Court Opinion

ID: 4231372
Source: CourtListenerOpinion
Date Created: 2017-12-21 21:00:54.47634+00
Date Added: 2024-06-11T14:42:45.633807
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       DEC 21 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                       No.    14-56869

                Plaintiff-Appellee,             D.C. No.
                                                8:12-cv-00219-DOC-JPR
  v.

MICHAEL BRANDNER; EVERGREEN                     MEMORANDUM*
CAPITAL, LLC,

                Claimants-Appellants,

$4,656,085.10 IN BANK FUNDS,

                Defendant.

                   Appeal from the United States District Court
                      for the Central District of California
                    David O. Carter, District Judge, Presiding

                    Argued and Submitted November 14, 2017
                              Pasadena, California

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: KOZINSKI,** HAWKINS, and PARKER,*** Circuit Judges.

      Claimants-Appellants Michael Brandner and Evergreen Capital, LLC

(together, “Brandner”) appeal from the District Court’s denial of Brandner’s

motion under Federal Rule of Civil Procedure 60(b)(1) to vacate the default

judgment the District Court entered in favor of the government in this civil

forfeiture action.

      When, as here, a defendant seeks relief under Rule 60(b)(1) based upon

“excusable neglect,” a court must consider three disjunctive factors; a finding that

any one factor is true constitutes sufficient reason for the court to refuse to vacate a

default judgment. United States v. Aguilar, 782 F.3d 1101, 1105 (9th Cir. 2015).

These factors are (1) whether the party seeking to set aside the default engaged in

culpable conduct that led to the default; (2) whether it had a meritorious defense;

or (3) whether vacating the default judgment would prejudice the other party. Id.

“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.” United States v.

Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1095, 1092 (9th Cir.

      **
            Prior to his retirement, Judge Kozinski fully participated in this case
and concurred in this disposition after deliberations were complete.
      ***
            The Honorable Barrington D. Parker, United States Circuit Judge for
the U.S. Court of Appeals for the Second Circuit, sitting by designation.

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2010) (quotation marks omitted). When evaluating the culpability of a legally

sophisticated party, “an understanding of the consequences of [the party’s] actions

may be assumed, and with it, intentionality.” Id. at 1093 (citation omitted).

      Brandner was properly served, understood the nature of the case and the

claims he faced, and acted upon the advice of counsel. Counsel advised him that

making a claim in the civil forfeiture action might increase the likelihood of

criminal charges being brought against him and might delay adjudication of his

wife’s claim in the forfeiture action. He then made a strategic decision to default.

He now argues that his failure to respond to the complaint constitutes excusable

neglect because his decision to default was based upon legal advice he now deems

unsound.

      We see no excusable neglect. To the contrary, we see no neglect at all.

After consulting with his counsel, Brandner deliberately chose not to respond as

part of a strategy to lessen his potential criminal exposure and to advantage his

wife’s claim to the funds. The District Court was well within its discretion in

concluding that Brandner’s culpable conduct led to the default judgment and, thus,

did not constitute excusable neglect.

      We have considered Brandner’s other arguments and conclude they are

meritless.

      AFFIRMED.

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