A Fla. Corp.. v. Parth Enter.s Inc.

• Decision Date: 19 July 2010
• Docket Number: Case No. CV 09-01426 MMM (AJWx).
• Citation: 725 F.Supp.2d 916
• Court: U.S. District Court — Central District of California
• Parties: LANDSTAR RANGER, INC., a Florida Corporation, Plaintiff, v. PARTH ENTERPRISES, INC., a California Corporation, USA Logistics, LLC, a New Jersey Limited Liability Company, and does 1 through 10, inclusive, Defendants.

725 F.Supp.2d 916

LANDSTAR RANGER, INC., a Florida Corporation, Plaintiff,

v.PARTH ENTERPRISES, INC., a California Corporation, USA Logistics, LLC, a New Jersey Limited Liability Company, and does 1 through 10, inclusive, Defendants.

Case No. CV 09-01426 MMM (AJWx).

United States District Court,C.D. California.

July 19, 2010.

Gregg S. Garfinkel, Nemecek & Cole PC, Sherman Oaks, CA, for Plaintiff.

ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

MARGARET M. MORROW, District Judge.

On February 27, 2009, plaintiff Landstar Ranger Inc., filed this breach of contract action against defendants Parth Enterprises, Inc., USA Logistics, LLC, and certain fictitious defendants, alleging breach of interstate transportation contracts. ¹ The clerk entered the default of Parth Enterprises, Inc. on August 20, 2009. ² Subsequently, the court dismissed plaintiff's claim against defendant USA Logistics, LLC without prejudice for lack of prosecution. ³ Plaintiff now seeks to have the court enter default judgment against Parth Enterprises, Inc. in the principal sum of $243,817.34 and to award prejudgment interest under California Civil Code § 3289. ⁴ Landstar also requests the opportunity to submit a bill of costs following entry of the default judgment. ⁵

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Landstar Ranger Inc., a Florida corporation with its principal place of business in Jacksonville, Florida, ⁶ is a federally licensed motor carrier engaged in the business of interstate carriage for hire. ⁷ Defendant Parth Enterprises Inc., a California corporation with its principal place of business in City of Industry, California, ⁸ contracted with Landstar to transport sixty shipments between September and November 2008. ⁹ Each shipment was prepared by USA Logistics; Landstar was the carrier of record and Parth was the shipper/consignor on each preprinted bill of lading contract. ¹⁰ Landstar picked up each shipment from Parth's City of Industry, California office and delivered it to Parth's office in Carnbury, New Jersey. It invoiced Parth a total of $313,803.60 for the sixty shipments. ¹¹ Parth accepted each of Landstar's invoices and related documentation without objection or protest. ¹²

Landstar received five wire transfer payments from USA Logistics for the shipments totaling $69,986.26. ¹³ Landstar contends that $243,817.34 remains due and owing for the deliveries to Parth. ¹⁴ It asserts that despite demand, Parth has failed to pay the remaining balance. ¹⁵ Landstar filed this action on February 27, 2009, and served Parth by personal service on the California Secretary of State on July 20, 2009, ¹⁶ as had been authorized by the court. ¹⁷ Landstar's motion for entry of default judgment is supported by the declaration of Gregg S. Garfinkel, who states that Parth is not an infant, incompetent person, member of the military service, or otherwise exempt from default judgment under the Service Members Civil Relief Act, 50 App. U.S.C. § 521. ¹⁸

II. STANDARDS FOR ENTRY OF DEFAULT JUDGMENT

A. Compliance with Rule 55 of the Federal Rules of Civil Procedure and Local Rule 55-1

Local Rule 55-1 requires that a party moving for default judgment submit a declaration (1) indicating when and against which party default has been entered; (2) identifying the pleading as to which default has been entered; (3) indicating whether the defaulting party is an infant or incompetent person, and if so, whether that person is represented by a general guardian, committee, conservator or other representative; (4) stating that the Service Members Civil Relief Act, 50 App. U.S.C. § 521, does not apply; and (5) affirming that notice has been served on the defaulting party, if required by Rule 55(b)(2). ¹⁹

Plaintiff has complied with these requirements. Plaintiff's motion states that on August 20, 2009, the clerk entered Parth's default. ²⁰ Plaintiff subsequently filed this motion for entry of default judgment against Parth. ²¹ Plaintiff asserts that Parth is not an infant, incompetent person, member of the military service or otherwise exempt from default judgment under the Service Members Civil Relief Act, 50 App. U.S.C. § 521. ²² Finally, as Parth has not appeared in the action, plaintiff was not required to notify defendant of its intent to seek this default judgment. ²³ The procedural prerequisites to entry of default judgment are thus satisfied. See, e.g., Elektra Entertainment Group Inc. v. Crawford, 226 F.R.D. 388, 392 (C.D.Cal.2005) (finding that the procedural requirements of Rule 55 and Local Rule 55-1 were met where plaintiff submitted declarations addressing each required factor). Therefore, the court turns to the merits of plaintiff's motion.

B. Legal Standard for Governing Default Judgment-the Eitel Factors

“Granting or denying a motion for default judgment is a matter within the court's discretion. Elektra Entertainment Group Inc. v. Bryant, No. CV 03-6381 GAF (JTLx), 2004 WL 783123, *1 (C.D.Cal. Feb. 13, 2004); see also Sony Music Entertainment Inc. v. Elias, No. CV03-6387 DT (RCX), 2004 WL 141959, *3 (C.D.Cal. Jan. 20, 2004). The Ninth Circuit has directed that courts consider the following factors in deciding whether to enter default judgment: (1) the possibility of prejudice to 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 the material facts; (6) whether defendant's default was the product of excusable neglect, and (7) the strong public policy favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.1986); see also Elektra Entertainment Group, 2004 WL 783123 at *1-2.

Once a party's default has been entered, the factual allegations of the complaint, except those concerning damages, are deemed to have been admitted by the non-responding party. See Fed.R.Civ.Proc. 8(b)(6); see also, e.g., Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir.1977) (stating the general rule that “upon default[,] the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true”). The court, however, must still “consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” 10A Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure: Civil 3d § 2688, at 63 (1998) (footnote omitted); see also Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir.1992) (“[N]ecessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default”); Doe v. Qi, 349 F.Supp.2d 1258, 1272 (N.D.Cal.2004) (“[Although] the factual allegations of [the] complaint together with other competent evidence submitted by the moving party are normally taken as true ... this Court must still review the facts to insure that the Plaintiffs have properly stated claims for relief”).

If the court determines that the allegations in the complaint are sufficient to establish liability, it must then determine the “amount and character” of the relief that should be awarded. 10A Wright, Miller, & Kane, supra, § 2688, at 63; Crawford, 226 F.R.D. at 394 (district court has “wide latitude” and discretion in determining the amount of damages to award upon default judgment, quoting James v. Frame, 6 F.3d 307, 310 (5th Cir.1993)).

III. DISCUSSION

A. Eitel Factors

1. Possibility of Prejudice to Plaintiff

The first Eitel factor considers whether a plaintiff will suffer prejudice if a default judgment is not entered. Pepsico, Inc. v. California Security Cans, 238 F.Supp.2d 1172, 1177 (C.D.Cal.2002). Denying default judgment here would leave Landstar without a proper remedy. See Pepsico, 238 F.Supp.2d at 1177 (stating plaintiffs would have no other recourse for recovery if default judgment was not granted). Such a denial is unwarranted given that plaintiff has delivered sixty shipments to Parth, and has only received partial payment for its services. Since the facts in the complaint are deemed true, see Geddes, 559 F.2d at 560, the court concludes that plaintiff would suffer prejudice if a default judgment were not entered.

2. Substantive Merits and Sufficiency of the Claim

The second and third Eitel factors assess the substantive merit of plaintiff's claim and the sufficiency of its pleadings. These factors “require that a plaintiff state a claim on which [it] may recover.” See Pepsico, 238 F.Supp.2d at 1175; see also Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir.1978) (stating that the issue is whether the allegations in the complaint state a claim upon which plaintiff can recover).

The elements of a claim for breach of contract are: (1) the existence of a contract, (2) performance by the plaintiff, (3) breach by the defendant and (4) damage to plaintiff as a result of defendant's breach. See Great American Insurance Co. v. MIVCO Packing Co., LLC, No. 08-05454, 2009 WL 942390, *6 (N.D.Cal. April 6, 2009) (citing Amelco Electric v. City of Thousand Oaks, 27 Cal.4th 228, 115 Cal.Rptr.2d 900, 38 P.3d 1120 (Cal.2002)).

Landstar's complaint adequately alleges all elements of a claim for breach of contract. It asserts that Parth tendered sixty shipments of goods under bill of lading contracts for transportation in interstate commerce between September and November 2008. ²⁴ It alleges that Landstar performed under the contracts by transporting each of the sixty shipments. ²⁵ Landstar alleges that, although Parth accepted each delivery and the related invoices without objection or protest, ²⁶ it breached the contracts by failing to pay $243,817.34 in shipping charges owed to Landstar. ²⁷ Accepting these factual allegations as true, as the court must in deciding a motion for default judgment, plaintiff has pled and proved a claim for breach of the bill of lading contracts.

3. Amount at Stake

The third...