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Directi Internet Solutions Pvt. v. Harry Dhillon

February 1, 2013

DIRECTI INTERNET SOLUTIONS PVT. LTD., PLAINTIFF,
v.
HARRY DHILLON, ET AL.,
DEFENDANTS.



FINDINGS AND RECOMMENDATIONS

This matter came before the court on August 24, 2012, for hearing on plaintiff's amended motion for default judgment. (Doc. No. 19.) Dylan Carson, Esq. appeared telephonically on behalf of the plaintiff. No appearance was made by or on behalf of either defendant. Having considered all written materials submitted with respect to the motion, and after hearing oral argument, the undersigned recommends that the motion for default judgment be granted in part and denied in part.

PROCEDURAL BACKGROUND

Plaintiff commenced this action on April 20, 2012, by filing a complaint and paying the required filing fee. Therein, plaintiff alleges causes of action for breach of contract, fraud, civil theft and violation of California Business and Professions Code § 17200. (Compl. (Doc. No. 5) at 4-6.*fn1 ) Plaintiff's complaint seeks, in part, actual, punitive and exemplary damages, as well as restitution and disgorgement of profits, and attorneys' fees and costs. (Id. at 7.)

Despite being served with process, defendants have failed to appear in this action, (Doc. Nos. 8 & 9), and pursuant to plaintiff's request the Clerk of the Court entered defendants' default. (Doc. Nos. 11 & 13.) On July 17, 2012, plaintiff filed the amended motion for default judgment now pending before the court, noticing it to be heard before the undersigned pursuant to Local Rule 302(c)(19). (Doc. No. 19.) The matter came before the court for hearing on August 24, 2012. (Doc. No. 22.) Despite being served with all papers filed in connection with the motion, there was no opposition filed nor appearance made by or on behalf of either defendant at the August 24, 2012 hearing.*fn2 (MDJ (Doc. No. 19) at 32.)

LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) governs applications to the court for 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 Products, 722 F.2d 1319, 1323 (7th Cir. 1983) (citing Geddes v. United Fin. Group, 559 F.2d 557 (9th Cir. 1977)); see also TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987).

However, while the complaint's factual allegations regarding liability are taken as true, the "'defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.'" DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Morever, where damages are liquidated (i.e., capable of ascertainment from definite figures contained in the documentary evidence or in detailed affidavits), judgment by default may be entered without a damages hearing. See 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 (5th Cir. 1993).

Granting or denying default judgment is within the court's sound discretion, see Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986) (citations omitted), and the court is free to consider a variety of factors in exercising that discretion, see Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). The court may consider such factors as:

(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 Rules of Civil Procedure favoring decisions on the merits.

Eitel, 782 F.2d at 1471-72 (citing 6 Moore's Federal Practice, ¶ 55-05[2], at 55-24 to 55-26).

ANALYSIS

Here, according to the allegations found in the complaint, plaintiff Directi Internet Solutions Pvt. Ltd. is an Indian company headquartered in Mumbai, India. Defendant Creative Aviation, Inc., ("CAI"), is a California Corporation with its principal place of business in Stockton, California. Defendant ...


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