BMO Harris Bank N.A. v. Mark Fairchild Logging, LLC et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
BMO HARRIS BANK N.A.,
Plaintiff,
v.
MARK FAIRCHILD LOGGING, LLC,
and CARL MARK FAIRCHILD,
Defendants.
Case No. 4:21-cv-00015-SLG
ORDER RE DEFENDANT’S VERIFIED MOTION TO SET ASIDE DEFAULT
AND MEMORANDUM IN SUPPORT THEREOF
Before the Court at Docket 11 is pro se Defendant Mark Fairchild’s motion
to set aside default. Plaintiff BMO Harris Bank N.A. filed a response in opposition
at Docket 12 and a memorandum in support thereof at Docket 13. Mr. Fairchild
replied at Docket 15.
DISCUSSION
Pursuant to Civil Rule 55(a), “[w]hen a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend, and this failure
is shown by affidavit or otherwise, the clerk must enter the party’s default.” In this
case, the Clerk of Court entered a default against both defendants on September
8, 2021.1 However, Rule 55(c) provides that the court may set aside an entry of
1 Docket 10. Plaintiff incorrectly refers to Docket 10 as a Default Judgment, but it is only an entry
of default. See generally Local Civil Rule 55.1.
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default for “good cause.” Three factors are considered when determining whether
good cause exists justifying issuance of an order vacating the Clerk's entry of
default; “a finding that any one of these factors is true is sufficient reason”: (1)
whether the party seeking to set aside the entry of default engaged in culpable
conduct that led to the default; (2) whether the party seeking to set aside the entry
of default had no meritorious defense; or (3) whether reopening the entry of default
would prejudice the other party.2 “Crucially, . . . a case should, whenever possible,
be decided on the merits.’”3 A district court is accorded “especially broad
[discretion] where, as here, it is entry of default that is being set aside, rather than
a default judgment.”4
First, Mr. Fairchild’s conduct is not culpable under the standard set by the
Ninth Circuit Court of Appeals. There is scant evidence that Mr. Fairchild intended
to “take advantage of the opposing party, interfere with judicial decision making, or
otherwise manipulate the legal process,” or that he “intentionally failed to answer.”5
BMO Harris Bank moved for default on September 7, 2021, which was entered by
the Clerk of the Court the next day.6 Mr. Fairchild notarized his motion to set aside
2 United States v. Signed Personal Check No. 730 of Yurban S. Mesle, 615 F.3d 1085, 1091 (9th
Cir. 2010).
3 Id. (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)).
4 Mendoza v. Wight Vineyard Mgmt., 783 F. 2d 941, 945 (9th Cir. 1986).
5 TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 697 (9th Cir. 2000) (emphasis in original)
(citation omitted) (construing “intentional” as “willful, deliberate, or evidence of bad faith”).
6 See Dockets 8, 10.
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the default just over a week later, on September 16, 2012, which Mr. Fairchild
claims was the day after he learned of the entry of default.7 Mr. Fairchild had also
retained an attorney to negotiate with BMO Harris Bank.8 While Mr. Fairchild had
actual or constructive notice of the lawsuit, his prompt response to the entry of
default and engagement in settlement discussions negate any purported ill
intention. Second, Mr. Fairchild asserts at least one meritorious defense to certain
claims, as well as apparent counter claims, albeit in his reply to the motion.9 Third,
the Court finds there is no prejudice to BMO Harris Bank caused by this minimal
delay—nor does BMO Harris Bank claim any prejudice here.10
Accordingly, the Court will set aside the entry of default as to Mr. Fairchild.
However, the Court will not set aside the default entered as to Mark Fairchild
Logging LLC. This is because an entity such as an LLC must be represented by
an attorney in federal court.11
7 See Docket 11 at 1–2. The Clerk of the Court received the motion on September 20, 2021.
8 See Docket 13 at 2, 4–5.
9 Docket 15 at 2 (“Plaintiff should have been aware that (1) I had an agreement to sell tractor
trailers subject to the Parties’ contract at a market price, but those trailers were then seized by
Plaintiff and sold at a lower price despite my protests; (2) Plaintiff took additional property from
me and, rather than marketing and selling such property, such property sat in the State of
Washington for months, idle, costing me thousands of dollars; (3) Plaintiff did not use
commercially reasonable means in disposing of such property; and (4) Plaintiff breached its
contract with me in other ways.”). See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (“A document
filed pro se is to be liberally construed” (internal quotation marks omitted)).
10 See Falk v. Allen, 739 F.2d 461, 463 (9th Cir.1984) (“The standard [for prejudice] is whether
his ability to pursue his claim will be hindered.”).
11 Rowland v. California Men’s Colony, 506 U.S. 194, 201–02 (1993) (holding that “a corporation
may appear in the federal courts only through licensed counsel”); D-Beam Ltd. P’ship v. Roller
Derby Skates, Inc., 366 F.3d 972, 973 (9th Cir. 2004) (“It is a longstanding rule that ‘[c]orporations
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Case No. 4:21-cv-00015-SLG, BMO Harris Bank v. Fairchild Logging, LLC, et al.
Order re Motion to Set Aside Default
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CONCLUSION
In light of the foregoing, Defendant’s motion to set aside entry of default at
Docket 11 is GRANTED as to Defendant Carl Mark Fairchild and DENIED without
prejudice as to Defendant Mark Fairchild Logging LLC. The Clerk of the Court is
directed to set aside the entry of default as to Mr. Fairchild at Docket 10. Mr.
Fairchild shall file his answer or other response to the complaint within 21 days of
the date of this order. The Clerk of Court is instructed to update Mr. Fairchild’s
address in this action to the Nenana address he provided at page 1 of Docket 11.
Going forward, at all times, Mr. Fairchild shall keep the Court informed of any
change of address. Such notice shall be titled “Notice of Change of Address.”12
The notice shall contain only information about the change of address, and its
effective date. The notice shall not include requests for any other relief. Failure to
file the notice may result in the dismissal of the action for failure to prosecute under
Rule 41(b) of the Federal Rules of Civil Procedure.
DATED this 25th day of October, 2021 at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE
and other unincorporated associations must appear in court through an attorney’” (quoting In re
Am. W. Airlines, 40 F.3d 1058, 1059 (9th Cir. 1994))).
12 See Local Civil Rule 11.1(b) (requiring a notice of change of address to be filed “[s]elf-
represented parties must keep the court and other parties advised of the party’s current address
and telephone number.”). A Notice of Change of Address form, PS23, may be obtained from the
Clerk of Court, if needed.
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