UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

________________ _________________ CINCINNATI SPECIALTY UNDERWRITERS INSURANCE COMPANY, Plaintiff - Appellee,

v. TAUSHA URBANO; GE RRY MADEN, Defendants - Appellants, and ALBUQUERQUE NAVA JO LODGE, 863 I.B.P.O.E. of W., Defendant. No. 16-2178 (D.C. No. 1:15-CV -00572-KG-WPL) (D. N.M.)

________________ _________________ ORDER AND JUDGMENT *

________________ _________________ Before TYMKOVICH , Chief Judge, McKAY and LUCERO , Circuit Judges.

________________ _________________ Tausha Urbano and Gerry Maden (Appella nts) appeal the district court’s denial of their motion, file d under Fed. R. Civ. P. 60( b), to set aside a default

* After examining the briefs and appellate record, th is panel has determined unanimously to honor the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted without oral argument. This or der and judgment is not binding precedent, except under the doctrines of la w of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### May 9, 2017
Elisabeth A. Shumaker Clerk of Court2 judgment entered against Albuquerque Navajo Lodge, 863 I.B.P.O.E. of W. (Lodge). They also contend that the district court erred by not dismissing this case under Fed. R. Civ. P. 19(b). Finally, they ask th is court to issue a d eclaration regarding the collateral effect of the district court’ s judgment. Exerci sing jurisdiction under 28 U.S.C. § 1291, we affirm. I. Background Appellants sued the Lodge in state c ourt after they were injured by gunfire during an event hosted by the Lodge. The Lodge had a commercial general liability policy (Policy) issued by Cincinnati Speci alty Underwriters Insurance Company (CSUIC). CSUIC filed this action against th e Lodge in the distri ct court, seeking a declaration that the Policy di d not provide coverage for Appellants’ claims against the Lodge. CSUIC did not name Appellant s as additional defendants. When the Lodge did not respond to the operative complaint, the dist rict court clerk entered a default against the Lodge. CSUIC then moved for a default judgmen t. In response, Barry Watson, a non-lawyer representative of the Lodge, se nt an email to the district court. Acknowledging that the Lodge had notice of the action, Mr. Watson stated that the Lodge was “not financially able to hi re legal representation to defend our organization against the lawsuit.” Aplt. App. at 140. He proceeded to describe the Lodge members’ limited financial resources, as well as the char itable interests that the Lodge chooses to support with its m eager funds. Althou gh he understood “that3 defaulting on any lawsuits is never a good th ing,” Mr. Watson asked for the district court’s “mercy.” Id. In its reply in support of its motion fo r a default judgment, CSUIC noted, per Mr. Watson’s email, that the Lodge did no t intend to respond to the complaint. CSUIC contended that the Lo dge had not shown good cause to set aside the default or any basis for the court to refrain from entering a defau lt judgment. The district court entered a default judgment in favor of CSUIC. Several months later, Appe llants simultaneously moved in the district court to intervene in this action and to set aside the default judgm ent. They claimed they were required parties un der Fed. R. Civ. P. 19(a)(1), a nd they sought to intervene as of right under Fed. R. Civ. P. 24(a)(2). Appellants argued that the default judgment should be set aside based on excusable negl ect because Appellant s received no notice of the action despite CSUIC’s knowledge of their underlying claims; the Lodge was indigent and acting without counsel; and there was a meritori ous defense to the action. CSUIC opposed both motions. Before filing their replies, Appellants and the Lodge reached two agreements. They negotiated a stipulated judgment in Appellants’ favor in the state-court action, and the Lodge agreed to assign its claims against CSUIC to Appe llants. Appellants then argued in their replies that the stipulated judgmen t and the assignment of the Lodge’s claims to them m ooted CSUIC’s arguments rega rding standing. Appellants also continued to argue there was excusable neglect sufficient to set aside the default judgment.4 The district court granted Appellants’ moti on to intervene. It first held that, due to the assignment of the Lodge’s clai ms against CSUIC, Appellants stood in the shoes of the Lodge. Therefore, the court concluded that Rules 19(a)(1) and 24(a)(2) no longer applied. It instead joined A ppellants as defendants in this action under Fed. R. Civ. P. 25(c), which pr ovides: “If an inte rest is transferred, the action may be continued by or against the original part y unless the court, on motion, orders the transferee to be substitute d in the action or joined with the original party.” The district court then took up Appella nts’ motion to set aside the default judgment. It held that Appellants were requ ired to show that th e Lodge’s failure to file a responsive pleading constituted excu sable neglect. The court found that the Lodge had made a deliberate decision not to obtain counsel and defend the lawsuit. It therefore rejected Appellants’ contenti on that the Lodge’s in ability to retain an attorney, due to its lack of funds, amounted to excusable neglect. Consequently, the district court denied Appellants’ motion for relief from the judgment. II. Discussion On appeal, Appellants contend that the district court erred in refusing to set aside the default judgment en tered against the Lodge and in failing to dismiss the action under Rule 19(b). They also seek a declaration that the default judgment has no collateral or res judicat a effect on their rights. A. Denial of Motion to Set Aside Default Judgment A district court may set aside a final default judgment under Rule 60(b). Fed. R. Civ. P. 55(c). We review a court’s denial of a Rule 60(b) motion for an abuse of5 discretion. See Pelican Prod. Corp. v. Marino , 893 F.2d 1143, 1145 (10th Cir. 1990). A court abuses its discretion if it s decision is “arbitrar y, capricious, or whimsical.” Id. at 1146. Where the district court denied a motion to aside a default judgment, “we look to the record in its entirety to see if the trial j udge clearly ignored excusable conduct or failed to recognize some other comp elling reason for relief to be granted.” Id. The district court must make three de terminations to set aside a default judgment under Rule 60(b): “(1) the moving party’s culpable conduct did not cause the default; (2) the moving party has a meritorious defense; and (3) the non-moving party will not be prejudiced by setting aside the judgment.” United States v. Timbers
Pres. , 999 F.2d 452, 454 (10th Cir. 1993), abrogated on other gr ounds by Degen v. United States , 517 U.S. 820, 825 (1996). Here, th e district court addressed only the first factor, finding that the Lodge was culp able because it made a deliberate decision not to defend the lawsuit. See id. (“Generally a party’s conduct will be considered culpable only if the party defaulted willfu lly or has no excuse for the default.”). Appellants argue that the district court abused its discretion. They maintain that the facts here are analogous to those in a case that we cited in Pelican Production Corp. , 893 F.2d at 1147. We noted th at another court had set aside a default judgment where the defendant “was an uneducated layman, who could not read, and had difficulty understanding the legal proceedings involved even after patient explanation.” Id. We distinguished these fact s from another case in which a court denied relief from judgment wher e the defendant “was not an indigent,6 unsophisticated party w ithout legal counsel.” Id. Here, Appellants argued excusable neglect based on the Lodge’s lack of f unds and Mr. Watson’s role as a volunteer representative of the Lodge. They conten d that Mr. Watson did all that he could, under the circumstances, to avoid a default. We are not persuaded. Mr. Watson’s email to the district court belies the suggestion that he is illiter ate and unsophisticat ed, or that he failed to comprehend these legal proceedings. Ra ther, the email and his de position testimony both show that he understood the nature of this ac tion and the consequences of a default judgment. See Aplt. App. at 140 (email); id. at 244-45 (Mr. Watson’s testimony regarding the steps he took after receiv ing Appellants’ dema nd letter, including putting CSUIC on notice; evaluating covera ge under the Policy; speaking to the Lodge’s membership about using funds to defend Appellants’ cl aims versus paying past-due property taxes; and filing an admi nistrative proceeding with the State of New Mexico Insurance Bureau challenging CSUIC’s failure to defend the Lodge in the state-court action). As to the Lodge’s claim of indigence, Appellants cite no cas e in which a court found excusable neglect based solely on a lack of funds, nor have we found such a case. For its part, the distri ct court relied on several deci sions in which other district courts held that inability to afford an attorney does not excuse a party’s failure to appear and defend. Appellants have not demonstrated that a “definite, clear or unmistakable error occurred below.” Pelican Prod. Corp. , 893 F.2d at 1147. “[O]nly if we find a7 complete absence of a reasonable basis a nd are certain that the district court’s decision is wrong do we reverse. Here we simply cannot sa y that a failure to provide relief constitutes an abuse of discretion.” Id. B. Failure to Dismiss Action Under Rule 19(b) Once the Lodge assigned its claims agains t CSUIC to Appellants, the district court held that Rule 19(a)—which addres ses persons required to be joined, if feasible—no longer applied. It instead joined Appellants as defendants under Rule 25(c). The court therefore did not determine whether Appellants were necessary parties under Rule 19(a) based on their pending claims against the Lodge. Appellants now argue that the district court should have di smissed this action under Rule 19(b), which provides that “[i]f a person who is required to be joined if feasible cannot be joined, the court must determine wh ether, in equity and good conscience, the action should proceed am ong the existing parties or should be dismissed.” Fed. R. Civ. P. 19(b). Rule 19(b) lists several factors a court should consider in making that determination. Appellants contend that these factors weigh in favor of dismissal. CSUIC argues that Appellants waived th is issue by failing to raise it in the district court. Appellants c oncede that they never asked th e district court to dismiss the action under Rule 19(b), but they conte nd that their argument is not waivable. Appellants are correct that, even if “not properly before the district court, the issue of indispensability is not waivable and may be raised for the firs t time on appeal.” Davis v. United States , 192 F.3d 951, 962 n. 13 (10th Cir. 1999).8 We nonetheless decline to reach the issu e whether this action should have been dismissed under Rule 19(b) because Appellants have not sufficiently supported their argument on appeal. See Perry v. Woodward , 199 F.3d 1126, 1141 n.13 (10th Cir. 1999) (noting this court “will not craf t a party’s arguments for him”). Determining whether an absent pa rty is indispensable requires a two-part analysis. The court must fi rst determine under Rule 19(a) whether the party is necessary to the suit and mu st therefore be joined if joinder is feasible. If the absent party is nece ssary but cannot be joined, the court must then determine under Rule 19(b) wh ether the party is indispensable. If so, the suit must be dismissed. Rishell v. Jane Phillip s Episcopal Med. Ctr. , 94 F.3d 1407, 1411 (10th Cir. 1996) (citations omitted). Althoug h Appellants acknowledge this required analysis in their reply brief, see Aplt. Reply Br. at 5, they bypass mu ch of it in their opening brief. They cite only one case for the propositi on that they were required parties under Rule 19(a)(1)—a case that did not involve application of Rule 19. See Harris v. Quinones , 507 F.2d 533, 536-37 (10t h Cir. 1974) (add ressing res judicata effect of a previous declaratory judgment). Nor do they explain why their joinder in this action under Rule 19 was not feasible. See, e.g., N. Arapaho Tribe v. Harnsberger , 697 F.3d 1272, 1282 (10th Ci r. 2012) (holding that s overeign Indian tribe was required party that could not feasibly be joined and then proceeding to Rule 19(b) analysis). Perfunctory allegations of error that fail to frame and develop an issue are insufficient to invoke appellate review. Murrell v. Shalala , 43 F.3d 1388, 1389 n.2 (10th Cir. 1994); see also Rapid Transit Lines, Inc. v. Wichita Developers, Inc. ,9 435 F.2d 850, 852 (10th Cir. 1970) (noting appellant’s citation to one, non-pertinent case “suggests . . . that it expects the court to do its research”). Moreover, “we routinely have declined to consid er arguments that are not raised, or are inadequately presented , in an appellant’s opening brief.” Bronson v. Swensen , 500 F.3d 1099, 1104 (10th Cir. 2007) (emphasis added). This principle is particularly applicable where the issue is raised fo r the first time on appeal. Consequently, we will not assume Appellants were require d parties who could not feas ibly be joined in this action in order to address Appellants’ new contentions regarding indispensability and failure to dismiss under Rule 19(b). See Perry , 199 F.3d at 1141 n.13 (declining to address appellate argument that failed to analyze the co rrect elements). C. Declaration Regarding Collateral Effect of Default Judgment on Appellants’ Rights Finally, Appellants ask this court to declare that the default judgment against the Lodge has no collateral effect on their rights. 1 They did not seek this relief in the district court. They assert that this court can grant it, in the first instance, pursuant to 28 U.S.C. § 2201, which provi des: “In a case of actu al controversy within its jurisdiction, . . . any court of the Unite d States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of a ny interested party seeking such declaration, whether or not further relief is or could be sought.” Appellants cite only § 2201 for their propositi on. It is true that “‘court of the United States’ includes . . . c ourts of appeals.” 28 U.S. C. § 451. But § 2201 also

1 Presumably, Appellants are interested in their right s, if any, as injured parties, rather than their right s as assignees of the Lodge.10 specifies that a court may ac t “upon the filing of an ap propriate pleading,” and the Federal Rules of Civil Proce dure stipulate that “[t]hese rules govern the procedure for obtaining a declaratory judgment under 28 U.S. C. § 2201.” Fed. R. Civ. P. 57, see also Hargrove v. Am . Cent. Ins. Co. , 125 F.2d 225, 228 (10th Cir. 1942) (noting applicability of the Federal Rules of Civil Procedure and the right to a jury trial in declaratory actions). The Federal Rules of Civil Procedure require the filing of a complaint in district court. See Fed. R. Civ. P. 3. Appe llants cite no case in which a federal appellate court has issued a declar atory judgment. Their briefing is wholly insufficient for us to reach and decide the question wh ether this court can grant the relief they request under § 2201. We therefore deny their request. 2

2 Even if Appellants had demonstrated th at the issue is appropriately before this court, we would decline to exercise discreti on to declare the collateral effect of the default judgment on Appellants’ rights. “Since its incepti on, the Declaratory Judgment Act has been understood to confer on federal courts uni que and substantial discretion in deciding whether to d eclare the rights of litigants.” Wilton v. Seven Falls Co. , 515 U.S. 277, 286 (1995). We have directed distri ct courts to consider several factors in deciding whether to exer cise that discretion, including “whether a declaratory action would settle the controversy” and “wheth er there is an alternative remedy which is better or more effective.” State Farm Fire & Cas. Co. v. Mhoon , 31 F.3d 979, 983 (10th Cir. 1994) (inter nal quotation marks omitted). Appellants have an alternative remedy th at could settle the entire cont roversy: a claim against CSUIC in the district court, which would undoubtedly i nvolve consideration of the collateral effect of the default judgment entered in this case.11 III. Conclusion The judgment of the district court is affirmed. Due to their inadequate briefing, we deny Appellants’ request for a declaration rega rding the collateral effect of the default judgment.

Entered for the Court
Monroe G. McKay Circuit Judge