Walbridge East, LLC v. Grandview PV Solar one, LLC et al

Filing 26

MEMORANDUM DECISION AND ORDER. In accordance with the Memorandum Decision above, NOW THEREFORE IT IS HEREBY ORDERED, that the motion for judgment onthe pleadings against Highway Technologies 24 is ADMINISTRATIVELYTERMINATED without prejudice to Wal bridge's right to move the motion back onto the Court's active docket when the bankruptcy stay is lifted. IT IS FURTHER ORDERED, that this action is STAYED as to defendant Highway Technologies pursuant to the Notice of Bankruptcy 25 . Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

WALBRIDGE EAST, LLC,
Case No. 1:12-cv-00510-BLW
Plaintiff,
MEMORANDUM DECISION AND
ORDER

v.

GRANDVIEW PV SOLAR ONE, LLC,
CORONA CAPITAL PARTNERS, LLC,
and HIGHWAY TECHNOLOGIES,
INC.,
Defendants.

INTRODUCTION
The Court has before it plaintiff Walbridge’s motions for (1) default judgment
against defendants Grandview and Corona, and (2) judgment on the pleadings against
defendant Highway Technologies. In addition, the record contains a Notice describing
the bankruptcy filing of defendant Highway Technologies on May 22, 2013. The Court
finds that the bankruptcy filing stays the action against Highway Technologies. As the
Court will explain below, the Court has no authority to stay the action against the other
two defendants, Grandview and Corona; only the bankruptcy court has that authority.
Accordingly, the Court will resolve the motion for default judgment against Grandview
and Corona by granting the motion and entering a judgment against those two defendants.

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FACTUAL BACKGROUND
In this lawsuit, Walbridge seeks damages from defendants Grandview and Corona
for their failure to pay for work done by Walbridge pursuant to a contract between
Grandview and Walbridge. The original contract was signed in December of 2011,
obligating Walbridge to construct a solar facility for Grandview. While Grandview was
the principal obligor on the contract, Walbridge alleges that Grandview was “under the
control of its alter ego defendant Corona.” See Amended Complaint (Dkt. No. 7) at ¶ 9.
Walbridge alleges that Grandview and Corona failed to make payments as required by
the contract, and that Walbridge has consequently been unable to pay its subcontractor,
Highway Technologies. Walbridge brought this action to recover damages from
Grandview and Corona, and obtain a declaratory judgment that it owes nothing to
Highway Technologies until it is paid by Grandview and Corona.
Grandview and Corona failed to answer the complaint and the Clerk entered
default against both defendants. See Clerk’s Entry of Default (Dkt. Nos. 19 & 21).
Walbridge then filed motions for default judgment against both defendants, as well as a
motion for judgment on the pleadings against Highway Technologies seeking a
declaratory judgment that Walbridge has no duty to pay Highway Technologies until
Walbridge receives payment from Grandview and Corona. Two days after that motion
was filed, Highway Technologies filed a Notice in this case that it was in bankruptcy.
The threshold issue raised by these filings concerns the effect of the bankruptcy on
this litigation. The Court will examine that issue and then take up the motions.

ANALYSIS
The automatic stay provisions of the Bankruptcy Code “prohibit the continuation
of a judicial action against the debtor that was commenced before the bankruptcy.” In re
White, 186 B.R. 700, 703 (B.A.P. 9th Cir.1995). Unless the assets of the bankrupt estate
are at stake, “the automatic stay does not extend to actions against parties other than the
debtor . . . .” U.S. v. Dos Cabezas Corp., 995 F.2d 1486, 1491 (9th Cir.1993). Some
Circuits have extended the stay to include non-debtors where their interests are
inextricably intertwined with those of the debtor. See A.H. Robins Co. v. Piccinin, 788
F.2d 994 (4th Cir.1986). That exception to the general rule is referred to as the “unusual
circumstances exception.” Id. at 999. In the Ninth Circuit, the “vitality of the unusual
circumstances exception is not clear.” In re Excel Innovations, Inc., 502 F.3d 1086, 1098
(9th Cir. 2007). Nevertheless, it is the bankruptcy court, and not the district court, that
has the authority to apply the exception and extend the stay. Wordtech Systems Inc. v.
Integrated Network Solutions, Inc., 2012 WL 6049592 (E.D.Cal. Dec. 5, 2012).
This action is clearly stayed as to Highway Technologies. The question arises as
to whether the stay extends to Grandview and Corona. Under the case law cited above,
this Court has no authority to extend the stay to non-debtors. Accordingly, the Court will
proceed to resolve Walbridge’s motion for default judgment against Grandview and
Corona.
Rule 55(b)(2) states that the Court “may” conduct a hearing prior to entering a
default judgment. However, the Court is not required to do so if the record reveals no
issue of material fact. Legardy v. Ceballos, 2013 WL 2995412 at *1 (9th Cir. June 14,
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2013).
Here, there is no material issue of fact. Walbridge specifically asked in his
complaint for the following: (1) “over $900,000 for work performed,” see Amended
Complaint, supra at ¶¶ 11, 25; (2) for prejudgment interest, id. at ¶ 25; (3) for costs, id.;
and (4) for attorney fees, id. at ¶ 26. Thus, it can come as no surprise to Grandview and
Corona that Walbridge is seeking, in its motion for default judgment, to recover these
four claims. Walbridge has supported each claim with detailed records that essentially
allow damages to be computed as a sum certain.
With regard to the first claim of recovery – the sum due for work performed –
Walbridge has submitted invoices totaling $955,845.35, accompanied by the Declaration
of Mike Miskevics, Walbridge’s Director of Projects, representing that this sum is “based
on the actual work completed in further of the project described in the Amended
Complaint, and is set out in detailed invoices that were delivered to Defendants
Grandview and Corona that demonstrate the date and extent of the work performed.” See
Miskevics Declaration (Dkt. No. 22-2) at ¶ 4. The second claim – for prejudgment
interest – is based on a contract provision authorizing an award of interest and setting the
rate as the LIBOR rate plus 2%. See Exhibit 1 (Dkt. No. 7-1) at ¶ 6.2. The prejudgment
interest as of May 15, 2013, totaled $27,490.10. See Declaration of Wonderlich (Dkt.
No. 22-1) at ¶ 3.
Walbridge also seeks attorney fees and costs pursuant to Idaho Code § 12-120(3).
The Court agrees that the statute authorizes an award of “reasonable” fees and costs in
this case, as Walbridge prevailed and the dispute was over a “commercial transaction.”

The Court finds that the attorney fees sought – $19,728.84 – and the costs incurred –
$1,544 – are both reasonable and should be awarded to Walbridge.
For all of these reasons, the Court will grant the motion for default judgment
against Grandview and Corona and enter judgment against them, jointly and severally, in
the sum of $1,005,058.29. The other pending motion – for judgment against Highway
Technologies – cannot be resolved at this time due to the bankruptcy stay. To ensure that
the Court’s docket reflects only motions actively under consideration, the Court will
administratively terminate the motion for judgment against Highway Technologies,
without prejudice to the right of Walbridge to move the motion back onto the active
docket when the bankruptcy stay is lifted.
The Court will enter a separate Judgment against Grandview and Corona, and
enter the stay against Highway Technologies in the Order below.
ORDER
In accordance with the Memorandum Decision above,
NOW THEREFORE IT IS HEREBY ORDERED, that the motion for judgment on
the pleadings against Highway Technologies (docket no. 24) is ADMINISTRATIVELY
TERMINATED without prejudice to Walbridge’s right to move the motion back onto the
Court’s active docket when the bankruptcy stay is lifted.
IT IS FURTHER ORDERED, that this action is STAYED as to defendant
Highway Technologies pursuant to the Notice of Bankruptcy (docket no. 25).

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DATED: August 29, 2013

_________________________
B. Lynn Winmill
Chief Judge
United States District Court