Allstate Insurance Co. et al v. Lighthouse Law P.S., Inc. et al

Filing 111

AMENDED ORDER granting Plaintiffs' 105 MOTION for Default Judgment, (Motions terminated: 110 MOTION Clarification/Nunc Pro Tunc Re Rate of Interest Applied to Default Judgment); by Judge Robert S. Lasnik. (SWT)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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ALLSTATE INSURANCE CO., et al.,
Plaintiffs,

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NO. C15-1976RSL
v.
LIGHTHOUSE LAW P.S. INC., et al.,
Defendants.

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AMENDED ORDER GRANTING
DEFAULT JUDGMENT

This matter comes before the Court on plaintiffs’ “Motion for Entry of Default
Judgment.” Dkt. # 105. Having reviewed the motion and the supporting materials, the Court
finds as follows.
The default entered in the above-captioned matter has established the well-pleaded
allegations of the amended complaint pertaining to liability. Dkt. # 84. Defendants’ default
cannot be attributed to excusable neglect, as they were properly served with the amended
complaint in October 2016, Dkt. ## 78, 79, 80, and defendant Seok Bae “Mike” Seo appeared
for two separate depositions in this case, in July 2016 and November 2016, Dkt. # 90-2 at 40–50.
In this second deposition, Mr. Seo acknowledged that he and his wife, defendant Lee Ok Mi,
were both aware of the lawsuit against them. Dkt. # 90-2 at 48. Though a large sum of money is
at stake in this action – plaintiffs have provided documentation supporting over $1 million in
damages resulting from fraudulent claims submitted by the sham law firm, defendant Lighthouse
Law, P.S., Inc., see Dkt. # 107-1 – defendants were on notice from October 2016 that they might

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AMENDED ORDER GRANTING DEFAULT JUDGMENT - 1

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be held jointly and severally liable for damages of at least $600,000, the amount stated in the

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amended complaint. Dkt. # 52 at 26, 27. Despite the strong policy favoring decisions on the

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merits, it appears in this case that defendants Seo, Mi, and their company, defendant Hanna &

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Dooree (H&D) Corporation, simply chose not to appear to defend against this suit. Default

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judgment in favor of plaintiffs and against defendant is therefore appropriate. See Eitel v.

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McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986).

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Plaintiffs have not, however, shown that the full damages amount of $600,000 should be

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awarded against these defendants. Though defendant Seo admitted to participating in the

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trafficking of insurance claims through the sham law firm, defendant Lighthouse Law, P.S., Inc.,

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see Dkt. # 90-2 at 48, plaintiffs have not shown that all of the fraudulent claims underlying their

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losses are attributable to the “capping” work of defendant Seo: indeed, plaintiffs have alleged

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that Lighthouse compensated a number of different “cappers” for referring clients to the law

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firm. Dkt. # 52, ¶¶ 53–57; see also Dkt. # 90-3 at 26. Plaintiffs have alleged that defendants

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Seo, Mi, and H&D Corporation received approximately $91,712.57 in compensation for

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defendant Seo’s work referring clients to Lighthouse Law. Dkt. # 52, ¶¶ 39(b), 40(b), 63.

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Accordingly, the Court concludes that a damages award of $91,712.57 is appropriate. Because

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treble damage awards under RCW 19.86.090 are capped at $25,000, the Court declines to award

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treble damages.

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Moreover, plaintiffs have not shown that these defendants should bear the full cost of

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plaintiffs’ attorney’s fees, costs, and expert expenses ($319,975 in fees; $4,081.94 in costs;

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$27,447.30 in expert expenses): these defendants were first named as defendants on August 17,

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2016; they were served on October 19, 2016; and default was entered against them on November

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14, 2016. Before, during, and after this time period, other defendants were actively litigating

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this case, and the vast majority of plaintiffs’ fees, costs, and expenses were incurred in the

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course of that litigation. Accordingly, based on a review of plaintiffs’ counsel’s billing

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statements and the rest of the docket in this matter, the Court finds that an award of $19,485 in

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AMENDED ORDER GRANTING DEFAULT JUDGMENT - 2

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attorney’s fees and costs is reasonable.1

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It is hereby ORDERED that default judgment is entered against Seok Bae “Mike” Seo,

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Lee Ok Mi, and Hanna & Dooree Corporation in the amount of $91,712.57 in damages, plus

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attorney’s fees and costs of $19,485, for a total amount owing of $111,197.57.

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IT IS FURTHER ORDERED that this Judgment shall accrue interest on the total

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unpaid balance at the rate of 6 percent (6%) per annum2 from the date of entry hereof until fully

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paid.

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For all of the foregoing reasons, plaintiffs’ motion for default judgment (Dkt. # 105) is

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GRANTED. The Clerk of Court shall enter judgment in favor of plaintiffs and against

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defendants as described above.

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SO ORDERED this 2nd day of May, 2017.

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A

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Robert S. Lasnik
United States District Judge

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This sum represents attorney’s fees and costs incurred for tasks specifically related to
plaintiffs’ claims against defendants Seo, Mi, and H&D Corp. See Dkt. # 106-2 at 143 to Dkt. # 106-3
at 116. Fees and costs incurred following entry of default against those defendants are not included,
except for those fees and costs incurred in preparing this motion for default judgment. See Dkt. # 106-4
at 19–29.

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After the Court entered default judgment with a post-judgment rate of interest of 0.12%, Dkt.
# 108, plaintiffs moved for clarification of the rate of interest, pointing out that the rate in their proposed
order was 12%, not 0.12%. See Dkt. # 105-1 at 2. No other post-judgment interest rate was discussed
in the moving papers. The Court hereby amends the rate of interest to 6% per annum, the rate
authorized by statute for interest on judgments founded on the tortious conduct of individuals. See
RCW 4.56.110(3)(b).

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AMENDED ORDER GRANTING DEFAULT JUDGMENT - 3