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Kern Ridge Growers, LLC v. Seacoast Distrib., Inc.

United States District Court, C.D. California

November 21, 2014

KERN RIDGE GROWERS, LLC, Plaintiff,
v.
SEACOAST DISTRIBUTING, INC.; VICTOR M. RODRIGUEZ; VINCENT R. TOWLES, Defendants

For Kern Ridge Growers, LLC, a corporation, Plaintiff: Bartholomew M Botta, Rynn and Janowsky LLP, Newport Beach, CA.

ORDER GRANTING MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANTS SEACOAST DISTRIBUTING, INC. AND VINCENT R. TOWLES [17]

OTIS D. WRIGHT, II, UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

Plaintiff Kern Ridge Growers, LLC filed this Motion for Default Judgment Against Defendants Seacoast Distributing, Inc. and Vincent R. Towles on October 17, 2014. (ECF No. 17.) Kern Ridge filed suit against Seacoast, Towles and a third Defendant Victor M. Rodriguez on May 28, 2014, seeking to enforce its trust rights under the Perishable Agricultural Commodities Act (" PACA"), 7 U.S.C. § § 499a-499t, and collect trust assets in the principal amount of $59, 886.40, plus interest. Seacoast and Towles were served with the Complaint and have failed to answer or otherwise defend this action. The Clerk of Court entered default on September 26, 2014. (ECF No. 13.) For the reasons discussed below, the Court GRANTS Kern Ridge's Motion for Default Judgment. (ECF No. 17.)

II. FACTUAL BACKGROUND

According to the Complaint, in a series of transactions between June 25, 2010 and July 22, 2010, Kern Ridge sold and shipped perishable agricultural commodities to Seacoast. (Compl. ¶ 11.) Seacoast agreed to pay Kern Ridge a total principal amount of $66, 862.40. (Id.) Kern Ridge alleges that Seacoast received and accepted all product shipped by Kern Ridge per the agreement between the parties. (Id. ¶ 12.) However, after repeated demands and partial payment, Kern Ridge alleges that $59, 866.40 remains past due and owing. (Id. ¶ ¶ 13-14.)

At the time of these transactions, Seacoast was engaged in handling produce in interstate and/or foreign commerce as a commission merchant, dealer, retailer, and/or distributor operating under PACA License Number 19871310. (Id. ¶ 10.) The individual Defendants in this action, Towles and Rodriguez, were officers, directors, and/or shareholders of Seacoast, responsible for the daily management and control of Seacoast. (Id. ¶ 6.)

Kern Ridge filed suit on May 28, 2014. (ECF No. 1.) Seacoast and Towles were personally served with the Summons and Complaint on June 22, 2014.[1] (ECF Nos. 8, 9.) Answers were due on July 13, 2014, but Seacoast and Towles failed to make an appearance. The Clerk of Court entered default against Seacoast and Towles on September 26, 2014. (ECF No. 13.) On October 17, 2014, Kern Ridge filed the present Motion for Default Judgment against Seacoast and Towles. (ECF No. 17.)

III. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b) authorizes a district court to grant default judgment after the default is entered under Rule 55(a). Local Rule 55-1 requires that the movant submit a declaration establishing (1) when and against which party default was entered; (2) identification of the pleading to which default was entered; (3) whether the defaulting party is a minor, incompetent person, or active service member; and (4) that the defaulting party was properly served with notice if required by Federal Rule of Civil Procedure 55(b)(2).

A district court has discretion whether to enter default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Upon default, the defendant's liability generally is conclusively established and the well-pleaded factual allegations in the complaint are accepted as true. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)).

In exercising its discretion, a court must consider several factors: (1) the possibility of prejudice to plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake; (5) the possibility of dispute concerning material facts; (6) whether the defendants 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).

IV. DISCUSSION


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