Rodgers v. Roic Pinole Vista, LLC et al

Northern District of California, cand-4:2015-cv-03447

ORDER by Judge Hamilton terminating {{55}} Administrative Motion; ORDER re bankruptcy stay; Order vacating {{39}} entry of default. (pjhlc1, COURT STAFF) (Additional attachment(s) added on 8/29/2016: # {{1}} Certificate/Proof of Service)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JOHN RODGERS, Case No. 15-cv-3447-PJH 8 Plaintiff, 9 v. ORDER RE BANKRUPTCY STAY; ORDER VACATING ENTRY OF 10 ROIC PINOLE VISTA, LLC, et al., DEFAULT; ORDER TERMINATING ADMINISTRATIVE MOTION 11 Defendants. 12 Northern District of California United States District Court 13 Plaintiff John Rodgers filed the above-entitled action alleging disability access 14 violations on July 27, 2015, against nine named defendants and 30 DOE defendants. 15 Default was entered against one named defendant, and four of the remaining named 16 defendants were subsequently dismissed from the case, the most recent of the four 17 orders of dismissal having been filed on January 5, 2016. The case was reassigned to 18 the undersigned District Judge on August 15, 2016. The court now ORDERS as follows: 19 1. Defendant Hometown Buffet, Inc., ("Hometown Buffet") filed a notice of 20 bankruptcy and stay of proceedings under 11 U.S.C. § 362(a) on March 8, 2016, 21 indicating that it filed a petition in bankruptcy on March 7, 2016. See In re Buffets, LLC, 22 Case No. 16-50557 (W.D. Tex. Bkrptcy). The court finds that an automatic stay is and has been in effect since that date as to Hometown Buffet. 23 In the absence of special circumstances, stays pursuant to § 362(a) are limited to 24 debtors and do not include claims against non-bankrupt co-defendants. See Ingersoll- 25 Rand Fin. Corp. v. Miller Mining Co., 817 F.2d 1424, 1427 (9th Cir. 1987). The complaint 26 in this action alleges that each of the 30 DOE defendants is liable under numerous 27 agency theories for the acts and omissions of "each of the other [d]efendants." See Cplt 28 1 ¶ 15. Accordingly, the court finds that the stay must be extended to the co-defendants, 2 because the entire "action or proceeding" affects defendant Hometown Buffet as well as 3 every other defendant. Plaintiff cannot continue litigating this action against any 4 defendant other than Hometown Buffet because to do so would affect Hometown Buffet 5 and its creditors. 6 Accordingly, as there appears no further reason to maintain the file as an open 7 one for statistical purposes, it is hereby ORDERED that the Clerk of the Court shall 8 submit a JS-6 form to the Administrative Office. This ruling shall not be considered a 9 dismissal or disposition of this action and should further proceedings become necessary or desirable, any party may initiate such proceedings in the same manner as if this order 10 had not been entered. 11 2. As to the default that was entered by the Clerk on October 28, 2015, 12 Northern District of California United States District Court against unrepresented defendant Satinder Pahwa (sued as "Satindef Pahwa" d/b/a 13 Subway Sandwiches and Salads), the court finds that the letter from Ms. Pahwa, which 14 was filed on December 9, 2015, should be liberally construed as a motion to set aside the 15 default for lack of proper service. The court has broad discretion to overturn an entry of 16 default. Mendoza v. Wight Vineyard Mgmt, 783 F.2d 941, 945-46 (9th Cir. 1986). 17 Discretion to overturn entry of default is "more liberally applied" where a defendant 18 seeks to set aside an entry of default pursuant to Rule 55(c) rather than a default 19 judgment pursuant to Rule 60(b). U.S. v. Signed Pers. Check No. 730 of Yubran S. 20 Mesle, 615 F.3d 1085, 1091 n.1 (9th Cir. 2010). Moreover, the rules governing motions 21 to set aside defaults "are solicitous towards movants, especially those whose actions 22 leading to the default were taken without the benefit of legal representation." Id. at 1089. 23 The court may set aside a default "[f]or good cause." Fed. R. Civ. P. 55(c). To 24 determine "good cause" under Rule 55(c) the court considers whether the party seeking 25 to set aside the default engaged in culpable conduct that led to the default; whether the 26 defaulting party had no meritorious defense; and whether reopening the defaulted claim 27 would prejudice the other party. Signed Pers. Check, 615 F.3d at 1091. 28 2 1 Here the proof of service shows service on August 24, 2015, on a "Nancy Pahwa, 2 (business) a person at least 18 years of age apparently in charge of the office of usual 3 place of business of the persons served." Ms. Pahwa states in her December 9, 2015, 4 letter that she was in India when the summons and complaint were purportedly served on 5 August 24, 2015, and that she did not re-enter the United States until November 25, 6 2015. She also states that she did not receive "any letter or any notice from the court" 7 except a copy of the clerk's notice of entry of default, dated October 28, 2015. She 8 requests that the court send her "detail of this case and what is my role in this." 9 Based on the above, the court finds no indication that Ms. Sahwa engaged in culpable conduct that led to the entry of default. It is unclear whether Ms. Sahwa has a 10 meritorious defense, but given the bankruptcy stay, it does not appear that reopening the 11 defaulted claim will prejudice plaintiff. Accordingly, the entry default against Ms. Pahwa 12 Northern District of California United States District Court is hereby VACATED. 13 3. The court TERMINATES plaintiff's administrative motion to continue the 14 deadline for filing the notice of need for mediation under General Order 56. Plaintiff filed 15 the administrative motion on August 2, 2016. As noted above, a stay has been in effect 16 since the filing of the notice of bankruptcy filing by defendant Hometown Buffet on March 17 8, 2016. 18 Defendant Hometown Buffet shall notify the court immediately upon resolution of 19 the action in the Bankruptcy Court. 20 21 IT IS SO ORDERED. 22 Dated: August 26, 2016 23 __________________________________ 24 PHYLLIS J. HAMILTON United States District Judge 25 26 27 28 3