Fahey v. Wally's Las Vegas, LLC, 2:25-cv-01044

Plaintiff James Fahey filed a lawsuit in Nevada state court on March 25, 2025, against Wally’s Las Vegas, LLC, Resorts World Las Vegas, LLC, and several individuals.
Defendants Peiser, Daniels, and Manoff were served between April 19 and 29, and, with others, filed a Notice of Appearance on May 19.
Their counsel delayed responding to the complaint while confirming representation for all Wally’s Defendants, aiming to avoid multiple filings.
Fahey subsequently filed an amended complaint and obtained the entry of default against Peiser, Daniels, and Manoff, then moved for default judgment.
The case was removed to federal court; Fahey moved to uphold the state court defaults, while defendants moved to set them aside.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether defaults against Peiser et al. from state court should be enforced	Defaults were properly entered in state court	Defaults should be set aside for good cause; no bad faith	Defaults set aside; allowed to proceed
Whether defendants’ conduct was culpable	Defendants failed to timely respond	Delay was not willful or in bad faith, but due to coordination	No culpable conduct found
Whether defendants have a meritorious defense	Defaults should stand; merits not relevant	Motion to dismiss shows meritorious defense	Sufficient facts for a meritorious defense
Whether setting aside default prejudices plaintiff	Setting aside would prejudice Fahey’s ability to pursue claims	No prejudice, claims can proceed on merits	No prejudice to Fahey found

Franchise Holding II, LLC. v. Huntington Restaurants Grp., Inc., 375 F.3d 922 (9th Cir. 2004) (establishes good cause factors for setting aside entry of default)
TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691 (9th Cir. 2001) (defines culpable conduct in the context of setting aside default)
United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085 (9th Cir. 2010) (sets standard for meritorious defense on motion to set aside default)