United States District Court, Northern District of California
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT
Plaintiff Solaria Corporation ("Solaria") seeks the entry of default judgment against Defendant T.S. Energie e Risorse, S.R.I. ("TSE"). ECF No. 46 ("Mot."). The motion is unopposed; responses were due on October 15, 2014, but TSE has not filed any opposition. Solaria's motion papers are woefully inadequate; they provide no analysis of the law at all -- not even a citation to the relevant Federal Rule of Civil Procedure -- and no supporting evidence for the claimed amount of damages. Nonetheless, for the reasons set forth below, the motion is GRANTED, and the Clerk is DIRECTED to enter TSE's default. However, as explained more fully below, judgment shall not issue until Solaria has substantiated its claim for damages.
Except where otherwise indicated, the following allegations are taken from Solaria's complaint. ECF No. 1-1 ("Compl."). In November of 2012, Solaria and TSE entered into a contract for Solaria to provide 1, 000, 000 watts of solar modules, module clamps, and engineering support services for $1, 020, 000.00. Compl. ¶ 9, Ex 1. On December 4, the parties supplemented the contract with a change order (the "Change Order") specifying certain payment date terms, including a final payment due on January 31, 2013. Id. Solaria performed its obligations under the contract, but TSE failed to make a final payment of $484, 816.10 on the contract balance, due by January 31, 2013. Compl. ¶¶ 10-11.
Solaria brought suit in California state court on June 4, 2013. TSE retained counsel and removed the matter to federal court on November 7, 2013. ECF No. 1. TSE answered the complaint on November 27 and brought a counterclaim. TSE continued to participate in this litigation until June of 2014, when TSE's counsel filed a motion to withdraw because TSE had failed to pay its attorneys' invoices and refused to respond to its attorneys' requests for direction regarding the case. ECF No. 34. On July 3, 2014, the Court granted the motion to withdraw. TSE's lawyers' withdrawal was conditioned on the attorneys' willingness to continue to be served for forwarding purposes until TSE could appear by other counsel. ECF No. 37. The Court gave TSE 30 days to find new counsel and ordered TSE to file substitution of counsel by August 4, 2014. Id. at 3. On August 1, 2014, the Court granted TSE a 21-day extension, ordering it to file substitution of counsel by August 25, 2014. ECF No. 43. TSE did not appear by the required date, and Solaria moved for default judgment on September 16. To this date, TSE has still not filed a substitution of counsel and has not responded to Solaria's motion.
III. LEGAL STANDARD
After entry of a default, the Court may enter a default judgment. Fed.R.Civ.P. 55(b)(2). Its decision whether to do so, while "discretionary, " Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980), is guided by several factors.
As a preliminary matter, the Court must "assess the adequacy of the service of process on the party against whom default judgment is requested." Bd. of Trs. of the N. Cal. Sheet Metal Workers v. Peters, No. 00-0395, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2, 2001). If the Court determines that service was sufficient, it may consider the following factors (the "Eitel factors") in its decision on the merits of a motion for default judgment:
(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). "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." Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977). Therefore, for the purposes of this Motion, the Court accepts as true the facts as presented in the Complaint, except those relating to the amount of damages.
A. Adequacy of Service
In this case, adequacy of service is not at issue because the defendant has appeared, answered the complaint, and participated in this litigation. With respect to the motion for default judgment itself, Solaria served the motion upon TSE's former counsel pursuant to ...