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Ascentium Capital LLC v. Maldonado

United States District Court, E.D. California

January 9, 2020

ASCENTIUM CAPITAL LLC, Plaintiff,
v.
ROTCEH COLON MALDONADO, Defendant.

          ORDER AND FINDINGS AND RECOMMENDATIONS

          CAROLYN K. DELANEY, UNITED STATES MAGISTRATE JUDGE

         INTRODUCTION

         Presently pending before the court is plaintiff Ascentium Capital LLC's motion for default judgment against defendant Dr. Rotceh Colon Maldonado. (ECF No. 8.) Defendant failed to file an opposition to plaintiff's motion in accordance with Local Rule 230(c). At the hearing on the motion held on December 18, 2019, plaintiff's counsel appeared telephonically and defendant did not appear.

         BACKGROUND

         The background facts are taken from plaintiff's complaint, unless otherwise noted. (See Plaintiff's Complaint, ECF No. 1 [“Compl.”].)

         In July 2017 plaintiff made a commercial loan to defendant to purchase a Coolsculpting Device. (Compl. ¶ 7.) Pursuant to the finance agreement defendant was to make sixty monthly payments of $3, 334.90, until the loan was satisfied. (Id.) Defendant stopped making payments on March 1, 2019 and has not made a payment since that date. (Id. ¶ 9.) On August 7, 2019, plaintiff sent defendant a letter entitled, “NOTICE OF DEFAULT AND ACCELERATION” outlining defendant's payments that were past due, and accelerating the remaining balance to be due immediately as permitted by the agreement. (Id. at 11-12.)

         Plaintiff commenced this action on August 27, 2019, alleging only one count: breach of the finance agreement. (Compl. at 1.) Defendant was personally served in Puerto Rico on September 7, 2019.[1] Defendant has not answered or appeared. On October 2, 2019, plaintiff requested an entry of default, which the Clerk of Court granted the same day. (ECF Nos. 6, 7.) Plaintiff filed the present motion for default judgment on November 8, 2019. (ECF No. 8.) Following the hearing on December 18, 2019, the court ordered plaintiff to provide additional briefing regarding how it reached its damages calculation, which plaintiff subsequently filed. (ECF Nos. 13, 14.)

         LEGAL STANDARDS

         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 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). Default judgments are ordinarily disfavored. Id. at 1472.

         As a general rule, once default is entered, well-pleaded factual allegations in the operative complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)); accord Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). In addition, although well-pleaded allegations in the complaint are admitted by a 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) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)); accord DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (noting that a defendant does not admit facts that are not well-pled or conclusions of law); Abney v. Alameida, 334 F.Supp.2d 1221, 1235 (S.D. Cal. 2004) (“[A] default judgment may not be entered on a legally insufficient claim.”). A party's default does not establish the amount of damages. Geddes, 559 F.2d at 560.

         DISCUSSION

         Appropriateness of the Entry of Default Judgment ...


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