United States of America v. Today.com Incorporated et al
Filing
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ORDER granting 38 Motion for Default Judgment. Default judgment is entered in favor of Plaintiff and against Defendant Today.com in the amount of $291,386.59. Signed by Judge David G Campbell on 11/17/2015.(KGM)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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United States of America,
Plaintiff,
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Today.com Incorporated, et al.,
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ORDER
v.
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No. CV-15-00086-PHX-DGC
Defendants.
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Plaintiff United States of America seeks entry of a default judgment against
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Defendant Today.com, Inc. under Rule 55(b) of the Federal Rules of Civil Procedure.
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Doc. 38. Today.com has failed to appear in this case. Defendants Nathan Gwilliam and
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Dale Gwilliam object to the entry of default judgment. Docs. 44, 45. The Court will
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grant the motion for default judgment.1
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I.
Background.
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Today.com was formed in approximately February 1998. See Doc. 13, ¶¶ 9-11.
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Nathan Gwilliam (“Nathan”) acted as President and Treasurer, and Dale Gwilliam
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(“Dale”), who appears to be Nathan’s father, was Secretary and Vice President. Id.,
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¶¶ 12-13. The government alleges that Today.com failed to pay-over to the IRS federal
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employment taxes it had withheld from employees during the quarters ending
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December 31, 1998, March 31, 1999, and June 30, 1999, and also failed to pay the
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The issues are fully briefed, and the Court finds that oral argument will not aid in
the resolution of this matter. See LR Civ. 7.2(f); Fed. R. Civ. P. 78(b).
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employer’s share of taxes under the Federal Insurance Contributions Act for these same
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quarters. Id., ¶ 51. Today.com also allegedly failed to pay federal unemployment taxes
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for the year ending December 31, 1998. Doc. 13, ¶ 51. As of October 15, 2015, the
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government had assessed back taxes and penalties of $291,386.59 against Today.com.
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Doc. 38 at 8.
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The government served Today.com with the complaint and summons in this action
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on April 28, 2015. Doc. 18. Today.com did not respond, and the Clerk of the Court
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entered a default against Today.com pursuant to Fed. R. Civ. P. 55(a). Doc. 34.
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II.
Legal Standard.
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Once the Clerk has entered default, a plaintiff may request entry of a default
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judgment. See Fed. R. Civ. P. 55(b). “The district court’s decision whether to enter
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default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th
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Cir. 1980). A court should consider several factors in deciding whether to enter a default
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judgment: (1) the possibility of prejudice to the plaintiff, (2) the merits of the plaintiff’s
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substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in
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the action, (5) the possibility of a dispute concerning material facts, (6) whether default
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was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of
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Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-
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72 (9th Cir. 1986).
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III.
Analysis.
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The first Eitel factor weighs in favor of granting default judgment. Today.com
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was served on April 28, 2015. Doc. 18. Today.com has not answered the complaint or
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otherwise appeared in this action. If the motion for default judgment is not granted, the
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government “will likely be without other recourse for recovery” against Today.com.
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PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002).
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The second and third Eitel factors favor default judgment where the complaint
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sufficiently states a claim for relief. See id. at 1175; Danning v. Lavine, 572 F.2d 1386,
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1388-89 (9th Cir. 1978). A review of the complaint (Doc. 13), the Court’s ruling on the
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motion to dismiss (Doc. 36), the motion for default judgment (Doc. 38), and the Kittrell
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Declaration (Doc. 39) shows that the government has stated a claim for relief against
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Today.com.
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The fourth factor considers the amount of money at stake in relation to the
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seriousness of the defendant’s conduct. See PepsiCo, Inc., 238 F. Supp. 2d at 1176. The
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government seeks $291,386.59 under 26 U.S.C. §§ 6656(a) and 6651(a)(2). Doc. 38.
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The Court finds this request to be appropriate in light of the alleged failure to pay taxes.
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This factor favors default judgment.
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The fifth Eitel factor weighs in favor of default judgment. Given the sufficiency
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of the complaint and Today.com’s default, “no genuine dispute of material facts would
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preclude granting [Plaintiff’s] motion.” PepsiCo, Inc., 238 F. Supp. 2d at 1177; see
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Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977).
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The sixth Eitel factor favors default judgment. Today.com was properly served
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with the summons and complaint. Doc. 18. It therefore is “unlikely that [Today.com’s]
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failure to answer and the resulting default was the result of excusable neglect.” Gemmel
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v. Systemhouse, Inc., No. CIV 04-187-TUC-CKJ, 2008 WL 65604, at *5 (D. Ariz. Jan. 3,
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2008).
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As for the seventh factor, it is true that “[c]ases should be decided upon their
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merits whenever reasonably possible,” Eitel, 782 F.2d at 1472, but the mere existence of
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Rule 55(b) “indicates that this preference, standing alone, is not dispositive,” PepsiCo,
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Inc., 238 F. Supp. at 1177 (citation omitted). Today.com’s failure to respond to the
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complaint “makes a decision on the merits impractical, if not impossible.” Id.
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Considering the Eitel factors as a whole, the Court concludes that entry of default
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judgment against Today.com is warranted.
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objections to such a default judgment, they do not represent Today.com and they do not
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dispute that Today.com has failed to answer or appear. The Court will not withhold
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default judgment on the basis of their objections, but neither does this order decide what
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defenses Nathan and Dale may assert in this case.
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Although Nathan and Dale have filed
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IT IS ORDERED:
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Plaintiff’s motion for default judgment (Doc. 38) is granted.
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Default judgment is entered in favor of Plaintiff and against Defendant
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Today.com in the amount of $291,386.59.
Dated this 17th day of November, 2015.
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