Mitsui O.S.K. Lines, Ltd. v. Centurion Logistics Management et al

Filing 150

DEFAULT JUDGMENT in favor of Mitsui O.S.K. Lines, Ltd. against Centurion Logistics Services LTD. Signed by Judge Samuel Conti on June 7, 2013. (sclc2, COURT STAFF) (Filed on 6/7/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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MITSUI O.S.K. LINES, LTD.,
Plaintiff,

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For the Northern District of California

United States District Court

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v.

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ALLIED TRANSPORT SYSTEM (USA),
INC.; CENTURION LOGISTICS
MANAGEMENT; CENTURION LOGISTICS
SERVICES, LTD.; UNION LOGISTICS,
INC.; and DOES 1 through 20,

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Defendants.

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) Case No. 10-cv-5586-SC
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) ORDER GRANTING APPLICATION
) FOR DEFAULT JUDGMENT
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I.

INTRODUCTION
Now before the court is Plaintiff Mitsui O.S.K. Lines, Ltd.'s

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("Plaintiff") Application for Default Judgment against Defendant

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Centurion Logistics Services, Ltd. ("Defendant").1

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("Appl.").

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Application after ordering it to prove service on Defendant.

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Order Denying Appl. at 1-2.

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action nor opposed Plaintiff's Application.

ECF No. 133

In this Order, the Court reconsiders Plaintiff's
See

Defendant has neither appeared in this
Pursuant to Civil

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All other named defendants in this matter have been dismissed, so
Plaintiff seeks default judgment against Defendant as the only
remaining defendant in the case. See ECF No. 141 ("Order Denying
Appl.").

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Local Rule 7–1(b), the Court finds this matter appropriate for

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resolution without oral argument.
For the reasons explained below, the Court GRANTS Plaintiff's

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unopposed application for default judgment against Centurion,

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ENTERS default judgment against Centurion, and AWARDS Plaintiff

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money damages in the full amount sought: $1,918,348.60.

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II.

BACKGROUND
Plaintiff is an ocean carrier and common carrier of goods for

United States District Court

For the Northern District of California

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hire between the United States and foreign ports.

ECF No. 35

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("SAC") ¶ 3.

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Id. ¶ 4.

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to ship goods to and from the United States and foreign ports at

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various times between December 2008 and June 2010.

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All of the shipping arrangements between Plaintiff and Defendant

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were governed by an array of bills of lading, tariffs, and service

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contracts ("Agreements").

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to pay Plaintiff the entire amounts of freight due under the

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Agreements for each shipment.

Defendant is a non-vessel operating common carrier.

Plaintiff alleges that it had contracted with Defendant

Id.

Id. ¶¶ 8-11.

The Agreements required Defendant

See id.

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After a long period of nonpayment, Plaintiff sued Defendant

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for $918,348.60 in unpaid contractual fees under the Agreements.

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See id. ¶ 21.

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fraudulently caused Plaintiff to pay more than $1,000,000 in

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trucking charges as part of the shipping arrangements it had made

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with Plaintiff under the Agreements.

Separately, Plaintiff alleges that Defendant

Id. ¶¶ 27-35.

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Defendant never appeared in this action, and the Clerk of

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Court entered default at the Court's direction on January 25, 2012.

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ECF No. 88 ("Jan. 25 Order"); ECF No. 89 ("Entry of Default").

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Plaintiff filed the instant Application on September 7, 2012.

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December 27, 2012, the Court denied the Application because

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Plaintiff did not file proof that it had served Defendant with the

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Application.

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Plaintiff to file the requested proof within twenty-one days of

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that order's signature date, and allowed ten days from the date of

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such service for Defendant to file a response.

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Plaintiff filed the requested proof and Defendant did not respond.

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See ECF No. 142 ("Proof of Service").

United States District Court

For the Northern District of California

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Order Denying Appl. at 1-2.

On

The Court required

Id. at 2.

Accordingly, Plaintiff now

moves for entry of default judgment against Defendant.

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III. LEGAL STANDARD
After entry of default, the Court may enter a default

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judgment.

Fed. R. Civ. P. 55(b)(2).

Its decision whether to do

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so, while "discretionary," Aldabe v. Aldabe, 616 F.2d 1089, 1092

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(9th Cir. 1980), is guided by several factors.

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matter, the Court must "assess the adequacy of the service of

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process on the party against whom default judgment is requested."

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Bd. of Trs. of the N. Cal. Sheet Metal Workers v. Peters, No. C-00-

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0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2,

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2001).

As a preliminary

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If the Court determines that service was sufficient, it should

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consider whether the following factors support the entry of default

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judgment: (1) the possibility of prejudice to the plaintiff; (2)

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the merits of a plaintiff's substantive claim; (3) the sufficiency

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of the complaint; (4) the sum of money at stake in the action; (5)

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the possibility of a dispute concerning material facts; (6) whether

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the default was due to excusable neglect; and (7) the strong policy

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underlying the Federal Rules of Civil Procedure favoring decisions

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on the merits.

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1986).

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allegations of the complaint, except those relating to the amount

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of damages, will be taken as true."

Geddes v. United Fin. Group,

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559 F.2d 557, 560 (9th Cir. 1977).

However, "necessary facts not

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contained in the pleadings, and claims which are legally

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insufficient, are not established by default."

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Co., 980 F.2d 1261, 1267 (9th Cir. 1992).

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.

"The general rule of law is that upon default the factual

Cripps v. Life Ins.

United States District Court

For the Northern District of California

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IV.

DISCUSSION

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A.

Procedural Requirements

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Before the Court may consider whether to exercise its

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discretion to enter default judgment, it must be satisfied that the

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procedural prerequisites, including adequate service of process,

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have been met.

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238 F. Supp. 2d 1172, 1175 (C.D. Cal. 2002).

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Court has already ruled that Plaintiff perfected service on

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Defendant in this action as of September 26, 2011.

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at 3.

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to file proof that the Application had been served on Defendant.

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Order Denying Appl. at 2.

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Application and the Court's order denying Plaintiff's first

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Application were properly served on Defendant, and Defendant has

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still not appeared in this action.

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Defendant, as a corporate entity, is not "a minor or incompetent

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person," and is not otherwise precluded from having default

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judgment entered against it.

See, e.g., PepsiCo, Inc. v. California Sec. Cans,
Here, they have.

The

Jan. 25 Order

The only deficiency in Plaintiff's application was a failure

Plaintiff has now shown that the

ECF No. 142.

Moreover,

Fed. R. Civ. P. 55(b)(2).

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Nor does

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the default judgment sought against Centurion "differ in kind from,

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or exceed in amount" what Plaintiff demanded in its Second Amended

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Complaint.

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Fed. R. Civ. P. 54(c).

The Court concludes that the procedural requisites of entering

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default judgment are satisfied here and therefore proceeds to

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considering whether to exercise its discretion to enter default

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judgment against Centurion in light of the Eitel factors.

Applying the factors articulated by the Ninth Circuit in

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United States District Court

B.

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For the Northern District of California

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Eitel, the Court finds the factors weigh in favor of granting

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Plaintiff's Application.

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Eitel Factors

The first factor considers whether the plaintiff would suffer

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prejudice if default judgment is not entered.

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Supp. 2d at 1177.

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against a defendant, a plaintiff has no other alternative by which

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to recover damages.

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would be prejudiced if default judgment is not granted.

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See PepsiCo, 238 F.

In general, where default has been entered

Id.

Therefore, the Court finds Plaintiff

The second and third Eitel factors require that a plaintiff's

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allegations state a claim upon which it can recover.

In the

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instant action, Plaintiff claims that Defendant breached the terms

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of its Agreements with Plaintiff by failing to accurately label the

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contents of shipments, which resulted in underpayment to Plaintiff

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because the Agreements set rates based partly on the shipments'

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contents.

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to Plaintiff the place of receipt of hundreds of shipments, thus

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inducing Plaintiff to pay for additional overland shipping that

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allegedly never occurred.

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to state claims for breach of contract under the Shipping Act, as

Plaintiff further claims that Defendant misrepresented

Plaintiffs' allegations are sufficient

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well as misrepresentation.

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second and third Eitel factors weigh in favor of default judgment.

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Accordingly, the Court finds that the

As to the fourth Eitel factor, the Court must consider "the

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amount of money at stake in relation to the seriousness of

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defendant's conduct."

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Plaintiffs seek a total of $1,918,348.60, no mean sum.

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Plaintiff's damages are consistent with the amount owing under the

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Agreements, since $918,348.60 of the total is based on the fees

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Defendant was required to pay Plaintiff, and the remaining

PepsiCo, 238 F. Supp. 2d at 1176.

Here
However,

United States District Court

For the Northern District of California

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$1,000,000 comes from the fraudulent trucking fees that Defendant

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tricked Plaintiff into paying, all amounts that Plaintiff proves

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through documentation and declaration of its employees. See SAC ¶¶

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22-35; ECF No. 134 ("Gaskins-Kennedy Decl.") (totaling unpaid

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fees); ECF Nos. 135-36 ("Minck Decls.") (totaling fraudulent

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trucking charges).

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favor of the entry of default judgment.

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The Court finds that this factor weighs in

With respect to the fifth Eitel factor, the material facts of

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the instant case are not reasonably likely to be subject to

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dispute.

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declarations supporting both their liability and damages claims.

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Additionally, as the Court may assume the truth of the facts pled

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in the Complaint (except with respect to damages) after the clerk's

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entry of default, it is unlikely that any genuine issue of material

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fact exists.

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answer Plaintiff's complaint or respond to Plaintiff's Application

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for Default Judgment further supports this conclusion.

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Court finds that this factor weighs in favor of entry of default

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judgment.

Plaintiff has pled factual allegations and provided

See Geddes, 559 F.2d at 560.

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Defendant's failure to

Thus, the

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As to the sixth factor, there is no support for finding that

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Defendant's default is due to excusable neglect.

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served with the complaint and summons in this action over a year

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ago and has yet to enter an appearance.

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default cannot be attributed to excusable neglect.

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Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 995, 1005 (N.D.

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Cal. 2001).

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default judgment.

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Defendant was

In such circumstances,
See Shanghai

The Court finds that this factor supports entry of

The final Eitel factor, underscoring the policy favoring

United States District Court

For the Northern District of California

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decisions on the merits, does not save this action from default

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judgment.

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to answer Plaintiff['s] Complaint makes a decision on the merits

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impractical, if not impossible."

This policy is not dispositive and "Defendant's failure

PepsiCo, 238 F. Supp. 2d at 11.

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C.

Damages

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Plaintiff seeks damages based on Defendant's unpaid fees and

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fraudulent trucking charges.

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damages with evidence.

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Trust Fund v. Moore Elec. Contracting, Inc., No. 11-CV-00942-LHK,

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2012 WL 1623236, at *2 (N.D. Cal. May 8, 2012).

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Plaintiff must "prove up" these

Orange Co. Elec. Ind. Health & Welfare

After reviewing the Application and the evidence submitted,

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the Court finds that the amount sought by Plaintiff is appropriate.

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Plaintiff provided adequate evidence supporting the amount of

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unpaid fees owing under the Agreements prior to the filing of the

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instant action, including a declaration from Frances Gaskins-

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Kennedy, Plaintiff's outside auditor in charge of auditing the

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Agreements and accounts of Plaintiff and Defendant.

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Kennedy Decl. ¶¶ 1-9.

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an explanation of the auditing process that led to the discovery of

Gaskins-

Ms. Gaskins-Kennedy's declaration includes

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Defendant's unpaid fees.

Id.

Plaintiff also included a

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declaration from Warrin Minck, Plaintiff's senior internal auditor,

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who examined Plaintiff's documents related to the fraudulent

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trucking shipments and provided the total amount Plaintiff paid for

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the fraudulent shipments.

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documents comport with the amount Plaintiff requests in its

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Application and are sufficient to prove up Plaintiff's damages.

Minck Decl. ¶¶ 1-9, Exs. A-G.

These

Prior to issuing this Order, the Court requested that

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United States District Court

D.

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For the Northern District of California

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Remaining Issues

Plaintiff also provide briefing on issues of joint and several

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liability, as well as the possibility that this judgment could

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result in double recovery based on the Court's findings of fact and

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conclusions of law in two recently decided cases, 10-cv-05591-SC

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(the "'91 Case") and 11-cv-02861-SC (collectively the "Decided

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Cases"), against other defendants for claims similar to those

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Plaintiff asserted against Defendant in this matter.

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The Court reviewed Plaintiff's and Decided Cases Defendants

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Seamaster Logistics and Summit Logistics International's briefs on

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those issues.

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satisfied that entering default judgment in the amount requested

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here will not result in a double recovery for Plaintiff.

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the Court declines to find joint and several liability among

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Defendant in this matter and any defendants in the Decided Cases,

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since Plaintiff provides no legal justification for doing so.

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find such liability when those defendants did not litigate this

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issue would be a breach of due process.

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///

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///

ECF No. 146; '91 Case ECF No. 217.

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ECF No. 145.

The Court is

However,

To

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V.

CONCLUSION
For the reasons described above, the Court GRANTS Plaintiff

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Mitsui O.S.K. Lines, Ltd.'s Application for Default Judgment

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against Defendant Centurion Logistics Services, Ltd., ENTERS

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default judgment against Defendant, and AWARDS Plaintiff money

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damages in the full amount sought: $1,918,348.60.

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IT IS SO ORDERED.

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United States District Court

For the Northern District of California

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Dated: June __, 2013
UNITED STATES DISTRICT JUDGE

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