Sunbelt Rentals, Inc. v. Three Brothers Electrical Contractors, Inc. ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 SUNBELT RENTALS, INC., ) Case No.: 1:21-cv-01357 JLT SKO ) 12 Plaintiff, ) ORDER GRANTING PLAINTIFF’S MOTION FOR ) JUDGMENT ON THE PLEADINGS AND 13 v. ) GRANTING IN PART PLAINTIFF’S MOTION ) FOR DEFAULT JUDGMENT 14 THREE BROTHERS ELECTRICAL CONTRACTORS, INC., and ALEX JONES, ) 15 ) (Docs. 22, 39) Defendants. ) 16 ) 17 Sunbelt Rentals, Inc. seeks to hold Three Brothers Electrical Contractors, Inc. and Alex Jones, 18 liable for failure to pay amounts due for the rental of its equipment. (See generally Doc. 1.) Pending 19 before the Court is Plaintiff’s motion for judgment on the pleadings as to Jones and motion for default 20 judgment as to Three Brothers. (Docs. 22, 39.) The Court finds the matters suitable for decision 21 without oral argument pursuant to Local Rule 230(g) and General Order 618. For the reasons set forth 22 below, the motion for judgment on the pleadings is GRANTED and the motion for default judgment 23 is GRANTED IN PART and DENIED IN PART. 24 I. Background and Procedural History 25 Plaintiff rents equipment to its customers for use primarily in construction projects. (Doc. 1, ¶ 26 6.) Three Brothers is an electrical contractor that services residential and commercial entities. (Id. at ¶ 27 7.) Alex Jones is the chief executive officer of Three Brothers. (Id. at ¶ 3.) In November 2018, Jones, 28 in his capacity as Three Brothers’ CEO, executed Plaintiff’s online credit application (Id. at ¶ 8; Doc. 1 1-1 at 1-2.) In connection with the application, Jones also signed an individual personal guaranty in 2 which he agreed to “personally guarantee prompt payment and performance of any obligations” of 3 Three Brothers to Plaintiff. (Doc. 1, ¶ 9; Doc. 1-1 at 3.) Upon Plaintiff’s approval of the application, 4 an open account was established through which Three Brothers could rent equipment from Plaintiff on 5 credit. (Doc. 1, ¶¶ 10-11; Doc. 1-2.) From August 2020 through February 2021, Plaintiff rented 6 equipment to Three Brothers, for which Plaintiff alleges Three Brothers has failed to pay. (Doc. 1, ¶¶ 7 12-13; Docs. 1-3, 1-4.) On September 10, 2021, Plaintiff filed this action in diversity against Jones and 8 Three Brothers, asserting causes of action for (1) breach of contract; (2) unjust enrichment; (3) 9 attorney’s fees, and (4) breach of personal guaranty. (Doc. 1.)1 10 On October 12, 2021, Jones filed an answer that purported to be on behalf of himself and 11 Three Brothers. (Doc. 10.) The Court struck the answer as to Three Brothers, a corporate entity, on 12 grounds that there was no indication that Jones was an “attorney” as defined by the Court’s Local Rule 13 183 such that he would be authorized to appear and file an answer on behalf of the entity. The Clerk of 14 Court entered default against Three Brothers (Id.) Three Brothers has not filed an answer. Plaintiff 15 filed a motion for default judgment against the company alone. (Doc. 14.) The assigned magistrate 16 judge recommended the motion be denied without prejudice because Jones had appeared to defend in 17 the action and default judgment against the company could result in inconsistent determinations. (Doc. 18 19 [citing Frow v. De La Vega, 82 U.S. 552, 554 (1872); In re First T.D. & Investment, Inc., 253 F.3d 19 520, 532 (9th Cir. 2001)].) The Court adopted the findings and recommendations in full on. (Doc. 21.) 20 Plaintiff then filed an amended motion for default judgment against Three Brothers (Doc. 26), which 21 was denied for the same reasons as before. (Doc. 29; Doc. 31) Next, Plaintiff filed a “motion for 22 decree pro confesso.” (Doc. 30.) This magistrate judge recommended the motion be denied (Doc. 33) 23 and the Court agreed. (Doc. 35.) 24 25 26 1 Upon entry of default, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) 27 (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)); see also Fed. R. Civ. P. 8(b)(6) (“An allegation—other than one relating to the amount of damages — is admitted if a responsive pleading is required 28 and the allegation is not denied.”). Accordingly, the factual background is based on the allegations of the complaint. 1 Pending before the Court is Plaintiff’s motion for judgment on the pleadings as to Mr. Jones 2 and the renewed motion for default judgment against Three Brothers only. (See Docs. 26, 39.) Plaintiff 3 seeks a default judgment for the unpaid principal of $80,711.99; accrued service charges of 1.5% 4 through June 3, 2022, in the amount of $22,616.27, and additional service charges that will continue to 5 accrue until the unpaid principal amount is fully collected; pre-judgment interest at a rate of 10% from 6 June 30, 2021 until June 3, 2022, in the amount of $7,473.18, and all interest that subsequently accrues 7 through the date of judgment; post-judgment interest under 28 U.S.C. §1961(a); and a declaration that 8 the defendants are liable for Plaintiff’s reasonable and necessary attorney’s fees and costs, the amount 9 of which the Court will determine in response to a post-judgment motion by Plaintiff under Federal 10 Rule of Civil Procedure 54(d). (Doc. 27 at 10-13.) 11 II. Motion for Judgment on the Pleadings 12 A. Legal Standard 13 Federal Rule of Civil Procedure 12(c) permits a party to seek judgment on the pleadings 14 “[a]fter the pleadings are closed—but early enough not to delay trial.” “A judgment on the pleadings is 15 a decision on the merits.” 3550 Stevens Creek Assocs. v. Barclays Bank of Cal., 915 F.2d 1355, 1356 16 (9th Cir. 1990). A Rule 12(c) motion “is designed to dispose of cases where the material facts are not 17 in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings 18 and any judicially noticed facts.” Herbert Abstract Co. v. Touchstone Props., Ltd., 914 F.2d 74, 76 19 (5th Cir. 1990) (per curiam). 20 Accordingly, “judgment on the pleadings is properly granted when, taking all the allegations in 21 the non-moving party’s pleadings as true, the moving party is entitled to judgment as a matter of law.” 22 Marshall Naify Revocable Trust v. United States, 672 F.3d 620, 623 (9th Cir. 2012) (quoting Fajardo 23 v. Cnty. of Los Angeles, 179 F.3d 698, 699 (9th Cir. 1999)). The Court applies the same standard as on 24 a 12(b)(6) motion for failure to state a claim upon which relief can be granted. Cafasso, U.S. ex rel. v. 25 Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 n.4 (9th Cir. 2011); see also Morgan v. Cnty. of 26 Yolo, 436 F. Supp. 2d 1152, 1154-55 (E.D. Cal. 2006), aff’d, 277 F. App’x 734 (9th Cir. 2008) (a 27 motion for judgment on the pleadings “challenges the legal sufficiency of the opposing party’s 28 pleadings and operates in much the same manner as a motion to dismiss under Rule 12(b)(6).”); 1 Diamond v. Corizon Health, Inc., 2016 WL 7034036 (N.D. Cal. Dec. 2, 2016) (describing the two 2 motions as “functionally identical”) (citing Dwokin v. Hustler Mag. Inc., 867 F.2d 1188 (9th Cir. 3 1989)). 4 Although typically brought by defendants, a 12(c) motion may also be brought by a plaintiff. 5 United States v. Brown, 2019 WL 5549174, at *2 (D. Ariz. Oct. 28, 2019) (citing Qwest Commc’ns 6 Corp. v. City of Berkeley, 208 F.R.D. 288, 291 (N.D. Cal. 2002)). A plaintiff may use a 12(c) motion 7 to its benefit where a defendant’s answer fails to deny the allegations of the Complaint. Id. (“A 8 plaintiff may move for judgment on the pleadings if the answer fails to controvert material facts 9 alleged in the complaint. Accordingly, when ruling on a motion for judgment on the pleadings filed by 10 a plaintiff, [u]ncontested allegations to which the other party had an opportunity to respond are taken 11 as true.”) (internal citations and quotation marks omitted); see also Munoz v. United States Dep’t of 12 State, 2018 WL 6842829, at *1 (C.D. Cal. June 8, 2018) (same). The existence of affirmative defenses 13 usually precludes judgment on the pleadings. See Gen. Conf. Corp. of Seventh-Day Adventists v. 14 Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir. 1989), unless the 15 affirmative defenses raise only questions of law. Pit River Tribe v. Bureau of Land Mgmt., 793 F.3d 16 1147, 1159 (9th Cir. 2015); RLI Ins. Co. v. City of Visalia, 297 F. Supp. 3d 1038, 1056 (E.D. Cal. 17 2018). Thus, a plaintiff may bring the motion if the defendant’s answer fails to controvert material 18 facts alleged in the Complaint or any affirmative defenses raise no issues of fact. 19 B. Discussion and Analysis 20 Because the Complaint does not make clear which causes of action it asserts against Jones, the 21 Court will address each in turn. 22 1. Breach of contract 23 Plaintiff’s claim for breach of contract asserts that the open account terms and invoices 24 established a contract between Plaintiff and Three Brothers, which was breached when Three Brothers 25 failed to fully satisfy rental payments due, and which caused Plaintiff to suffer damages. (Doc. 1 at ¶¶ 26 23-25.) Jones’ answer in response was “no contest.” (Doc. 10 at 3.) This unquestionably fails to deny 27 or controvert the material facts of the Complaint and Jones raises no affirmative defenses to this cause 28 of action. 1 2. Attorney’s fees 2 Plaintiff claims that due to Three Brothers’ breach of the agreement and Jones’ breach of the 3 personal guaranty, it was forced to retain attorneys to litigate its claims after numerous requests for 4 payment went unanswered. (Doc. 1 at ¶ 27.) Accordingly, Plaintiff asserts it is entitled to reasonable 5 attorney’s fees. (Id. at ¶ 28.) Jones’ answer does not deny Plaintiff’s entitlement to attorney’s fees. 6 Rather, he states that “Defendants request reduction [of attorney’s fees] by half.” (Doc. 10 at 3.) Thus, 7 Jones’ answer effectively admits liability for attorney’s fees. Failure to deny a plaintiff’s allegations in 8 a complaint constitutes an admission. See Lockwood v. Wolf Corp., 629 F.2d 603 (9th Cir. 1980) 9 (citing Fed. R. Civ. P. 8(d)). Only challenging the amount of attorney’s fees does not constitute an 10 affirmative defense. See Hernandez v. Cnty. of Monterey, 306 F.R.D. 279, 285 (N.D. Cal. 2015) 11 (clarifying that “attorneys’ fees are not damages. In any event, a defense targeting the amount of the 12 recovery is a limitation rather than an affirmative defense.”); see also, e.g., Brown v. DirecTV, LLC, 13 562 F. Supp. 3d 590, 605 (C.D. Cal. 2021) (explaining that “partial summary judgment may still be 14 appropriate as to liability, even if not as to the total amount of damages, so long as the material facts 15 are undisputed”). 16 3. Unjust enrichment 17 Plaintiff’s third count alleges that it rented equipment to Three Brothers, who used the 18 equipment in conducting its business, “thereby retaining the value of renting the equipment without 19 paying for it.” (Doc. 1 at ¶¶ 30-31.) According to Plaintiff, “[i]t would be unjust for Three Brothers to 20 retain the benefit of the [e]quipment without paying for the same,” entitling Plaintiff to recovery for 21 unjust enrichment. (Id. at ¶¶ 32, 34.) In his answer, Jones responds: 22 A. “Defendant has not been fully compensated by project owners and general contractor.” 23 B. “Defendant is in the process of filing suit against the owners and general contractor.” 24 C. “Defendant request[s] a management payment plan, [$]1,000.00 to [$]1,500.00 per month for 12 months with review of 25 Defendant[‘s] finances and amount owed to determine adjustment of payment.” (Id.) 26 (Doc. 10 at 3.) 27 Again, Jones does not deny or controvert Plaintiff’s entitlement to recovery under the doctrine 28 of unjust enrichment. He also does not challenge the amount of damages, only that he be allowed to 1 enter a payment plan to satisfy the judgment. In effect, Jones admits the allegations as to Plaintiff’s 2 claim for unjust enrichment. Lockwood v. Wolf Corp., 629 F.2d 603 (9th Cir. 1980). However, because 3 Plaintiff alleges unjust enrichment as an alternative to the breach of contract, and the Court finds the 4 breach occurred, the unjust enrichment claim does not serve as a basis to find Mr. Jones liable on the 5 personal guaranty claim. 6 4. Breach of personal guaranty 7 According to the Complaint, in filing a credit application with Plaintiff, Jones signed an 8 individual personal guaranty in which he agreed to “personally guarantee prompt payment and 9 performance of any obligations” of Three Brothers to Plaintiff, including payment for outstanding 10 balances. (Doc. 1 at ¶¶ 9, 21.) Plaintiff’s final claim for breach of personal guaranty alleges that after 11 the guaranty’s execution, Jones, as guarantor of Three Brothers, failed to pay Plaintiff upon Three 12 Brothers’ default. (Id. at ¶¶ 36-37.) As a result, Plaintiff asserts he suffered damages. (Id. at ¶ 38.) As 13 with the unjust enrichment claim, Jones answers that he “is willing to make payments to settle 14 default.” (Doc. 10 at 3.) Notably, there isn’t a challenge to the amount of damages. Thus, Jones fails to 15 deny this claim or controvert the material facts of the Complaint, entitling Plaintiff to judgment on the 16 pleadings as a matter of law. Critically, Jones does not challenge any of Plaintiff’s four causes of 17 action. He had ample opportunity to deny these claims, controvert the material facts, or raise an 18 affirmative defense. He failed to do any of these. Thus, Plaintiff’s allegations are taken as true, and the 19 motion for judgment on the pleadings is GRANTED. 20 III. Motion for Default Judgment 21 A. Legal Standard 22 “Our starting point is the general rule that default judgments are ordinarily disfavored,” as 23 “[c]ases should be decided upon their merits whenever reasonably possible.” NewGen, LLC v. Safe 24 Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016) (quoting Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 25 1986)). Pursuant to Federal Rules of Civil Procedure 55, obtaining a default judgment is a two-step 26 process. Entry of default is appropriate as to any party against whom a judgment for affirmative relief 27 is sought that has failed to plead or otherwise defend as provided by the Federal Rules of Civil 28 Procedure and where that fact is made to appear by affidavit or otherwise. Fed. R. Civ. P. 55(a). After 1 entry of default, a plaintiff can seek entry of default judgment. Fed. R. Civ. P. 55(b). 2 The decision to grant a motion for entry of default judgment is within the discretion of the 3 Court. PepsiCo, Inc. v. California Security Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002). The 4 Ninth Circuit has directed courts to consider the following factors in deciding whether to enter default 5 judgment: (1) the possibility of prejudice to plaintiff; (2) the merits of plaintiff’s substantive claims; 6 (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a 7 dispute concerning the material facts; (6) whether defendant’s default was the product of excusable 8 neglect; and (7) the strong policy favoring decisions on the merits. See Eitel, 782 F.2d at 1471-72. 9 B. Discussion and Analysis 10 Plaintiff moves the Court to enter default judgment against Three Brothers for its failure to 11 appear to defend itself in this matter. (See Docs. 26, 39.) Applying the factors articulated by the Ninth 12 Circuit in Eitel, the Court finds the factors weigh in favor of granting Plaintiff’s motion for default 13 judgment with respect to the breach of contract claim against Three Brothers. 14 1. Eitel factors 15 a. Prejudice to Plaintiff 16 The first factor considers whether the plaintiff would suffer prejudice if default judgment is not 17 entered, and potential prejudice to the plaintiff weighs in favor of granting a default judgment. See 18 PepsiCo, 238 F. Supp. 2d at 1177. Generally, where default has been entered against a defendant, a 19 plaintiff has no other means by which to recover damages. Id.; Moroccanoil, Inc. v. Allstate Beauty 20 Prods., 847 F. Supp. 2d 1197, 1200-01 (C.D. Cal. 2012). 21 Plaintiff argues it will be severely prejudiced because Three Brothers has not retained an 22 attorney or answered the Complaint, and although Jones has appeared on his own behalf, Jones’ 23 liability relies on Three Brothers’ liability. (Doc. 27 at 4-5.) The Court agrees that Plaintiff will be 24 prejudiced if default judgment is not granted. Plaintiff filed this lawsuit on September 10, 2021. (See 25 Doc. 1.) If default judgment is not entered, Plaintiff will effectively be denied relief, as it is apparent 26 Three Brothers will not appear or otherwise defend itself in this matter. Therefore, this factor weighs 27 in favor of entering a default judgment. 28 /// 1 b. Merits of Plaintiff’s claims and sufficiency of the complaint 2 “The second and third Eitel factors instruct the Court to evaluate the merits of the substantive 3 claims alleged in the complaint as well as the sufficiency of the complaint itself. It is appropriate for 4 the court to analyze these two factors together.” Arroyo v. J.S.T. LLC, 2019 WL 4877573, at *6 (E.D. 5 Cal. Oct. 3, 2019) (citations omitted). The Ninth Circuit has suggested that, when combined, the 6 factors require a plaintiff to “state a claim on which the plaintiff may recover.” Pepsico, 238 F. Supp. 7 2d at 1175. 8 i. Breach of contract 9 Under California law, the elements of a breach of contract claim are: “(1) the existence of the 10 contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach and (4) the 11 resulting damages to the plaintiff.” Oasis West Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011) 12 (internal citation omitted). For a contract to be enforceable, the contract terms must be sufficiently 13 definite as a matter of law for the court “to ascertain the parties’ obligations and to determine whether 14 those obligations have been performed.” Ersa Grae Corp. v. Fluor Corp., 1 Cal. App. 4th 613, 623 15 (Cal. Ct. App. 1991). “Stated otherwise, the contract will be enforced if it is possible to reach a fair 16 and just result even if, in the process, the court is required to fill in some gaps.” Id. 17 Plaintiff alleges Jones executed a credit application on behalf of Three Brothers, along with a 18 personal guaranty, agreeing to be bound by the “open account” terms and allowing Three Brothers to 19 rent Plaintiff’s equipment on credit. Doc. 1 at ¶¶ 8-10; Docs. 1-1, 1-2.) As evidenced by the terms and 20 invoices, attached to the Complaint, Plaintiff asserts its approval of Jones’ application formed a 21 contract between the parties. (See Doc. 1 at ¶ 23.) The contract was governed by Plaintiff’s standard 22 “open account” terms wherein Three Brothers would pay to rent Plaintiff’s equipment, personally 23 guaranteed by Jones. (See Docs. 1-1, 1-2.) The Complaint also alleges that Plaintiff performed its 24 portion of the contract by renting equipment to Three Brothers from August 2020 through February 25 2021 (Doc. 1 at ¶ 12), Three Brothers breached the contract by failing to pay the rental charges owed 26 to Plaintiff (id. at ¶¶ 13, 24), and Plaintiff suffered monetary damages as a result of the breach. (See id. 27 at ¶¶ 16, 18-19, 25.) These allegations are legally sufficient to entitle Plaintiff to relief against Three 28 Brothers on the breach of contract claim. 1 ii. Unjust enrichment 2 With respect to the unjust enrichment claim, Plaintiff asserts that “in the alternative, if [the] breach of 3 contract claim was deemed insufficient, [Plaintiff] is entitled to recover from Three Brothers for the 4 damages set forth below based on unjust enrichment.” (Doc. 27 at 6.) As discussed above, Plaintiff 5 sufficiently stated a claim for breach of contract. Moreover, “California law does not permit a 6 standalone cause of action for unjust enrichment where an enforceable written contract governs the 7 same subject matter.” BASF at *4 (citing Paracor Fin., Inc. v. Gen. Elec. Cap. Corp., 96 F.3d 1151, 8 1167 (9th Cir. 1996)). As such, because the subject matter of Plaintiff’s unjust enrichment claim is 9 governed by the same contract as for the breach of contract claim, Plaintiff cannot rely on a separate, 10 duplicative cause of action for unjust enrichment. Id. (quoting Durell v. Sharp Healthcare, 183 Cal. 11 App. 4th 1350, 1370 (2010)) (“As a matter of law, an unjust enrichment claim does not lie where the 12 parties have an enforceable express contract.”). In sum, the second and third Eitel factors weigh in 13 favor of default judgment as to the breach of contract claim but not as to the unjust enrichment claim. 14 Thus, Plaintiff’s motion is DENIED as to the unjust enrichment claim, which is DISMISSED WITH 15 PREJUDICE. BASF Corp. v. ENS, Inc., 2022 WL 16973248, at *6 (C.D. Cal. Nov. 16, 2022); 16 Carlson Produce, LLC v. Clapper, 2020 WL 533004, at *4 (N.D. Cal. Feb. 3, 2020). 17 c. Sum of money at stake 18 Generally, when considering this factor, the Court “must consider the amount of money at 19 stake in relation to the seriousness of Defendant’s conduct.” Pepsico, 238 F. Supp. 2d at 1176; see 20 also Nolan v. Calello, 2021 WL 4621945, at *3 (C.D. Cal. July 8, 2021) (balancing the amount and 21 the seriousness “requires that the Court assess whether the recovery sought is proportional to the harm 22 caused by the defendant’s conduct.”) (citing Landstar Ranger, Inc. v. Parth Enters., Inc., 725 F. Supp. 23 2d 916, 921 (C.D. Cal. 2010)). “Default judgment is disfavored when a large amount of money is 24 involved,” or the amount sought appears “unreasonable in light of the potential loss caused by the 25 defendant's actions.” HICA Educ. Loan Corp. v. Warne, 2012 WL 1156402, at *3 (N.D. Cal. Apr. 6, 26 2012) (citations and internal quotation marks omitted). Because the amount of relief sought is 27 comprised only of charges enumerated in the parties’ binding agreement—principal charges, service 28 charges, interest, and attorney’s fees—the Court does not find the amount unreasonable or 1 disproportionate in relation to the losses caused by Three Brother’s conduct. Accordingly, the fourth 2 Eitel factor weighs in favor of entering default judgment. 3 d. Possibility of dispute concerning material facts 4 There is little possibility of dispute concerning material facts because (1) based on the entry of 5 default, the Court accepts allegations in Plaintiff’s Complaint as true and (2) though properly served, 6 Three Brothers failed to appear or otherwise challenge the well-pleaded allegations of the Complaint. 7 See Pepsico, 238 F. Supp. 2d at 1177; see also Elektra Entm’t Group, Inc. v. Crawford, 226 F.R.D. 8 388, 393 (C.D. Cal. 2005) (“Because all allegations in a well-pleaded complaint are taken as true after 9 the court clerk enters default judgment, there is no likelihood that any genuine issue of material fact 10 exists”). Accordingly, this factor favors entry of default judgment. 11 e. Whether default was due to excusable neglect 12 Generally, the Court will consider whether a defendant’s failure to answer is due to excusable 13 neglect. See Eitel, 782 F.2d at 1472. Three Brothers was properly served with the Summons and 14 Complaint. (See Doc. 5.) Nevertheless, Three Brothers has not appeared in this action, nor has it 15 opposed the motion for default judgment. Given these facts, it is unlikely that Three Brothers’ actions 16 were the result of excusable neglect. Shanghai Automation Instrument Co., Ltd. v. Kuei, 194 F. Supp. 17 2d 995, 1005 (N.D. Cal. 2001) (finding no excusable neglect because the defendants “were properly 18 served with the Complaint, the notice of entry of default, as well as the papers in support of the instant 19 motion”). Thus, this factor weighs in favor of default judgment. 20 e. Policy disfavoring default judgment 21 As noted above, default judgments are disfavored because “[c]ases should be decided on their 22 merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. However, the policy favoring decisions 23 on the merits does not weigh against entering default judgment where, as here, the defendant’s failure 24 to appear has made impractical a decision on the merits. Arroyo, 2019 WL 4877573, at *11. 25 Given the prejudice to Plaintiff if default judgment is not granted and the merits of the 26 allegations contained in complaint, granting default judgment in this case would not violate the 27 general policy under the Federal Rules of Civil Procedure favoring decisions on the merits. See 28 PepsiCo, 238 F. Supp. 2d at 1177 (“Defendant’s failure to answer Plaintiffs’ Complaint makes a 1 decision on the merits impractical, if not impossible. Under Fed. R. Civ. P. 55(a), termination of a case 2 before hearing the merits is allowed whenever a defendant fails to defend an action.”). Because Three 3 Brothers has failed to defend the action, the Court finds the policy favoring decisions on the merits 4 does not preclude entering default judgment against Three Brothers under these circumstances. 5 The Eitel factors weigh strongly in favor of granting default judgment and the entry of default 6 judgment is within the discretion of the Court. See Aldabe, 616 F.2d at 1092. Furthermore, “where a 7 complaint alleges that defendants are jointly liable and one of them defaults, judgment should not be 8 entered against the defaulting defendant until the matter has been adjudicated with regard to all 9 defendants.” In re First T.D. & Investment, Inc., 253 F.3d 520, 532 (9th Cir. 2001) (citing Frow v. De 10 La Vega, 82 U.S. 552, 554 (1872)). As a decision on the merits, judgment in favor of Plaintiff and 11 against Jones on the personal guaranty claim under Rule 12(c) amounts to an adjudication with regards 12 to the remaining defendant. Accordingly, Plaintiff’s motion for default judgment as to Three Brothers 13 on the breach of contract claim is GRANTED. Additionally, as guarantor, Jones and Three Brothers 14 are jointly and severally liable for the damage amount, discussed below. 15 2. Terms of judgment 16 Under Rule 8(a)(3), a plaintiff’s demand for relief must be specific, and it “must ‘prove up’ the 17 amount of damages.” Philip Morris USA Inc. v. Banh, 2005 WL 5758392, at *6 (C.D. Cal. Jan. 14, 18 2005). Rule 54(c) “allows only the amount prayed for in the complaint to be awarded to the plaintiff in 19 a default.” Elektra Entertainment Group v. Bryant, 2004 WL 783123, at *5 (C.D. Cal. Feb. 13, 2004); 20 PepsiCo, 238 F. Supp. 2d at 1175 (stating that a 54(c) motion is proper when it “requests a remedy 21 that is not different in kind from that prayed for in the Complaint.”). 22 a. Compensatory damages 23 In its motion for default judgment, Plaintiff seeks $103,328.26 in compensatory damages, 24 including the unpaid principal amount of $80,711.99 and accrued service charges at 1.5% through 25 June 3, 2022, totaling $22,616.27. (See Docs. 26, 27.) Plaintiff indicates the service charges continue 26 to accrue until the principal amount is paid in full. (Doc. 27 at 12.) 27 In support of the damages amount, Plaintiff provides numerous invoices and late charge 28 notices detailing the type of equipment rented by Three Brothers, the dates of the rental period, and the 1 applicable charges. (See Doc. 1-3.) The invoice dates encompass the entire alleged rental period, from 2 August 2020 to February 2021. (See id. at 1-28.) Plaintiff further provides an account summary 3 indicating a principal amount owed totaling $80,711.99. (See Doc. 1-4; Doc. 26-1 at 5.) The 4 declaration from Catherine Hargis, Plaintiff’s corporate collections manager, demonstrates that as of 5 June 3, 2022, the accrued service charges amounted to $22,616.27. (Doc. 26-1.) As evidenced and 6 declared by Ms. Hargis, the open account terms provide that unpaid service charges accrue interest at 7 1.5% per month. (See Doc. 1-2 at 2; Doc. 26-1.) 8 The Court finds that Plaintiff has provided sufficient proof of the damages amount through the 9 declaration of Ms. Hargis and supporting documentation. Thus, Plaintiff is entitled to the full amount 10 of compensatory damages without the need for a hearing. See Nike, Inc. v. B&B Clothing Co., 2007 11 WL 1515307, at *1 (E.D. Cal. May 22, 2007) (internal citations omitted) (“Where damages are 12 liquidated or otherwise capable of ascertainment from definite figures contained in the documentary 13 evidence or in detailed affidavits, judgment by default may be entered without a damages hearing.”); 14 see also Priv. Funding Grp., LLC v. Goldshield Medline Grp., Inc., 2022 WL 18356997, at *6 (C.D. 15 Cal. Dec. 9, 2022) (no “prove-up” hearing required when the sum is capable of mathematical 16 calculation). Plaintiff SHALL provide the exact amount of damages sought in a proposed form of 17 short order to be submitted within 10 days of entry of judgment. 18 b. Prejudgment interest 19 Plaintiff also seeks prejudgment interest at the statutory interest rate at 10%, amounting to 20 $7,473.18 as of June 3, 2022, plus all interest that accrues through the date judgment is entered. (Doc. 21 27 at 12.) Prejudgment interest “serves to compensate [the prevailing wronged party] for the loss of 22 use of money due as damages from the time the claim accrues until judgment is entered, thereby 23 achieving full compensation for the injury those damages are intended to redress.” Schneider v. 24 County of San Diego, 285 F.3d 784, 789 (9th Cir. 2002) (internal quotation omitted). State law 25 generally governs the award of prejudgment interest in diversity actions. Oak Harbor Freight Lines, 26 Inc. v. Sears Roebuck & Co., 513 F.3d 949, 961 (9th Cir. 2008). California Civil Procedure Code § 27 3287(a) provides that a party “entitled to recover damages certain, or capable of being made certain by 28 calculation, and the right to recover which is vested in the person upon a particular day, is entitled to 1 also recover interest thereon from that day.” Further, the obligation set forth by a contract “shall bear 2 interest at a rate of 10 percent per annum after a breach.” Cal. Civ. Proc. Code § 3289(b). Because 3 Plaintiff alleges that it is entitled to prejudgment interest and because the Court finds that Plaintiff 4 provided adequate proof of the damages amount, the Court also concludes that Plaintiff is entitled to 5 recover the full amount of prejudgment interest. Plaintiff SHALL provide the exact amount of 6 prejudgment interest sought in a proposed form of short order to be submitted within 10 days of entry 7 of judgment. 8 c. Post-judgment interest 9 Plaintiff is entitled to receive post-judgement interest. “Under the provisions of 28 U.S.C. § 10 1961, post-judgment interest on a district court judgment is mandatory.” Air Separation, Inc. v. 11 Underwriters at Lloyd’s of London, 45 F.3d 288, 290 (9th Cir. 1995) (citing Perkins v. Standard Oil 12 Co., 487 F.2d 672, 674 (9th Cir. 1973)). Post-judgment interest applies to the entire judgment, 13 including principal, pre-judgment interest, attorneys’ fees, and costs. Id. at 291. The post-judgment 14 interest rate is set “at a rate equal to the weekly average 1–year constant maturity Treasury yield, as 15 published by the Board of Governors of the Federal Reserve System, for the calendar week preceding 16 ... the date of the judgment.” 28 U.S.C. § 1961(a). 17 d. Attorney’s fees 18 Plaintiff seeks a declaration that Three Brothers is liable for reasonable attorney’s fees and 19 costs incurred to enforce the parties’ contract, the amount of which to be determined upon the filing of 20 a post-judgment motion under Federal Rule of Civil Procedure 54(d). (See Doc. 27 at 10-13; Doc. 23 21 at 8.) Under California law, reasonable attorney’s fees and costs are available to the prevailing party of 22 a contract action “where the contract specifically provides that attorney’s fees and costs, which are 23 incurred to enforce that contract,” are recoverable. Cal. Civ. Code § 1717. Section 15 of Plaintiff’s 24 conditions and terms provides that “[i]f a Customer default occurs . . . Customer shall pay all of 25 [Plaintiff’s] costs, including reasonable costs of collection, court costs, attorneys and legal fees, 26 incurred in exercising any of its rights or remedies herein.” (Doc. 1-2 at 2.) Because the Court has 27 determined that the contract is enforceable, the Court concludes Plaintiff is entitled to reasonable 28 attorney’s fees and costs. Plaintiff indicates its intention to file a motion for attorney’s fees after entry 1 of judgment. (See Docs. 26, 39.) Thus, the Court RESERVES jurisdiction as to the amount of 2 attorney’s fees pending examination of Plaintiff’s Rule 54(d) motion or stipulation. Plaintiff SHALL 3 submit such stipulation or motion within 28 days of entry of final judgment. L.R. 293. 4 IV. Conclusion and Order 5 For the reasons set forth above, the Court ORDERS: 6 1. Plaintiff’s motion for judgment on the pleadings (Doc. 22) is GRANTED as to the 7 personal guaranty claim against Defendant Alex Jones. 8 2. Plaintiff Sunbelt Rentals, Inc.’s motion for default judgment (Doc. 39) is GRANTED 9 IN PART AND DENIED IN PART as follows: 10 a. Plaintiff’s motion is GRANTED as to Plaintiff’s breach of contract claim. 11 b. Plaintiff’s motion is DENIED as to the unjust enrichment claim and the claim is 12 DISMISSED WITH PREJUDICE. 13 3. Plaintiff is awarded damages as follows: 14 a. Compensatory damages, the amount of which is to be determined 15 pursuant to Plaintiff’s submission of a proposed order. 16 b. Prejudgment interest, the amount of which is to be determined pursuant 17 to Plaintiff’s submission of a proposed order. 18 c. Any postjudgment interest accruing after the entry of judgment at the 19 statutory rate pursuant to 28 U.S.C. § 1961 until the judgment is paid. 20 d. Reasonable attorney’s fees and costs, the amount of which is to be 21 determined pursuant to Plaintiff’s submission of a postjudgment motion 22 or stipulation. 23 4. Plaintiff SHALL provide the exact amount of damages and prejudgment interest 24 sought by way of a proposed form of short order to be submitted within 10 days of 25 entry of judgment. 26 5. The Court RESERVES jurisdiction to enter an award of reasonable attorney’s fees, 27 litigation expenses, and costs in the interim between judgment and Plaintiff’s 28 postjudgment filing. 1 6. Plaintiff SHALL submit its motion or stipulation for attorney’s fees within 28 days of 2 the Court’s entry of final judgment. 3 7. The Clerk of the Court is directed to enter judgment in favor of Plaintiff and against 4 Defendants as follows: 5 a. Against Three Brothers Electrical Contractors, Inc. as to the breach of 6 contract claim. 7 b. Against Alex Jones as to the personal guaranty claim. 8 8. The Clerk of the Court is directed to CLOSE the case. 9 10 IS SO ORDERED. 11 || Dated: _March 19, 2023 ( Li pA LU. wan 12 TED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15