Wilson v. Scherwin & Associates, LLC ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 ANDREW D. WILSON, Case No. 2:21-cv-00897-TLN-JDP (PS) 12 Plaintiff, FINDINGS AND RECOMMENDATIONS THAT PLAINTIFF’S AMENDED MOTION 13 v. FOR DEFAULT JUDGMENT BE GRANTED 14 SCHERWIN & ASSOCIATES, LLC, ECF No. 11 15 Defendant. OBJECTIONS DUE WITHIN 14 DAYS 16 17 Plaintiff Andrew D. Wilson seeks damages for illegal debt collection activities under the 18 Fair Debt Collection Practices Act and the Rosenthal Fair Debt Collection Practices Act against 19 defendant Scherwin & Associates, LLC. Defendant has neither answered the complaint nor 20 otherwise appeared. On August 20, 2021, plaintiff filed a motion for default judgment. ECF No. 21 7. The court held a hearing on the motion on September 16, 2021, and defendant did not appear. 22 After the hearing, on October 14, 2021, plaintiff filed the instant amended motion for default 23 judgment in the amount of $6,240.00. ECF No. 11. Because defendant was properly served, and 24 because relevant discretionary factors favor of default judgment, I recommend that plaintiff’s 25 motion be granted. 26 Discussion 27 Federal Rule of Civil Procedure 55(b)(2) allows a court to enter judgment against a 28 defaulting party. While the decision to do so is “discretionary,” Aldabe v. Aldabe, 616 F.2d 1089, 1 1092 (9th Cir. 1980), it is guided by several factors. The court must first assess the adequacy of 2 service on the party against whom the default judgment would be entered. See Cranick v. 3 Niagara Credit Recovery, Inc., No. 1:13-CV-671-LJO-GSA, 2014 WL 325321, at *1 (E.D. Cal. 4 Jan. 28, 2014); see also Omni Capital Int’l., Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987) 5 (“[B]efore a federal court may exercise personal jurisdiction over a defendant, the procedural 6 requirement of service of summons must be satisfied.”). If service was sufficient, the court may 7 then consider a number of factors, including possible prejudice to the plaintiff; the merits of 8 plaintiff’s claim; the sufficiency of the complaint; the sum of money at stake; the possibility of a 9 factual dispute; whether the default was potentially due to excusable neglect; and the general 10 policy that cases be decided on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 11 1986). In addition, “the factual allegations of the complaint, except those relating to the amount 12 of damages, will be taken as true.” Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 13 1977). 14 Here, service on defendant was appropriate, and the clerk of court properly entered a 15 default on June 21, 2021. ECF No. 6. Federal Rule of Civil Procedure 4(e) allows service to 16 occur by “following state law for serving a summons . . . in the state where the district court is 17 located or where service is made,” or by “delivering a copy of [the summon and complaint] to an 18 agent authorized by appointment or by law to receive service of process.” Here, plaintiff 19 delivered a copy of the summons and complaint to defendant’s authorized agent through a 20 process server. ECF No. 4. The court thus finds that defendant was properly served. 21 Additionally, because defendant is a Delaware corporation, I examine whether the court 22 has specific personal jurisdiction, which is evaluated in FDCPA claims under the “purposeful 23 direction” framework. Deveroux v. TT Mktg., No. 1:18-CV-487-AWI-SAB, 2018 U.S. Dist. 24 LEXIS 139244, at *17 n.2 (E.D. Cal. Aug. 16, 2018). Specific jurisdiction exists when (1) the 25 non-resident purposefully directs his activities or consummates a transaction with a resident of the 26 forum; (2) the claim is one that arises out of or relates to the defendant’s forum-related activities; 27 and (3) the exercise of jurisdiction is reasonable. In re W. States Wholesale Nat. Gas Antitrust 28 Litig., 715 F.3d 716, 741-42 (9th Cir. 2013), aff’d sub nom. Oneok, Inc. v. Learjet, Inc., 575 U.S. 1 373 (2015). In cases like this one, in which a debt collector’s conduct that forms the basis of 2 plaintiff’s claims is directed to the forum state by sending mail or making calls to plaintiff in that 3 state, courts have consistently found specific personal jurisdiction. See, e.g., Frazier v. Am. 4 Credit Resolution, Inc., No. 18-cv-07729-TSH, 2019 U.S. Dist. LEXIS 181879, at *10 (N.D. Cal. 5 Oct. 21, 2019); Taub v. Parker Jewish Inst. for Health Care & Rehab., No. 18-cv-07491-RS, 6 2019 U.S. Dist. LEXIS 121912, at *14 (N.D. Cal. July 19, 2019); Garcia v. Hillcrest, Davidson 7 & Assocs. LLC, No. CV-16-00265-TUC-BPV, 2017 U.S. Dist. LEXIS 113232, at *9 (D. Ariz. 8 July 18, 2017); Freligh v. ROC Asset Sols., LLC, No. 16-cv-00653-MEJ, 2016 U.S. Dist. LEXIS 9 89660, at *7 (N.D. Cal. June 8, 2016). Specific personal jurisdiction is appropriate in this case as 10 well. 11 The Eitel factors also favor default judgment. Generally, a plaintiff has no means other 12 than a default judgment to recover against a defaulting defendant and would be prejudiced if 13 judgment were not entered. See Moroccanoil, Inc. v. Allstate Beauty Prods., 847 F. Supp. 2d 14 1197, 1200-01 (C.D. Cal. 2012). Plaintiff’s complaint also states a claim that—accepting the 15 allegations therein as true—appears meritorious. The claim is straightforward: Plaintiff alleges 16 that defendant is attempting to collect a debt that is at least 15 years old. In approximately April 17 2021, defendant began calling plaintiff’s family members and disclosing to them that plaintiff 18 owes the debt. Defendant placed calls to plaintiff’s cell phone and left at least one voicemail 19 warning that there was a “civil complaint” against plaintiff. When plaintiff spoke to defendant, 20 he was told the statute of limitation would not have any effect on the debt and was threatened 21 with adding attorney’s fees to the debt if it was not paid promptly. Defendant also sent plaintiff a 22 proposed settlement agreement in another attempt to extract payment and plaintiff’s credit card 23 information. 24 The FDCPA prohibits any debt collector from communicating with any person other than 25 the consumer about the existence of debt or for the purpose of locating the consumer. 15 U.S.C. 26 § 1692(b). Additionally, it prohibits the use of false, deceptive, or misleading representations or 27 unfair means in connection with collecting a debt. 15 U.S.C. §§ 1692(e)-(f). The state statute 28 provides for recovery when the FDCPA is violated. Cal. Civ. Code § 1788.17. The amount 1 || requested in judgment—$6,240.00—appears to reflect the sum of damages, costs, and attorney’s 2 | fees. ECF No. 10 at 2. Finally, given that Scherwin & Associates was properly served, there is 3 | no evidence that the company’s failure to appear is due to excusable neglect. Cf Shanghai 4 | Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 995, 1005 (N.D. Cal. 2001). 5 Eitel does make clear that “[c]ases should be decided upon their merits whenever 6 || reasonably possible.” 782 F.2d at 1472. But, standing alone, this policy is insufficient to deny 7 | default judgment against a defendant that has failed to appear and defend itself. PepsiCo, Inc. v. 8 | California Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). With no appearance from 9 | the defendant, a decision on the merits is simply unworkable. 10 Conclusion 11 I recommend that plaintiff’s motion for default judgment in the amount of $6,240.00 be 12 | granted. ECF No. 11. I submit these findings and recommendations to the district judge under 28 13 | U.S.C. § 636(b)(1)(B) and Rule 304 of the Local Rules of Practice for the United States District 14 | Court, Eastern District of California. The parties may, within 14 days of the service of the 15 | findings and recommendations, file written objections to the findings and recommendations with 16 | the court. Such objections should be captioned “Objections to Magistrate Judge’s Findings and 17 | Recommendations.” The district judge will review the findings and recommendations under 28 18 | U.S.C. § 636(b))(C). 19 20 IT IS SO ORDERED. 21 ( q Sty - Dated: _ April 25, 2022 □□ 22 JEREMY D,. PETERSON 54 UNITED STATES MAGISTRATE JUDGE 24 25 26 27 28