Iglesia Ni Cristo v. Cayabyab
- Beth Freeman
- 5:18-cv-00561
- U.S. District Court · Northern District of California
- 6
In Iglesia Ni Cristo v. Garcia, Judge Freeman granted Garcia’s motion to set aside the default and ordered him to answer.
Bernard Garcia’s default was removed, allowing him to defend the case and requiring him to answer the operative second amended complaint by October 9, 2020. Iglesia Ni Cristo must continue pursuing its claims against him through ordinary litigation.
What happened
Iglesia Ni Cristo sued Luisito E Cayabyab and others, including Bernard Garcia, over alleged use of Iglesia Ni Cristo’s name, trademarks, and copyrighted hymns. Garcia, who was representing himself, asked the court to remove the default entered against him.
The court found that Garcia’s failure to respond resulted from confusion, the COVID-19 quarantine, and difficulty finding a lawyer—not bad faith. It also found that he had shown a potentially valid argument that California lacked personal jurisdiction over him, and that removing the default would not unfairly hinder Iglesia Ni Cristo’s claims.
Judge Beth Labson Freeman granted Garcia’s motion, ordered the Clerk to remove the default, and required Garcia to answer the operative second amended complaint by October 9, 2020.
The detailed version
- Iglesia Ni Cristo v. Cayabyab · No. 5:18-cv-00561
- Beth Freeman
- Sept. 18, 2020
Background
Iglesia Ni Cristo, a nonprofit religious corporation, filed the action on January 25, 2018. It alleged that former ministers, officers, and members, along with the nonprofit religious corporation H2O Now USA, were presenting themselves as affiliated with Iglesia Ni Cristo by using its name, trademarks, and copyrighted hymns. The court later filed an operative second amended complaint.
The Clerk entered default against Bernard Garcia after Iglesia Ni Cristo filed a proof of service stating that Garcia had been served on March 19, 2020. Garcia moved under Federal Rule of Civil Procedure 55(c) to set aside, or remove, the Clerk’s entry of default. Garcia was proceeding without a lawyer.
Legal standard
Under Rule 55(c), a court may set aside an entry of default for “good cause.” The court considered whether Garcia’s conduct leading to the default was culpable, whether he had a potentially valid defense, and whether removing the default would prejudice Iglesia Ni Cristo. The court explained that default is a severe remedy and that cases should generally be decided on their merits when possible.
Court’s analysis
The court found that Garcia’s conduct was not culpable. Garcia stated that he was beginning home quarantine when he was served, had difficulty finding a lawyer, did not understand the meaning of the Clerk’s entry of default, and had limited financial resources. The court concluded that his failure to respond resulted from confusion rather than bad faith.
Garcia proposed several possible defenses. The court found that his planned challenges based on insufficient process and insufficient service of process were not shown to be potentially valid. It also found that his assertion that he lacked sufficient contacts with California, together with the facts that his address of record was in New Jersey and that he appeared to work in New York, met the minimal requirement for showing a potentially valid defense based on lack of personal jurisdiction. The court did not decide whether Garcia actually lacked those contacts; it only decided that the asserted facts, if true, could support a defense.
The court also rejected Iglesia Ni Cristo’s claim that removing the default would cause sufficient prejudice. The court explained that prejudice requires more than delay and that requiring a party to litigate the case on its merits is not, by itself, prejudice. The court noted that a default judgment against Garcia had already been deemed premature while the case continued against other defendants.
Disposition
Judge Beth Labson Freeman determined that all three good-cause factors favored removing the default. The court granted Garcia’s motion to set aside the Clerk’s entry of default, ordered the Clerk to set it aside, and ordered Garcia to file an answer to the operative second amended complaint by October 9, 2020. The order did not decide the underlying claims against Garcia.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.