VP Fresh Produce, LLC v. Frank R Gioia
2:15-cv-07810
C.D. Cal.Feb 11, 2016Background
- VP Fresh Produce sued Frank R. Gioia alleging breach of contract, violations and enforcement of the PACA statutory trust, failure to account and pay promptly, and breach of fiduciary duty for unpaid tomato shipments.
- Gioia was personally served on October 15, 2015, did not file an answer, and the Clerk entered default on November 19, 2015.
- VP Fresh filed for default judgment on January 12, 2016; Gioia moved to set aside the entry of default on January 25, 2016.
- Gioia, appearing pro se, contends he contacted plaintiff’s counsel and believed those communications were a sufficient response; he also alleges efforts to stop shipments and raises factual defenses about produce quality and inspections.
- The court applied the Ninth Circuit three-part test for setting aside default: (1) culpable conduct, (2) meritorious defense, and (3) prejudice to plaintiff, and found all three factors favored vacatur.
- The court granted Gioia’s motion to set aside the default, ordered Gioia to file a responsive pleading by March 14, 2016, and denied VP Fresh’s default judgment motion as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to set aside the entry of default | Default should stand because Gioia was served and failed to answer | Default should be set aside for good cause under Rule 55(c) | Vacated default; case to proceed on merits |
| Culpable conduct | Gioia’s failure to answer shows culpability | Gioia was pro se, contacted opposing counsel, and lacked legal knowledge | No culpable conduct found; pro se status and explanation acceptable |
| Meritorious defense | Plaintiff asserts unpaid deliveries and PACA violations | Gioia alleges attempts to rescind, quality/inspection issues, and communications stopping shipments | Gioia alleged factual bases sufficient to suggest possible meritorious defenses |
| Prejudice to plaintiff if vacatur granted | Vacatur will prejudice plaintiff by delaying recovery | Vacatur only delays; no evidence of lost evidence or increased discovery burden | No undue prejudice; merely losing a "quick victory" is insufficient |
Key Cases Cited
- TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691 (9th Cir. 2000) (articulates three-factor test for setting aside defaults and default judgments)
- United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085 (9th Cir. 2010) (explains solicitude toward pro se defendants and culpability standard)
- Mendoza v. Wight Vineyard Mgmt., 783 F.2d 941 (9th Cir. 1986) (recognizes district court discretion to set aside defaults)
- Pena v. Seguros La Comercial, S.A., 770 F.2d 811 (9th Cir. 1985) (default judgments disfavored; doubts resolved against moving party)
- Hawaii Carpenters' Trust Funds v. Stone, 794 F.2d 508 (9th Cir. 1986) (defendant must show possibility that full trial outcome could differ from default result)
- Bateman v. United States Postal Serv., 231 F.3d 1220 (9th Cir. 2000) (vacatur is not prejudicial merely because it delays a plaintiff’s quick victory)