United States District Court, N.D. California, San Jose Division
GRANTING MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANTS
EDWARD FORTE AND PRECISE CONSTRUCTION & DISMANTLEMENT
SYSTEMS, INC.; VACATING HEARING ON MOTION; VACATING INITIAL
CASE MANAEMENT CONFERENCE; AND TERMINATING AS MOOT
PLAINTIFF'S MOTIONS FOR TELEPHONIC APPEARANCE [RE: ECF
35, 42, 43]
LABSON FREEMAN, UNITED STATES DISTRICT JUDGE
Omni Financial, LLC moves for default judgment against the
only defendants remaining in this action, Edward Forte,
Individually and as Trustee of the Forte Family Trust and
Precise Construction & Dismantlement Systems, Inc., dba
Precise Construction. The Court hereby SUBMITS the motion for
decision without oral argument and VACATES the hearing
scheduled for November 7, 2019. See Civ. L.R.
7-1(b). The motion is GRANTED for the reasons discussed
below. However, because the amount of reasonable
attorneys' fees and costs recoverable in connection with
this default judgment are not adequately documented,
Plaintiff is directed to submit a supplemental brief
addressing reasonable attorneys' fees and costs.
light of the Court's ruling on the motion for default
judgment, the Court VACATES the Initial Case Management
Conference scheduled for November 7, 2019 and TERMINATES AS
MOOT Omni's motions for telephonic appearance at the
motion hearing and the Initial Case Management Conference.
Omni Financial, LLC (“Omni”) is an investment
pool made up of approximately 500 members located in and
around Santa Cruz, California. Boone Decl. ¶ 1, ECF
35-2. Omni filed this action against Defendants Global
Petroleum, LLC (“Global”), Suzette Jerez
(“Jerez), Edward Forte (“Forte”), and
Precise Construction & Dismantlement Systems, Inc.
(“Precise Construction”). Compl., ECF 1. Omni
alleges that Defendants entered into a scheme “to
fraudulently induce the plaintiff to enter into a joint
venture and to invest money in the purported purchase and
sale of gold ore.” Compl. ¶ 1. Defendants
“represented that the plaintiff's investment would
be used to purchase gold from a third-party seller, that the
defendants would contribute an amount equal to
plaintiff's investment toward the purchase transaction,
that the gold would be sold at a profit to a buyer procured
by defendants, and that OMNI's investment would be
returned along with a share of profits from the sale
transaction.” Id. Omni invested funds, but
Defendants did not use Omni's funds to buy gold, did not
contribute equal funds, and did not have a third-party buyer
available to purchase gold. Compl. ¶ 2. Despite
Omni's demands, Defendants did not return Omni's
investment money or a share of profits. Id. Omni
alleges that as a result of Defendants' fraudulent
representations and promises, Omni was damaged in the amount
of $2, 412, 474.66. Compl. ¶ 4.
complaint alleges the specifics of the joint venture
agreement entered into by Omni and Defendant Global in May
2018, and attaches a copy of the joint venture agreement and
an addendum to the agreement as Exhibits D and E to the
complaint. Compl. ¶¶ 17-23 & Exhs. D, E. Omni
agreed to provide Global with the sum of $1, 375, 000 in
return for a priority return on its investment plus and
additional 25% of the net profit from the gold venture.
Compl. ¶ 18. As security for the transaction, Global
executed a Straight Note in the principal sum of $1, 375,
000.00, plus profit sharing as provided in the joint venture
agreement. Compl. ¶ 22. Global had six months from the
date of the agreement to provide a return on Omni's
investment. Id. Omni wired Global the $1, 375, 000
but Global did not use the funds to purchase gold. Compl.
¶ 22. Global did not have an arrangement with a
third-party buyer to repurchase gold acquired with Omni's
funds, and had no intention of returning Omni's
investment or sharing profits with Omni. Compl. ¶ 23.
2018, Defendant Forte executed a loan guarantee agreement
(“the Forte Guaranty”), promising to pay the
indebtedness owned by Global to Omni up to the sum of $1,
375, 000. Compl. ¶ 24. Forte is the president of
Defendant Precise Construction. Compl. ¶ 9. Defendant
Precise Construction also executed a payment guaranty in May
2018 (“the Precise Construction Guaranty”),
promising to pay the indebtedness owned by Global to Omni up
to the sum of $1, 375, 000. Compl. ¶ 25.
November 2018, after payment had become due to Omni,
Defendant Jerez (Global's president) requested a
thirty-day extension on behalf of Global. Compl. ¶¶
26-28. Global agreed to pay Omni the sum of $2, 295, 287.50
due under the agreements, plus an additional amount of $117,
187.16, for a total sum payment of $2, 412, 474.66, by
December 10, 2018. Compl. ¶¶ 28-30. On December 11,
2018, after the extended deadline for payment had expired,
Defendant Jerez proposed a second modification to
Global's payment terms. Compl. ¶ 31. Omni agreed to
the proposed second modification, under which Global was to
send a wire transfer to Omni in the sum of $1, 512, 474.66 by
close of business on December 11, 2018, a second payment of
$100, 000 by March 11, 2019, and a final payment of $800, 000
by May 11, 2019. Compl. ¶ 31. Global did not wire any
funds on December 11, 2019. Compl. ¶ 33. On December 13,
2018, Defendant Jerez sent Omni an email advising that Global
had decided not to wire the funds due as agreed, but that
Global would wire $1, 500, 000 to Omni by December 14, 2018.
Id. Global did not wire funds by December 14, 2018.
Compl. ¶ 34. On December 17, 2018, Omni's counsel
sent a written letter to Defendants giving notice of default
under the agreements and demanding that Defendants pay the
outstanding balance of $2, 412, 474.66 due and owing to Omni.
Compl. ¶ 35.
filed this suit on January 2, 2019, asserting claims against
Global and its president Jerez (collectively, “GP
Defendants”), Forte, and Precise Construction for: (1)
fraud - intentional misrepresentation (against GP
Defendants); (2) negligent misrepresentation (against GP
Defendants); (3) conversion (against GP Defendants); (4)
breach of written contract (against GP Defendants); (5)
breach of fiduciary duty (against Global); (6) unjust
enrichment (against GP Defendants); (7) declaratory relief
(against GP Defendants); (8) breach of written guaranty
(against Forte); and (9) breach of written guaranty (against
thereafter entered into a Stipulation for Entry of Judgment
upon Default (“Stipulation”) with Defendants
Global and Jerez only, providing for settlement of the action
conditioned on certain payments being made by Defendants
Global and Jerez to Omni. See Stipulation p. 5
¶ 4, ECF 20. In the event Defendants Global and Jerez
defaulted on any of their settlement obligations, Omni was
entitled to enter judgment against Defendants Global and
Jerez on an ex parte basis in the amount of the
outstanding payments due plus reasonable attorneys' fees
and costs incurred in prosecuting the action or enforcing the
Stipulation. See Stipulation p. 6 ¶ 6, ECF 20.
Defendants Global and Jerez ultimately defaulted on their
settlement obligations, after which the Court granted
Omni's ex parte application for entry of
judgment against Global and Jerez. See Order
Granting Plaintiff's Ex Parte Application, ECF 29. On
February 27, 2019, the Court entered judgment in favor of
Omni and against Defendants Global and Jerez jointly and
severally in the sum of $2, 500, 000.00, plus attorneys'
fees and costs in the sum of $34, 383.74, for a total
judgment of $2, 534, 383.74 against Defendants Global and
Jerez. See Judgment Pursuant to Stipulation and
Order, ECF 30.
April 11, 2019, the Clerk entered default against Defendants
Forte and Precise Construction. See Entry of
Default, ECF 34. Omni now seeks default judgment against
Defendants Forte and Precise Construction for breach of the
written guaranty agreements as set forth in Claims 8 and 9.
See Motion for Default Judgment, ECF 35. Omni seeks
judgment in the sum of $1, 375, 000 (the guaranty amount set
forth in the Forte Guaranty and the Precise Construction
Guaranty), as well as attorneys' fees and costs in the
amount of $62, 405.65. See Id. Omni served the
motion for default judgment and supporting documents on Forte
and Precise Construction by mail on May 15, 2019.
See Proof of Service, ECF 36. Forte and Precise
Construction have not responded.