Ochwat v. Pinnacle Asset Group, L.L.C.

          FINDINGS AND RECOMMENDATIONS

          EDMUND F. BRENNAN UNITED STATES MAGISTRATE JUDGE

         This matter was before the court on June 8, 2016, for hearing for hearing on plaintiff's motion for default judgment against defendant Pinnacle Asset Group, L.L.C.^[1] ECF No. 8. Attorney Trinette Kent appeared on behalf of plaintiff;^[2] no appearance was made by defendant. At the hearing, the court observed that it was unclear whether defendant had been properly served with a copy of the summons and complaint and ordered plaintiff to submit a supplemental declaration addressing this issue. That declaration has been submitted, ECF No. 15, and addresses the concerns identified by the court. Having considered plaintiff's pleadings, the arguments made at the hearing, and the supplemental declaration, the court finds that plaintiff's application for default judgment should be granted.

         I. Background

         Plaintiff filed this action against defendant, alleging violation of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. ("FDCPA") and the California Rosenthal Act, California Civil Code §§ 1788 et. seq. ("Rosenthal Act"). ECF No. 1. She filed a proof of service which states that on October 23, 2015, a process server identified as Richard Fink completed service on "Pinnacle Asset Group, LLC c/o Raymond Stillwell Esquire" by personally serving a copy of the summons and complaint on Chris Tocha, an "Authorized Agent, " at 4476 Main Street #120, Amherst, NY, 14226. ECF No. 5. Defendant has not filed an answer to the complaint or otherwise appeared in this action. Plaintiff requested the clerk to enter defendant's default, ECF No. 6, which was entered on January 4, 2016, ECF No. 7. Plaintiff now moves for entry of default judgment on her FDCPA and Rosenthal Act claims. ECF No. 8.

         II. Legal Standard

         Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend against the action. See Fed. R. Civ. P. 55(a). However, "[a] defendant's default does not automatically entitle the plaintiff to a court-ordered judgment." PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986)). Instead, the decision to grant or deny an application for default judgment lies within the district court's sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this determination, the court considers the following factors:

(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 the 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). "In applying this discretionary standard, default judgments are more often granted than denied." Philip Morris USA, Inc. v. Castworld Products, Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003) (quoting PepsiCo, Inc. v. Triunfo-Mex, Inc., 189 F.R.D. 431, 432 (C.D. Cal. 1999)).

         As a general rule, once default is entered, the factual allegations of the complaint are taken as true, except for those allegations relating to damages. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (citations omitted). However, although well-pleaded allegations in the complaint are admitted by defendant's failure to respond, "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). A party's default conclusively establishes that party's liability, although it does not establish the amount of damages. Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (stating that although a default established liability, it did not establish the extent of the damages).

         III. Discussion

         A. Appropriateness of the Entry of Default Judgment Under the Eitel Factors

         1. Factor 1: Possibility of Prejudice to Plaintiff

         The first Eitel factor considers whether the plaintiff would suffer prejudice if default judgment is not entered, and such potential prejudice to the plaintiff militates in favor of granting a default judgment. See PepsiCo, Inc., 238 F.Supp.2d at 1177. Here, plaintiff would potentially face prejudice if the court did not enter a default judgment. Absent entry of a default judgment, plaintiff would be unable to obtain remedies for defendant's alleged misconduct.

         2. Factors Two and Three: The Merits of Plaintiff's Substantive Claims ...