Accor Franchising North America, LLC v. Elohim Ent. Inc. et al

Filing 26

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Carolyn K. Delaney on 1/24/13 RECOMMENDING that Plaintiff's 19 24 Motions for default judgment against defendant Elohim Ent., Inc. be granted in the amount of $114,805.63. Referred to Judge Garland E. Burrell, Jr.; Objections to F&R due within 14 days after being served with these findings and recommendations. (Meuleman, A)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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ACCOR FRANCHISING NORTH
AMERICA, LLC,
Plaintiff,

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No. 2:12-cv-0762 GEB CKD

vs.
ELOHIM ENT. INC., et al.,
Defendants.

FINDINGS & RECOMMENDATIONS
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Presently before the court is plaintiff’s motion for default judgment against

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defendant Elohim Ent. Inc. This matter is submitted without oral argument. The undersigned

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has fully considered the briefs and record in this case and, for the reasons stated below, will

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recommend that plaintiff’s motion for default judgment be granted.

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In this action, plaintiff seeks damages for breach of contract-franchise agreement,

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breach of contract--guaranty, audit demand/accounting and unjust enrichment. Plaintiff’s claims

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arise out of a franchise agreement for operation of a Motel 6 at 3240 Mather Field Road in

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Rancho Cordova, California. The record reflects that defendant Elohim Ent. Inc. was properly

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served with process by personally serving the summons and complaint on the California

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Secretary of State on July 12, 2012 pursuant to California Corporations Code section 1702(a) and
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the order of the District Judge filed June 6, 2012. Default against defendant Elohim Ent. Inc was

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entered on December 21, 2012. Plaintiff seeks an entry of default judgment in the total amount

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of $114,805.63, comprising $20,060.78 for past due franchise fees, $75,000.00 for liquidated

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damages, prejudgment interest of $7,129.55 and $12,615.30 for attorneys fees and costs.

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Entry of default effects an admission of all well-pleaded allegations of the

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complaint by the defaulted party. Geddes v. United Financial Group, 559 F.2d 557 (9th Cir.

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1977). The court finds the well pleaded allegations of the complaint state a claim for which

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relief can be granted. Anderson v. Air West, 542 F.2d 1090, 1093 (9th Cir. 1976). The

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application for default judgment and the exhibits and affidavits attached thereto also support the

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finding that plaintiff is entitled to the relief in the form of monetary damages requested in the

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prayer for default judgment, which does not differ in kind from the relief requested in the

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complaint. Henry v. Sneiders, 490 F.2d 315, 317 (9th Cir.), cert. denied, 419 U.S. 832 (1974).

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The amount sought is supported by the affidavits submitted in support of the motion for default

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judgment. Savas Declaration; Complaint, Exhibit A, Franchise Agreement, ¶ 13.6 (provision

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allowing for liquidated damages in the amount of $75,000.00). Plaintiff also requests

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prejudgment interest at the rate of 6%, calculated under Texas law. Complaint, Exhibit A,

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Franchise Agreement, ¶ 4.7. The franchise agreement provides for the application of Texas law;

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prejudgment interest should therefore be awarded pursuant to the terms of the contract. Plaintiff

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is also entitled to attorneys fees under the franchise agreement at issue here and the amount

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claimed is reasonable. Ganzberger Declaration; Complaint, Exhibit A, Franchise Agreement, ¶

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22.8. There are no policy considerations which preclude the entry of default judgment of the type

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requested. See Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir. 1986) (factors that may be

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considered by the court are possibility of prejudice to the plaintiff, merits of plaintiff’s

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substantive claim, sufficiency of the complaint, sum of money at stake in the action; possibility

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of a dispute concerning material facts; whether the default was due to excusable neglect, and

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strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits).
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For the foregoing reasons, IT IS HEREBY RECOMMENDED that plaintiff’s

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motion for default judgment (dkt. nos. 19, 24) against defendant Elohim Ent. Inc. be granted in

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the amount of $114,805.63.

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These findings and recommendations are submitted to the United States District

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Judge assigned to this action, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within

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fourteen days after being served with these findings and recommendations, any party may file

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written objections with the court and serve a copy on all parties. Such a document should be

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captioned “Objections to Magistrate Judge’s Findings and Recommendations.” Any reply to the

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objections shall be served and filed within seven days after service of the objections. The parties

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are advised that failure to file objections within the specified time may waive the right to appeal

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the District Court’s order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

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Dated: January 24, 2013

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_____________________________________
CAROLYN K. DELANEY
UNITED STATES MAGISTRATE JUDGE

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accor0762.def

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