Knapper v. Stellar Recovery Incorporated et al

Filing 32

ORDER AND DEFAULT JUDGMENT: Plaintiff's 31 motion for default judgment is granted. Default judgment is entered in favor of Plaintiff and against Defendant Stellar Recovery, Inc. in the amount of $8,646.00. The Clerk is directed to terminate this action. Signed by Judge David G Campbell on 4/20/2018. (ATD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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No. CV-17-02261-PHX-DGC

JoAnne Knapper,
Plaintiff,

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v.

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ORDER AND DEFAULT JUDGMENT

Stellar Recovery, Inc.,
Defendant.

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Plaintiff JoAnne Knapper has filed a motion for default judgment against

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Defendant Stellar Recovery, Inc. Doc. 31. For reasons stated below, default judgment is

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appropriate.

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I.

Background.

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Plaintiff brought this action pursuant to the Fair Debt Collection Practices Act

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(“FDCPA”), 15 U.S.C. § 1692 et seq. Doc. 1. Plaintiff alleges that Defendant violated

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the FDCPA by falsely representing the status of her debt and using false or misleading

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representations in its collection efforts. Id. ¶¶ 42-45. Specifically, Plaintiff alleges that

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Defendant misrepresented in a collection letter that she could not be sued on the debt

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because of its age. Id. ¶¶ 34-41. Plaintiff sought statutory damages and an award of

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attorneys’ fees and costs. Id. ¶¶ 43, 45.

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Defendant has ceased operations. On April 4, 2018, a hearing was held to address

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the motion to withdraw as attorney filed by Defendant’s counsel. Docs. 24, 29. Based on

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the discussion at the hearing, the Court granted the motion to withdraw and directed

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Plaintiff to submit a request for default judgment. Docs. 29, 30. Plaintiff thereafter filed

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the present motion seeking default judgment under Rule 55(b) of the Federal Rules of

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Civil Procedure. Doc. 31.

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II.

Default Judgment.

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The Court’s “decision whether to enter a default judgment is a discretionary one.”

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Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Although the Court should

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consider and weigh relevant factors as part of the decision-making process, it “is not

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required to make detailed findings of fact.” Fair Hous. of Marin v. Combs, 285 F.3d 899,

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906 (9th Cir. 2002).

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The following factors may be considered in deciding whether default judgment is

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appropriate under Rule 55(b): (1) the possibility of prejudice to the plaintiff, (2) the

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merits of the claims, (3) the sufficiency of the complaint, (4) the amount of money at

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stake, (5) the possibility of factual disputes, and (6) the policy favoring decisions on the

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merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In considering the

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merits and sufficiency of the complaint, the court accepts as true the complaint’s well-

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pled factual allegations, but the plaintiff must establish the damages sought in the

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complaint. See Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977). Having

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reviewed the complaint and default judgment motion, and based on the discussion held at

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the April 4 hearing, the Court finds that the Eitel factors favor default judgment in the

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amount of $8,646.00.

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A.

Possible Prejudice to Plaintiff.

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The first Eitel factor weighs in favor of default judgment. Defendant has ceased

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operations, and its representative, John Schenk, stated at the hearing that he will not hire

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new counsel or mount any kind of defense in this case. Doc. 29. If Plaintiff’s motion is

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not granted, Plaintiff will be without other recourse for recovery. See PepsiCo, Inc. v.

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Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002).
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B.

Merits of the Claims and Sufficiency of the Complaint.

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The second and third Eitel factors favor default judgment where, as in this case,

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the complaint sufficiently states a plausible claim for relief under the Rule 8 pleading

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standard. See id. at 1175; Danning v. Lavine, 572 F.2d 1386, 1388-89 (9th Cir. 1978).

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As noted above, Plaintiff alleges that Defendant violated the FDCPA by falsely

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representing the status of her debt and using false or misleading representations in its

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collection efforts.

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and Plaintiff alleges sufficient facts to show Defendant’s liability for statutory damages.

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Id. ¶¶ 34-41. The second and third factors favor default judgment.

Doc. 1 ¶¶ 42-45. This is a viable claim for relief under the statute,

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C.

Amount of Money at Stake.

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Under the fourth Eitel factor, the Court considers the amount of money at stake in

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relation to the seriousness of the defendant’s conduct. Plaintiff seeks only $1,000 in

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statutory damages, and reasonable attorneys’ fees and costs in the amounts of $7,146 and

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$500, respectively. Doc. 31 at 2. These amounts are supported by the affidavit of

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counsel. Doc. 31-1. The Court finds the requested amounts to be reasonable.

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D.

Possible Dispute Concerning Material Facts.

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Given the sufficiency of the complaint and Defendant’s intent not to defend or

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further participate in this case, “no genuine dispute of material facts would preclude

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granting [Plaintiff’s] motion.” PepsiCo, 238 F. Supp. 2d at 1177.

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E.

Policy Favoring a Decision on the Merits.

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The last factor usually weighs against default judgment given that cases “should

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be decided on their merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. The

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mere existence of Rule 55(b), however, “indicates that this preference, standing alone, is

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not dispositive.” PepsiCo, 238 F. Supp. 2d at 1177. Moreover, Defendant has made

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clear that it does not intend to defend this case on the merits. The Court therefore is not

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precluded from entering default judgment against Defendant.

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F.

Conclusion.

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Five of the six Eitel factors favor default judgment, and one factor is neutral. The
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Court therefore concludes that default judgment is appropriate. The Court will award

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$1,000 in statutory damages, $7,146 in attorneys’ fees, and $500 in costs. See 15 U.S.C.

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§ 1692(k)(a)(2)-(3).

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IT IS ORDERED:

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1.

Plaintiff’s motion for default judgment (Doc. 31) is granted.

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2.

Default judgment is entered in favor of Plaintiff and against Defendant
Stellar Recovery, Inc. in the amount of $8,646.00.

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3.

The Clerk is directed to terminate this action.

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Dated this 20th day of April, 2018.

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