United States District Court, D. Oregon, Eugene Division
OPINION & ORDER
Aiken, United States District Judge.
Barker ("Plaintiff”) filed a complaint in state
court on May 17, 2018 and BSI Financial Services and Civic
Financial Services ("Defendants") timely removed
the matter to federal court based on federal question
jurisdiction. Before me are Plaintiffs motions for default
(docs. 9, 10, 11, and 12) and Defendants' Motion to
Dismiss (doc. 24). For the reasons herein, Plaintiffs motions
for default are DENIED and Defendants' Motion to Dismiss
17, 2018, Plaintiff filed suit in Lane County Circuit Court
alleging violations of the Fair Debt Collection Practices
Act, the Real Estate Settlement Procedures Act, the Consumer
Protection Act/Truth in Lending Act, and various common law
violations. See Pl.'s First Amend. Compl. at 1
(doc. 21). Plaintiffs claimed violations stem from
Defendants' alleged transmittal of a falsified mortgage
history ledger indicating that Plaintiff had been late on
payments for a loan he received to purchase a property in
Eugene and that was serviced by Defendants. Plaintiff alleges
that Defendants' actions caused him long-term economic
loss due to an increase in interest payments, lowered credit
score, and emotional strain, among other things. See Id
. at 3.
timely served defendants BSI and Civic in September of 2018
and Defendants removed the case to federal court within 30
days of being served. See Notice of Removal at 3
(doc. 1). Defendants explain in their response to one of
Plaintiffs requests for entry of default that individual
defendants Troy Valentine and Gagan Sharma were not properly
served in the state court action, were therefore not parties
to the case when it was removed, and are therefore not proper
parties in the removed action before the Court. See
doc. 18 at 3, n.1. Since the action's removal to federal
court, Plaintiff has moved for entries of default against
Defendants as well as against Valentine and Sharma.
Defendants have moved to dismiss the case based on Rule
12(b)(1) and 12(b)(6).
are several motions before me: (i) Plaintiffs four motions
for default and (ii) Defendants' Motion to
Dismiss. Each, is addressed below.
Motions for Default
requests that this Court file entries of default against
Defendants as well as against Gagan Sharma and Troy
Valentine. Defendants argue that an entry of default is
improper because they have been defending in the action and
because Plaintiff won't be prejudiced by having to
litigate at this stage.
of default is the essential first step in the two-step
process of obtaining a default judgment for failure to
appear. Eitel v. McCool, 782 F.2d 1470, 1471 (9th
Cir. 1986). Rule 55(a) provides that "[w]hen a party
against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend as provided by these
rules, and that fact is made to appear by affidavit or
otherwise, the clerk shall enter the party's
default." Fed.R.Civ.P. 55(a). For entry of default to be
proper, the moving party has the burden of showing that: (1)
the party against whom default is sought has been properly
served; (2) the Court has proper subject matter jurisdiction;
and (3) the defaulting party has failed to plead or otherwise
defend. U.S. v. Panter, 2012 WL 1245669 at *3 (D.
Or. March 14, 2012).
defaults is a discretionary matter reserved for the district
court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th
Cir. 1980); see also Dreith v. Nu Image, Inc., 648
F.3d 779, 786 (9th Cir. 2011). The "starting point"
of the court's analysis, however, "is the general
rule that default judgments are ordinarily disfavored."
Id. at 1472.
while Defendants failed to file responsive pleading within
the allotted time provided for in Rule 12, entry of default
would be improper under Rule 55(a). Defendants indicate that
they have corresponded with Plaintiff about the case in
January and have been engaged in discovery since the action
was filed. They have also conferred with Plaintiff about
their plans to defend in this case and removed the action to
federal court. All of this is evidence of Defendants'
intention to defend the case. See U.S. v. Panter,
2012 WL 1245669 at*3 (D. Or. March 14, 2012). Moreover, there
is no reason to believe Plaintiff will be prejudiced if this
action is allowed to continue on its merits. While Plaintiff
argues that prejudice exists because two months had passed
since the action was removed before Plaintiff ultimately
requested entries of default, two months is simply not long
enough to necessarily constitute prejudice and Plaintiff does
not explain why this suit is a special situation where
default would be appropriate. Thus, I find that entries of
default against Defendants would be unwarranted.
of default would also be improper with respect to Valentine
and Sharma. Under FRCP 4(e)(1) service may be made
"following state law for serving a summons in an action
brought in courts of general jurisdiction in the state where
the district court is located or where service is made."
But since Plaintiff only attempted to serve Valentine and
Sharma while this case was in state court, the Court must
consider whether Plaintiff followed Oregon law for service of
process. Rule 7D(1) of the Oregon Rules of Civil Procedure
provides that summons must be served in any manner reasonably
calculated under all the circumstances to apprise the
defendant of the existence and pendency of the action and to
afford a reasonable opportunity to appear and defend. The
Oregon rules also provide for presumptively adequate methods
of service. See Or. R. Civ. P. 7 D. But when service
is not made by one of the presumptively adequate methods, the
inquiry "focuses on whether plaintiffs conduct was
objectively and reasonably calculated under the totality of
the circumstances existing at the time of attempted service
to apprise defendants of the pendency of the action."
See Baker v. Foy, 310 Or. 221, 228-29
(1990). If that inquiry is answered in the affirmative,
service is deemed valid. Davis Wright Tremaine, LLP v.
Menken, 181 Or.App. 332, 337 (2002). The inquiry
focuses, not on the defendant's subjective notice, but on
whether the plaintiffs conduct was objectively, reasonably
calculated, under the totality of the circumstances then
known to the plaintiff, to apprise the defendant of the
pendency of the action. Id. at 339. Thus, actual
notice "is, essentially, irrelevant." Id; see
also Jordan v. Wiser, 302 Or. 50, 60 (1986) (actual
notice does not make service adequate under Rule 7).
general rule, service by mail on an individual must be by via
restricted delivery-only the person being served can either
accept or refuse the mailing-to satisfy the reasonable notice
standard of Rule 7 D(1). Davis Wright, 181 Or.App.
at 988. Thus, a summons and complaint sent by first class
mail is not sufficient to satisfy Rule 7 D(1). In Murphy
v. Price,131 Or.App. 693, 697 (1995), the court held
that service by sending a copy of the summons and complaint
to defendant at his mailing address using certified mail,
return receipt requested, but with unrestricted delivery was
inadequate because anyone at that address could have signed
for the documents with no assurances that defendant would
ever see the papers. See also Davis Wright, 181
Or.App. at 343 ("mere service by certified mail, without
some more particularized assurance or confirmation of
delivery to the defendant, e.g., restricted
delivery, return ...