Trustees on behalf of Bay Area Automotive Group Welfare Fund v. Impark Pacific…

Background

Impark Pacific Parking moved under Federal Rule of Civil Procedure 55(c) to set aside the clerk’s entry of default. An entry of default is a procedural ruling made when a party does not timely respond to a case. The plaintiff did not file a response. The court decided the motion without oral argument and vacated the scheduled December 22, 2022 hearing.

Court’s analysis

Rule 55(c) allows a court to set aside an entry of default for “good cause.” The court considered whether Impark engaged in culpable conduct, whether Impark had a potentially meritorious defense, and whether setting aside the default would prejudice the plaintiff.

The court found that Impark’s failure to respond was unintentional. Impark attributed the delay to a clerical error likely related to changes in its work environment during the COVID-19 pandemic and said it acted diligently after learning about the case and the default. The court therefore found no culpable conduct.

The court also found that Impark had identified a potentially meritorious defense. Impark contended that some contributions the plaintiff claimed were owed had been calculated incorrectly and that the requested liquidated damages were excessive. The court did not decide whether those factual assertions were true; it held that alleging facts that could constitute a defense was enough at this stage.

Finally, the court found no prejudice to the plaintiff. The default had been entered only about one month earlier, and the plaintiff had not shown harm beyond delaying resolution of the case.

Ruling

The court found that all three good-cause factors favored setting aside the default. Judge Thomas S. Hixson granted Impark’s motion to set aside the entry of default and allowed the case to proceed on the merits.