Bell-Sparrow v. Wiltz et al

Filing 63

ORDER DENYING WITHOUT PREJUDICE PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANTS WILTZ AND MONE'T (Illston, Susan) (Filed on 2/11/2014) (Additional attachment(s) added on 2/11/2014: # 1 Certificate/Proof of Service) (tfS, COURT STAFF).

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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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ARLENE BELL-SPARROW,

No. C 12-02782 SI

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Plaintiff,

ORDER DENYING WITHOUT
PREJUDICE PLAINTIFF’S MOTION
FOR DEFAULT JUDGMENT AGAINST
DEFENDANTS WILTZ AND MONE’T

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United States District Court
For the Northern District of California

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v.
PAUL WILTZ, MONE’T INC., and WONDA
MCGOWAN
Defendants.

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Now before the Court is a motion by plaintiff Arlene Bell-Sparrow for default judgment against

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defendants Paul Wiltz and Mone’t Inc. The Court held a hearing on the matter on February 7, 2013.

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Having considered plaintiff’s arguments, the Court hereby DENIES WITHOUT PREJUDICE plaintiff’s

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motion for default judgment.

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BACKGROUND

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The following allegations are taken from plaintiff’s first amended complaint (“FAC”).

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Defendant Mone’t Inc. is an Illinois corporation that provides funding for commercial property. Docket

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No. 28, FAC at 6. Defendant Paul Wiltz is the owner and CEO of Mone’t, and defendant Wonda

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McGowan is the Executive Vice-President of Mone’t. Id.

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Around August 2009, plaintiff contacted Mr. Wiltz about helping her with the purchase of a

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commercial property. FAC at 6. Mr. Wiltz forwarded plaintiff a retention agreement. Id. at 6, Ex. 66.6.

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Plaintiff states that the contract contained a clause requiring a non-refundable up-front fee of $11,500.

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Id. After reading the clause, plaintiff called Mr. Wiltz and requested that the contract be changed so that

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she would receive the $11,500 fee back if the commercial project was not funded. Id. Mr. Wiltz agreed

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to change the terms of the contract and stated that he would reimburse plaintiff the $11,500 if the project

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did not go through. Id. at 6-7, ¶¶ 2-3. Plaintiff entered into the contract with Mone’t and paid the

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$11,500 fee. FAC ¶¶ 1, 49.

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Plaintiff found a commercial property called Emerald Square Apartments listed for $4,700,000,

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and plaintiff’s real estate agent forwarded that information to Mr. Wiltz in December 2009. FAC ¶ 6.

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Mr. Wiltz informed plaintiff that to obtain funding for the property, plaintiff would have to pay an

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additional $60,000.1 Id. ¶¶ 8, 11. Plaintiff states that this additional cost was not required under the

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terms of the contract. Id. ¶¶ 107-08. Plaintiff did not have the additional money, so on January 20,

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2010, plaintiff sent an email to Mr. Wiltz and Ms. McGowan requesting a refund of her $11,500 fee.2

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Id. ¶¶ 8-9.

United States District Court
For the Northern District of California

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Plaintiff alleges that through several communications, Mr. Wiltz, Ms. McGowan, and Mr.

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Wiltz’s attorney represented to plaintiff that she would be refunded the $11,500 fee.3 FAC ¶¶ 16-24,

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38-39. But, on May 3, 2010, Mr. Wiltz’s attorney emailed plaintiff and stated that the money would not

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be refunded. Id. ¶¶ 31, 42.

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On May 31, 2012, plaintiff filed this action against defendants Paul Wiltz, Mone’t Inc., and

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Wonda McGowan, alleging causes of action for breach of contract and fraud. Docket No. 1. Shortly

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thereafter, the Court granted plaintiff in forma pauperis status and issued summons as to all three

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defendants. Docket No. 11. Because of her in forma pauperis status, the United States Marshal Service

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attempted service of process on the defendants. Only defendant McGowan returned receipt of service

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of process. Docket No. 15. Service of process on defendants Wiltz and Mone’t, was returned

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unexecuted, with a note that defendants had moved. Docket No. 16. On July 26, 2013, plaintiff filed

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Plaintiff also alleges that the additional charges and fees Mone’t added on for closing on the
property would have cost a total of $2,840,000, making the final purchase price of the property
$7,540,000. FAC ¶ 13.
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Plaintiff alleges that she had previously informed Mr. Wiltz and Ms. McGowan that the
$11,500 was all the money that she had. FAC ¶ 12.
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Plaintiff alleges that these communications included plaintiff signing a settlement agreement
on April 27, 2010 that was provided to her by Mr. Wiltz’s attorney, whereby Mr. Wiltz agreed to return
the $11,500 in exchange for plaintiff withdrawing her complaints against Mr. Wiltz. FAC ¶¶ 46, 57-58.
It is unclear from the allegations whether Mr. Wiltz also signed the agreement.

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proofs of service stating that defendants Wiltz and Mone’t had been served with the complaint and

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summons by mail. Docket Nos. 46-47.

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After defendants Wiltz and Mone’t failed to file an answer or otherwise respond to plaintiff’s

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complaint, plaintiff filed a request for the entry of default. Docket No. 51. Subsequently, the Clerk

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entered default against defendants Wiltz and Mone’t. Docket No. 55. By the present motions, plaintiff

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moves for default judgment against defendants Wiltz and Mone’t. Docket No. 54.

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DISCUSSION
Plaintiff moves for default judgment against defendants Wiltz and Mone’t. Docket No. 54.

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United States District Court
For the Northern District of California

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However, defendant McGowan, who is not in default, remains in the present action. In Frow v. De La

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Vega, the Supreme Court cautioned that a court should not enter a default judgment against a defendant

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that is, or is likely to be, inconsistent with a judgment on the merits as to the other remaining defendants.

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82 U.S. 552, 554 (1872). Therefore, where the defendants are jointly liable or similarly situated, and

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one of them defaults, “judgment should not be entered against the defaulting defendant until the matter

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has been adjudicated with regard to all defendants.” In re First T.D. & Invest., Inc., 253 F.3d 520, 532

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(9th Cir. 2001) (citing Frow, 82 U.S. at 554); see also Shanghai Automation Instrument CO. v. Kuei,

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194 F. Supp. 2d 995, 1008 (N.D. Cal. 2001) (“Frow’s applicability turns not on labels such as ‘joint

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liability’ or ‘joint and several liability,’ but rather on the key question of whether under the theory of

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the complaint, liability of all the defendants must be uniform.”).

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Here, the three defendants are similarly situated. Plaintiff alleges the same facts and causes of

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action against the three defendants. See FAC ¶¶ 44-108. Although the Court has dismissed some of

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plaintiff’s claims against defendant McGowan, plaintiff’s claims against her for fraud, negligent

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misrepresentation, and violation of the UCL remain. Docket No. 61. Accordingly, because defendant

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McGowan remains in this action, the Court DENIES plaintiff’s motion for default judgment against

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defendants Paul Wiltz and Mone’t, Inc. WITHOUT PREJUDICE to renewal at the conclusion of the

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case on the merits. Cf. Garamendi v. Henin, 683 F.3d 1069, 1083 (9th Cir. 2012) (stating that the

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district court followed the proper procedure where the court waited until completion of the trial against

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the non-defaulting defendants before fixing damages and entering default judgment against the

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defaulting defendant).

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CONCLUSION
For the foregoing reasons, the Court DENIES WITHOUT PREJUDICE plaintiff’s motion for
default judgment.

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IT IS SO ORDERED.

United States District Court
For the Northern District of California

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Dated: February 11 , 2014
SUSAN ILLSTON
United States District Judge

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