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Allstate Insurance Co. v. Lighthouse Law P.S. Inc.

United States District Court, W.D. Washington, Seattle

December 29, 2017

ALLSTATE INSURANCE CO., et al., Plaintiffs,
v.
LIGHTHOUSE LAW P.S. INC., et al., Defendants.

          ORDER VACATING DEFAULT AND DEFAULT JUDGMENT

          Robert S. Lasnik United States District Judge

         This matter comes before the Court on a motion to vacate entries of default and default judgment entered against defendants Seok Bae “Mike” Seo, Lee Ok Mi, and Hanna & Dooree Corporation (“H&D Corp.”). Dkt. # 114. The Court has considered the parties' memoranda, filings, and exhibits. For the reasons explained below, defendants' motion is GRANTED.

         I. BACKGROUND

         This matter stems from a lawsuit brought by Allstate Insurance Company and several of its associated corporate entities[1] (together, “Allstate”) alleging a scheme of false insurance claims submitted through a sham law firm. The three defendants who bring this motion were not defendants in Allstate's original complaint, Dkt. # 1, but during discovery Allstate contacted and corresponded with Mr. Seo, obtained documents from him via subpoena, and deposed him July 12, 2016. At that deposition, Mr. Seo was represented by attorney Shawn McCully.

         The Court dismissed the original complaint, but granted Allstate leave to amend. Dkt. # 47. On August 17, 2016, Allstate filed an amended complaint that newly named as defendants Mr. Seo, his wife Ms. Mi, and H&D Corp., a company Mr. Seo apparently used to do business with the law firm at the center of the lawsuit's allegations. Dkt. # 52. The day Allstate filed its amended complaint, Allstate's counsel emailed copies of the amended complaint to various parties, including Mr. McCully. Dkt. # 119-1 at 1. Mr. McCully responded by notifying plaintiff's counsel that it was unlikely he would continue to represent Mr. Seo and that he would not accept service on Mr. Seo's behalf. Dkt. # 119-1 at 2. The morning of October 19, 2016, Allstate served the amended complaint and summons on Mr. Seo and on Ms. Mi, who accepted service on her own behalf and on behalf of H&D Corp. Dkt. ## 79, 80, 81.

         Mr. Seo and Ms. Mi did not answer the amended complaint or otherwise defend the suit, but Mr. Seo continued to cooperate and correspond with plaintiff's counsel. Dkt. # 114-1 at 13. For example, hours after Mr. Seo was served with the amended complaint, he sent the following email to the offices of plaintiff's counsel:

Please reschedule my deposition which scheduled on October 24, 2016 9:30 a.m due to attorney withdraw from my case. I need to find new attorney for this matter. Beside that, I am not going to be available on November because I will be with my father to get his lung cancer treatment and surgery plane with doctors in CA.
thanks
Michael

Dkt. # 119-1 at 9 (mistakes in original). Two days later, he followed up with another message:

I got noticed the deposition form my priviou attorney yesterday's email. I don't want to be in the deposition by myself. I will find attorney for my deposition asap. I am not available in first two weeks of November. I am back to Seattle on 13th of November. I would like to reschedule after that and let me know.
Thanks

Dkt. # 119-1 at 9 (mistakes in original).

         Allstate continued to correspond with Mr. Seo about testifying against the original defendants and other topics, but simultaneously pursued judgment by default, the mechanism in the Federal Rules of Civil Procedure for pursuing judgment against an unresponsive party whose failures to respond have brought the process of a lawsuit to a halt. See Fed.R.Civ.P. 55. Obtaining a default judgment begins by seeking an entry of default if a defendant fails to responsively plead or otherwise defend a suit within twenty-one days of service. See Fed.R.Civ.P. 12(a)(1)(A)(ii); Fed.R.Civ.P. 55(a). Mr. Seo failed to file a responsive pleading with the Court within twenty-one days of service, and on November 10, 2016-twenty-two days after service-Allstate sought a default against ...


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