United States District Court, C.D. California
Present: The Honorable CHRISTINA A. SNYDER Judge.
CIVIL MINUTES - GENERAL
(IN CHAMBERS) - PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT
AGAINST DEFENDANTS HUNG ERN TOH, BARR CONSULTING AND
HOLDINGS, INC., AND BARR HOLDINGS, LLC. (Dkt. 95, filed March
INTRODUCTION AND BACKGROUND
case concerns an allegedly fraudulent scheme orchestrated by
Hung Ern Toh (“Toh”), wherein Toh convinced
non-English speaking residents of the People's Republic
of China to invest substantial sums of money in his entities,
Barr Consulting and Holdings, Inc. and Barr Holdings, LLC
(the “Barr defendants” or “Barr
entities”), by promising them that these investments
would allow them to obtain permanent resident status in the
United States. Dkt. 1 (“Compl.”) ¶ 2. Toh
and his co-defendants then allegedly misappropriated these
funds. Id. ¶¶ 2-4. This scheme has
resulted in the filings of several related cases in this
Yongxin Long (“Long”), a resident of the
People's Republic of China, entered into a series of
contracts with Toh for immigration services. Id.
¶¶ 24-32. Under the agreements, Toh promised Long
that by investing in the Barr entities, Long would qualify
for an L-1 visa for travel to and from the United States, and
would eventually be able to obtain permanent residence status
in the United States. Id. ¶ 5. Toh also assured
Long that the investment would be held in attorney John
Bradford Flecke's (“Flecke”) client service
account until her immigration status was resolved.
Id. ¶ 7. Based on these representations, Long
wired $300, 000 into Flecke's client service account and
incurred $75, 977 in related fees. Id. ¶¶
Long discovered Flecke's unauthorized disbursement of her
investment to the Barr defendants. Id. ¶¶
4, 56-58. Upon learning that her L-1 visa application was
denied, Long demanded that defendants return her money.
However, Toh engaged in delay tactics and refused to return
Long's investment. Id. ¶ 4.
November 30, 2017, Long brought this action against
defendants Flecke,  Toh, and the Barr defendants. In brief,
Long alleges that she and the defendants entered into a
series of contracts that contained false promises intended to
entice Long into investing money in Toh's businesses, the
Barr entities, as part of a fraudulent immigration scheme.
Id. ¶¶ 1-2. Long asserts the following
causes of action: (1) fraud; (2) fraud based on conspiracy;
(3) conversion; (4) rescission and restitution due to fraud;
(5) breach of written contract; (6) breach of fiduciary duty;
(7) violation of the California Business & Professions
Code § 17200 et seq.; and (8) violation of the
California Business & Professions Code § 6148.
for Toh and the Barr defendants have since withdrawn from
representation. Dkts. 68, 74. Toh's counsel withdrew on
September 10, 2018, dkt. 68, and the Court allowed the Barr
defendants' counsel to withdraw on October 11, 2018, dkt.
74. The Barr defendants were ordered to obtain new counsel
within thirty days of their counsel's withdrawal.
Id. On November 19, 2018, the Court ordered Toh and
the Barr defendants to show cause in writing no later than
December 20, 2018 as to why their answers should not be
stricken and default be entered against them for failure to
retain new counsel. Dkt. 79. The defendants failed to respond
to the Court's order. On January 3, 2019, Toh and the
Barr defendants failed to appear or otherwise participate in
a status conference held by the Court, and the Court ordered
Long's counsel to move for entry of default against the
defendants. Dkt. 80. Pursuant to the Court's order, Long
filed a Request for Entry of Default against Toh and the Barr
defendants on January 16, 2019. Dkts. 80-81. The Clerk
entered default on January 18, 2019. Dkt. 83. On March 26,
2019, Long filed the instant motion for entry of default
judgment against Toh and the Barr defendants on her claims
for fraud and breach of contract. Dkt. 95
(“Mot.”). Long now requests that this Court grant
her motion for default judgment in the amount of $375,
977.00, plus the legal rate of interest. Id. at 18,
20. Long served the motion for default judgment on defendants
and filed proof of service on March 26, 2019. Dkt. 95-3.
Long's motion is unopposed.
Court held a hearing on April 29, 2019. Having carefully
considered Long's motion and supporting documents, the
Court finds and concludes as follows.
to Federal Rule of Civil Procedure 55, when a party against
whom a judgment for affirmative relief is sought has failed
to plead or otherwise defend, and the plaintiff does not seek
a sum certain, the plaintiff must apply to the court for a
default judgment. Fed.R.Civ.P. 55.
general rule, cases should be decided on the merits as
opposed to by default, and therefore, “any doubts as to
the propriety of a default are usually resolved against the
party seeking a default judgment.” Judge Beverly Reid
O'Connell & Judge Karen L. Stevenson, California
Practice Guide: Federal Civil Procedure Before Trial ¶
6:11 (The Rutter Group 2017) (citing Pena v. Seguros La
Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985)).
Granting or denying a motion for default judgment is a matter
within the court's discretion. Elektra Entm't
Grp. Inc. v. Crawford, 226 F.R.D. 388, 392 (C.D. Cal.
Ninth Circuit has directed that courts consider the following
factors in deciding whether to enter default judgment: (1)
the possibility of prejudice to plaintiff; (2) the merits of
plaintiff's substantive claims; (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 defendant's default was the product of
excusable neglect; and (7) the strong policy favoring
decisions on the merits. See Eitel v. McCool, 782
F.2d 1470, 1471-72 (9th Cir. 1986); see also
Elektra, 226 F.R.D. at 392.