Bostik, Inc. v. J.E. Higgins Lumber Company et al
Filing
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ORDER denying 27 Motion for Default Judgment.Signed by by Judge Samuel Conti 1/10/2013. (sclc2, COURT STAFF) (Filed on 1/10/2013)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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BOSTIK, INC.,
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Plaintiff,
v.
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For the Northern District of California
United States District Court
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J.E. HIGGINS LUMBER CO.; GOLDEN
STATE FLOORING, INC.; and DOES 150, inclusive,
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Defendants.
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) Case No. 12-4021 SC
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) ORDER DENYING APPLICATION
) FOR DEFAULT JUDGMENT
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I.
INTRODUCTION
Now before the court is Plaintiff Bostik, Inc.'s ("Plaintiff")
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Application for Default Judgment against Defendant J.E. Higgins
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Lumber Co. ("Defendant").
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neither appeared in this action nor opposed Plaintiff's
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Application.
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this matter appropriate for resolution without oral argument.
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discussed below, Plaintiff's Application is DENIED without
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prejudice.
ECF No. 27 ("Appl.").
Defendant has
Pursuant to Civil Local Rule 7–1(b), the Court finds
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II.
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Plaintiff is a manufacturer and supplier of industrial
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BACKGROUND
adhesives, among other things.
Defendant, a hardwood flooring
As
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company, purchased adhesive products from Plaintiff in twenty-one
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transactions, each enshrined in the parties' purchase orders and
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invoices (collectively, the "Agreements").
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7-10; ECF No. 1-2 ("Thompson Decl.").
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by Plaintiff's Terms and Conditions of Sale ("Terms").
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Decl. Ex. B.
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Agreements, but Defendant never paid.
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therefore sued Defendant for breach of contract.
ECF No. 1 ("Compl.") ¶¶
The Agreements are governed
Thompson
Plaintiff alleges that it performed per the
Compl. ¶¶ 7-10.
Plaintiff
Compl. ¶¶ 11-15.
Plaintiff served Defendant with the Summons and Complaint on
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United States District Court
For the Northern District of California
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August 1, 2012.
ECF No. 6-1 (Proof of Service) ("POS").
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never responded or appeared in this action.
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entered default against Defendant on October 5, 2012, ECF No. 21,
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and Plaintiff served the Clerk's notice of entry of default on
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Defendant that same day.
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Plaintiff served Defendant with a copy of the present Application
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and other papers.
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judgment for a total of $680,593.64, comprised of: (1) $590,946.27
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in unpaid contractual fees under the Agreements; (2) $70,913.55 in
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contractual interest, based on the Terms' requirement that
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Defendant pay the maximum allowable interest under Wisconsin law on
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unpaid contractual fees; and (3) $18,733.82 in attorneys' fees,
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costs, and expenses, per the Terms' requirement that Defendant pay
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Plaintiff's attorneys' fees and other costs if Plaintiff is forced
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to recover unpaid fees from Defendant.
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has not opposed Plaintiff's Application.
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///
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///
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///
ECF No. 22.
ECF No. 27-5.
Defendant
The Clerk of Court
On October 17, 2012,
Now Plaintiff seeks default
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Appl. at 2-3.
Defendant
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III. LEGAL STANDARD
Under Federal Rule of Civil Procedure 55(b)(2), a party may
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apply to the Court for entry of default judgment after the Clerk of
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Court has entered default.
The Court's decision to enter default
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judgment is discretionary.
Aldabe v. Aldabe, 616 F.2d 1089, 1092
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(9th Cir. 1980).
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the adequacy of the service of process on the party against whom
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default judgment is requested."
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Metal Workers v. Peters, No. C 00-0395 VRW, 2000 U.S. Dist. LEXIS
United States District Court
For the Northern District of California
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As a preliminary matter, the Court must "assess
Bd. of Trs. of the N. Cal. Sheet
19065, at *2 (N.D. Cal. Jan. 2, 2001).
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If the Court determines that service was sufficient, its
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decision to enter default judgment may be guided by the following
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factors: (1) the possibility of prejudice to the plaintiff; (2) the
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merits of the plaintiff's substantive claim; (3) the sufficiency of
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the complaint; (4) the sum of money at stake in the action; (5) the
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possibility of a dispute concerning material facts; (6) whether the
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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 regarding liability are taken as true, except with
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respect to the damages requested.
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285 F.3d 899, 906 (9th Cir. 2002).
Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.
When the Court assesses the Eitel factors, all well-pleaded
Fair Hous. of Marin v. Combs,
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IV.
DISCUSSION
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A.
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Federal Rule of Civil Procedure 4(e) permits service by any
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Adequacy of Service
means authorized by the law of the state in which the district
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court sits.
See Fed. R. Civ. P. 4(e)(1).
Rule 4(h)(1)(A)
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authorizes service upon a corporation "in the manner prescribed by
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Rule 4(e)(1) for serving an individual."
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corporation may be served by either: (1) personal delivery of a
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copy of the summons and complaint to an officer, general manager,
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or a person authorized by the corporation to receive service of
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process; or (2) "leaving a copy of the summons and complaint during
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usual office hours in his or her office . . . with the person who
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is apparently in charge thereof" and then by mailing the papers to
Under California law, a
United States District Court
For the Northern District of California
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the person to be served at the office address.
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Proc. §§ 415.20(a), 416.10(b).
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complete on the tenth day after mailing.
Cal. Code Civ.
This method of service is deemed
Id.
On August 1, 2012, Plaintiff's process server delivered to
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Defendant's offices copies of the Summons and Complaint, addressed
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to Defendant's registered agent for service of process, and left
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them with "Brad Ibiadt," the "Front Desk Person," who was informed
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of the nature of the papers.
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Plaintiff mailed copies of the service papers to Defendant's
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registered agent in compliance with the California Code of Civil
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Procedure section 415.20.
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Mr. Ibiadt was not "apparently in charge" of the office.
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accordingly finds that Plaintiff adequately served Defendant as of
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August 12, 2012, the tenth day after Plaintiff mailed the service
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papers to Defendant.
POS at 1.
Id. at 2.
On August 2, 2012,
There is no indication that
The Court
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B.
Eitel Factors
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Since service was proper, the Court turns to the Eitel factors
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to determine whether default judgment is appropriate.
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///
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1.
Prejudice Against Plaintiff
The first factor considers the possibility of prejudice
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against the plaintiff is default judgment is not entered.
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Court finds that, because Plaintiff may be without recourse for
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recovery if default judgment is not entered, this factor weighs in
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favor of default judgment.
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Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002).
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2.
The
See PepsiCo, Inc. v. California Sec.
Plaintiff's Allegations Must State a Claim
The second and third Eitel factors require that a plaintiff's
United States District Court
For the Northern District of California
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allegations state a claim upon which it can recover.
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instant action, Plaintiff claims that Defendant breached the
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Agreements by failing to pay after Plaintiff performed.
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Plaintiff's allegations are sufficient to state a claim for breach
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of contract.
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in favor of default judgment.
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3.
In the
Accordingly, the Court finds that these factors weigh
The Amount of Money at Stake
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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Workers, No. C 00-0395 VW, 2000 U.S. Dist. LEXIS 19065, at *4-5
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(N.D. Cal. Dec. 29, 2000).
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declarations, calculations, and other documentation of damages in
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determining if the amount at stake is reasonable."
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Corp. v. Twinstar Tea Corp., No. 06–CV–03594, 2007 WL 1545173, at
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*12 (N.D. Cal. May 29, 2007).
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Bd. of Trs. of the N. Cal. Sheet Metal
"The Court considers Plaintiff's
Truong Giang
In its Application, Plaintiff seeks a total of $680,593.64:
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$590,946.27 in contractual fees, $70,913.55 in interest, and
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$18,733.82 in attorneys' fees, costs, and expenses.
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Appl. at 2-3.
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While this is a significant amount, the parties are corporations in
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a commercial transaction, and the contractual fees and interest
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accumulated over a relatively long period of time.
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contractual fees at issue here are based on Defendant's refusal or
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failure to pay the amounts explicitly required of it per the
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Agreements, and Plaintiff has a clear contractual basis for
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requesting interest and attorneys' fees and costs.
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Plaintiff has sources of proof for the amount it requests.
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Also, the
In other words,
However, as discussed below, Plaintiff fails to "prove up" the
United States District Court
For the Northern District of California
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amount of money it seeks in judgment despite its sources of proof
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because of several significant mistakes in its Application.
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Granting the requested amount under these circumstances would be
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unreasonable and unfair.
4.
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Likelihood of Dispute Over Material Facts
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 its claims.
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may assume the truth of the facts pled in the Complaint (except
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with respect to damages) upon default, there is no likelihood that
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any genuine issue of material fact exists here.
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United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977).
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failure to appear at any point in this case further supports this
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conclusion.
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default judgment.
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Plaintiff has pled factual allegations and provided
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Accordingly, since the Court
See Geddes v.
Defendant's
Accordingly, this factor weighs in favor of entry of
Excusable Neglect
For the sixth Eitel factor, there is no support for finding
that Defendant's default is due to excusable neglect.
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Defendant
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was served with the Complaint and Summons in this action over five
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months ago and has yet to enter an appearance.
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served Defendant with their Application.
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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).
6.
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Plaintiffs also
In such circumstances,
See Shanghai
This factor supports entry of default judgment.
Policy Favoring Decision on the Merits
"Cases should be decided upon their merits whenever
reasonably possible."
Eitel, 782 F.2d at 1472.
However, this
United States District Court
For the Northern District of California
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policy is not dispositive, and "Defendant's failure to answer
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Plaintiff['s] Complaint makes a decision on the merits impractical,
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if not impossible."
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of a case before hearing the merits is allowed when a defendant
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fails to defend an action.
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factor does not weigh against default judgment.
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PepsiCo, 238 F. Supp. 2d at 11.
Id.
Termination
Therefore, in this case, this
Summary of Eitel Factors
The Eitel factors favor entry of default judgment.
However,
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as explained more fully below, the Court finds that Plaintiff's
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failure to provide adequate proof of the amount requested outweighs
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mechanical application of the Eitel factors in this case.
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B.
DAMAGES
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In granting default judgment, a court can award only up to the
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amount prayed for by a plaintiff in its complaint.
Fed. R. Civ.
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Pro. 54(c).
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8(a)(3), and plaintiff must "prove up" the amount of damages, fees,
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and costs it requests by providing admissible evidence in the form
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of clear declarations, calculations, witness testimony, or other
A demand for relief must be specific, under FRCP
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documentation supporting its request.
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& Welfare Trust Fund v. Moore Elec. Contracting, Inc., No. 11-CV-
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00942-LHK, 2012 WL 1623236, at *2 (N.D. Cal. May 8, 2012); Truong
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Giang, 2007 WL 1545173, at *13.
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its damages.
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Orange Co. Elec. Ind. Health
Plaintiff has failed to prove up
First, Plaintiff requests $590,946.27 in unpaid contractual
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fees, based on the amounts provided in the Agreements.
Appl. at 3.
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However, the amounts identified in Plaintiff's supporting
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documentation total $591,151.11, not $590,946.27.
See Thompson
United States District Court
For the Northern District of California
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Decl. ¶¶ 3(a)-(u); id. Ex. A.
This discrepancy makes Plaintiff's
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calculations impossible to accept, because it is not clear whether
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Plaintiff has provided incorrect dollar amounts via the Agreements,
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made a mistake of addition in its Application, or introduced some
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other kind of error.
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failure to prove up damages.
Plaintiff's lack of clarity here amounts to a
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Second, Plaintiff's incorrect calculation of unpaid fees
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suggests that its calculation of contractual interest is also
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wrong.
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interest per Wisconsin Statute § 138.05, the statute that governs
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interest Defendant owes on its unpaid fees.
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Decl. Ex. B at #3.
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explanation of how Plaintiff applied the Wisconsin Statute, the
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Court cannot be sure that $70,913.55 is the proper amount of
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interest on Defendant's unpaid fees.
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In any event, Plaintiff did not explain how it calculated
Appl. at 3; Thompson
Without a correct calculation of fees or an
Third, Plaintiff requests $18,733.82 in attorneys' fees and
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costs.
Appl. at 3.
Plaintiff's justification for this is a bare
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assertion that it has incurred fees of $18,115 and costs of $618.82
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during its pursuit of its breach of contract claim.
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Appl. at 2-3;
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Thompson Decl. ¶ 8.
However, Plaintiff does not provide any
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explanation of these amounts, such as its counsel's hourly rates,
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counsel's time spent working on the matter, or any other breakdown
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of costs.
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amount it claims.1
Plaintiff must prove to the Court that it is owed the
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The Court therefore finds that Plaintiff has failed to prove
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up the amount of damages it requests, despite having an otherwise
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favorable case for default judgment.
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precluded from filing another application for default judgment that
However, Plaintiff is not
United States District Court
For the Northern District of California
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provides adequate support for the relief it has requested, as
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discussed in this Order.
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VI.
CONCLUSION
For the reasons discussed above, the Court DENIES without
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prejudice the Application for Default Judgment filed by Plaintiff
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Bostik, Inc., against Defendant J.E. Higgins Lumber Company.
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Plaintiff may submit a revised application for default judgment
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addressing the issues discussed above within thirty (30) days of
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the signature date of this Order.
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dismissal of this action with prejudice.
Failure to do so will result in
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IT IS SO ORDERED.
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Dated: January ___, 2013
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UNITED STATES DISTRICT JUDGE
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Plaintiff cannot, however, reassert fees for supplemental
briefing on this issue. Defendant should not have to pay for
Plaintiff's errors in filing a motion.
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