Yoon Yoo v. Matthew Arnold

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAY 29 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
YOON CHUL YOO, an individual, on No. 13-55670
behalf of himself and similarly situated
investors, D.C .No. 2:09-cv-07483- MMM
Plaintiff-counter-defendant -
Appellant, MEMORANDUM*
v.
MATTHEW ARNOLD, an individual;
DARK HALL PRODUCTIONS, LLC, a
California limited liability company,
Defendants-counter-claimants
- Appellees.
Appeal from the United States District Court
for the Central District of California
Margaret M. Morrow, District Judge, Presiding
Argued and Submitted May 8, 2015
Pasadena, California
Before: TASHIMA, TALLMAN, and NGUYEN, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Appellant Yoon Chul Yoo appeals from the district court’s denial of his
motion to set aside default, and its entry of default judgment against him in favor
of Appellees Matthew Arnold and Dark Hall Productions, LLC (“DHP”).
Specifically, Yoo argues that the district court erred in determining that the default
was due to Yoo’s own culpable conduct and in its award of damages upon entry of
default judgment. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
1. The district court did not abuse its discretion in denying Yoo’s motion
to set aside default. “A district court’s denial of a motion to set aside . . . default
. . . is reviewed for abuse of discretion.” Brandt v. Am. Bankers Ins. Co. of Fla.,
653 F.3d 1108, 1110 (9th Cir. 2011). In evaluating such a motion, “a court must
consider three factors: (1) whether the party seeking to set aside the default
engaged in culpable conduct that led to the default; (2) whether it had no
meritorious defense; or (3) whether reopening the default judgment would
prejudice the other party.” United States v. Signed Pers. Check No. 730 of Yubran
S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (“Mesle”) (internal quotations and
alterations omitted). “[A] finding that any one of these factors is true is sufficient
reason for the district court to refuse to set aside the default.” Id.
The district court denied the motion to set aside default based only on the
first factor, namely, because the default was the result of Yoo’s own culpable
2
conduct. “[A] defendant’s conduct is culpable if he has received actual or
constructive notice of the filing of the action and intentionally failed to answer.”
Id. at 1092 (quoting TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 697 (9th
Cir. 2001)) (alteration in original). Put differently, conduct is culpable “where
there is no explanation of the default inconsistent with a devious, deliberate,
willful, or bad faith failure to respond.” TCI Grp. Life Ins. Plan, 244 F.3d at 698.
The district court relied on a laundry list of culpable conduct, including Yoo’s
failure to sit for a scheduled deposition, respond to motions, pay his attorneys,
address his attorneys’ requests to withdraw, and respond to the district court’s
order to show cause why his affirmative claims should not be dismissed for failure
to prosecute.
Yoo’s proffered explanations for his conduct are unavailing. Yoo suggests
the district court should ignore his apparent indifference to the proceedings
because he does not speak English. However, there is no evidence in the record of
Yoo’s language abilities, and regardless, Yoo managed to meet with Arnold and
hire several American attorneys, indicating that he has some means of
communicating with English speakers. Additionally, Yoo argues that the district
court should have overlooked his missteps because he was unrepresented during
most of the proceedings below. While this court is normally especially “solicitous
3
towards movants . . . whose actions leading to the default were taken without the
benefit of legal representation,” Mesle, 615 F.3d at 1089, Yoo is not deserving of
the court’s solicitude because his lack of representation was the direct result of his
culpable conduct in failing to pay his attorneys. Accordingly, the district court did
not abuse its discretion in finding that Yoo’s own culpable conduct led to the entry
of default.
2. The district court correctly calculated damages upon its entry of
default judgment. After an entry of default, the court accepts as true all factual
allegations in the complaint, except those as to the amount of damages. TeleVideo
Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). The district court
may determine the amount of damages without a hearing where “the amount
claimed is a liquidated sum or capable of mathematical calculation.” Davis v.
Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). Here, the district court properly
based its damage award on evidence in Arnold’s affidavit. Cf. Fed. R. Civ. P.
55(b)(1) (clerk may enter default judgment “with an affidavit showing the amount
due”).
The district court’s measure of damages was appropriate under a breach-of-
contract theory of liability. Yoo, working with his daughter, Sophia, agreed to
finance Arnold’s production of a film titled “The Door” with a total production
4
budget of $4,500,000. Yoo deprived Arnold and DHP of the benefit of that
bargain by dispossessing Arnold and DHP of all the promised funds. Yoo induced
Arnold to return $1,761,141.82 based on false claims that the money would be
returned to investors. Then Yoo caused Sophia to withdraw $1,945,000 from
DHP’s accounts. Finally, Yoo refused to pass along $800,000 provided by a
Japanese investor. The district court properly determined that these sums were
compensable under a breach of contract theory in order to put Arnold and DHP “in
as good a position as [they] would have been had performance been rendered as
promised.” See Richards v. Sequoia Ins. Co., 124 Cal. Rptr. 3d 637, 641 (Ct. App.
2011) (quoting State v. Pac. Indem. Co., 75 Cal. Rptr. 2d 69, 79 (Ct. App. 1998)).
Because DHP had already recovered $1,945,000 from an earlier judgment against
Sophia based on the same harm, the district court correctly reduced its
compensatory damage award by that amount to prevent double recovery.1
Because its damage award was supported by evidence and based in law, the
district court did not err.
• ! •
1
Because we uphold the entire amount of damages under a breach-of-
contract theory, we need not determine whether the district court also correctly
determined that aspects of DHP’s recovery were alternatively compensable under a
tort theory of liability based on fraud.
5
The judgment of the district court is
AFFIRMED.
6