Toledo v. Keller King & Assocs. Inc.
| Decision Date | 26 September 2011 |
| Docket Number | CASE NO. 5:10-cv-03821 EJD |
| Court | U.S. District Court — Northern District of California |
| Parties | MARTHA TOLEDO, Plaintiff(s), v. KELLER KING & ASSOCIATES, INC., Defendant(s). |
Presently before the Court is Plaintiff Martha Toledo's ("Plaintiff") Motion for Default Judgment ("Motion") against Defendant Keller King & Associates, Inc. ("Defendant"). To date, Defendants have not filed an opposition to the Motion or otherwise appeared in this proceeding. Pursuant to Local Rule 7-1(b), the court determined this motion was suitable for decision without oral argument and therefore vacated the previously-scheduled hearing. Having reviewed Plaintiff's pleadings and the applicable legal authorities, the Motion will be denied for the reasons which follow.1
The entirety of Plaintiff's operative allegations are contained in two sentences. Plaintiff contends Defendant "places collection calls to Plaintiff seeking and demanding payment for an alleged debt." See Complaint ("Cmplt."), Docket Item No. 1, at ¶ 12. Plaintiff also alleges thatDefendant "places collection calls to Plaintiff and fails to disclose that the call is from a debt collector." See id. at ¶ 13.
On August 26, 2010, Plaintiff filed an original Complaint in this court alleging two causes of action for violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et. seq., and the Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), Cal. Civ. Code § 1788, et. seq. Defendant's default was then entered by the Clerk on April 12, 2011. See Docket Item No. 15. Plaintiff now requests this court enter judgment against Defendant.
Pursuant to Federal Rule of Civil Procedure 55(b), the court may enter default judgment against a defendant who has failed to plead or otherwise defend an action. "The district court's decision whether to enter default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The Ninth Circuit has provided seven factors for consideration by the district court in exercising its discretion to enter default judgment: (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 dispute concerning material facts; (6) whether default was due to excusable neglect and; (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). When assessing these factors, all factual allegations in the complaint are taken as true, except those with regard to damages. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).
District courts also have an affirmative duty to examine their own jurisdiction when entry of judgment is sought, and must also determine whether the party in default has been properly served. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).
As can be seen from the discussion which follows, jurisdiction is proper in this court, but evidence of proper service is insufficient. Moreover, an examination of two of the Eitel factors reveal that the current state of Plaintiff's Complaint does not support entry of judgment. The Motion must therefore be denied.
District courts have original jurisdiction to hear civil actions that present a federal question. 28 U.S.C. § 1331(a). Here, the face of the Complaint presents a federal question since Plaintiff's first claim arises under a federal statute, namely the FDCPA. See Cmplt. at ¶¶ 16-19. Thus, a basis for federal jurisdiction exists and the court may exercise supplemental jurisdiction over Plaintiff's second claim under the RFDCPA. See 28 U.S.C. § 1367.
As the party seeking to invoke the court 's jurisdiction, Plaintiff must establish the basis for personal jurisdiction over Defendant. See Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986). Notably, Plaintiff's Motion is silent as to this issue. According to the Complaint, Defendant is a debt collector based in Jacksonville, Florida, which conducts business in California. See Cmplt. at ¶¶ 4, 9. Thus, in order for this court to exercise jurisdiction over Defendant, "that defendant must have at least 'minimum contacts' with the relevant forum such that the exercise of jurisdiction 'does not offend traditional notions of fair play and substantial justice.'" Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004) (internal citations omitted). A determination of jurisdiction based on 'minimum contacts' requires a three-step analysis:
(1) the non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privileges of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.
Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1484 (9th Cir. 1993).
In order to establish 'purposeful availment,' Plaintiff must demonstrate that defendant "engage[d] in some form of affirmative conduct allowing or promoting the transaction of business within the forum state." Gray & Co. V. Firstenberg Mach. Co., 913 F.2d 758, 760 (9th Cir. 1990). A defendant purposefully directs activity at a forum state when he "(1) commit[s] an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to besuffered in the forum state." Schwarzenegger, 374 F.3d at 805. "The touchstone is whether the 'defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.'" Gordy v. Daily News, L.P., 95 F.3d 829, 832 (9th Cir. 1996) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). "The requisite connection, however, need not involve physical entry into the forum." Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985)).
Looking at the Complaint, Plaintiff's allegations, while skeletal, are sufficient to demonstrate purposeful availment. Plaintiff alleges that Defendant "places collection calls to Plaintiff seeking and demanding payment." See Cmplt. at ¶ 12. These telephone calls made by Defendant to Plaintiff qualify as an intentional act. And when the allegation is read in conjunction with prior portions of the Complaint, specifically that Plaintiff resides in San Jose, it demonstrates that Defendant's actions were "expressly aimed" toward California, a fact Defendant presumably understood when placing the calls. Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002) (); see also Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1087 (9th Cir. 2000) (). Even though Defendant's employees never physically entered this state, the conduct alleged created a sufficient connection to this forum such that Defendant could anticipate having to defend litigation in California. See Paradise v. Robinson & Hoover, 883 F. Supp. 521, 525 (D. Nev. 1995) ().
The second factor of the 'minimum contacts' test requires that the claim be one that 'arises out of or relates to' defendant's activities in the forum. Core-Vent Corp., 11 F.3d at 1484. Here, Plaintiff's claim for violations of federal and state debt collection statutes plainly arises out of the Defendant's conduct directed toward this forum. Indeed, Defendant's phone calls to Plaintiff inCalifornia form the entire basis of this lawsuit.
The final factor requires jurisdiction in this forum be reasonable in that it comports with fair play and substantial justice. Id. For this requirement, courts generally "presume that an otherwise valid exercise of specific jurisdiction is reasonable." Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995). "The burden of convincing [the court] otherwise is on the [defendant]." Id. Here, Defendants did not respond to the Motion and have not otherwise submitted information to suggest to that personal jurisdiction is unreasonable. Accordingly, the presumption of reasonableness prevails.
The court must assess whether Defendant was properly served with notice of this action. For a corporate defendant, service must be effectuated in accordance with Federal Rule of Civil Procedure 4(h). Thus, a corporation may be served "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process." Fed. R. Civ. P. 4(h)(1)(B). Service may also be effected by any method authorized under the law of the state in which the district court is located, in this case California, or in which service was made, which here is Florida. Fed. R. Civ. P. 4(h)(1)(A).
California Code of Civil Procedure provides for service of process on corporations through its officers,...
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