Direct Connect Logistix, Inc. v. Rd. Kings Trucking Inc., Case No. 1:16-cv-01006-AWI-SKO
| Decision Date | 08 November 2016 |
| Docket Number | Case No. 1:16-cv-01006-AWI-SKO |
| Court | U.S. District Court — Eastern District of California |
| Parties | DIRECT CONNECT LOGISTIX, INC., Plaintiff, v. ROAD KINGS TRUCKING INC., STAR LOGISTICS INC., Defendants. |
FINDINGS AND RECOMMENDATIONS THAT PLAINTIFF'S APPLICATION FOR DEFAULT JUDGMENT BE GRANTED IN PART
OBJECTIONS DUE: 21 DAYS
Pending is the Notice of Motion and Motion of Plaintiff Direct Connect Logistix, Inc. for Default Judgment Against Both Defendants and Supporting Declaration (the "Motion for Default Judgment"). (Doc. 13.) Neither Defendant has filed an opposition to the Motion for Default Judgment to date. The Court has reviewed the Motion for Default Judgment and the supporting documentation and determined pursuant to Local Rule 230(g) that this matter is suitable for decision without oral argument.
For the reasons set forth herein, the undersigned RECOMMENDS that the district court GRANT IN PART Plaintiff's Motion for Default Judgment against both Defendants.
This is an action by Plaintiff to recover the value of a shipment of cheddar cheese that was allegedly lost or converted while in Defendants' possession in April or May 2016 (the "Shipment"). Plaintiff is a corporation organized under the laws of the state of Indiana that "engage[s] in business on a nationwide basis as a property broker, arranging for transportation services through interstate motor carriers." (Doc. 1 ¶ 1.) Defendants Road Kings Trucking Inc. ("Road Kings") and Star Logistics Inc. ("Star Logistics") are both corporations organized under the laws of the state of California that "conduct[] business as . . . licensed motor carrier[s] of property in interstate and foreign commerce." (Id. ¶ 2.)
On November 25, 2015, Plaintiff and Defendant Star Logistics entered into a "Contract Carrier Agreement" pertaining to Plaintiff's use of "the services of [Defendant Star Logistics] to transport for or on behalf of [Plaintiff's] customers." (Doc. 15, Ex. A at 2.) On February 8, 2016, Plaintiff and Defendant Road Kings entered into a similar "Contract Carrier Agreement." (Id., Ex. B at 10-16; see also Doc. 15 at 3 ().) Both of these agreements include identical "[i]ndemnity" provisions, which provide the following, in relevant part:
[Defendants] shall defend, indemnify, and hold [Plaintiff], its customer, and each of their affiliated entities harmless from and against all loss, liability, damage, claim, fine, cost or expense, including reasonable attorney's fees, arising out of or in any way related to the performance or breach of this [Contract Carrier Agreement] by [Defendants], [their] employees or independent contractors working for [Defendants] . . . .
(Id., Ex. A at 6; id., Ex. B at 14.) Plaintiff's Contract Carrier Agreements with Defendants "remain[ed] in effect for one . . . year" from the date of the execution of each agreement. (Id., Ex. A at 2; id., Ex. B at 10.)
According to the Complaint, "[o]n or about April 28, 2016, [D]efendant[] Star Logistics . . . accepted a written request from [P]laintiff in the form of [P]laintiff's [l]oad [c]onfirmation totransport . . . one shipment of cheddar cheese from Hilmar, California to Mercer, Pennsylvania." (Doc. 1 ¶ 9.) The Complaint alleges that Defendant Star Logistics "subcontracted and/or brokered the transportation of" the Shipment "to [D]efendant Road Kings" without "the knowledge or consent of [P]laintiff." (Id. ¶ 10.) The Complaint then avers that, "[o]n or about April 29, 2016, [D]efendants . . . received" the Shipment in "good condition" for "transportation from California to Pennsylvania." (Id. ¶¶ 11-12.) The Complaint further alleges that Defendants "failed to satisfy [their] obligations with respect to" the Shipment, as the Shipment "was lost or converted while in [D]efendants' possession in California." (Id. ¶ 13.)
The Complaint avers that, "[a]s a result of [the] loss" of the Shipment, Plaintiff "received a claim from its customer, Hilmar Cheese Company in the sum of $59,442.59." (Id. ¶ 15; see also Doc. 15, Ex. C at 18 ().) On September 1, 2016, Plaintiff issued a check to Hilmar Cheese Company in the amount of $59,442.59 "in satisfaction of the claim." (Doc. 15 at 4; see also id., Ex. D at 23 ().)
On July 13, 2016, Plaintiff filed the Complaint against Defendants in this Court. (See Doc. 1.) The Complaint includes the following claims: (1) Count I—loss of cargo against both Defendants pursuant to 49 U.S.C. § 14706, ); (2) Count II—negligence against both Defendants, (see id. ¶¶ 17-20); (3) Count III—breach of contract against Defendant Star Logistics arising out of the alleged breach of the November 25, 2015 Contract Carrier Agreement, (see id. ¶¶ 21-27); (4) Count IV—breach of contract against Defendant Star Logistics arising out of the alleged breach of a "[l]oad [c]onfirmation accepted . . . on or about April 28, 2016," (see id. ¶¶ 28-32); and (5) Count V—breach of contract against Defendant Road Kings arising out of the alleged breach of the February 8, 2016 Contract Carrier Agreement, (see id. ¶¶ 33-38). The Complaint includes the following prayers for relief: (1) "the sum of $59,442.59 plus interestthereon at the maximum lawful rate from June 7, 2016;" and (2) attorneys' fees and costs. (Id. at 10.)
On July 23, 2016, Plaintiff effectuated service of the Complaint on both Defendants. (See Docs. 6 & 7.) After Defendants failed to respond to the Complaint, Plaintiff filed a Request to Enter Default of Both Defendants on August 16, 2016. (Doc. 8.) The Clerk then entered Certificates of Entry of Default against both Defendants on August 18, 2016. (Docs. 9 & 10.)
On September 7, 2016, Plaintiff filed the Motion for Default Judgment. (Doc. 13.) To date, neither Defendant has responded to this motion. The Motion for Default Judgment is thus ready for disposition.
Federal Rule of Civil Procedure 55(b) permits a court-ordered default judgment following the entry of default by the clerk of the court under Rule 55(a). See Fed. R. Civ. P. 55(b)(2). "[D]efault does not entitle the non-defaulting party to a default judgment as a matter of right . . . ." Dreith v. Nu Image, Inc., 648 F.3d 779, 785 (9th Cir. 2011). Rather, "[t]he district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (citations omitted).
In Eitel v. McCool, the Ninth Circuit identified seven "[f]actors which may be considered by courts in exercising discretion as to the entry of a default judgment," including (1) "the possibility of prejudice to the plaintiff;" (2) "the merits of plaintiff's substantive claim;" (3) "the sufficiency of the complaint;" (4) "the sum of money at stake in the action;" (5) "the possibility of a dispute concerning material facts;" (6) "whether the default was due to excusable neglect;" and (7) "the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits." 782 F.2d 1470, 1471-72 (9th Cir. 1986). The "general rule" is "that default judgments are ordinarily disfavored." Id. at 1472. Nonetheless, in applying the Eitel "discretionary standard, default judgments are more often granted than denied." Philip Morris USA, Inc. v.Castworld Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003) (quoting PepsiCo v. Triunfo-Mex, Inc., 189 F.R.D. 431, 432 (C.D. Cal. 1999)).
"The general rule of law is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)); see also Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) . "However, a defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law." DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (citation omitted). Further, "necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default." Id. (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)).
Federal Rule of Civil Procedure 54(b) provides, in part, that "[w]hen an action presents more than one claim for relief . . . or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay." However, "under certain circumstances, the court should not enter a default judgment against one or more defendants which is, or likely to be, inconsistent with judgment on the merits in favor of the remaining answering defendants." Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 995, 1005 (N.D. Cal. 2001) ).
The undersigned will address each of the Eitel factors, in turn. For the reasons provided below, the undersigned finds that these factors weigh in favor of the entry of default judgment against both Defendants.
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