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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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 MITSUI O.S.K. LINES, LTD., Plaintiff, 10 For the Northern District of California United States District Court 9 v. 11 12 ALLIED TRANSPORT SYSTEM (USA), INC.; CENTURION LOGISTICS MANAGEMENT; CENTURION LOGISTICS SERVICES, LTD.; UNION LOGISTICS, INC.; and DOES 1 through 20, 13 14 15 Defendants. 16 ) Case No. 10-cv-5586-SC ) ) ORDER GRANTING APPLICATION ) FOR DEFAULT JUDGMENT ) ) ) ) ) ) ) ) ) ) 17 18 I. INTRODUCTION Now before the court is Plaintiff Mitsui O.S.K. Lines, Ltd.'s 19 20 ("Plaintiff") Application for Default Judgment against Defendant 21 Centurion Logistics Services, Ltd. ("Defendant").1 22 ("Appl."). 23 Application after ordering it to prove service on Defendant. 24 Order Denying Appl. at 1-2. 25 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 26 27 28 1 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."). 1 Local Rule 7–1(b), the Court finds this matter appropriate for 2 resolution without oral argument. For the reasons explained below, the Court GRANTS Plaintiff's 3 4 unopposed application for default judgment against Centurion, 5 ENTERS default judgment against Centurion, and AWARDS Plaintiff 6 money damages in the full amount sought: $1,918,348.60. 7 8 9 II. BACKGROUND Plaintiff is an ocean carrier and common carrier of goods for United States District Court For the Northern District of California 10 hire between the United States and foreign ports. ECF No. 35 11 ("SAC") ¶ 3. 12 Id. ¶ 4. 13 to ship goods to and from the United States and foreign ports at 14 various times between December 2008 and June 2010. 15 All of the shipping arrangements between Plaintiff and Defendant 16 were governed by an array of bills of lading, tariffs, and service 17 contracts ("Agreements"). 18 to pay Plaintiff the entire amounts of freight due under the 19 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. 20 After a long period of nonpayment, Plaintiff sued Defendant 21 for $918,348.60 in unpaid contractual fees under the Agreements. 22 See id. ¶ 21. 23 fraudulently caused Plaintiff to pay more than $1,000,000 in 24 trucking charges as part of the shipping arrangements it had made 25 with Plaintiff under the Agreements. Separately, Plaintiff alleges that Defendant Id. ¶¶ 27-35. 26 Defendant never appeared in this action, and the Clerk of 27 Court entered default at the Court's direction on January 25, 2012. 28 ECF No. 88 ("Jan. 25 Order"); ECF No. 89 ("Entry of Default"). 2 1 Plaintiff filed the instant Application on September 7, 2012. 2 December 27, 2012, the Court denied the Application because 3 Plaintiff did not file proof that it had served Defendant with the 4 Application. 5 Plaintiff to file the requested proof within twenty-one days of 6 that order's signature date, and allowed ten days from the date of 7 such service for Defendant to file a response. 8 Plaintiff filed the requested proof and Defendant did not respond. 9 See ECF No. 142 ("Proof of Service"). United States District Court For the Northern District of California 10 Order Denying Appl. at 1-2. On The Court required Id. at 2. Accordingly, Plaintiff now moves for entry of default judgment against Defendant. 11 12 13 III. LEGAL STANDARD After entry of default, the Court may enter a default 14 judgment. Fed. R. Civ. P. 55(b)(2). Its decision whether to do 15 so, while "discretionary," Aldabe v. Aldabe, 616 F.2d 1089, 1092 16 (9th Cir. 1980), is guided by several factors. 17 matter, the Court must "assess the adequacy of the service of 18 process on the party against whom default judgment is requested." 19 Bd. of Trs. of the N. Cal. Sheet Metal Workers v. Peters, No. C-00- 20 0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2, 21 2001). As a preliminary 22 If the Court determines that service was sufficient, it should 23 consider whether the following factors support the entry of default 24 judgment: (1) the possibility of prejudice to the plaintiff; (2) 25 the merits of a plaintiff's substantive claim; (3) the sufficiency 26 of the complaint; (4) the sum of money at stake in the action; (5) 27 the possibility of a dispute concerning material facts; (6) whether 28 the default was due to excusable neglect; and (7) the strong policy 3 1 underlying the Federal Rules of Civil Procedure favoring decisions 2 on the merits. 3 1986). 4 allegations of the complaint, except those relating to the amount 5 of damages, will be taken as true." Geddes v. United Fin. Group, 6 559 F.2d 557, 560 (9th Cir. 1977). However, "necessary facts not 7 contained in the pleadings, and claims which are legally 8 insufficient, are not established by default." 9 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 10 11 IV. DISCUSSION 12 A. Procedural Requirements 13 Before the Court may consider whether to exercise its 14 discretion to enter default judgment, it must be satisfied that the 15 procedural prerequisites, including adequate service of process, 16 have been met. 17 238 F. Supp. 2d 1172, 1175 (C.D. Cal. 2002). 18 Court has already ruled that Plaintiff perfected service on 19 Defendant in this action as of September 26, 2011. 20 at 3. 21 to file proof that the Application had been served on Defendant. 22 Order Denying Appl. at 2. 23 Application and the Court's order denying Plaintiff's first 24 Application were properly served on Defendant, and Defendant has 25 still not appeared in this action. 26 Defendant, as a corporate entity, is not "a minor or incompetent 27 person," and is not otherwise precluded from having default 28 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). 4 Nor does 1 the default judgment sought against Centurion "differ in kind from, 2 or exceed in amount" what Plaintiff demanded in its Second Amended 3 Complaint. 4 Fed. R. Civ. P. 54(c). The Court concludes that the procedural requisites of entering 5 default judgment are satisfied here and therefore proceeds to 6 considering whether to exercise its discretion to enter default 7 judgment against Centurion in light of the Eitel factors. Applying the factors articulated by the Ninth Circuit in 10 United States District Court B. 9 For the Northern District of California 8 Eitel, the Court finds the factors weigh in favor of granting 11 Plaintiff's Application. 12 Eitel Factors The first factor considers whether the plaintiff would suffer 13 prejudice if default judgment is not entered. 14 Supp. 2d at 1177. 15 against a defendant, a plaintiff has no other alternative by which 16 to recover damages. 17 would be prejudiced if default judgment is not granted. 18 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 19 allegations state a claim upon which it can recover. In the 20 instant action, Plaintiff claims that Defendant breached the terms 21 of its Agreements with Plaintiff by failing to accurately label the 22 contents of shipments, which resulted in underpayment to Plaintiff 23 because the Agreements set rates based partly on the shipments' 24 contents. 25 to Plaintiff the place of receipt of hundreds of shipments, thus 26 inducing Plaintiff to pay for additional overland shipping that 27 allegedly never occurred. 28 to state claims for breach of contract under the Shipping Act, as Plaintiff further claims that Defendant misrepresented Plaintiffs' allegations are sufficient 5 1 well as misrepresentation. 2 second and third Eitel factors weigh in favor of default judgment. 3 Accordingly, the Court finds that the As to the fourth Eitel factor, the Court must consider "the 4 amount of money at stake in relation to the seriousness of 5 defendant's conduct." 6 Plaintiffs seek a total of $1,918,348.60, no mean sum. 7 Plaintiff's damages are consistent with the amount owing under the 8 Agreements, since $918,348.60 of the total is based on the fees 9 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 10 $1,000,000 comes from the fraudulent trucking fees that Defendant 11 tricked Plaintiff into paying, all amounts that Plaintiff proves 12 through documentation and declaration of its employees. See SAC ¶¶ 13 22-35; ECF No. 134 ("Gaskins-Kennedy Decl.") (totaling unpaid 14 fees); ECF Nos. 135-36 ("Minck Decls.") (totaling fraudulent 15 trucking charges). 16 favor of the entry of default judgment. 17 The Court finds that this factor weighs in With respect to the fifth Eitel factor, the material facts of 18 the instant case are not reasonably likely to be subject to 19 dispute. 20 declarations supporting both their liability and damages claims. 21 Additionally, as the Court may assume the truth of the facts pled 22 in the Complaint (except with respect to damages) after the clerk's 23 entry of default, it is unlikely that any genuine issue of material 24 fact exists. 25 answer Plaintiff's complaint or respond to Plaintiff's Application 26 for Default Judgment further supports this conclusion. 27 Court finds that this factor weighs in favor of entry of default 28 judgment. Plaintiff has pled factual allegations and provided See Geddes, 559 F.2d at 560. 6 Defendant's failure to Thus, the 1 As to the sixth factor, there is no support for finding that 2 Defendant's default is due to excusable neglect. 3 served with the complaint and summons in this action over a year 4 ago and has yet to enter an appearance. 5 default cannot be attributed to excusable neglect. 6 Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 995, 1005 (N.D. 7 Cal. 2001). 8 default judgment. 9 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 10 decisions on the merits, does not save this action from default 11 judgment. 12 to answer Plaintiff['s] Complaint makes a decision on the merits 13 impractical, if not impossible." This policy is not dispositive and "Defendant's failure PepsiCo, 238 F. Supp. 2d at 11. 14 C. Damages 15 Plaintiff seeks damages based on Defendant's unpaid fees and 16 fraudulent trucking charges. 17 damages with evidence. 18 Trust Fund v. Moore Elec. Contracting, Inc., No. 11-CV-00942-LHK, 19 2012 WL 1623236, at *2 (N.D. Cal. May 8, 2012). 20 Plaintiff must "prove up" these Orange Co. Elec. Ind. Health & Welfare After reviewing the Application and the evidence submitted, 21 the Court finds that the amount sought by Plaintiff is appropriate. 22 Plaintiff provided adequate evidence supporting the amount of 23 unpaid fees owing under the Agreements prior to the filing of the 24 instant action, including a declaration from Frances Gaskins- 25 Kennedy, Plaintiff's outside auditor in charge of auditing the 26 Agreements and accounts of Plaintiff and Defendant. 27 Kennedy Decl. ¶¶ 1-9. 28 an explanation of the auditing process that led to the discovery of Gaskins- Ms. Gaskins-Kennedy's declaration includes 7 1 Defendant's unpaid fees. Id. Plaintiff also included a 2 declaration from Warrin Minck, Plaintiff's senior internal auditor, 3 who examined Plaintiff's documents related to the fraudulent 4 trucking shipments and provided the total amount Plaintiff paid for 5 the fraudulent shipments. 6 documents comport with the amount Plaintiff requests in its 7 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 10 United States District Court D. 9 For the Northern District of California 8 Remaining Issues Plaintiff also provide briefing on issues of joint and several 11 liability, as well as the possibility that this judgment could 12 result in double recovery based on the Court's findings of fact and 13 conclusions of law in two recently decided cases, 10-cv-05591-SC 14 (the "'91 Case") and 11-cv-02861-SC (collectively the "Decided 15 Cases"), against other defendants for claims similar to those 16 Plaintiff asserted against Defendant in this matter. 17 The Court reviewed Plaintiff's and Decided Cases Defendants 18 Seamaster Logistics and Summit Logistics International's briefs on 19 those issues. 20 satisfied that entering default judgment in the amount requested 21 here will not result in a double recovery for Plaintiff. 22 the Court declines to find joint and several liability among 23 Defendant in this matter and any defendants in the Decided Cases, 24 since Plaintiff provides no legal justification for doing so. 25 find such liability when those defendants did not litigate this 26 issue would be a breach of due process. 27 /// 28 /// ECF No. 146; '91 Case ECF No. 217. 8 ECF No. 145. The Court is However, To 1 2 V. CONCLUSION For the reasons described above, the Court GRANTS Plaintiff 3 Mitsui O.S.K. Lines, Ltd.'s Application for Default Judgment 4 against Defendant Centurion Logistics Services, Ltd., ENTERS 5 default judgment against Defendant, and AWARDS Plaintiff money 6 damages in the full amount sought: $1,918,348.60. 7 8 IT IS SO ORDERED. 9 United States District Court For the Northern District of California 10 11 7 Dated: June __, 2013 UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9

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