UBS Financial Services Incorporated et al v. Harrison

Filing 19

DEFAULT JUDGMENT - IT IS HEREBY ORDERED that UBS Financial Services Inc. and UBS Credit Corp.'s Motion for Entry of Default Judgment (Doc. 16 ) is GRANTED. The Clerk of the Court is kindly directed to enter default judgment on the July 29, 2 021, Arbitration Award (Doc. 1 -2) under 9 U.S.C. § 13, and terminate this action. UBS is entitled to $736,347.52 in damages plus post judgment interest at $33.01 per diem from July 16, 2021, until the Award is paid in full. IT IS FINALLY ORDERED that UBS Financial Services Inc. and UBS Credit Corp. may file a motion for costs and attorneys' fees within fourteen (14) days of the entry of this Order. See document for complete details. Signed by Judge Diane J Humetewa on 5/19/2023. (WLP)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

UBS Financial Services Incorporated, et al.,
Petitioners,

10
11

v.

12

Harold Walter Harrison,

13

No. CV-22-00386-PHX-DJH
ORDER

Respondent.

14
15

On September 13, 2022, the Clerk of Court entered Default against Defendant

16

Harold Walter Harrison (“Defendant”) after he failed to appear or otherwise defend against

17

UBS Financial Services Inc. and UBS Credit Corp.’s (collectively “UBS”) petition to

18

confirm an arbitration award. (Doc. 13); See Fed. R. Civ. P. 55(a). On October 28, 2022,

19

Plaintiff filed a Motion for Entry of Default Judgment (Doc. 16). The Court considered

20

the Motion and found subject matter jurisdiction over the action, personal jurisdiction over

21

Defendant, and that the seven relevant factors under Eitel v. McCool, 782 F.2d 1470, 1471-

22

–72 (9th Cir. 1986) supported an entry of default judgment against Defendant. (See

23

generally Doc. 17 at 4–8). Nonetheless, the Court deferred on conducting a damages

24

analysis because UBS had not yet provided copies of the alleged arbitration agreements as

25

required by Section 13 of the Federal Arbitration Agreement (“FAA”). 9 U.S.C. § 13(a).

26

UBS has since done so. (Doc. 18). For the following reasons, the Court grants UBS’

27

Motion for Entry of Default Judgment on the basis of the underlying arbitration award.

28

I.

Legal Standard

1

Having found that entry of default judgment is proper under Eitel v. McCool, 782

2

F.2d 1470, 1471–72 (9th Cir. 1986), the Court must determine what damages UBS is

3

entitled to. In contrast to the other allegations in a complaint, allegations pertaining to

4

damages are not automatically taken as true. TeleVideo Sys., Inc., 826 F.2d at 917–18.

5

“The plaintiff is required to provide evidence of its damages, and the damages sought must

6

not be different in kind or amount from those set forth in the complaint.” Amini Innovation

7

Corp. v. KTY Int’l Mktg., 768 F. Supp. 2d 1049, 1054 (C.D. Cal. 2011); Fed. R. Civ. P.

8

54(c). This is so a defendant may know from the complaint what the potential award may

9

be, and the defendant may then decide whether a response is worthwhile. See e.g., Silge v.

10

Merz, 510 F.3d 157, 160 (2d Cir. 2007) (limiting damages in a default judgment award to

11

what is “specified in the [complaint’s] ‘demand for judgment’. . . ensures that a defendant

12

who is considering default can look at the damages clause, satisfy himself that he is willing

13

to suffer judgment in that amount, and then default without the need to hire a lawyer”).

14

II.

Damages Analysis

15

Defendant obtained seven loans from UBS totaling to $897,104.84 (the “UBS

16

Loans”). (Doc. 1 at ¶¶ 7– 8). He executed seven promissory notes in connection with his

17

UBS Loans (Doc. 18-1), each of which contained an arbitration clause requiring the parties

18

to resolve disputes through arbitration conducted by the Financial Industry Regulation

19

Authority (“FINRA”).

20

Defendant’s failure to make payments on the UBS Loans resulted in the underlying July

21

29, 2021, Arbitration Award (Doc. 1-2) (the “Award”). See UBS Fin. Servs. Inc. v.

22

Harrison, No. 19-03751 (Fin. Indus. Regul. Auth. July 29, 2021) (Kalish, Arb.).

23

Motion for Default Judgment, UBS seeks to recover damages as calculated in the Award.

24

(Doc. 16 at ¶ 25).

25
26
27
28

(Id. at 4–5, 10–11, 16–17, 22–23, 28–29, 34–35, 40–42).

In its

The Award was issued in favor of UBS and against Defendant and provided for the
following:
-

$635,492.85 in compensatory damages on the seven unpaid UBS loan
balances;

-2-

-

$58.328.67 in interest accrued from Defendant’s voluntary
resignation on September 12, 2016, through July 15, 2021;

3

-

$33.01 per diem from July 16, 2021, until the Award is paid in full;

4

-

$40,376.00 in attorneys’ fees;

5

-

$2,150.00 in FINRA fees (this amount excludes UBS’s filing and
FINRA membership fees (see Doc. 1-2 at 5)).

1
2

6
7
8
9
10

(Doc. 1-2 at 3–6). This totals to $736,347.52 plus post judgment interest at $33.01 per
diem from July 16, 2021, until the Award is paid in full. Indeed, this request does not differ
in kind or amount from those set forth in the Complaint. (Compare Doc. 1 at ¶ 14 with
Doc. 16 at ¶¶ 9, 16).

11

“The Court may enter a default judgment without a damages hearing when . . . ‘the

12

amount claimed is a liquidated sum or capable of mathematical calculation.’” Capitol

13
14
15
16
17
18
19
20
21

Specialty Ins. Corp. v. Chaldean LLC, 2022 U.S. Dist. LEXIS 132713, at *12 (D. Ariz.
July 25, 2022) (quoting HTS, Inc. v. Boley, 954 F. Supp. 2d 927, 947 (D. Ariz.
2013)); Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). Here, all measures of
damages are definite sums that are calculated according to the Award. Defendant was also
put on notice of these damages because he was served with a copy of the Award when it
was issued on July 29, 2021. (Doc. 1-2 at 7). Therefore, the Court can calculate UBS’s
total alleged damages with certainty and a damages hearing is unnecessary. See Capitol
Specialty Ins. Corp., 2022 U.S. Dist. LEXIS 132713, at *12.
III.

22
23
24
25
26
27
28

Conclusion
In sum, the Court finds jurisdiction over the present action and that the relevant Eitel

factors support an entry of default judgment against Defendant. The Award serves the
basis for UBS’s request for damages and so the Court can calculate damages with certainty.
///
Accordingly.
IT IS HEREBY ORDERED that UBS Financial Services Inc. and UBS Credit
Corp.’s Motion for Entry of Default Judgment (Doc. 16) is GRANTED. The Clerk of the
-3-

1

Court is kindly directed to enter default judgment on the July 29, 2021, Arbitration Award

2

(Doc. 1-2) under 9 U.S.C. § 13, and terminate this action. UBS is entitled to $736,347.52

3

in damages plus post judgment interest at $33.01 per diem from July 16, 2021, until the

4

Award is paid in full.

5

IT IS FINALLY ORDERED that UBS Financial Services Inc. and UBS Credit

6

Corp. may file a motion for costs and attorneys’ fees within fourteen (14) days of the

7

entry of this Order

8

Dated this 19th day of May, 2023.

9
10
11
12

Honorable Diane J. Humetewa
United States District Judge

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

-4-