Gendi v. Oak Rock Financial, LLC ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 MAGDI GENDI and MARITHERESE No. 2:22-cv-01809 DAD AC RAID, 12 Plaintiffs, 13 FINDINGS & RECOMMENDATIONS v. 14 OAK RIDGE FINANCIAL, LLC, 15 Defendant. 16 17 18 Plaintiffs have filed a motion for default judgment. ECF No. 14. The motion is 19 improperly noticed. Pursuant to Local Rule 302(c)(19), motions for default judgment must be 20 noticed before the assigned Magistrate Judge. The motion is further deficient because it does not 21 contain the information or argument necessary for entry of default judgment. 22 I. Procedure for Default 23 A party seeking default judgment must first request entry of default from the Clerk’s 24 Office under Fed. R. Civ. P. 55(a). The court Clerk determines whether entry is appropriate by 25 reviewing the requesting party’s request and accompanying documentation. If the Clerk finds 26 that the facts establish a failure to plead or otherwise defend, the Clerk will enter a default 27 without any need for a judicial order. A default entry is not a judgment, but it is a necessary 28 precondition for judgment. 1 If the plaintiff is granted entry of default by the Clerk of the Court, plaintiff may apply to 2 the court to obtain a default judgement. Fed. R. Civ. Proc. 55(b)(2). Plaintiff must file a motion 3 for entry of default judgment and notice the motion for hearing before the undersigned pursuant 4 to Local Rule 230. The motion may be made any time after entry of defendant’s default. 5 However, “[a] defendant’s default does not automatically entitle the plaintiff to a court- 6 ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) 7 (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986)); see Fed. R. Civ. P. 55(b) 8 (governing the entry of default judgments). Instead, the decision to grant or deny an application 9 for default judgment lies within the district court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 10 1089, 1092 (9th Cir. 1980). In making this determination, the court will consider the following 11 factors: 12 (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) 13 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 14 excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 15 16 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 17 disfavored. Id. at 1472. 18 As a general rule, once default is entered by the Clerk, well-pleaded factual allegations in 19 the operative complaint are taken as true, except for those allegations relating to damages. 20 TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam). Although 21 well-pleaded allegations in the complaint are admitted by a defendant’s failure to respond, 22 “necessary facts not contained in the pleadings, and claims which are legally insufficient, are not 23 established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992). 24 II. Procedural Posture 25 Plaintiffs filed their complaint against Oak Ridge Financial, LLC, on October 13, 2022. 26 ECF No. 1. Plaintiffs subsequently filed proof of service. There was no appearance on behalf of 27 defendant, and plaintiffs took no further action. On February 13, 2023, the district judge ordered 28 plaintiffs to show cause why the action should not be dismissed for failure to prosecute. ECF No. 1 6. Plaintiffs then requested a Clerk’s entry of default, default was entered, and the OSC was 2 discharged. ECF Nos. 7, 9, 12, respectively. Again, plaintiffs took no further action. On June 3 15, 2023, a second order to show cause issued. ECF No. 13. The instant motion followed. 4 Plaintiff’s motion for default judgment recites the facts of defendant’s failure to appear 5 and on that basis seeks judgment. ECF No. 14. The motion completely fails to address the Eitel 6 factors discussed above, or to brief the legal adequacy of plaintiff’s allegations to support relief 7 on each cause of action. Accordingly, the moving party has failed to demonstrate its entitlement 8 to the relief it seeks. 9 It will be recommended that the instant motion be denied, but that plaintiffs be permitted 10 to file a new motion for default judgment under Fed. R. Civ. Proc. 55(b)(2) that addresses the 11 factors set forth in Eitel v. McCool, above. Plaintiffs are reminded that it is their burden to brief 12 the elements of each cause of action and argue why the specific allegations of the complaint, 13 assumed to be true, support judgment. Plaintiffs are further informed that it is the practice of the 14 undersigned to require that motions for default judgment be served on defendants. Proof of 15 service should be attached to the motion. 16 CONCLUSION 17 For the reasons set forth above, IT IS HEREBY RECOMENDED that plaintiffs’ motion 18 for default judgment (ECF No. 14) is DENIED without prejudice to filing a fully briefed motion 19 noticed before the Magistrate Judge. 20 These findings and recommendations are submitted to the United States District Judge 21 assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within twenty-one days 22 after being served with these findings and recommendations, any party may file written 23 objections with the court and serve a copy on all parties. Id.; see also Local Rule 304(b). Such a 24 document should be captioned “Objections to Magistrate Judge’s Findings and 25 Recommendations.” Any response to the objections shall be filed with the court and served on all 26 parties within fourteen days after service of the objections. Local Rule 304(d). Failure to file 27 objections within the specified time may waive the right to appeal the District Court’s order. 28 //// 1 | Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. YIst, 951 F.2d 1153, 1156-57 2 | (9th Cir. 1991). 3 || DATED: June 22, 2023 4 ~ 4 ALLISONCLAIRE. 5 UNITED STATES MAGISTRATE JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28