The opinion of the court was delivered by: Dennis L. Beck United States Magistrate Judge
ORDER GRANTING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT (Document 30)
Plaintiffs Dean Lane and Deborah Lane, as Trustees of the Dean and Deborah Lane Living Trust, Jenni Braunberger and Rick Foy ("Plaintiffs") filed the instant motion for default judgment on June 3, 2008. The matter was heard on July 25, 2008, before the Honorable Dennis L. Beck, United States Magistrate Judge. James Ciampa appeared on behalf of Plaintiffs. Defendants did not appear.
Pursuant to 28 U.S.C. § 636(c), the parties have consented to the jurisdiction of the United States Magistrate Judge for all purposes.
Plaintiffs filed this breach of contract action on December 13, 2007. The remaining Defendants are Smiling Earth Energy, LLC ("SEE") and Clifford M. Cowles.*fn1 Plaintiffs assert causes of action for violation of the Racketeer Influenced and Corrupt Organization Act ("RICO"), breach of contract, fraud, breach of the implied covenant of good faith and fair dealing, conversion and money had and received.
On January 25, 2008, Plaintiffs filed Certificates of Service with the Court indicating that Defendants SEE and Cowles were served with the summons and complaint on December 28, 2007. Cowles was personally served individually and as the authorized agent for SEE.
On February 11, 2008, Plaintiffs requested that the Clerk enter default against SEE and Cowles. Default was entered on February 12, 2008.
On June 3, 2008, Plaintiffs filed the instant motion for default judgment, seeking a total judgment of $847,671.67. Plaintiffs state that this amount is subject to offset by the sum of $35,000- the amount for which Plaintiffs settled the action with Defendant Mock.
FACTS AND CAUSES OF ACTION ALLEGED IN THE COMPLAINT
The causes of action arise out of three promissory notes dated July 16, 2007, between Plaintiffs and SEE, broken down as follows: (1) By promissory note dated July 16, 2007, Plaintiff Lane lent SEE the sum of $100,000 in exchange for SEE's promise to repay the loan with an "investment return" of $25,000 on or before October 1, 2007. The note was to be secured by a recorded interest against the property known as 19329 South Lake Road, Taft, California ("Taft Property"); (2) By promissory note dated July 16, 2007, Plaintiff Braunberger lent SEE the sum of $100,000 in exchange for SEE's promise to repay the loan with an "investment return" of $25,000 on or before October 1, 2007. The note was to be secured by the Taft Property; and (3) By promissory note dated July 16, 2007, Plaintiff Foy lent SEE the sum of $50,000 in exchange for SEE's promise to repay the loan with an "investment return" of $12,500 on or before October 1, 2007. The note was to be secured by the Taft Property.
On or about October 12, 2007, Plaintiffs Lane and Braunberger agreed with Defendant SEE to extend the maturity dates to November 12, 2007, in exchange for a return of interest on the original principal at the rate of 15 percent per annum.
On November 15, 2007, all Plaintiffs informed SEE, through communication with Cowles, that SEE was in default under all three promissory notes. Plaintiffs demanded that all monies owed be paid by November 16, 2007.
Defendants have not made any payments on the notes, nor have they recorded the notes against the Taft Property.
The First Cause of Action for violation of RICO alleges that SEE develops biodiesel fuel products and builds biodiesel plants, and is engaged in interstate commerce. It further alleges that it induced Plaintiffs, including through the use of electronic transmissions, to sign promissory notes and wire funds for SEE's benefit by promising to repay Plaintiffs and to secure the notes with the Taft Property. Plaintiffs allege that this was a scheme devised by Defendants to obtain money from Plaintiffs by wire transfer, and constituted wire fraud. 18 U.S.C. § 1343. The acts were committed against each Plaintiff, which constitutes a pattern of racketeering activity. 18 U.S.C. § 1961(5). As a result of Defendants' conduct, Lane suffered damages in the approximate amount of $150,000, Braunberger in the approximate amount of $150,000 and Foy in the amount of $90,000. Lane ...