Traffic Tech, Inc. v. Velox Group, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 TRAFFIC TECH, INC., Case No. 2:19-cv-01793-KJM-JDP 12 Plaintiff, FINDINGS AND RECOMMENDATIONS 13 THAT PLAINTIFF’S RENEWED MOTION v. FOR DEFAULT JUDGMENT BE GRANTED 14 VELOX GROUP, INC., OBJECTIONS DUE WITHIN14DAYS 15 Defendant. ECF No. 15 16 17 18 19 Plaintiff Traffic Tech, Inc., proceeds in this action under the CarmackAmendment to the 20 Interstate Commerce Act,49U.S.C. § 14706, which governs the federal liability of freight 21 carriers. ECF No. 1. Plaintiff claims that defendant Velox Group, Inc. agreed to transport a 22 truckload of packaged frozen, diced red peppers by precooled, food-grade refrigerated truck. Id. 23 at 2. Defendant received the cargo on July 21, 2018, but the cargo was rejected at its destination 24 on account of temperature abuseon July 24, 2018. Id. Velox Grouphas not answered the 25 complaint or otherwise appeared. On September 11, 2020, plaintiff filed the instant renewed 26 motionfor default judgment in the amount of $36,706.85. SeeECF No. 15. The court held a 27 hearing on October 15, 2020,but only plaintiff’s counsel appeared. Because defendant was 28 1 properly served, and because relevant discretionary factors point in favor of the default judgment, 2 Irecommend that plaintiff’s motion be grantedfor the full amount—$36,706.85. 3 DISCUSSION 4 Federal Rule of Civil Procedure 55(b)(2)allows a court to enter judgment against a party 5 that has defaulted. While the decision to do so is “discretionary,” Aldabe v. Aldabe, 616 F.2d 6 1089, 1092 (9th Cir.1980), it is guided by several factors. The court must first assess the 7 adequacy of service on the party against whom the default judgment would be entered. See 8 Cranick v. Niagara Credit Recovery, Inc., No. 1:13-CV-671 LJO GSA, 2014 WL 325321, at *1 9 (E.D. Cal. Jan. 28, 2014);see also Omni Capital Int’l., Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 10 104 (1987)(“[B]efore a federal court may exercise personal jurisdiction over a defendant, the 11 procedural requirement of service of summons must be satisfied.”). Ifservice was sufficient, the 12 court may thenconsider a number offactors, includingpossible prejudice to the plaintiff; the 13 merits of plaintiff’s claim; the sufficiency of the complaint; the sum of money at stake; the 14 possibility of a factual dispute; whether the default was potentially due to excusable neglect; and 15 the general policy that cases be decided on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471- 16 72 (9th Cir.1986). In addition, “the factual allegations of the complaint, except those relating to 17 the amount of damages, will be taken as true.” Geddes v. United Fin. Group,559 F.2d 557, 560 18 (9th Cir.1977). 19 Here, service on defendant was properly completed, and the clerk of court properly 20 entered a default on January 14,2020. SeeECF No. 8. Federal Rule of Civil Procedure 21 4(h)(1)(B)allows service to occur on any “agent authorized by appointment or by law to receive 22 service of process.” In turn, 49 USC §13304(a)requires designation of an agent for service to be 23 filed with the Department of Transportation. Here, defendant’s agent for process registered with 24 DOT was personally served on October 2, 2019. SeeECF No. 15-1. The court thus finds that 25 defendant was properly served. 26 The Eitel factors also point in favor of granting default judgment. Generally, a plaintiff 27 has nomeans other than a default judgment to recover against a defaulting defendant and would 28 be prejudiced if judgment were not entered. See Moroccanoil, Inc. v. Allstate Beauty Prods., 847 1 F.Supp.2d 1197, 1200-01 (C.D. Cal. 2012). Plaintiff’s complaint also states a claim that— 2 accepting the allegations therein as true—appears meritorious. That claim is straightforward: 3 “Defendant agreed to transport a truckloadof packaged frozen, diced red peppers . . .from 4 Escalon, California toSchulenburg, Texas for $4,400.00 by precooled, food-grade refrigerated 5 truck.” ECF No. 1 at 2. Plaintiff alleges, however, that the peppers were rejected “on account of 6 temperature abuse” resulting in a loss of $29,375 worth of cargo and incurring $225 in costs for 7 plaintiff in relation to inspection of the refrigeration unit. Id. The parties also agreed that 8 “plaintiff is entitled to its attorneys’ fees incurred in enforcingthe Agreement, which governs the 9 relationship between the parties including cargoloss and damage claims.” Id.at 2-3; see also 10 ECF No. 15-3. 11 The Carmack Amendment makes clear that the carrier “providing transportation or 12 service” is “liable to the person entitled to recover under the receipt or bill of lading.” 49 U.S.C. 13 § 14706(a)(1); see also Pac. Indem. Co. v. Atlas Van Lines, Inc., 642 F.3d 702, 710 (9th Cir. 14 2011)(“The Carmack Amendment imposes strict liability upon receiving carriers and delivering 15 carriers.”). Theamount requested in judgment—$36,706.85—appears reasonably to reflect the 16 sum of damages, interest, costs, and attorney’s fees. ECF No. 15. Finally, given that defendant 17 was properly served, there is no evidence that the company’s failure to appear is due to excusable 18 neglect. Cf.Shanghai Automation Instrument Co. v. Kuei, 194 F.Supp.2d 995, 1005 (N.D. Cal. 19 2001). 20 Eitel does make clear that “[c]ases should be decided upon their merits whenever 21 reasonably possible.” 782 F.2d at 1472. But, standing alone, this policy is insufficient to deny 22 default judgment against a defendant that has failed to appear and defend itself. PepsiCo, Inc. v. 23 California Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). With no appearance from 24 the defendant, a decision on the merits is simply unworkable. 25 FINDINGS AND RECOMMENDATIONS 26 Irecommend that plaintiff’s motion for a default judgment be granted in the amount of 27 $36,706.85, that judgment be entered against defendant, and that the clerk be directed to close this 28 1 || case. 2 These recommendations will be submitted to the U.S. district judge presiding over the 3 || case under 28 U.S.C. § 636(b)(1)(B) and Local Rule 304. Within 14 days of the service of the 4 | findings and recommendations, the parties may file written objections to the findings and 5 || recommendations with the court and serve a copy on all parties. That document must be 6 || captioned “Objections to Magistrate Judge’s Findings and Recommendations.” The presiding 7 | district judge will then review the findings and recommendations under 28 U.S.C. § 636(b)(1)(C). 8 || Dated: October 21, 2020 Demers: 10 STATE GISTRATE JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28