Barbieri v. Timeshare Liquidators LLC
2:18-cv-00355
D. Nev.Apr 3, 2020Background
- Pro se plaintiff Anthony Barbieri sued Timeshare Liquidators, LLC and manager Stan Mullis for retaliation and hostile-work-environment claims arising from his termination.
- Defendants failed to answer; the Clerk entered default against them.
- Barbieri moved for a default judgment.
- Defendants filed a countermotion to set aside the defaults, explaining they reasonably believed their then-attorney was defending the case and that attorney had been negligent; they replaced counsel after learning of the default judgment motion.
- Defendants pointed to prior administrative proceedings (Nevada DETR) that rejected Barbieri’s claims and found termination for misconduct or voluntary leaving without good cause, asserting a meritorious defense.
- The court applied the Ninth Circuit three-factor test (prejudice, meritorious defense, culpability), found good cause to set aside the defaults, denied Barbieri’s default-judgment motion, and ordered defendants to answer by April 13, 2020.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to set aside the Clerk's entry of default | Default judgment appropriate because defendants did not answer | Default should be set aside because counsel's negligence caused the default and defendants believed counsel was handling the case | Set aside the defaults; default judgment denied; case to proceed on merits |
| Prejudice from setting aside default | Setting aside harms plaintiff's ability to obtain relief | No true prejudice; delay is minimal and issues can be decided on the merits | No undue prejudice to Barbieri; favors setting aside |
| Existence of a meritorious defense | Plaintiff alleges merits support default judgment | Prior administrative findings rejected Barbieri's claims—constitute a meritorious defense | Defendants showed a meritorious defense via administrative determinations |
| Whether defendants’ conduct was culpable | Plaintiff implies defendants are at fault for the default | Defendants reasonably relied on retained counsel and acted promptly once aware; negligence by counsel rather than culpable intent | Court could not find defendants’ conduct culpable; relief warranted |
Key Cases Cited
- Mendoza v. Wight Vineyard Mgmt., 783 F.2d 941 (9th Cir. 1986) (standard favoring resolution on the merits when timely relief from default is sought)
- O'Connor v. State of Nev., 27 F.3d 357 (9th Cir. 1994) (court has especially broad discretion to set aside an entry of default)
- Falk v. Allen, 739 F.2d 461 (9th Cir. 1984) (articulating factors for setting aside default)
- Community Dental Services v. Tani, 282 F.3d 1164 (9th Cir. 2002) (setting aside defaults or judgments can be necessary to afford clients relief from counsel's gross negligence)