CNC Software, Inc. v. Q&V Machines, LLC

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CNC SOFTWARE INC., a Connecticut Case No.: 21-cv-00866-WQH-RBB corporation, 12 ORDER Plaintiff, 13 v. 14 Q&V MACHINES, LLC, a California 15 limited liability company; VU TRAN, an 16 individual; ANDY LIEU, an individual; AND DOES 1-10, 17 Defendants. 18 19 HAYES, Judge: 20 The matter before the Court is the Stipulation to Set Aside Entry of Default and 21 Default Judgment Against Defendants Q&V Machines, LLC (“Q&V Machines”) and 22 Andy Lieu. (ECF No. 16). 23 On May 4, 2021, Plaintiff CNC Software Inc. initiated this action by filing a 24 Complaint. (ECF No. 1). On August 31, 2021, the Clerk of the Court entered Default as to 25 all Defendants. (ECF No. 9). On November 19, 2021, the Court granted Plaintiff’s Motion 26 for Default Judgment. (ECF No. 12). On February 3, 2022, the Court entered Judgment in 27 favor of Plaintiffs and against all Defendants. (ECF No. 15). 28 1 On August 3, 2022, Plaintiff filed the Stipulation to Set Aside Entry of Default and 2 Default Judgment Against Defendants Q&V Machines and Lieu. (ECF No. 16). The 3 stipulation states that “the parties have entered into a settlement agreement in this matter.” 4 (Id. at 2). The stipulation requests that the Court set aside the entry of default and default 5 judgment as to Defendants Q&V Machines and Lieu only. 6 Rule 55 of the Federal Rules of Civil Procedure states that “[t]he court may set aside 7 an entry of default for good cause, and it may set aside a final default judgment under Rule 8 60(b).” Fed. R. Civ. P. 55(c). “To determine ‘good cause,’ a court must ‘consider[] three 9 factors: (1) whether [the party seeking to set aside the default] engaged in culpable conduct 10 that led to the default; (2) whether [it] had [no] meritorious defense; or (3) whether 11 reopening the default judgment would prejudice’ the other party.” United States v. Signed 12 Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (quoting 13 Franchise Holding II v. Huntington Rests. Grp., Inc., 375 F.3d 922, 925-26 (9th Cir. 2004)) 14 (alterations in original). The same standard, applied more strictly, “is used to determine 15 whether a default judgment should be set aside under Rule 60(b).” Id. at 1091, 1091 n.1. 16 In this case, there is no risk of prejudice to Plaintiff, who has stipulated to setting 17 aside the entry of default and default judgment. There is no evidence that Defendants Q&V 18 Machines or Lieu engaged in culpable conduct that led to the default. See id. at 1092 (“to 19 treat a failure to answer as culpable, the movant must have acted with bad faith ….”). The 20 third factor—whether Defendants have a meritorious defense—is not applicable to this 21 case because the parties have entered into a settlement agreement. The Court finds that 22 there is good cause to set aside the entry of default under Rule 55(c) and default judgment 23 under Rule 60(b) as to Defendants Q&V Machines and Lieu.1 24 IT IS HEREBY ORDERED that the Entry of Default as to Defendants Q&V 25 Machines, LCC and Andy Lieu (see ECF No. 9) is set aside. 26 27 28 1 IT IS FURTHER ORDERED that the Default Judgment as to Defendants Q&V 2 || Machines, LCC and Andy Lieu (see ECF No. 15) is set aside. The Clerk of the Court shall 3 reopen the case. 4 || Dated: August 4, 2022 BME: ie Z. A a 5 Hon. William Q. Hayes 6 United States District Court 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28