United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT Re: Dkt.
H. KOH, United States District Judge
the Court is Plaintiff Golden West Veg Inc.'s
(“Golden West”) renewed motion for default
judgment against Defendants James M. Bartley
(“Bartley”) and Greenfield Produce Sales
(“Greenfield”). Having considered Plaintiff's
motion, the relevant law, and the record in this case, the
Court hereby GRANTS Plaintiff's motion.
West brings this case for violation of the Perishable
Agricultural Commodities Act (“PACA”), 7 U.S.C.
§ 499a et seq., and for breach of contract and
breach of fiduciary duty. Plaintiff is a California
corporation engaged in the business of selling and shipping
perishable agricultural commodities and has its principal
place of business in Salinas, California. ECF No. 43
(“FAC”), ¶¶ 1-2. Plaintiff alleges that
at all times relevant to this action, Plaintiff operated
under a valid PACA license number 20140205. Id.
¶ 16. Defendant Greenfield is a sole proprietorship of
Defendant Bartley with its principal place of business in
Salinas, California. Id. ¶ 4. Plaintiff alleges
that at all times relevant to this action, Bartley and
Greenfield were “insiders” who were “in a
position to control the PACA trust assets that are the
subject of this lawsuit.” Id. ¶ 6.
alleges that Defendants were “engaged in the handling
of produce in interstate and/or foreign commerce as a
commission merchant, dealer and/or retailer in wholesale and
jobbing quantities.” Id. ¶ 8. Therefore,
Plaintiff alleges that Defendants are “subject to the
provisions of the PACA and the regulations promulgated by the
Secretary of Agriculture.” Id. Plaintiff
further alleges that Defendants operated under PACA license
number 20061039. Id. ¶ 17.
alleges that between January 4, 2016 and April 14, 2016,
Plaintiff sold perishable agricultural commodities to
Defendants. Id. ¶ 9. In exchange, Plaintiff
alleges that Defendants agreed to pay Plaintiff $97, 430.40.
Id. Specifically, Plaintiff alleges that on or near
the date of each transaction, Plaintiff forwarded to
Defendants invoices for the transactions. Id. ¶
10. Plaintiff has attached these invoices, of which there are
14 in total, to the FAC, and these invoices total $97,
430.40. Ex. 1 to FAC. Plaintiff alleges that Defendants have
paid “the partial sum of $44, 226.22” but have
left an “outstanding principal sum due of $53, 203.78,
no part of which has been paid.” Id. Plaintiff
alleges that despite shipping the produce to Defendants, and
despite repeated demands that Defendants pay the amount due,
Defendants “have failed and refused” to pay the
remaining amount due. Id. ¶ 10. Plaintiff
therefore seeks damages in the amount of the overdue balance,
as well as “reasonable attorney's fees and costs of
suit” and “interest at the highest legal rate
from the date the obligation became due.” Id.
filed this PACA action against Defendants on July 1, 2016.
ECF No. 1. On August 24, 2016, Plaintiff filed a motion for
entry of default by the Clerk. ECF No. 15. On September 27,
2016, the Clerk entered default against Greenfield, ECF No.
20, but declined to enter default against Bartley, ECF No.
20. The same day, September 27, 2016, the Court ordered that
Plaintiff file any motion for default judgment against
Greenfield by October 18, 2018. ECF No. 21. The Court also
ordered that if Plaintiff filed a renewed motion for entry of
default and the Clerk entered default against Bartley,
Plaintiff was required to file a motion for default judgment
against Bartley within 21 days after the entry of default.
October 12, 2016, Plaintiff filed a motion to continue the
deadline to file a motion for default judgment. ECF No. 23.
In the motion, Plaintiff stated that after the entry of
default, Bartley had contacted Plaintiff and that Plaintiff
and Bartley had begun settlement discussions. Id. at
2. Plaintiff therefore sought a continuance in order to
facilitate these settlement discussions. Id. On
October 13, 2016, the Court granted Plaintiff's motion
and continued the deadline to file a motion for default
judgment until November 1, 2016. ECF No. 24.
then filed an amended motion for entry of default against
Bartley on October 28, 2016. ECF No. 25. Soon afterward, on
November 1, 2016, Plaintiff filed a motion for default
judgment against Greenfield. ECF No. 25. On November 2, 2016,
the Clerk entered default against Bartley. ECF No. 32. On
November 7, 2016, Plaintiff filed an amended motion for
default judgment against both Greenfield and Bartley. ECF No.
33. On January 27, 2017, the Court denied the motions for
default judgment without prejudice because the Court found
that the original complaint failed to allege all elements of
a PACA claim. ECF No. 42.
the Court denied the motions for default judgment without
prejudice, Plaintiff filed an Amended Complaint
(“FAC”) on February 10, 2017. ECF No. 43. On
March 7, 2017, Plaintiff filed a motion for entry of default
against Bartley individually and doing business as Greenfield
Produce Sales. ECF No. 46. On March 8, 2017, the Clerk
entered default against Bartley individually and doing
business as Greenfield Produce Sales. ECF No. 48. On March 8,
2017, Plaintiff filed a motion for entry of default against
Greenfield. ECF No. 49. On March 9, 2017, the Clerk entered
default against Greenfield. ECF No. 51.
then filed the instant motion for default judgment against
Bartley and Greenfield on March 16, 2017. ECF No. 52.
to Rule 55(b)(2), the court may enter a default judgment when
the clerk, under Rule 55(a), has previously entered the
party's default. Fed.R.Civ.P. 55(b). “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). Once the Clerk of Court enters
default, all well-pleaded allegations regarding liability are
taken as true, except with respect to damages. See Fair
Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir.
2002) (“With respect to the determination of liability
and the default judgment itself, the general rule is that
well-pled allegations in the complaint regarding liability
are deemed true.”); TeleVideo Sys. v.
Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987)
(“[U]pon default the factual allegations of the
complaint, except those relating to the amount of damages,
will be taken as true.”); Philip Morris USA v.
Castworld Prods., 219 F.R.D. 494, 499 (C.D. Cal. 2003)
(“[B]y defaulting, Defendant is deemed to have admitted
the truth of Plaintiff's averments.”). “In
applying this discretionary standard, default judgments are
more often granted than denied.” Philip
Morris, 219 F.R.D. at 498.
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).
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). The Court thus begins by evaluating subject matter
jurisdiction and personal jurisdiction.
Subject Matter Jurisdiction
Court finds that the exercise of subject matter jurisdiction
over this case is proper. “[A] federal court may
exercise federal-question jurisdiction if a federal right or
immunity is an element, and an essential one, of the
plaintiff's cause of action.” Provincial
Gov't of Marinduque v Placer Dome, Inc., 582 F.3d
1083, 1086 (9th Cir. 2009) (citation omitted); see
also 28 U.S.C. § 1331. Plaintiff asserts claims
under PACA and California contract law. See Compl.
¶¶ 7-34. As the PACA causes of action raise federal
questions, the Court may properly exercise subject matter
jurisdiction over the PACA causes of action. Because the
state law claim arises out of the same factual allegations as
the PACA causes of action, the Court exercises supplemental
jurisdiction over that claim. See 28 U.S.C. §
determine the propriety of asserting personal jurisdiction
over a nonresident defendant, the Court examines whether such
jurisdiction is permitted by the applicable state's
long-arm statute and comports with the demands of federal due
process. Harris Rutsky & Co. Ins. Servs., Inc. v.
Bell & Clements, Ltd., 328 F.3d 1122, 1128-29 (9th
Cir. 2003). Because California's long-arm statute, Cal.
Civ. Proc. Code § 410.10, is coextensive with federal
due process requirements, the jurisdictional analyses under
state law and federal due process are the same. See
Cal. Civ. Proc. Code § 410.10 (“[A] court of this
state may exercise jurisdiction on any basis not inconsistent
with the Constitution of this state or of the United
States.”); Mavrix Photo, Inc. v. Brand Techs.,
Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). For a court
to exercise personal jurisdiction over a nonresident
defendant consistent with due process, that defendant must
have “certain minimum contacts” with the relevant
forum “such that the maintenance of the suit does not
offend ‘traditional notions of fair play and
substantial justice.'” Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)). In
addition, “the defendant's ‘conduct and
connection with the forum State' must be such that the
defendant ‘should reasonably anticipate being haled
into court there.'” Sher v. Johnson, 911
F.2d 1357, 1361 (9th Cir. 1990) (quoting World-Wide
Volkwagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).
may exercise either general or specific jurisdiction over a
nonresident defendant. Ziegler v. Indian River
Cnty., 64 F.3d 470, 473 (9th Cir. 1995). General
jurisdiction exists where a nonresident defendant's
activities in the state are “continuous and
systematic” such that said contacts approximate
physical presence in the forum state. See Schwarzenegger
v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir.
2004) (citation omitted). Where general jurisdiction is
inappropriate, a court may still exercise specific
jurisdiction where the nonresident defendant's
“contacts with the forum give rise to the cause of
action before the court.” Doe v. Unocal Corp.,
248 F.3d 915, 923 (9th Cir. 2001).
for the Court to exercise personal jurisdiction over a
defendant, the defendant must have been served in accordance
with Federal Rule of Civil Procedure 4. See Jackson v.
Hayakawa, 682 F.2d 1344, 1347 (9th Cir. 1982)
(“Defendants must be served in accordance with Rule
4(d) of the Federal Rules of Civil Procedure, or there is no
personal jurisdiction.” (footnote omitted)).
Defendant Greenfield, the Court concludes that the exercise
of general jurisdiction is appropriate. Plaintiff has alleged
that Greenfield's principal place of business is in
Salinas, California. FAC ¶ 2. Therefore, California is a
state in which Greenfield “is fairly regarded as at
home” and is therefore subject to general jurisdiction.
Daimler AG v. Bauman, 134 S.Ct. 746, 760 (2014).
Greenfield has “substantial” and
“continuous and systematic” contacts with
California as well as a “physical presence” in
California that support the Court's exercise of general
jurisdiction. See Schwarzenegger, 374 F.3d at 801
(general jurisdiction exists where a defendant has
“continuous and systematic general business contacts .
. . that approximate physical presence in the forum
state” (citations omitted)).
Plaintiff effected service of process upon Greenfield by
serving the summons and complaint on Greenfield's sole
proprietor and agent of service, Defendant Bartley.
See ECF No. 45 (affidavit of service on Greenfield
through its agent James M. Bartley). There is no indication
in the record that this service was improper.
Defendant Bartley, the Court concludes that the exercise of
personal jurisdiction is appropriate. In the complaint,
Plaintiff alleges that Defendant Bartley was at all times
relevant to the complaint the sole proprietor of Greenfield,
which had its principal place of business in Salinas,
California. FAC ¶ 2. Operating a sole proprietorship
continuously in the state of California is sufficient to
establish “continuous and systematic” contacts
with California that can support an exercise of general
jurisdiction. Schwarzenegger, 374 F.3d at 801;
see also Woodworkers Tool Works v. Byrne, 202 F.2d
530, 531 (9th Cir. 1953) (upholding a finding of personal
jurisdiction based on continuous and systematic contacts with
California through a sole proprietorship.”
service on Defendant Bartley was proper. The affidavit of
service shows that Plaintiff effected service of process on
Defendant Bartley personally on February 11, 2017. ECF No.
44. There ...