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Neves v. Kraft

United States District Court, N.D. California, San Jose Division

May 22, 2014

SANDY ESTRELA NEVES, Plaintiff,
v.
PAUL R. KRAFT D/B/A LAW OFFICE OF PAUL R. KRAFT, Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

LUCY H. KOH, District Judge.

Plaintiff Sandy Neves moves for default judgment against Defendant Paul Kraft. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument and therefore VACATES the hearing set for August 7, 2014. For the reasons set forth below, Ms. Neves' motion is GRANTED in part and DENIED in part.

I. BACKGROUND

Ms. Neves alleges that Mr. Kraft's principal business is filing lawsuits to collect on defaulted consumer debts due or alleged to be due. ECF No. 1 ¶ 8. Mr. Kraft, in an underlying action in Santa Clara County Superior Court that was filed on December 20, 2012, alleged that Ms. Neves was obliged to pay a consumer debt issued by Bank of the West that was later transferred to Baseline Financial Services, which in turn retained Mr. Kraft to help collect. Id. ¶¶ 9-12.

On February 12, 2013, Ms. Neves retained Fred Schwinn as counsel in the underlying action. Id. ¶ 13. On February 13, 2013, Mr. Schwinn served Mr. Kraft with Ms. Neves' answer in the underlying action, which notified Mr. Kraft that Mr. Schwinn was representing Ms. Neves. Id. ¶ 14. On February 28, 2013, with knowledge that Ms. Neves was represented by Mr. Schwinn, Mr. Kraft allegedly sent a litigation document in the underlying action directly to Ms. Neves. Id. ¶ 18.

On October 10, 2013 Ms. Neves filed her Complaint in the instant litigation alleging violations of the Fair Debt Collection Practices Act ("FDCPA") stemming from Mr. Kraft's direct communication with a represented party. See id. Mr. Kraft was served on December 12, 2013, and his answer was therefore due on January 2, 2014. See ECF No. 9. Mr. Kraft did not file a timely answer, and on January 10, 2014, Ms. Neves filed a Motion for Entry of Default. ECF No. 10. The Clerk entered default on January 16, 2014. ECF No. 14. On March 25, 2014, Ms. Neves filed the instant Motion for Default Judgment. See ECF No. 20.

II. LEGAL STANDARD

"The district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). After entry of default under Fed.R.Civ.P. 55(a), the Court may enter a default judgment against the defaulting party. See Fed.R.Civ.P. 55(b)(2). "A failure to make a timely answer to a properly served complaint will justify the entry of a default judgment." Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986). "The general rule of law is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987)) (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)) (internal quotation marks omitted). "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 N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)).

"Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (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 v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

"When entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties. A judgment entered without personal jurisdiction over the parties is void." In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (citations omitted).

III. ANALYSIS

A. Jurisdiction

1. Subject Matter Jurisdiction

This Court has subject matter jurisdiction over Ms. Neves' FDCPA claim under 15 U.S.C. § 1692k(d), which states that "[a]n action to enforce any liability created by this subchapter may be brought in any appropriate United States district court without regard to the amount in controversy... within one year from the date on which the violation occurs." Ms. Neves filed her ...


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