Acosta v. Perez, 1:19-cv-01224-AWI-EPG

JOSE ACOSTA, Plaintiff, v. MARIA DEL CARMEN PARRA PEREZ, et al., Defendants.

No. 1:19-cv-01224-AWI-EPG

United States District Court, E.D. California

September 1, 2021

FINDINGS AND RECOMMENDATIONS RECOMMENDING THAT PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT BE GRANTED IN PART

(ECF NO. 58)

FOURTEEN (14) DAY DEADLINE

Currently before the Court is Plaintiff Jose Acosta's (“Plaintiff”) motion for default judgment against Defendants Thu Huynh, Ngoc Tran, and THNBT LLC (“Defendants”). The matter was referred to the undersigned pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302(c)(19). For the following reasons, the Court recommends granting the motion in part, with a reduction in the amount of attorneys' fees awarded.

I. BACKGROUND

a Procedural History

Plaintiff filed this action on September 5, 2019, alleging violations of the Americans with Disabilities Act (the “ADA”), 42 U.S.C. §§ 12101 et seq. and related California law, against Defendants Maria Del Carmen Parra Perez, doing business as Lesly's Gifts and More, Thu Huynh, and Ngoc Tran. (ECF. No. 1) Plaintiff filed a First Amended Complaint as a matter of course pursuant to Federal Rule of Civil Procedure 15(a)(1) on October 16, 2019. (ECF No. 6.) On November 6, 2019, Defendant Perez filed a motion to dismiss the First Amended Complaint for lack of subject matter jurisdiction. (ECF No. 10.)

On November 18, 2019, Plaintiff filed proofs of service stating that Defendants Huynh and Tran were served by substituted service on “Ann Nguyen, Co-Occupant” and copies of the summons and complaint were mailed to them at 2586 Greenrock Road, Milpitas, CA 95035. (ECF Nos. 14, 15.) On December 23, 2019, Defendants Huynh and Tran, appearing through counsel, filed a notice of joinder in Defendant Perez's motion to dismiss. (ECF No. 22.) On May 6, 2020, District Judge Anthony W. Ishii entered an order denying the motion to dismiss. (ECF No. 28.)

On June 16, 2020, after Defendants Huynh and Tran did not file a response to the First Amended Complaint, Plaintiff requested entry of default against them. (ECF No. 32.) On June 22, 2020, the Clerk of Court entered default against Defendants Huynh and Tran. (ECF No. 33.)

On July 16, 2020, Plaintiff and Defendant Perez filed a stipulated request to allow Plaintiff leave to file a Second Amended Complaint, which the Court approved by order entered on July 17, 2020. (ECF Nos. 36, 37.) The Clerk of Court again entered default against Defendants Huynh and Tran on June 22, 2020, pursuant to Plaintiff's request. (ECF Nos. 39, 40.) Plaintiff and Defendant Perez filed a stipulation of dismissal as to Defendant Perez only on August 20, 2020. (ECF Nos. 41, 42.)

On October 20, 2020, Plaintiff filed a motion seeking leave to file a Third Amended Complaint (“TAC”) in order to name THNBT LLC (“THNBT”) as a defendant. (ECF No. 45.) According to the motion, THNBT is an alter ego of Defendants Huynh and Tran and was created during the pendency of this litigation in an attempt to evade collection on a default judgment by transferring ownership of the property at issue from Defendants Huynh and Tran to THNBT. (Id.; see also ECF Nos. 45-2, 45-4.) On February 2, 2021, the Court entered an order granting Plaintiff's motion. (ECF No. 49.)

Plaintiff filed the TAC on February 9, 2021. (ECF No. 50.) On February 18, 2021, Plaintiff filed a proof of service indicating that Defendant THNBT was served through its registered agent, Defendant Huynh. (ECF No. 52.) On March 26, 2021, at Plaintiff's request, the Clerk of Court entered default against Defendant THNBT. (ECF No. 53, 54.)

Plaintiff filed the instant motion for default judgment on April 30, 2021. (ECF No. 58.) Plaintiff argues that he is entitled to default judgment against Defendants because the complaint adequately alleges that he is entitled to relief under the ADA. (ECF No. 58-1 at 8-10.) Additionally, Defendants are jointly and severally liable for the ADA violations. (Id. at 10.) Plaintiff is entitled to an injunction requiring Defendants to remove all architectural barriers, $4, 000.00 in statutory damages, and attorneys' fees and costs in the amount of $25, 114.06. (Id. at 12-20.) Plaintiff argues that this amount should be offset by $4, 000.00 to reflect Plaintiff's settlement with Defendant Perez. (Id. at 10-12.)

Defendants were served with the motion for default judgment but did not file an opposition or otherwise respond to the motion. (See ECF No. 58-7.)

The Court held a hearing on the motion on June 11, 2021. (ECF Nos. 61, 62.) Counsel Tanya Moore appeared at the hearing on behalf of Plaintiff. (ECF No. 61.) Defendants did not appear at the hearing. (Id.) At the hearing, Plaintiff was granted leave to file a supplemental brief addressing issues regarding service of the operative complaint on Defendants Huynh and Tran. (ECF No. 62.)

On June 11, 2021, Plaintiff filed a request for entry of default as to Defendants Huynh and Tran due to their failure to respond to the TAC. (ECF No. 60.) On June 15, 2021, pursuant to Plaintiff's request, the Clerk of Court again entered default against Defendants Huynh and Tran. (ECF Nos. 60, 63.)

On June 16, 2021, Plaintiff filed supplemental briefing in support of the motion. (ECF No. 64.) In his supplemental briefing, Plaintiff argued that Defendants Huynh and Tran were not required to be served with the TAC but were electronically served through their counsel of record. (Id. at 1-3.) Defendants Huynh and Tran were also served with the motion for default judgment. (Id.) Plaintiff requests an additional $465.50 in attorneys' fees incurred in attending the hearing on the motion and preparing the supplemental briefing. (Id.)

On July 28, 2021, the Court entered an order permitting Plaintiff to file further supplemental briefing in support of the motion. (ECF No. 65.) Specifically, the Court allowed Plaintiff to file supplemental briefing addressing the factors under Eitel v. McCool, 782 F.2d 1470, 1471-72 as well as the adequacy of service and the Court's jurisdiction over the subject matter and the parties. (Id.) Plaintiff filed further supplemental briefing on August 11, 2021. (ECF No. 66.) Plaintiff requested an additional $909.50 in attorneys' fees incurred in preparing the second supplemental brief, bringing the total amount of attorneys' fees and costs sought to $26, 489.06, less an offset of $4, 000.00 paid by Defendant Perez. (Id.)

II. LEGAL STANDARDS

Federal Rule of Civil Procedure 55 permits the Court to enter default judgment following a defendant's default. See Fed. R. Civ. P. 55(b). Rule 55 specifically provides that:

(b) Entering a Default Judgment

(1) By the Clerk. If the plaintiff's claim is for a sum certain or a sum that can be made certain by computation, the clerk-on the plaintiff's request, with an affidavit showing the amount due-must enter judgment for that amount and costs against a defendant who has been defaulted for not appearing and who is neither a minor nor an incompetent person.

(2) By the Court. In all other cases, the party must apply to the court for a default judgement. A default judgment may be entered against a minor or incompetent person only if represented by a general guardian, conservator, or other like fiduciary who has appeared personally or by a representative, that person or its representative must be served with written notice of the application at least 7 days before the hearing. The court may conduct hearings or make referrals-preserving any federal statutory right to a jury trial-when, to enter or effectuate judgment, it needs to:

(A) Conduct an accounting;

(B) Determine the amount of damages;

(C) Establish the truth of any allegation by evidence; or

(D) Investigate any other matter.

Fed. R. Civ. P. 55(b).

Whether to enter a default judgment lies within the court's discretion. Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986). The Ninth Circuit has enumerated the following factors (collectively, the Eitel factors) that a court may consider in determining whether to grant default judgment: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) 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 excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). “The general rule of law is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” TeleVideo Sys., 826 F.2d at 917-18 (9th Cir. 1987). Therefore, the plaintiff is required to provide proof of all damages sought in the complaint.

In addition, before awarding a default judgment against a defendant, the Court must determine the adequacy of service of process, as well as the Court's jurisdiction over the subject matter and the parties. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (“When entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties.”); cf. S.E.C. v. Internet Sols. for Bus. Inc., 509 F.3d 1161, 1165 (9th Cir. 2007) (“We review de novo whether default judgment is void because of lack of personal jurisdiction due to insufficient service of process.”).

III. DISCUSSION

The Court first addresses its subject matter jurisdiction for entering default judgment as well as adequacy of service of process. The Court will then examine the Eitel factors and the terms of the proposed judgment.

A. Jurisdiction

1. Subject Matter...