Bolanos v. YXY Express Incorporated et al

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Karen Acosta Yesenia Bolanos,
Plaintiff,
v.
YXY Express Incorporated, et al.,
Defendants.
No. CV-25-01622-PHX-GMS
ORDER
Pending before the Court is Defendants Zhuoxian Cao and Jane Doe Cao’s
(collectively, the “Caos”) Motion to Set Aside Default Judgment. (Doc. 40). Because the
parties are familiar with the procedural history of this case, the Court will not recount it
here but incorporates its description of those facts from its order denying the Caos’ Motion
to be Excluded from Case. (Doc. 38). After the Court denied the Caos’ Motion to be
Excluded, the Caos filed the instant motion, asserting the same grounds for relief (compare
Doc. 34, with Doc. 40) and asking the Court to set aside the default judgment against them
on January 13, 2026 (Doc. 27) and judgment on attorney’s fees entered on March 18, 2026
(Doc. 37). For the reasons discussed below, the Caos’ motion is denied.
Under Federal Rule of Civil Procedure 55(c), “the [C]ourt may set aside a final
default judgment under Rule 60(b).” Rule 60(b), in turn, allows the Court to grant relief
from a final judgment for “mistake, inadvertence, surprise, or excusable neglect.” When a
party moves to set aside default for excusable neglect, the Court considers three factors,
often referred to as the Falk factors: “(1) whether the plaintiff will be prejudiced, (2)
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whether the defendant has a meritorious defense, and (3) whether culpable conduct of the
defendant led to the default.” Brandt v. Am. Bankers Ins. Co., 653 F.3d 1108, 1111 (9th
Cir. 2011) (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)). The analysis of these
factors is “at bottom an equitable one, taking into account all relevant circumstances
surrounding the party’s omission.” Id. (quoting Pioneer Inv. Servs. Co. v. Brunswick Assoc.
Ltd., 507 U.S. 380, 395 (1993)).
Because decisions on the merits are heavily favored over default judgments,
“appropriate exercise of district court discretion under Rule 60(b) requires that the finality
interest should give way fairly readily, to further the competing interest in reaching the
merits of a dispute.” TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir.
2001), overruled on other grounds by Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141
(2001). Nonetheless, the moving party “bears the burden of demonstrating that these [Falk]
factors favor vacating the judgment.” Id. Further, “[a] district court may exercise its
discretion to deny relief to a defaulting defendant based solely upon a finding of
defendant’s culpability.” Brandt, 653 F.3d 1112.
Here, the Court finds—as it has previously found—that the Caos were culpable in
the conduct leading to the default.1 The essence of the Caos’ culpability argument is that
they “failed to respond to the Complaint because the other parties in the matter told
[Zhuoxian Cao] that he did not need to respond. Both YXY and counsel for Plaintiff told
[Zhuoxian Cao] not to worry about responding.” (Doc. 47 at 1). Despite what the other
parties told the Caos about their obligations in this case, the Caos received proper service
of Plaintiff’s Complaint and a summons that clearly stated that they needed to respond.
(Doc. 4 at 7, 9; Docs. 8, 18). Throughout the proceedings, they were also served with the
Plaintiff’s applications for Entry of Default against them (Doc. 12 at 2; Doc. 21 at 21),
Motion for Default Judgment against them (Doc. 24 at 13), and Motion for Attorney Fees
and Cost (Doc. 28 at 19). The Caos make no assertion that they did not receive service of
these documents or that they did not have knowledge that Plaintiff was proceeding with
1 Because the Court finds the Caos’ culpability as sufficient grounds to deny their requested
relief, it does not address the other Falk factors. Brandt, 653 F.3d 1112.
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her case against them. (See Doc. 40 at 1-2). Instead, they assert only that they ignored the
proceedings “because the other parties in the matter told [Zhuoxian Cao] that he did not
need to respond.” (Doc. 47 at 1; see Doc. 40 at 1-2).
If a defendant receives actual notice of an action and intentionally fails to answer,
they are culpable in the conduct leading to the default. TCI, 244 F.3d at 697 (quoting Alan
Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988)). In the context of
Rule 60(b), “intentional” means to act willfully, deliberately, or in bad faith. Id. (quoting
Am. All. Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 61 (2d Cir. 1996)). Here, the Caos willfully
ignored Plaintiff’s complaint and subsequent filings in this case in blind reliance on
representations from the other parties, despite consistent notices from the Court and
Plaintiff that proceedings against them were ongoing. While the Caos did not act deviously
or in bad faith, they repeatedly ignored the action over a period of months with no
understandable reasons for doing so and make no assertion that they attempted to consult
with the other parties again as the case progressed. Blind reliance on the other parties’
assessment of their obligations when Zhuoxian Cao was first served may have been
excusable initially, but as the case progressed, the language in the summons and repeated
service of motions by Plaintiff clearly demonstrated the consequences of default and
Plaintiff’s prosecution of the action. As time passed, the Caos’ willful ignorance of the
action made them culpable and inexcusably neglectful.
Accordingly,
IT IS ORDERED that Defendants Zhuoxian Cao and Jane Doe Cao’s Motion to
Set Aside Default Judgment (Doc. 40) is DENIED.
Dated this 12th day of June, 2026.
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