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United States ex rel Felix Haro Construction, Inc. v. St. Paul Fire and Marine Insurance Co.

June 23, 2009

UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF FELIX HARO CONSTRUCTION, INC., PLAINTIFF,
v.
ST. PAUL FIRE AND MARINE INSURANCE COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Sandra M. Snyder United States Magistrate Judge

ORDER VACATING HEARING ON PLAINTIFF'S APPLICATION FOR DEFAULT JUDGMENT AND DEEMING MOTION SUBMITTED (DOC. 32) Vacated hearing date: June 26, 2009

FINDINGS AND RECOMMENDATIONS TO DENY PLAINTIFF'S APPLICATION FOR DEFAULT JUDGMENT AGAINST DEFENDANT RWC, INC., AND TO VACATE THE CLERK'S ENTRY OF DEFAULT (DOC. 22)

Plaintiff is proceeding with counsel with a civil action in this Court. The matter has been referred to the Magistrate Judge pursuant to 28 U.S.C. § 636(b) and Local Rules 72-302 and 72-303. Pending before the Court is Plaintiff's application for default judgment against Defendant RWC, Inc., filed on March 24, 2009, along with a memorandum and declarations of Darryl J. Horowitt and Alonzo Haro.

I. Background

Plaintiff is proceeding with an action commenced on September 21, 2007, by the filing of a complaint alleging claims against various contractors involved in the construction of employee housing for the Curry Village Project, including a claim against Defendant RWC, Inc., for breach of contract (cmplt., ninth claim, ¶¶ 75-82) seeking damages according to proof, interest at the legal rate from October 20, 2006, costs of suit, and reasonable attorney's fees (id., pp. 18-19). It was alleged that Defendant Rwc, Inc. was a California corporation with its principal place of business in the County of Calaveras, state of California. (Cmplt. ¶ 8.)

Plaintiff's application for default judgment was filed on March 24, 2009, along with a memorandum, the declarations of counsel Darryl J. Horowitt and of Alonzo Haro, and a proposed judgment.

One hearing was vacated, and the matter was reset for hearing on June 26, 2009. Plaintiff was given an opportunity to submit additional materials and briefing concerning the application by order dated and served on May 7, 2009, but no additional materials were submitted.

II. Vacating the Hearing on the Motion

Pursuant to Rule 78-230(h) of the Local Rules of Practice for the United States District Court, Eastern District of California, the Court finds that the application of Plaintiffs for default judgment is a matter that may appropriately be submitted upon the record and briefs.

Accordingly, the hearing on the motion, presently set for June 26, 2009, at 9:30 a.m., IS VACATED, and the motion IS DEEMED SUBMITTED to the Court for decision.

III. Requirements for Entitlement to Default Judgment

A court has the discretion to enter a default judgment against one who is not an infant, incompetent, or member of the armed services where the claim is for an amount that is not certain on the face of the claim and where 1) the defendant has been served with the claim; 2) the defendant's default has been entered for failure to appear; 3) if the defendant has appeared in the action, the defendant has been served with written notice of the application for judgment at least three days before the hearing on the application; and 4) the court has undertaken any necessary and proper investigation or hearing in order to enter judgment or carry it into effect. Fed. R. Civ. P. 55(b); Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988). Factors that may be considered by courts in exercising discretion as to the entry or setting aside of a default judgment include the nature and extent of the delay, Draper v. Coombs, 792 F.2d 915, 924-925 (9th Cir. 1986); the possibility of prejudice to the plaintiff, Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.1986); the merits of plaintiff's substantive claim, id.; the sufficiency of the allegations in the complaint to support judgment, Alan Neuman Productions, Inc., 862 F.2d at 1392; the amount in controversy, Eitel v. McCool, 782 F.2d at 1471-1472; the possibility of a dispute concerning material facts, id.; whether the default was due to excusable neglect, id.; and the strong policy underlying the Federal Rules of Civil Procedure that favors decisions on the merits, id.

A default judgment generally bars the defaulting party from disputing the facts alleged in the complaint, but the defaulting party may argue that the facts as alleged do not state a claim. Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392. Thus, well pleaded factual allegations, except as to damages, are taken as true; however, necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default. Cripps v. Life Ins. Co. of North America, 980 F.2d 1261, 1267 (9th Cir. 1992); TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987).

A. Service

A return of service executed by a private investigator under penalty of perjury on January 30, 2008, and filed on February 13, 2008, reflected that Defendant RWC, Inc., was served by leaving copies of the pertinent documents at the Defendant's dwelling house or usual place of abode with a person of suitable age and discretion then residing therein, Jeannette Blades; neither the address nor the position and/or authority of Blades is stated, but the place is merely described as the dwelling house or usual place of abode of the defendant.

Pursuant to Fed. R. Civ. P. 4(h), unless federal law provides otherwise, a domestic or foreign corporation, or a partnership or other unincorporated association that is subject to suit under a common name, must be served in a judicial district of the United States in the manner prescribed by Rule 4(e)(1) for serving an individual, or by delivering copies of the summons and complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process, and, if the agent is one authorized by statute and the statute so requires, by also mailing a copy of each to the defendant. Service at a place not within any judicial district of the United States may be by any manner prescribed by Rule 4(f) for serving an individual except by personal delivery under Rule 4(f)(2)(C)(i).

The proof of service did not include any evidence that Blades was a person described in Cal. Code Civ. Proc. 416.10*fn1 , or evidence of the agency status of Blades. See, Dill v. Berquist Construction Co., 24 Cal.App.4th 1426, 1437-39 (1994). It is unclear whether this service was effected within California. It is unclear if this is adequate service under Fed. R. Civ. P. 4 and/or under California law.

A purported proof of service, which was not declared to be true under penalty of perjury and thus which fails to comply with the requirements of Fed. R. Civ. P. 4(l), 28 U.S.C. § 1746, or Local Rule 5-135(c), was filed on February 13, 2008.*fn2 The later mailing of the relevant documents to a different entity, Robert Wyckoff, President/Agent for Service of Process for RWC, Inc., at 4190 Wagon Wheel Drive, Copperopolis, California 95228, is purported to be proved by Kathy Imburgia, a different person from the investigator who executed the ...


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