Stephenson v. El-Batrawi

The Trustee for the Estate of MJK Clearing Inc. (plaintiff) sued various defendants, including El-Batrawi (defendant), alleging fraud. MJK served the summons and complaint on El-Batrawi at his California address and, later, an amended complaint, neither of which were returned. Copies of the summons and amended complaint were also sent to three additional addresses, each of which were returned to MJK indicating El-Batrawi no longer resided there. When El-Batrawi failed to appear in this action, MJK served El-Batrawi by publication in the Los Angeles Times once a week for four consecutive weeks, which received no response from El-Batrawi. At MJK’s request, the clerk of court entered default against El-Batrawi and, in the meantime, MJK reached a settlement agreement with the other defendants. MJK then filed a motion for entry of default judgment against El-Batrawi for the remaining damages it alleged due. Less than a week after filing the motion for default judgment, and over three years after service of the initial complaint, El-Batrawi made his first appearance by filing a motion to set aside the default entered against him. The district court denied El-Batrawi’s motion and instead granted MJK’s motion for default judgment against him for $67.5 million in damages. El-Batrawi appealed both the denial of his motion to set aside default and the granted default judgment against him.