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Eurodrip, Usa, Inc. v. B&B Drip Irrigation

July 30, 2009

EURODRIP, USA, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
B&B DRIP IRRIGATION, INC., DEFENDANT.



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

ORDER VACATING HEARING ON PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND DEEMING THE MOTION SUBMITTED FOR DECISION (Doc. 18) Vacated Hearing Date: August 14, 2009

FINDINGS AND RECOMMENDATIONS RE: PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (DOC. 18)

ORDER DIRECTING THE CLERK TO SERVE FINDINGS AND RECOMMENDATIONS ON DEFENDANT

Plaintiffs are proceeding 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 Rule 72-302(c)(19).

Pending before the Court is Plaintiff's motion for default judgment, filed on June 30, 2009, with a memorandum, declarations of Christopher S. Hall and Rowland Wilkinson with exhibits, a proposed order, and a certificate of service.

I. 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 motion of Plaintiff for entry of a default judgment is a matter that may appropriately be submitted upon the record and briefs.

Accordingly, the hearing on the motion, presently set for August 14, 2009, IS VACATED, and the motion IS DEEMED SUBMITTED to the Court for decision.

II. 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.

III. Notice and Default

A. Notice of the Application

Fed. R. Civ. P. 55(b)(2) requires written notice of an application for default judgment be served at least three days prior to the hearing on a defaulting party who has appeared in the action. An appearance for the purpose of Rule 55 need not be a formal one and may consist even of informal contacts made by the defaulting party where the defaulting party demonstrates a clear purpose to defend the suit. In re Roxford Foods v. Ford, 12 F.3d 875, 879-81 (9th Cir. 1993).

Here, the purported proof of service of the motion for default judgment (Doc. 19, filed June 30, 2009) is not supported by a declaration under penalty of perjury. Local Rule 5-135(c) expressly requires that proof of service shall be under penalty of perjury. Accordingly, if notice of the application were required, then legally sufficient proof of service of the pertinent papers is lacking.

However, the declaration of Plaintiff's counsel, Christopher S. Hall, establishes that the sole communication he had with Defendant relative to this action was a certified demand letter dated April 7, 2009, addressed to Defendant's representative, Lance Bradford, to which Defendant did not respond. (Decl. ¶ 14, Ex. A.) Plaintiff has shown that Defendant has not appeared in the action within the meaning of Rule 55(b).

Accordingly, there has been a demonstration that there is no inadequacy of notice of the application.

B. Notice of the Judgment Sought

Fed. R. Civ. P. 55(d) and 54(c) require that a judgment by default shall not be different in kind from or exceed in amount that prayed for in the demand for judgment.

Here, in the complaint Plaintiff sought damages in the principal amount of $188,000.78, with interest at the maximum legal rate from the date of filing of the complaint through the entry of judgment, and then at the maximum legal rate from the date of entry of judgment until paid in full; Plaintiff also sought costs. (Cmplt. p. 5.) In the application for default judgment, Plaintiff seeks some costs and the same amount of damages plus pre-judgment and post-judgment interest in amounts computed by Plaintiff. Accordingly, adequate notice of the judgment sought has been given to Defendant.

C. Service

With respect to Defendant's notice of the action, a proof of service stated to be true under penalty of perjury under the laws of the state of California reflects that a registered process server personally served the registered agent of Defendant B&B, a Texas corporation, at a specified address and time on April 29, 2009. This service is legally sufficient pursuant to Fed. R. Civ. P. 4(e)(2)(A).

D. Default

The twenty-day time period provided in Rule 12(a) ran after service of the complaint, and yet Defendant B&B failed to file a responsive pleading. The Clerk entered the default of Defendant on May 27, 2009, after Plaintiff filed a request for entry of default ...


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