Vlad Malenko (USA) LLC v. Shvartsman et al

Filing 15

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Allison Claire on 07/08/2024 RECOMMENDING that the 12 Motion for Default Judgment be denied without prejudice. Referred to Judge Dale A. Drozd. Objections due within 21 days after being served with these Findings and Recommendations. (Nair, C)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 12 VLAD MALENKO (USA) LLC, a California Limited Liability Corporation, Plaintiff, 13 14 15 16 v. No. 2:24-cv-00121 DAD AC FINDINGS AND RECOMMENDATIONS DIANA SHVARTSMAN and MIRAGE FINE ART, A New Jersey Corporation, Defendants. 17 18 The Clerk of Court entered default against both defendants in this case on March 1, 2024. 19 Plaintiff has filed a motion for default judgment against both defendants. ECF No. 12. There are 20 several problems with the motion that prevent it from being granted at this time. First, neither the 21 motion itself nor the attached declarations indicate that the motion has been served on defendants. 22 Second, the motion summarily seeks judgment in plaintiff’s favor on the basis of the Clerk’s 23 entry of default, without providing any argument that the legal requirements for default judgment 24 are satisfied. See ECF No. 12 at 1-2. 25 “A defendant’s default does not automatically entitle the plaintiff to a court-ordered 26 judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing 27 Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986)); see Fed. R. Civ. P. 55(b) (governing 28 the entry of default judgments). Instead, the decision to grant or deny an application for default 1 1 judgment lies within the district court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 2 (9th Cir. 1980). In making this determination, the court will consider the following factors: 3 4 5 6 (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. 7 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 8 disfavored. Id. at 1472. 9 Generally, once default is entered by the Clerk, well-pleaded factual allegations in the 10 operative complaint are taken as true, except for those allegations relating to damages. TeleVideo 11 Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam). Although well- 12 pleaded allegations in the complaint are admitted by a defendant’s failure to respond, “necessary 13 facts not contained in the pleadings, and claims which are legally insufficient, are not established 14 by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992). 15 Because the motion does not brief the factors relevant to the propriety of default 16 judgment, and because the motion has not been served on defendants, the undersigned 17 recommends that it be denied without prejudice. Any second motion for default judgment under 18 Fed. R. Civ. Proc. 55(b)(2) should address the factors set forth in Eitel v. McCool, supra, 19 including discussion of the elements of liability on each of plaintiff’s claims and how the factual 20 allegations of the complaint support all of them. A second motion for default judgment should 21 also contain a declaration stating that defendants were served with the motion. 22 23 24 For the reasons set forth above, IT IS RECOMMENDED that the motion for default judgment (ECF NO. 12) be DENIED without prejudice. These findings and recommendations are submitted to the United States District Judge 25 assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within twenty-one days 26 after being served with these findings and recommendations, any party may file written 27 objections with the court and serve a copy on all parties. Id.; see also Local Rule 304(b). Such a 28 document should be captioned “Objections to Magistrate Judge’s Findings and 2 1 Recommendations.” Any response to the objections shall be filed with the court and served on all 2 parties within fourteen days after service of the objections. Local Rule 304(d). Failure to file 3 objections within the specified time may waive the right to appeal the District Court’s order. 4 Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998), as amended on denial of reh’g (Nov. 24, 5 1998); Martinez v. Ylst, 951 F.2d 1153, 1156-57 (9th Cir. 1991). 6 DATED: July 8, 2024 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3

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