Opinion
3:21-cv-454-JR
04-18-2022
JANA SMITH, Plaintiff, v. MARK DOWNEY, CHARLES OLSEN. ARIELL HARTWELL, MARK SIMON and SHERMAN SMITH, Defendants.
FINDINGS & RECOMMENDATION
Jolie A. Russo United States Magistrate Judge
Plaintiff, Jana Smith, brings this action seeking relief for the defendants' “discriminatory hostile housing environment, conspiracy to interfere with civil rights, conversion, retaliation, ouster, false imprisonment, trespass, failure to maintain, unlawful and deceptive trade practices and other common law claims arising out of plaintiff's lease of [a Portland, Oregon] premises.” Plaintiff moves for entry of default judgments against defendants Charles Olsen, Mark Simon, and Sherman Smith. For the reasons stated below, the motions should be denied.
BACKGROUND
Plaintiff alleges she sublet a room from May 15, 2018, to April 12, 2020, at a premises located at 3814 Hassalo Street, Portland, Oregon. First Amended Complaint (ECF 26) at ¶ 1. Plaintiff alleges: defendant Mark Downy owns the premises and was plaintiff's landlord; defendant Olsen was also plaintiff's landlord in that he leased from and managed the premises for Downy by subletting rooms; defendant Arielle Hartwell, also plaintiff's landlord who sublet and comanaged the premises from October 2019 until April 2020; defendant Smith is plaintiff's exhusband who conspired with defendants to convert plaintiff's personal possessions from the premises; and defendant Simon is plaintiff's former business partner and sublessor who conspired with defendants to trespass onto plaintiff's chattels. Id. at ¶¶ 2-6.
Plaintiff asserts she rented a small room and placed a storage shed in the yard of the premises. Id. at ¶ 9. Based on Olsen's assurances that the other individuals living in the house were stable and “enthusiastically” approved her residency, plaintiff alleges she moved in and constructed a storage shed at considerable expense. Id. at ¶¶ 11-12. However, plaintiff asserts after a few months the “stable” residents left and were replaced with “substance-addicted drifters.” Id. at ¶¶ 14-15.
Plaintiff alleges that after suffering malfunctioning facilities, theft, unsanitary conditions, damage to her property, violent behavior, and “encouraged” harassment, defendant Downy gave her notice to “vacate” the premises in October 2018. Id. at ¶¶ 16-31. Plaintiff asserts she continued to suffer harassment, and vandalism to, and theft of, her property. Id. at ¶ 32-42.
Plaintiff alleges in October 2019, defendant Hartwell arrived as the new house manager and told plaintiff “the sole reason she was there was to get plaintiff out.” Id. at ¶ 43.
Plaintiff alleges the attempts to get her to vacate the premises, including the use of violence, continued. Moreover, plaintiff observed defendant Hartwell oust others and take possession of their belongings. Id. at ¶¶ 45-46, 47-49, 51-55, 57-61. Plaintiff asserts defendants Downy, Hartwell, and Simon attempted to steal her cars. Id. at ¶ 50.
Plaintiff alleges defendants Simon or Downy hired a private investigator to ask about her as a tenant. Id. at ¶ 56.
Plaintiff asserts that in April 2020, defendants Hartwell, Olsen, and Smith broke into her shed and converted plaintiff's “most valued possessions from the vandalized storage shed.” Id. at ¶ 62.
Plaintiff alleges the following nineteen claims: (1) violation of the Fair Housing Act against defendants Olsen and Downey; (2) conspiracy to interfere with her civil rights against defendants Olsen and Downy; (3) failure to maintain the premises in violation of State law against defendants Olsen and Downy; (4) retaliation against defendants Olsen, Downy, and Hartwell; (5) unlawful ouster against defendants Olsen, Downy, and Hartwell; (6) abuse of access against defendant Olsen and Downy; (7) trespass against defendants Olsen and Hartwell; (8) trespass to chattels against defendants Olsen, Downey, Hartwell, and Simon; (9) conversion against defendants Olsen, Hartwell, Downey, Simon, and Smith; (10) assault against defendant Olsen; (11) battery against defendants Olsen and Hartwell; (12) intrusion upon seclusion against defendant Hartwell; (13) false imprisonment against defendants Olsen, Downey, and Hartwell; (14) “unlawful tow” against defendants Downey and Simon; (15) abuse of process against defendants Olsen, Downy, and Hartwell; (16) unlawful and deceptive trade practices against defendants Olsen and Downy; (17) violation of Portland Renter additional protections against defendants Olsen and Downy; (18) intentional infliction of emotional distress against defendants Olsen, Downy, and Hartwell; and (19) negligent infliction of emotional distress against defendants Olsen, Hartwell, Smith, Simon, and Downy.
Plaintiff served all defendants and obtained an entry of default against defendants Simon, Olsen, and Smith. Plaintiff now seeks a default judgment against these defendants.
DISCUSSION
Plaintiff seeks a judgment of money damages in the amount of $6,139,400 against defendant Olsen “jointly and severally, ” $3,475,000 against defendant Simon “jointly and severally, ” and $3,100,000 against defendant Smith “jointly and severally.” Motions for Default Judgment (ECF 34, 35, 36).
Entry of default is appropriate “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend.” Fed.R.Civ.P. 55(a). A party has no duty to defend, however, unless the plaintiff properly served the defendant with the summons and complaint, or waives such service, pursuant to Federal Rule of Civil Procedure 4. See Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999) (“one becomes a party officially, and is required to take action in that capacity, only upon service of a summons”).
Before the Court decides whether to grant default judgment, Federal Rule of Civil Procedure 55(b)(2) requires the Clerk's entry of default. However, entry of a defendant's default does not automatically entitle plaintiff to a court-ordered judgment. See Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986). Indeed, a district court has discretion in deciding whether to enter a default judgment. See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising this discretion, the court may consider a number of factors: (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 (the Eitel factors). See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Additionally, when a party seeks entry of default judgment, courts have a duty to examine their own jurisdiction-both subject matter and personal. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).
This Court has subject matter jurisdiction pursuant to 28 U.S.C §§ 1331 and 1343 because the claims involve or are related to federal causes of action arising under 42 U.S.C. §§ 3601, 1985.
The Court has personal jurisdiction over defendant Olsen because he resided within this District at the time plaintiff initiated this action and committed the alleged activities in violation of plaintiff's rights within this District. Defendant Smith is a resident of North Carolina and defendant Simon is a resident of California. Nonetheless, plaintiff alleges defendants Simon and Smith committed the acts giving rise to this cause of action within the District.
A. Elements of the Claims
Plaintiff does not address whether she seeks judgment as to all claims against the defaulting defendants, however, the Court assumes plaintiff seeks judgment as to all claims. Where, as here, a default has been entered, the factual allegations of the complaint together with other submitted competent evidence must be taken as true. See TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir.1987); Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir.1978). In her motions, plaintiff submits affidavits detailing the facts regarding defendants' actions, but provides no legal analysis of the claims.
Allegations as to the amount of damages are not accepted as true and a plaintiff seeking damages through a default judgment must prove damages. TeleVideo Systems, Inc., 826 F.2d at 917-18.
B. Eitel Analysis
As noted above, in exercising its discretion to award a default judgment, the Court considers the seven factors under Eitel, 782 F.2d at 1471-72.
(1) Factor One: Possibility of Prejudice to Plaintiff
In assessing this factor, courts have considered whether plaintiff would be without recourse for recovery if the motion for default judgment is denied. See, e.g., J & J Sports Prods., Inc. v. Cardoze, 2010 WL 2757106, at *5 (N.D. Cal. July 9, 2010); PepsiCo, Inc. v. California Sec. Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002). Plaintiff does not address this factor in her motion.
(2) Factors Two and Three: Merits of Claims and Sufficiency of Complaint
Upon entry of default, this Court must take the well-pleaded factual allegations of the complaint as true. See Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977) (“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.”); Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (“In reviewing a default judgment, this court must take the well-pleaded factual allegations of [the complaint] as true.”). Plaintiff does not address these factors or otherwise provide an analysis of whether the complaint and affidavits establish the elements of plaintiff's claims sufficient to prove liability.
(3) Fourth Factor: Sum of Money at Stake
Under the fourth Eitel factor, “the court must consider the amount of money at stake in relation to the seriousness of [defendant's conduct.” PepsiCo, 238 F.Supp.2d at 1176-77; see also J&J Sports Productions, 2010 WL 2757106, at *5 (“a large sum of money at stake would disfavor default damages, ” such as a request for $114,200 in damages); Board of Trustees of the Sheet Metal Workers v. Vigil, 2007 WL 3239281, at *2 (N.D. Cal. Nov. 1, 2007) (“[D]efault judgment is disfavored if there were a large sum of money involved”).
Plaintiff seeks several million dollars in damages and given the allegations of conspiracy and joint and several liability, potentially puts the non-defaulting defendants at risk for the money judgment. Such a large award weighs against entering default judgment. Courts balance the amount of damages against the other Eitel factors. See Craigslist, Inc. v. Naturemarket, Inc., 694 F.Supp.2d 1039, 1060 (N.D. Cal. 2010) (holding that the damages in the range of one to five million dollars did not defeat entry of default judgment when the defendant had engaged in willful infringement and refused to respond to allegations in the lawsuit); see also Khraibut v. Chahal, 2021 WL 1164940, at *15-25 (N.D. Cal. Mar. 26, 2021) (allowing total judgment of $1,735,442.20) for workplace discrimination, breach of contract, failure to pay wages, retaliation and fraudulent misrepresentation). However, plaintiff does not address this factor in her motion.
(4) Fifth Factor: Possibility of Dispute Over Material Facts
In addressing the fifth factor, the Court considers whether a dispute concerning material facts exists. As mentioned above, “[u]pon entry of default, all well-pleaded facts in the complaint are taken as true, except those relating to damages.” PepsiCo, 238 F.Supp.2d at 1177. Thus, “[t]he fifth factor . . . weighs in favor of default judgment when the claims in the complaint are well-pleaded.” Joe Hand Prods. v. Holmes, 2015 WL 5144297, at *7 (D. Or. Aug. 31, 2015). Otherwise stated, “[b]ecause all allegations in a well-pleaded complaint are taken as true after the court clerk enters default judgment, there is no likelihood that any genuine issue of material fact exists.” Elektra Entm't Grp., Inc. v. Crawford, 226 F.R.D. 388, 393 (C.D. Cal. 2005). Nonetheless, because plaintiff fails to address the elements of her claims, it cannot be determined if there exists a possibility of dispute. Plaintiff fails to address this factor.
(5) Sixth Factor: Excusable Neglect
The sixth factor pertains to the possibility that the default resulted from excusable neglect. There is no evidence in the record before this Court of excusable neglect and, as noted above, plaintiff appears to have properly served defendants with a copy of the summons and complaint.
(6) Seventh Factor: Policy Favoring Decisions on the Merits
Factor seven is “the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits, ” specifically the policy that “[c]ases should be decided upon their merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. However, “this policy, standing alone, is not dispositive, especially where a defendant fails to appear or defend itself in an action.” Joe Hand Promotions, Inc. v. Machuca, 2014 WL 1330749, at *6 (E.D. Cal. Mar. 31, 2014). Where a defendant has failed to answer a complaint, it “makes a decision on the merits impractical, if not impossible.” PepsiCo, 238 F.Supp.2d at 1177. Fed.R.Civ.P. 55 allows the court to terminate a case before a hearing on the merits when a defendant fails to defend an action. Id. Thus, the preference to decide cases on the merits does not preclude a court from granting default judgment. PepsiCo, 238 F.Supp.2d at 1177. Plaintiff has not addressed this factor in her motions.
C. Certainty of Amount of Damages and Multiple Parties
“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.” Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977). Thus, “a default judgment for money may not be entered without a hearing unless the amount claimed is a liquidated sum or capable of mathematical calculation.” See Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). When multiple parties are involved, prior to entry of final judgment the Court must expressly determine that there is “no just reason for delay.” Fed.R.Civ.P. 54 (b).
“[W]here a complaint alleges that defendants are jointly liable and one of them defaults, judgment should not be entered against the defaulting defendant until the matter has been adjudicated with regard to all defendants.”In re First T.D. & Inv., Inc., 253 F.3d 520, 532 (9th Cir. 2001). The purpose of this rule is to avoid inconsistent judgments. Frow v. De La Vega, 82 U.S. 552, 554 (1872). The Ninth Circuit has extended Frow to circumstances where the defendants are similarly situated, and the “central legal issue” is the same. In re First T.D. & Inv., Inc., 253 F.3d at 532. Plaintiff has alleged a conspiracy and specifically alleged all defendants are jointly and severally liable. First Amended Complaint (ECF 26) at p. 30. Accordingly, given the possibility of inconsistent judgments, the Court should deny the motions for default judgment.
CONCLUSION
Plaintiff's motions for judgment of default (ECF 34, 35, 36)) should be denied.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment or appealable order. The parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the court. Thereafter, the parties shall have fourteen (14) days within which to file a response to the objections. Failure to timely file objections to any factual determination of the Magistrate Judge will be considered as a waiver of a party's right to de novo consideration of the factual issues and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to this recommendation.