United States District Court, C.D. California
MOLLY MOON FILMS LIMITED ET AL.
ARC ENTERTAINMENT, LLC ET AL.
Present The Honorable CHRISTINA A. SNYDER
CIVIL MINUTES - GENERAL
PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT
ARC ENTERTAINMENT, LLC (Dkt. [ 47 ], filed September 10,
INTRODUCTION AND BACKGROUND
December 29, 2017, plaintiffs Molly Moon Films Limited
("MMF"), Motion Investment Limited
("MIL"), and Cumulus Investors LLC
("Cumulus") filed this action against defendants
ARC Entertainment, LLC ("ARC") and OA Investment
Holdings, Inc. ("OA"). Dkt. 1 ("Compl.").
The complaint asserts claims for: (1) breach of contract; (2)
breach of the implied covenant of good faith and fair
dealing; and (3) unjust enrichment. Id. OA filed its
answer on October 8, 2018. Dkt. 24. Plaintiffs and OA
thereafter reached a settlement and filed a joint stipulation
to dismiss plaintiffs' claims against OA on September 10,
2019. Dkt. 46. The Court dismissed plaintiffs' claims
against OA on September 11, 2019. Dkt. 49.
not appeared in this action to date. On November 1, 2018,
plaintiffs requested that the Clerk enter default against
ARC, and the Clerk did so on November 2, 2018. Dkt. 30, 31.
On September 10, 2019, plaintiffs filed the present motion
for default judgment against ARC, dkt. 47-1
("Mot."), as well as a supporting declaration, dkt.
47-2 ("Pelikan Decl.").
claims arise out of a dispute regarding the distribution
rights to a motion picture entitled Molly Moon: The
Incredible Hypnotist (the "Motion Picture").
Compl. ¶¶ 8-35. MMF produced the Motion Picture,
while MIL and Cumulus are its primary investors. Compl.
¶ 9. In July 2015, MMF and ARC entered into a
Distribution Agreement (the "Agreement"), granting
ARC the rights to distribute the Motion Picture within the
United States and Canada. Id. ¶ 10. The
Agreement requires ARC to make advance payments totaling $80,
000 in return for the "rights to license, sub-license,
distribute, advertise, promote, market, and publicize the
Motion Picture for theaters, home use and digitally."
Compl. ¶¶ 11, 13. The Agreement also requires ARC
to pay performance bonuses to plaintiffs based on the Motion
Picture's overall sales, as well as a portion of the net
revenues and net receipts that ARC earned from its
distribution of the Motion Picture. Id. ¶¶
16-17. In 2015, OA acquired ARC's rights and interests in
the Agreement. Id. ¶¶ 30-31.
allege that neither ARC nor OA has made the payments required
under the Agreement. Id. ¶¶ 25, 29, 31.
Failure to make the $80, 000 in advance payments provides a
basis for terminating the Agreement. Id. ¶ 22.
Accordingly, plaintiffs now seek default judgment against ARC
in the amount of $80, 000.00. See Mot. at 4.
Court held a hearing on October 21, 2019. Having carefully
considered plaintiffs' motion and supporting exhibits,
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 may apply to the court for a
default judgment. Fed.R.Civ.P. 55. 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 (CD. Cal. 2005). The 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
plaintiffs 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.
a court can enter a default judgment against a defendant, the
plaintiff must satisfy the procedural requirements set forth
in Federal Rules of Civil Procedure 54(c) and 55, as well as
Local Rule 55-1 and 55-2." Harman IntT Indus., Inc.
v. Pro Sound Gear, Inc., No. 2:17-cv-06650-ODW-FFM, 2018
WL 1989518, at *1 (CD. Cal. Apr. 24, 2018). Accordingly, when
an applicant seeks a default judgment from the Court, the
movant must submit a declaration specifying: "(a) When
and against what party the default was entered; (b) The
identification of the pleading to which default was entered;
(c) Whether the defaulting party is an infant or incompetent
person, and if so, whether that person is represented by a
general guardian, committee, conservator or other
representative; (d) That the Servicemembers Civil Relief Act
(50 U.S.C. App. § 521) does not apply; and (e) That
notice has been served on the defaulting party, if required
by [Federal Rule of Civil Procedure] 55(b)(2)." See CD.
Cal. L.R. 55-1.
contend that "entry of default judgment as to ARC is
appropriate under Rule 55(b)(2) because the Eitel
factors have been satisfied." Mot. at 6. In connection
with their motion for default judgment, plaintiffs submit a
declaration attesting that: (a) the Clerk entered default
against ARC on November 2, 2018 after ARC failed to respond
to plaintiffs' complaint; (b) that Arc is neither an
infant nor an incompetent person; and (c) that the
Servicemembers Civil Relief Act does not apply. See
Pelikan Decl. ¶¶ 8-14.
Accordingly, plaintiffs have satisfied the procedural
requirements for default judgment. See Harman, 2018 WL
1989518, at *2. The Court therefore addresses each of the
Eitel factors in turn. The Court also considers the
relief sought by plaintiffs.
Application of ...