public gets those goods or services. The

principle of noscitur a sociis requires that the

term, "place of public accommodation," be

interpreted within the context of the

accompanying words, and this context suggests

that some connection between the good or service

complained of and an actual physical place is

required.

The question then is whether an insurance

company, like UNUM, that administers an employerprovided disability plan is a "place of public

accommodation." Certainly, an insurance office

is a place where the public generally has access. 

But this case is not about such matters as ramps

and elevators so that disabled people can get to

the office. The dispute in this case, over terms

of a contract that the insurer markets through an

employer, is not what Congress addressed in the

public accommodations provisions.

Weyer, 198 F.3d at 1114 (footnote omitted).

Here, just like the situation in Weyer, the required

“connection between the good or service complained of and an actual

physical place” is lacking. Id. Plaintiff’s amended complaint does

not allege that he was denied access to a physical location. This is

not a case, for example, where plaintiff was denied physical access

to Correll & Associates law offices or Farmers’ insurance office due

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to a lack of accessible parking spaces, wheelchair ramps or

restrooms. Accordingly, the undersigned will recommend that

plaintiff’s ADA claim be dismissed for failure to state a cognizable

claim. See Weyer, 198 F.3d at 1115; see also Chabner v. United of

Omaha Life Ins. Co., 225 F.3d 1042, 1047 (9th Cir. 2000)(finding

insurance company administering employer-provided disability plan was

not "place of public accommodation" under ADA because employees

received benefits through employment, not through public

accommodation); Torres v. At&T Broadband, LLC, 158 F. Supp. 2d 1035,

1038 (N.D. Cal. 2001)(finding digital cable televison system which

failed to provide menu of available channels to visually impaired was

not place of public accommodation); Van Hulle v. Pacific Telesis

Corp., 124 F. Supp. 2d 642, 644 (N.D. Cal. 2000)(finding

administrator of employee health insurance benefits was not place of

public accommodation).

If this recommendation regarding the motion to dismiss is

adopted, only state law claims will remain. “Under 28 U.S.C. §

1367(c)(3) a district court may elect, in its discretion, not to

exercise supplemental jurisdiction over state claims if it has

dismissed the original jurisdiction federal claims.” Binder v.

Gillespie, 184 F.3d 1059, 1066 (9th Cir. 1999)(citing Fang v. United

States, 140 F.3d 1238, 1241 (9th Cir. 1998) and Voight v. Savell, 70

F.3d 1552, 1565 (9th Cir. 1995)). Where, as here, all federal claims

are dismissed before trial, the balance of relevant factors points

toward declining to exercise jurisdiction over the remaining state

law claims. Gini v. Las Vegas Metro. Police Dep’t, 40 F.3d 1041,

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1046 (9th Cir. 1994); Imagineering, Inc. v. Kiewit Pac. Co., 976 F.2d

1303, 1309 (9th Cir. 1992). Under these circumstances, the

undersigned will further recommend that the district court decline to

exercise its supplemental jurisdiction to adjudicate plaintiff’s

state law claims and that those claims be dismissed without

prejudice.

Finally, the undersigned realizes that defendant Farmers

has not moved to dismiss plaintiff’s amended complaint. However, the

court “may properly on its own motion dismiss an action as to

defendants who have not moved to dismiss where such defendants are in

a position similar to that of moving defendants or where claims

against such defendants are integrally related.” Silverton v. Dep’t

of Treasury, 644 F.2d 1341, 1345 (9th Cir. 1981); see also Omar v.

Sea-Land Service, Inc., 813 F.2d 986, 991 (9th Cir. 1987) (“Such a

dismissal may be made without notice where the plaintiff cannot

possible win relief.”). The court’s authority in this regard

includes sua sponte dismissal as to both defendants who have not been

served and those who have not yet answered or appeared. See Ricotta

v. State of California, 4 F. Supp. 2d 961, 978 (S.D. Cal. 1998); Bach

v. Mason, 190 F.R.D. 567, 571 & n.7 (D. Idaho 1999)(Garcia, J.). 

Here, all of the named defendants are similarly situated to the

moving defendants with respect to plaintiff’s amended complaint. 

Accordingly, dismissal as to all named defendants is appropriate at

this time.

/////

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2 The undersigned has considered whether leave to amend might

be appropriate. However, in light of the nature of the deficiencies

noted with respect to plaintiff’s ADA claim, the undersigned finds

that granting leave to amend would be futile. Schmier v. United

States Court of Appeals for the Ninth Circuit, 279 F.3d 817, 824 (9th

Cir. 2002). 

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III. CONCLUSION

For the reasons set forth above, IT IS HEREBY RECOMMENDED

that:

1. Defendant Farmers’ motion to set aside entry of default

be granted;

2. Defendants’ motion to dismiss for failure to state a

claim be granted as to all defendants;

3. Plaintiff’s causes of action under the ADA be dismissed

with prejudice;2 and

4. The remaining state law claims be dismissed without

prejudice for lack of jurisdiction.

These findings and recommendations are submitted to the

United States District Judge assigned to the case, pursuant to the

provisions of 28 U.S.C. § 636(b)(1). Within ten (10) days after

being served with these findings and recommendations, any party may

file written objections with the court and serve a copy on all

parties. Such a document should be captioned “Objections to

Magistrate Judge’s Findings and Recommendations.” The parties are

advised that failure to file objections within the specified time may

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waive the right to appeal the District Court’s order. See Martinez

v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

DATED: October 19, 2005.

DAD:th

DDad1\orders.prose\ervin0701.f&r.default.mtd

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