Free Order on Motion to Set Aside - District Court of Arizona - Arizona

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

David H. Busch, Jr., Plaintiff, vs. Seahawk Software Development, L.L.C., et al., Defendants.

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No. CV-04-0425-PHX-PGR ORDER and OPINION

The Court entered an order (doc. #23) and judgment (doc. #24) on January 6, 2006 dismissing this action without prejudice pursuant to Fed.R.Civ.P. 41(b) as a result of the plaintiff's unexplained failure to comply with two Court's orders. The first order (doc. #20), entered on November 3, 2005, required the plaintiff to file a motion for default judgment, together with a memorandum of points and authorities, no later than November 30, 2005; the order specifically listed eight areas the Court wanted the plaintiff to discuss in his memorandum of points and authorities. The second order (doc. #22), entered on December 1, 2005 as a result of the plaintiff having filed, on November 17, 2005, a one-sentence Motion for Default Judgment unaccompanied by any memorandum of points and authorities, required the plaintiff to file the previously-ordered memorandum no later than December 19, 2005; that order warned the plaintiff that this action could be dismissed if he failed timely file the required memorandum.
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The plaintiff immediately responded to the Court's dismissal of this action by filing a Motion to Set Aside Judgment (doc. #25) on January 6, 2006. In the motion, filed pursuant to Fed.R.Civ.P. 60(b)(1), the plaintiff argued that the judgment should be vacated because the failure to timely file the required memorandum was due to excusable neglect in that his counsel suffered a heart attack on December 22, 2005 while in the process of completing the memorandum. In an order (doc. #26) entered on January 9, 2006, the Court noted that it had to consider four equitable factors in determining whether to grant the Rule 60(b) motion: (1) the danger of prejudice to the opposing party; (2) the length of the delay and its potential impact on the proceedings; (3) the reason for the delay, and (4) whether the movant acted in good faith. The Court further noted that the first two factors militated in favor of granting the plaintiff's motion because the defendants, having been defaulted, would not be prejudiced if the judgment were to be vacated, and because the plaintiff filed his Rule 60(b) motion immediately upon receipt of the Court's order and judgment of dismissal. The Court further noted, however, that it could not evaluate the final two elements due to the incompleteness of the plaintiff's motion. The Court therefore required the plaintiff to file an addendum to his motion explaining (1) why the plaintiff's Motion for Default Judgment filed on November 17, 2005 failed to include the required memorandum, (2) why the required memorandum was not filed by the initial deadline of November 30, 2005, and (3) why the plaintiff's counsel's heart attack on December 22, 2005 should excuse his failure to timely file the memorandum when the extended filing deadline was December 19, 2005. The plaintiff timely filed his Addendum to Motion to Set Aside Judgment (doc. #27) on January 13, 2006. The plaintiff's explanation in his addendum as to why the required memorandum was not filed at the time the default judgment motion was filed amounts to no explanation at all in that the plaintiff merely states
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that counsel erred in failing to file the memorandum and "so requests that the Court exercise its discretion with respect to this admitted error." The plaintiff's explanation for why the original filing deadline and the extended deadline were both missed is that, "[f]or reasons which cannot be fully explained", those deadlines were not docketed by counsel's assistant in either the law firm's computerized docketing system or in its manual calendar docketing system. The plaintiff further states in his addendum that his counsel started to prepare the required memorandum after reviewing his firm's file on December 19, 2005, but did not complete it as a result of the heart attack he suffered on December 22, 2005. The plaintiff argues that his counsel's docketing errors constitute the excusable neglect necessary to justifying vacating the judgment. The Supreme Court has noted that "excusable neglect" can include situations in which the failure to comply with a filing deadline is attributable to counsel's inadvertence, mistake or carelessness. Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380, 113 S.Ct. 1489 (1993). The Court concludes that the third and fourth equitable factors militate in favor of granting the plaintiff's motion because the plaintiff's counsel's office had an in-house docketing system in place to calendar deadlines, the malfunctioning of the docketing system was the apparent reason why the memorandum was not timely filed, and there is no evidence suggesting that counsel intentionally disregarded the Court's orders for some bad faith purpose.1 See Pincay v. Andrews, 389 F.3d 853 (9th Cor. 2004) (en banc), cert. denied, 125 S.Ct. 1726 (2005) (Court concluded that attorney's failure to timely file notice of appeal amounted to excusable neglect notwithstanding that he relied on non-attorney

The Court feels compelled to note, however, that it would find counsel's explanation more palatable if the docketing malfunction had occurred only once, and if counsel had offered some explanation of what he did after receiving the Court's order of December 1, 2005 to ensure that the extended deadline set by that order was properly docketed so that it would not also be missed.

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calendaring clerk to determine appropriate deadline and place it in law firm's sophisticated system for calendaring deadlines.); see also, In re Pacific Gas & Electric Co., 331 B.R. 915, 919 (Bankr.N.D.Cal. 2005) (Court, in concluding that party's failure to timely file a proof of claim was not excusable when all the factors were considered, did find that the third and fourth elements of excusable neglect test weighed in that party's favor because it had mechanisms in place to process incoming legal matters that should have been sufficient to lead to the timely filing of the proof of claim and there was no evidence that those processes were intentionally disregarded.) The Court will therefore vacate the judgment of dismissal and will allow the plaintiff to now file the required memorandum. As required by the Court's order of November 3rd, the memorandum shall set forth (1) the reasons why the Court should, in the exercise of its discretion, enter a default judgment in favor of the plaintiff, see Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986)2, (2) whether the plaintiff is seeking an award of actual damages and profits pursuant to 17 U.S.C. § 504(b) or an award of statutory damages pursuant to 17 U.S.C. § 504(c), (3) the amount of such damages being sought, (4) the factual and legal bases underlying the amount of damages requested, (5) the factual and legal bases underlying the plaintiff's request for injunctive relief, (6) the reasons why the plaintiff believes an evidentiary hearing is necessary, (7) the number of witnesses the plaintiff would present at an evidentiary hearing, and (8) the length of time the plaintiff reasonably believes an evidentiary hearing would take.
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In Eitel, the Ninth Circuit stated that the

[f]actors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.

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Once the plaintiff has filed his memorandum, the Court will make a determination as to whether it can decide the default judgment motion based on the plaintiff's written submissions or will need to schedule a hearing on the matter. The plaintiff is advised that his failure to timely comply with this order in its entirety will result in this action being dismissed pursuant to Fed.R.Civ.P. 41(b). Therefore, IT IS ORDERED that the plaintiff's Motion to Set Aside Judgment (doc. #25) is granted and that the Court's order of dismissal (doc. #23) and judgment of dismissal (doc. #24) are vacated. IT IS FURTHER ORDERED that the plaintiff's Motion for Default Judgment (doc. #21) is reinstated. IT IS FURTHER ORDERED that the plaintiff shall file his memorandum of points and authorities in support of his Motion for Default Judgment in full compliance with this Order no later than February 10, 2006. DATED this 30th day of January, 2006.

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