APL CO. Pte., LTD., et al v. CNJ International, Inc.

Filing 27

ORDER GRANTING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT by Judge William Alsup [granting 18 Motion for Default Judgment]. (whasec, COURT STAFF) (Filed on 2/14/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California

United States District Court

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APL CO. PTE., LTD. and AMERICAN
PRESIDENT LINES, LTD.,
Plaintiffs,

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No. C 12-04758 WHA
v.
ORDER GRANTING
PLAINTIFFS’ MOTION
FOR DEFAULT JUDGMENT

CNJ INTERNATIONAL, INC. and
JOON WOO RYU,
Defendants.

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INTRODUCTION

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In this action for breach of a maritime contract, plaintiffs move for entry of default

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judgment. For the following reasons, the motion is GRANTED.
STATEMENT
Plaintiffs APL Co. Pte., Ltd., a Singapore shipping company, and American President

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Lines, Ltd., a Delaware company (collectively “APL”) allege the following facts.

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Defendants CNJ International, Inc, and its president, Joon Woo Ryu, share identity of interest

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and are domiciled in New Jersey. In May 2008, the parties entered a service contract under

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which plaintiff agreed to ship CNJ’s raw cotton from the United States to various ports abroad.

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CNJ agreed to ship a minimum of 25 “freight equivalent units” by the time the contract expired

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in November 2008. The agreement provided for liquidated damages. The relevant clause —

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a “dead freight” provision — called for CNJ to pay $350 per freight equivalent unit for any

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shortfall. Upon reconciling its accounts after the contract expired, plaintiff discovered that CNJ

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had not shipped any units. CNJ was therefore liable to plaintiff for 25 units of dead freight, or

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$8,750 (25 x $350 = $8,750). Plaintiff alleges it sent more than one invoice for this amount,

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and although CNJ acknowledged receipt of at least one of these, it never paid its bill (Compl.

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¶¶ 3–19, 27).

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Nor has CNJ responded to this lawsuit. The complaint and summons were properly

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served and proper proof of service was filed (Dkt. Nos. 5 and 6). Plaintiff alleges breach of

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maritime contract, open account, and a common count of services performed. Plaintiff seeks

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recovery totaling $11,260, consisting of: (1) $8,750 in dead freight; (2) $2,160 in attorney’s

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fees; and (3) $350 in costs.
CNJ and Ryu have been served with all filings to date (see Dkt. Nos. 11, 16, 17, 22 and

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For the Northern District of California

United States District Court

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25). The clerk entered default against both defendants in November 2012. The instant motion

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for default judgment was filed in January 2013 with a hearing noticed for February 2013.

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Defendants did not appear or oppose.

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ANALYSIS

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1.

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It is preferable to decide cases on their merits, but when a party refuses to litigate and

DEFAULT JUDGMENT.

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default has been entered, Rule 55(b)(2) allows a district court, in its discretion, to enter default

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judgment against a defendant. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980).

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Several factors enter into a court’s discretionary decision whether to enter default judgment:

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(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.

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Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). Rule 54(c) governs the scope of relief
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granted, which in the case of a default judgment “must not differ in kind from, or exceed in
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amount, what is demanded in the pleadings.”
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As to the merits, after entry of default, well-pled allegations in the complaint regarding
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liability are taken as true, except as to the amount of damages. Fair Hous. of Marin v. Combs,
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285 F.3d 899, 906 (9th Cir. 2002). As to sufficiency, the complaint adequately alleges breach
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of a maritime contract: it includes the contract’s terms, CNJ’s breach in failing to ship the

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minimum required freight units, and the agreed value of the damages. Finally, as to the

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possibility of a dispute concerning material facts, defendant never answered or otherwise

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responded to the complaint, and the facts are easily verified by reference to the contract and

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plaintiff’s records. Consequently, there is no dispute now, nor is there likely to be one in the

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future. Eitel factors two, three, and five favor entry of default judgment. The remaining Eitel

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factors, as explained below, also favor default judgment.

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First, plaintiff would be prejudiced if default judgment were not granted, because
plaintiff would otherwise be without a remedy.
Second, this action is concerned with a moderate sum. While $11,260 is a

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For the Northern District of California

United States District Court

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not-insignificant amount, it is a far cry from the $2,900,000 at issue in Eitel. See 782 F.2d at

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1472.

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Third, there is no indication that CNJ’s failure to respond was the result of excusable

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neglect. Plaintiff alleges CNJ was sent more than one invoice for the dead freight owing and

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never responded. Furthermore, this action was filed in September 2012, and CNJ was properly

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served all the relevant documents but has made no response.

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Fourth, federal policy certainly favors decisions on the merits. But where, as here, a
defendant refuses to litigate, Rule 55(b)(2) allows entry of a default judgment.
Following consideration of the Eitel factors, this order determines that entry of default
judgment is warranted.
DETERMINATION OF RELIEF.

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2.

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Plaintiff seeks recovery totaling $11,260, consisting of: (1) $8,750 in dead freight;

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(2) $2,160 in attorney’s fees; and (3) $350 in costs. These amounts are supported by sworn

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declarations and exhibits (Dkt Nos. 19 and 20). The dead freight terms are adequately set forth

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in the contract’s provisions, and the amount owing was properly calculated thereunder (Dkt. 19).

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The requested attorney’s fees and costs are reasonable and well-supported by Attorney

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de Langis’s declaration that plaintiff has compensated him in the amount of approximately

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$2160 for the twelve hours or so he has spent on the matter (Dkt. No. 20). Finally, plaintiff asks
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for $350 in order to compensate Attorney de Langis for the cost of filing this suit (id.).

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In addition, the contract explicitly provided for the non-prevailing party to litigation to pay

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reasonable attorney’s fees and costs (Dkt. 19). Considering the above, plaintiff’s requests for

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dead freight, attorney’s fees, and costs are GRANTED in the amount of $11,260.

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3.

IDENTITY OF INTEREST.

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Plaintiff alleges identity of interest between the corporation CNJ and its president, Ryu.

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In an admiralty action, district courts examining an alter-ego allegation apply federal common

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law, which allows a court to pierce the corporate veil where (1) an individual uses a corporation

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to perpetrate a fraud, or (2) he so dominates and disregards his alter ego's corporate form that the
alter-ego corporation essentially carried on his personal business instead of its own. That an

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For the Northern District of California

United States District Court

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individual is a corporation’s sole owner does not, by itself, justify piercing the corporate veil.

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Chan v. Soc’y Expeditions, Inc., 123 F.3d 1287, 1294 (9th Cir. 1997); Kirno Hill Corp. v. Holt,

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618 F.2d 982, 985 (2d Cir. 1980). “Bare assertions of alter ego status, without more,” fail to

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prove identity of interest. Stevedoring Servs. of Am. v. Ancora Transp., N.V., 59 F.3d 879, 883

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(9th Cir. 1995).

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Plaintiff’s allegation that Ryu is the alter ego of CNJ is supported by nothing more

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than bare assertion (Compl. ¶¶ 7–10). Plaintiff provides no facts to bolster this conclusion, and

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alleging that Ryu is CNJ’s sole owner is insufficient. Nor does plaintiff renew this allegation

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in its motion for default judgment or in its proposed order. The contract is between plaintiff and

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CNJ only, not Ryu, and the invoice was addressed to CNJ (Dkt. Nos. 18 and 21). Therefore, on

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this record, this order determines that CNJ alone is liable for the judgment.
CONCLUSION

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For the above reasons, plaintiff’s motion for default judgment against both defendants is
GRANTED. Plaintiff may recover a total of $11,260 from defendant CNJ International, Inc.

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IT IS SO ORDERED.
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Dated: February 14, 2013.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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