Opinion
6:23-cv-00734-MK
08-09-2023
DOWELL TOWING AND RECOVERY INCORPORATED, Plaintiff, v. NORTHPOINT TRANSPORTATION, INC., Defendant.
FINDINGS AND RECOMMENDATION
MUSTAFA T. KASUBHAI (HE / HIM) UNITED STATES MAGISTRATE JUDGE
Plaintiff Dowell Towing and Recovery, Inc., (“Plaintiff”) filed this lawsuit against Defendant Northpoint Transportation, Inc., (“Defendant”) on May 17, 2023, alleging breach of contract and unjust enrichment. ECF No. 1. Before the Court is Plaintiff's Motion for Default Judgment (ECF No. 13). For the reasons stated, Plaintiff's motion should be GRANTED.
BACKGROUND
On or about December 21, 2022, Defendant was involved in a single vehicle accident at or about Milepost 183, Highway 97, Klamath County, Oregon. Complaint, ECF No. 1 at ¶ 4 (“Compl.”). Defendant's 2017 Freightliner Cascadia vehicle and the trailer were severely disabled at the scene of the accident. Id. Plaintiff's agent met the driver of Defendant's vehicle at the scene of the accident, where Defendant's authorized agents requested and authorized Plaintiff to provide towing, recovery, traffic safety, clean up, cargo recovery, and storage services. Id. Defendant's agent executed a written authorization for tow and recovery work (the “Agreement”) on December 21, 2022, authorizing performance of towing and recovery services by Plaintiff and obliging Defendant to pay for these services. Id. at ¶ 5; ECF No. 1-1.
Pursuant to the parties' Agreement, Plaintiff provided Defendant with towing and recovery services and provided Defendant with an invoice for Plaintiff's services. ECF No. 1-2. Defendants failed to pay the invoice. Compl. at ¶ 9. Plaintiff filed this lawsuit against Defendant on May 17, 2023, alleging breach of contract and unjust enrichment. Defendant's answer was due on June 30, 2023. ECF 10-1, but Defendant failed to appear or request an extension of time. Plaintiff subsequently filed a Motion for Default Judgment (ECF No. 10-1) on July 3, 2023. As of the date of this Findings and Recommendation, Defendant has failed to appear in this action.
STANDARD
Pursuant to Fed.R.Civ.P. 55(b), following the clerk's entry of default against a defendant under Rule 55(a), a court may enter default judgment against a defendant upon motion by the plaintiff. See Playboy Enters. Int'l, Inc. v. Muller, 314 F.Supp.2d 1037, 1038-39 (D. Nev. 2004). Default judgments are “ordinarily disfavored,” Eitel v. McCool, 782 F.2d 1470, 1472. (9th Cir. 1986), and “[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).
DISCUSSION
In the Ninth Circuit, courts may consider seven factors when deciding whether to enter a default judgment: (1) the possibility of prejudice to the claimant; (2) the merits of the claimant's substantive claims; (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. Eitel, 782 F.2d at 1471-72. Here, because Plaintiff has shown that all factors mitigate in favor of granting a default judgment, the Court should grant Plaintiff's motion.
I. Risk of Prejudice to Plaintiff
Due to the significant labor and costs Plaintiff invested in performing on the Agreement, the Court is satisfied that Plaintiff will suffer substantial prejudice if default judgment is not entered, as Plaintiff will be left without a remedy for Defendant's breach. As noted, Defendant has not participated in this action. Because of Defendant's failure to appear or participate in this action, the harm from Defendant's breach of the Agreement may continue without redress, causing harm to Plaintiff. The first Eitel factor therefore favors an entry of default judgment. Eitel, 782 F.2d at 1471.
II. Merits of Plaintiff's Substantive Claims and Sufficiency of the Complaint
On careful review of Plaintiff's Complaint, the Court also finds that Plaintiff has pleaded facts to support a claim on which it may recover. Plaintiff alleges with sufficient factual specificity that Defendant executed an Agreement with Plaintiff that induced Plaintiff's performance at significant cost to Plaintiff. The second and third Eitel factors also weigh in favor of default judgment. Eitel, 782 F.2d at 1471.
III. Sum of Money at Stake in the Action
The sum of money at stake in this action is significant and weighs in favor of a default judgment. Eitel, 782 F.2d at 1471. Plaintiff's Motion for Entry of Default Judgment (ECF No. 13) asks the Court for an entry of judgment and award of attorney fees and costs in the following amounts:
1. Principal $229,200.96.
2. Prejudgment Interest $12,377.88
3. Attorney Fees $4,872.50
4. Costs $505.07 5. Post-Judgment Interest at 9% per annum from the date of judgment is entered until paid.ECF No. 13 at 2. Thus excluding any post-judgment interest, Defendant's breach of the Agreement has already cost Plaintiff over $246,956.41. The Court therefore finds that the fourth Eitel factor weighs in favor of entering default judgment.
IV. Possibility of a Dispute Concerning Material Facts
More than 30 days have elapsed since Defendant's deadline to appear in this action. Nevertheless, Defendant has not submitted any filings or made any efforts to communicate with this Court in any way that would indicate an outstanding dispute concerning the material facts in this case. On this record, the Court concludes from Defendant's silence that there is no dispute concerning the material facts of this case and that the fifth Eitel factor weighs in favor of default judgment. Eitel, 782 F.2d at 1471.
V. Excusable Neglect
The Court next considers whether Defendant's default was due to excusable neglect. Eitel, 782 F.2d at 1472. Here, Defendant has been properly served and is aware of this action. ECF No. 8. See Wecosign, Inc. v. IFG Holdings, Inc., 845 F.Supp.2d 1072, 1082 (C.D. Cal. 2012) (“This factor favors default judgment when the defendant has been properly served or the plaintiff demonstrates that the defendant is aware of the lawsuit”). Accordingly, the Court concludes that the possibility of excusable neglect is minimal, and this factor therefore favors entry of default. Id. at 1083.
VI. Policy Considerations
While the policy underlying the Federal Rules of Civil Procedure favors decisions on the merits, Rule 55(a) allows a court to decide a case before the merits are heard if a defendant fails to appear and defend. See Landstar Ranger, Inc. v. Parth Enterprises, Inc., 725 F.Supp.2d 916, 922 (C.D. Cal. 2010). Here, Defendant's failure to participate in this case has rendered a decision on the merits impractical. Based on Defendant's breach of its Agreement with Plaintiff and failure to participate in this action, the seventh Eitel factor does not preclude entry of default judgment against Defendant. For these reasons, the Court finds that all of the Eitel factors weigh in favor of granting Plaintiff's Motion for Default Judgment. Eitel, 782 F.2d at 1471-72.
RECOMMENDATION
For the reasons above, Plaintiff's Motion for Entry of Default Judgment should be GRANTED.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Federal Rule of Appellate Procedure 4(a)(1) should not be filed until entry of the district court's judgment or appealable order. The Findings and Recommendation will be referred to a district judge. Objections to this Findings and Recommendation, if any, are due fourteen (14) days from today's date. See Fed. R. Civ. P. 72. Failure to file objections within the specified time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153, 1157 (9th Cir. 1991).