Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Securities and Exchange v. David A. Souza

June 2, 2011

SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF,
v.
DAVID A. SOUZA, ET AL.,
DEFENDANTS.



FINDINGS & RECOMMENDATIONS

This matter came before the court on May 27, 2011, for hearing of plaintiff's motion for default judgment against defendants David A. Souza and D. A. Souza Investments, LLC. (Doc. No. 98.) Judith Anderson appeared telephonically on behalf of plaintiff. No appearance was made by or on behalf of defendants at the hearing.

The court's docket reflects that defendants have not filed any motion for relief from the defaults entered against defendant Souza on April 21, 2011 and against defendant D. A. Souza Investments, LLC on September 15, 2010. Upon hearing argument from plaintiff's counsel on the motion for default judgment, the court took the matter under submission.

For the reasons set forth below, the undersigned recommends that plaintiff's motion be granted and that default judgment be entered against defendants.

BACKGROUND

In this action, plaintiff Securities and Exchange Commission alleges claims for securities fraud against defendant David Souza and his investment company, D. A. Souza Investments, LLC. Plaintiff alleges defendant Souza induced approximately 28*fn1 investors associated with a church community to invest more than $1 million dollars with his investment firm and that the money was used in part to fund a Ponzi scheme, with the remainder of the funds being used for defendant Souza's personal living expenses.

The record reflects that both defendants were properly served with process and defaults have been entered. (Doc. Nos. 74 and 97.) On April 25, 2011, plaintiff filed its motion for default judgment with a proof of service reflecting service of the motion on defendants.

LEGAL STANDARDS

Federal Rule of Civil Procedure 55(b)(2) governs applications to the court for entry of default judgment. Upon entry of default, the complaint's factual allegations regarding liability are taken as true, while allegations regarding the amount of damages must be proven. Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th Cir. 1983) (citing Pope v. United States, 323 U.S. 1 (1944); Geddes v. United Fin. Group, 559 F.2d 557 (9th Cir. 1977)); see also DirectTV v. Huynh, 503 F.3d 847, 851 (9th Cir. 2007); TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).

Where damages are liquidated, i.e., capable of ascertainment from definite figures

contained in documentary evidence or in detailed affidavits, judgment by default may be entered without a damages hearing. Dundee, 722 F.2d at 1323. Unliquidated and punitive damages, however, require "proving up" at an evidentiary hearing or through other means. Dundee, 722 F.2d at 1323-24; see also James v. Frame, 6 F.3d 307, 310-11 (5th Cir. 1993).

Granting or denying default judgment is within the court's sound discretion. Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986); Aldabe v. Aldabe, 616 F.2d. 1089, 1092 (9th Cir. 1980). The court is free to consider a variety of factors in exercising its discretion. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Among the factors that may be considered by the court are

(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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.