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General Produce Co., Ltd. v. Warehouse Markets, LLC

United States District Court, E.D. California

April 1, 2015

GENERAL PRODUCE CO., LTD., a California limited partnership, Plaintiff,
v.
WAREHOUSE MARKETS, LLC, a California limited liability company; MICHAEL A. WEBB, an individual; NYCOLE WARREN, an individual; and C & S WHOLESALE GROCERS, INC., a Vermont corporation, Defendants. FRESHKO PRODUCE SERVICES, INC., a California corporation, Intervening-Plaintiff,
v.
WAREHOUSE MARKETS, LLC, a California limited liability company; MICHAEL A. WEBB, an individual; NYCOLE WARREN, an individual; and C & S WHOLESALE GROCERS, INC., a Vermont corporation, Defendants.

FINDINGS AND RECOMMENDATIONS

DALE A. DROZD, Magistrate Judge.

This matter came before the court on October 17, 2014, for hearing of intervening plaintiff FreshKo Produce Services, Inc.'s, ("FreshKo"), motion for default judgment. Attorney June Monroe appeared on behalf FreshKo. No appearance was made by or on behalf of any defendant. Oral argument was heard and the motion was taken under submission. Having considered all written materials submitted with respect to the motion, and after hearing oral argument, the undersigned recommends that the intervening plaintiff's motion for default judgment be granted.

PROCEDURAL BACKGROUND

On April 17, 2013, plaintiff General Produce Co., Ltd., ("General Produce"), commenced this action by filing a complaint and paying the required filing fee.[1] (Dkt. No. 1.) Defendants Warehouse Markets, LLC, ("Warehouse"), Michael A. Webb, Nycole Warren and C & S Wholesale Grocers, Inc., ("C &S Wholesale"), ("Defendants"), filed answers in May of 2013. (Dkt. Nos. 9-11.) On June 6, 2013, the parties filed a stipulation to stay pending defendant Warehouse's payment to plaintiff General Produce the sum of $70, 636.79. (Dkt. No. 12.) On June 10, 2013, the assigned District Judge issued an order, pursuant to the parties' stipulation, staying this action pending either dismissal or plaintiff's providing of notice of defendants' default as to payment. (Dkt. No. 13.)

On December 10, 2013, General Produce filed a notice of default in payment with the court. (Dkt. No. 16.) On December 23, 2013, the assigned District Judge vacated the stay of this action. (Dkt. No. 18.) On January 14, 2014, FreshKo filed a motion for leave to intervene in this action. (Dkt. No. 19.) The assigned District Judge granted FreshKo's motion to intervene on April 10, 2014. (Dkt. No. 30.)

On April 18, 2014, FreshKo filed an intervening complaint. (Dkt. No. 31.) Therein, FreshKo alleges causes of action for breach of contract, against defendant Warehouse, and violations of the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. § 499e, et seq., unjust enrichment and conversion against defendants Warehouse, Michael A. Webb, Nycole Warren and C & S Wholesale. The complaint seeks declaratory relief, damages in the amount of $41, 869.50 plus fees, costs and interest.

On August 19, 2014, FreshKo filed a request for the Clerk's entry of defendants' default, (Dkt. No. 47), and on August 22, 2014, the Clerk of the Court entered defendants' default.[2] (Dkt. No. 48.) On July 24, 2014, the assigned District Judge granted a motion to withdraw as counsel of record filed by defendants' counsel.[3] (Dkt. No. 41.) FreshKo filed the motion for default judgment now pending before the court on September 15, 2014, and it came for hearing before the undersigned pursuant to Local Rule 302(c)(19) on October 17, 2014. (Dkt. Nos. 49 & 54.) Despite being served with all papers filed in connection with FreshKo's motion for default judgment (Dkt. No. 53) there was no opposition to the motion for default judgment filed by any defendant nor did any of the defaulting defendants appear at the hearing on the motion for default judgment.[4]

LEGAL STANDARDS

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 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 ex ercising 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 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], ...


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