Cupp v. Plastiras

Background

Ronald Cupp, representing himself, sued Basil Plastiras, Michael Terrizzi, Parkway Properties 12 LLC, and Plastiras & Terrizzi, APC. Cupp alleged that the defendants’ debt-collection activities violated bankruptcy and consumer-protection laws. The claims arose from a 2007 Sonoma County Superior Court action against Cupp and a later monetary judgment in the defendants’ favor.

Cupp filed the federal action on May 30, 2024. His proof of service stated that process server Mark Andrews personally served Basil Plastiras and that the remaining defendants were served by leaving the summons and complaint with Plastiras. After the defendants did not appear, the clerk entered default on June 26, 2024. Cupp then moved for default judgment, requesting $362,192.33 plus $705 in costs.

The defendants moved to set aside the default, asserting that Cupp personally served Plastiras and that service by a party to the case was improper. Plastiras also asserted that he lacked authority to accept service for Michael Terrizzi. The court held oral argument and an evidentiary hearing at which Cupp, Plastiras, and Andrews testified.

Court’s analysis

Under Federal Rule of Civil Procedure 55(c), a court may set aside an entry of default for “good cause.” The court considered whether the defendants engaged in culpable conduct, whether they had a potentially meritorious defense, and whether setting aside the default would prejudice Cupp.

The evidence about who served Plastiras conflicted. Cupp’s statements indicated that he was present when service occurred, while Andrews testified that Cupp waited in his car and did not enter the building. Plastiras testified that Cupp personally served him, but the court also identified inconsistencies between Plastiras’s email, declaration, and hearing testimony.

The court stated that it did not need to resolve the factual dispute because, regardless of who served Plastiras, the defendants did not act culpably. The court noted that Plastiras’s June 3 email suggested he may have believed the dispute had been resolved or may genuinely have believed service was improper. The court also stated that it was unreasonable for Cupp to seek entry of default on the first available date while communicating with the defendants without warning them of that intention.

The defendants satisfied the meritorious-defense requirement by submitting a proposed answer and an alternative explanation for the challenged debt-collection activities. The court did not decide whether those defenses were true. Because the case was at an early stage and Cupp moved for default shortly after the response deadline, the court found no prejudice from setting aside the default.

Disposition

The court concluded that good cause existed and granted the defendants’ motion to set aside default. The court did not decide the merits of Cupp’s claims or enter the requested default judgment. It ordered the defendants to file a response to the complaint by October 10, 2024, and set an initial case-management conference for November 7, 2024, by video.