Ewing v. Allfi, Inc. et al

Filing 51

ORDER denying Plaintiff's Motion for Default Judgment (Doc. No. 49 ). Signed by Judge Anthony J. Battaglia on 8/13/2019. (All non-registered users served via U.S. Mail Service)(jrm) (sjt).

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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Anton Ewing,

Case No.: 3:18-cv-0158-AJB-AGS
Plaintiff,

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v.

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ORDER DENYING PLAINTIFF’S
MOTION FOR DEFAULT
JUDGMENT
(Doc. No. 49)

Allfi, Inc., et al.,

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Defendants.

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Before the Court is Plaintiff Anton Ewing’s motion for default judgment against

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Defendants Innovative Business Capital, LLC, Todd Parker, and Yakim Manasseh Jordan.

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(Doc. No. 49.) However, the Court finds that Plaintiff has not stated a legally sufficient

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claim against any of these defendants for the claims brought in his complaint. Although

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allegations are typically taken as true once the Court Clerk enters default, those which are

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legally insufficient are not. Accordingly, the Court DENIES Plaintiff’s motion.

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I.

BACKGROUND

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Plaintiff brings his normal Telephone Consumer Protection Act case against various

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defendants alleging defendants engaged in a scheme to “use the wires of the United States

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to criminally call Plaintiff . . . .” (Doc. No. 1 ¶ 10.) Default judgments were entered against

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Innovative and Parker on May 7, 2018, (Docs. No. 21, 22), and against Jordan on February

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26, 2019, (Doc. No. 46). None of the three defendants have opposed Ewing’s motion for
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default judgment.

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II.

LEGAL STANDARDS

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Federal Rule of Civil Procedure 55(b)(2) permits a court, following default by a

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defendant, to enter default judgment in a case. It is within the sound discretion of the district

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court to grant or deny an application for default judgment. Aldabe v. Aldabe, 616 F.2d

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1089, 1092 (9th Cir. 1980). In making this determination, the Court considers the following

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factors, commonly referred to as the Eitel factors: (1) “the possibility of prejudice to the

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plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint,

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(4) the sum of money at stake in the action, (5) the possibility of a dispute concerning

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material facts, (6) whether the default was due to excusable neglect, and (7) the strong

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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). “In applying this discretionary

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standard, default judgments are more often granted than denied.” Philip Morris USA, Inc.

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v. Castworld Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003) (citation omitted).

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Generally, once the court clerk enters default, the factual allegations of the complaint

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are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v.

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Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). However, although well-pleaded

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allegations in the complaint are admitted by a defendant’s failure to respond, “necessary

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facts not contained in the pleadings, and claims which are legally insufficient, are not

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established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267

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(9th Cir. 1992), superseded by statute on other grounds, Pub. L. No. 100-702, 102 Stat.

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4669.
I.

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DISCUSSION

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Plaintiff argues he had met all the Eitel factors and thus requests the Court grant his

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motion for default judgment. However, because the Court finds Plaintiff failed to state

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either a RICO, TCPA, or CIPA claim against Innovative, Jordan, or Parker in his

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complaint, the Court only analyzes the relevant Eitel factors—the second and third—and

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DENIES Plaintiff’s motion.
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1. Substantive Merits and Sufficiency of Claim

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Under the second and third Eitel factors, the Court must examine whether the

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plaintiff has pled facts sufficient to establish and succeed on its claims. See Eitel, 782 F.2d

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at 1471. These factors require the complaint “state a claim on which the plaintiff may

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recover.” PepsiCo, 238 F. Supp. 2d at 1175. Plaintiff brings claims for RICO under 18

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U.S.C. § 1964, TCPA violations under 47 U.S.C. § 227, and California Invasion of Privacy

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(“CIPA”) §§ 632, 637.2, and 632.7. (Doc. No. 1.)

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a.

RICO

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To state a claim for a RICO violation under Section 1962(c) a plaintiff must allege:

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“(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Sedima,

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S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985). An “enterprise” in the text of RICO

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is fairly straightforward and not demanding, Odom v. Microsoft Corp., 486 F.3d 541, 548

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(9th Cir. 2007), and includes “any individual, partnership, corporation, association, or other

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legal entity, and any union or group of individuals associated in fact although not a legal

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entity.” 18 U.S.C. § 1961(4). “Racketeering activity” is any act indictable under the several

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provisions of Title 18 of the United States Code. 18 U.S.C. § 1961(1); Turner v. Cook, 362

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F.3d 1219, 1229 (9th Cir. 2004). A “pattern of racketeering activity” requires at least two

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predicate acts. Clark v. Time Warner Cable, 523 F.3d 1110, 1116 (9th Cir. 2008) (internal

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citations omitted).

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Although Plaintiff believes all his claims are admitted by default, legally deficient

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claims are not established through this procedure. Plaintiff makes no argument as to these

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facts with regards to his RICO claim. Looking to his complaint, Plaintiff only provides a

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formulaic recitation of RICO’s elements. (Doc. No. 1 ¶ 15.) Plaintiff has not shown—

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beyond conclusory allegations—how the three defendants here acted in unison to form an

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enterprise or conducted a pattern of racketeering activity. (See id. ¶¶ 93–102.) Thus, the

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Court DENIES granting default judgment or damages under this claim.

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b.

TCPA

The TCPA makes it unlawful to use an ATDS without the prior express consent of
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the called party, to call any cellular telephone. Mims v. Arrow Fin. Servs., LLC, 132 S. Ct.

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740, 747 (2012). To sufficiently allege a violation of the TCPA, Plaintiff must plead two

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elements: (1) a call to a cellular telephone; (2) via an ATDS. Robbins v. Coca Cola Co.,

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No. 13-CV-132, 2013 WL 2252646, at *2 (S.D. Cal. May 22, 2013).

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Here, Plaintiff does not allege that Innovative called him using an ATDS. In his

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complaint, Plaintiff states Innovative was using its “web domain . . . to run its wire fraud

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scam.” (Doc. No. 1 ¶ 1(g).) Plaintiff similarly fails to allege Parker called him using an

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ATDS. Rather, Plaintiff alleges Parker sent him three emails and once “called Plaintiff

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prior to 8:00 a.m. and tried to sell Plaintiff a loan.” (Id. at (h).) But Plaintiff does not

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establish Parker used an ATDS during this call. Finally, Plaintiff fails to establish that

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Jordan actually called him using an ATDS. Instead, Plaintiff alleges that Jordan “runs a

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religious telemarketing scam. Jordan’s scam is massive. . . . Jordan has figured out how to

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employ an ATDS with prerecorded messages and third world country call centers to run

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his [ ] scam.” (Id. at (k).)

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In his motion for default judgment, Plaintiff argues Innovative Business Capital,

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LLC called him 12 times and Jordan called him 118 times. (Doc. No. 49 at 5.) However,

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these allegations are not found in the complaint. Plaintiff points to paragraph 12 of his

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complaint as proof of the calls, however, that paragraph merely alleges that “Defendants

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placed repeated automated telephone calls” without specifying which defendant called and

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when. (Doc. No. 1 ¶ 12.) Regarding Jordan, Plaintiff states he “continues to receive

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Jordan’s pre-recorded scam messages on both phones even to this day[.]” (Doc. No. 49 at

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10.) Plaintiff states that Exhibit F attached to the complaint denotes the details of Jordan’s

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calls to him, however, if exhibits are “intended to support a complaint, such exhibits must

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be attached to the complaint and must be incorporated by reference.” Fed. R. Civ. P. 10(c);

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Martin v. Yates, No. 1:09–cv–00755–DLB (PC), 2009 WL 3320456, at *2 (E.D. Cal. Oct.

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14, 2009) (“If Plaintiff attaches exhibits to his complaint, each exhibit must be specifically

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referenced. For example, Plaintiff must state ‘see Exhibit A’ or something similar in order

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to alert the court to exactly which exhibit plaintiff is referencing.”). Here, Plaintiff does not
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use the word “exhibit” once in his complaint. (See Doc. No. 1.) Thus, the Court will not

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consider Plaintiff’s voluminous and unreferenced exhibits as support. See Yeron v. Hirsh,

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2007 WL 4215242, at *3 (E.D. Cal. Nov. 28, 2007) (“Plaintiff may not merely point the

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court to attached exhibits and expect that the court will read through all of the exhibits and

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determine which exhibit it appears that plaintiff refers to. Further, if the exhibit consists of

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more than one page, plaintiff must refer to the specific portion of the exhibit.”).

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Plaintiff allege that the only defendants who called him are Allfi, Inc., Frank

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Shreyberg, Glamour Services, and Term Funding, Inc. however, these defendants were

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dismissed from the case in 2018. (Docs. No. 10 (dismissing Allfi and Shreyberg), 12

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(dismissing Term Funding), 41 (dismissing Glamour).) Accordingly, the Court finds

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Plaintiff did not state a legally sufficient claim under the TCPA against the three defendants

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here. Thus, the Court DENIES granting Plaintiff’s default judgment under this claim.

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c.

CIPA

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CIPA is California’s anti-wiretapping and anti-eavesdropping statute and is

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designed “to protect the right of privacy.” Cal. Penal Code § 630. The Act provides for a

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civil action for damages based on violations of section 632 which prohibits recording a

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“confidential communication” “intentionally and without the consent of all of the parties.”

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Id.; Cal. Penal Code § 637.2(a) (“Any person who has been injured by a violation of this

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chapter may bring an action against the person who committed the violation.”). To state a

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claim for violation of § 632, the three elements that a plaintiff must plead are “(1) an

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electronic recording of (or eavesdropping on); (2) a ‘confidential’ communication; [where]

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(3) all parties did not consent.” Weiner v. ARS Nat’l Servs., Inc., 887 F. Supp. 2d 1029,

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1032 (S.D. Cal. 2012) (citing Flanagan v. Flanagan, 27 Cal. 4th 766, 774–76 (2002)).

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Section 632(c) defines a “confidential communication” as including “any communication

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carried on in circumstances as may reasonably indicate that any party to the communication

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desires it to be confined to the parties thereto.” Cal. Penal Code § 632(c). Excluded from

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protection are communications in “circumstance[s] in which the parties to the

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communication may reasonably expect that the communication may be overheard or
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recorded.” Roberts v. Wyndham Int’l, Inc., No. 12CV5083, 2012 WL 6001459, at *5 (N.D.

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Cal. Nov. 30, 2012); Cal. Penal Code § 632(c).

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However, without finding any allegations that Innovative or Jordan called Plaintiff,

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the Court finds they could not have also recorded Plaintiff. With regards to Parker, Plaintiff

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does not allege that during the one phone call Parker made to Plaintiff he was being

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recorded. Accordingly, the Court also finds Plaintiff cannot state a claim against these

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defendants under CIPA and DENIES granting default judgment under it.
II.

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CONCLUSION

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The Court DENIES Plaintiff’s motion for default judgment against Innovative,

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Parker, and Jordan finding the second and third Eitel factors cannot be met as Plaintiff

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cannot state a legally sufficient claim against these defendants. (Doc. No. 49.) As no other

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defendants remain in the case, the Court DIRECTS the Court Clerk to close the case.

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IT IS SO ORDERED.
Dated: August 13, 2019

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