Ascentium Capital, LLC v. Indu Motel, LLC

CourtDistrict Court, E.D. California
DecidedFebruary 2, 2022
Docket2:21-cv-00376
StatusUnknown

This text of Ascentium Capital, LLC v. Indu Motel, LLC (Ascentium Capital, LLC v. Indu Motel, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ascentium Capital, LLC v. Indu Motel, LLC, (E.D. Cal. 2022).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 ASCENTIUM CAPITAL LLC, No. 2:21-cv-00376 KJM CKD 12 Plaintiff, 13 v. ORDER AND FINDINGS AND RECOMMENDATIONS 14 INDU MOTEL, LLC, et al., 15 Defendants. 16 17 Before the court is plaintiff’s (“Ascentium”) motion for default judgment against 18 defendant Indu Motel LLC and two individual defendants, Pragnesh Patel and Vasant Patel. 19 (ECF No. 16.) Defendants, proceeding pro se, failed to file an opposition to the motion for 20 default judgment in accordance with Local Rule 230(c). Accordingly, the hearing on the motion 21 set for October 22, 2021 was vacated and defendants were given additional time to respond to the 22 motion. (ECF No. 17.) Defendants were advised that failure to timely respond would result in a 23 recommendation that default be entered against them. (Id.) Defendants have not timely 24 responded. 25 The undersigned has fully considered the briefs and record in this case and, good cause 26 appearing, THE COURT FINDS AS FOLLOWS: 27 //// 28 1 I. BACKGROUND 2 Plaintiff initiated this action on March 1, 2021, alleging breach of an equipment finance 3 agreement and breach of guaranties. (ECF No. 1.) Plaintiff avers that defendant Indu Motel 4 (“Borrower”) is a Pennsylvania limited liability company located in Somerset, Pennsylvania; that 5 defendant Pragnesh Patel is the managing member of Borrower; and that defendant Vasant Patel 6 is also a member of Borrower. (Id. at 2.) On June 2, 2021, all three defendants were served with 7 the complaint (ECF Nos. 7, 8, 9), but subsequently failed to respond. On August 11, 2021, the 8 Clerk of Court entered default as to defendants. (ECF No. 15.) Plaintiff filed the instant motion 9 for default judgment on October 5, 2021. (ECF No. 16.) To date, defendants have not appeared 10 or taken any action in this case. 11 The complaint alleges as follows: 12 On or about May 16, 2018, Plaintiff loaned the sum of $175,956.00 (“Loan”) to Borrower 13 pursuant to the terms of an Equipment Financing Agreement (“EFA”). Under the EFA, Borrower 14 was to make three payments of $99.00 followed by sixty monthly payments of $3,965.95 until the 15 loan was paid in full. (ECF No. 1, ¶ 7.) According to the terms of the EFA, plaintiff was granted 16 a security interest in certain personal property—specifically, multiple headboards, nightstands, 17 desks, refrigerators, and other motel furnishings that defendants purchased with the Loan—which 18 served as collateral for the Loan. (Id., ¶ 8, Exhibit 2.) Defendants Pragnesh and Vasant Patel 19 (“Guarantors”) executed Guaranties individually obligating themselves to pay all sums due and 20 payable to plaintiff under the EFA. (Id., ¶ 20, Exhibit 1.) 21 Borrower requested Loan deferral relief as a result of being in poor financial condition, 22 and plaintiff allowed two three-month deferrals pursuant to the terms of an Amendment and 23 Modification of Payment Terms (“Modifications”). Payment deferrals went until August 15, 24 2020. (Id., ¶ 12, Exhibits 6 & 7.) Borrower failed to make the monthly payments due for August 25 15, 2020, and each month thereafter after the deferral periods ended. Plaintiff has performed all 26 conditions, covenants, and promises on its part required to be performed in accordance with the 27 terms of the Loan as evidenced by the EFA and related contractual documents. (Id., ¶ 13.) 28 Demand was made on Borrower to pay all sums due, but Borrower failed to do so. (Id., ¶ 14.) 1 As a result, plaintiff has declared the Loan in default and the total sum of $174,501.80 is 2 all due and payable less unearned interest on the Loan. All future payments which have not yet 3 accrued must be discounted to present value at three percent (3%) and plaintiff will discount 4 unearned interest on future payments to present value. (Id., ¶ 15.) Plaintiff is also entitled to late 5 charges in at least the sum of $1,189.80, plus reimbursement for site fee charges in the sum of 6 $820.00. (Id., ¶¶ 16, 17.) Plaintiff also seek attorney’s fees. (Id. at 5.) 7 II. LEGAL STANDARDS 8 Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party 9 against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend 10 against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not 11 automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 12 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 13 (9th Cir. 1986)). Instead, the decision to grant or deny an application for default judgment lies 14 within the district court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 15 1980). In making this determination, the court considers the following factors: 16 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) 17 the sum of money at stake in the action[,] (5) the possibility of a dispute concerning material facts[,] (6) whether the default was due 18 to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 19 20 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 21 disfavored. Id. at 1472. 22 As a general rule, once default is entered, well-pleaded factual allegations in the operative 23 complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. 24 v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. 25 Group, 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)); accord Fair Housing of Marin v. Combs, 26 285 F.3d 899, 906 (9th Cir. 2002). In addition, although well-pleaded allegations in the 27 complaint are admitted by a defendant’s failure to respond, “necessary facts not contained in the 28 pleadings, and claims which are legally insufficient, are not established by default.” Cripps v. 1 Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 2 1386, 1388 (9th Cir. 1978)); accord DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 3 2007) (stating that a defendant does not admit facts that are not well-pled or conclusions of law); 4 Abney v. Alameida, 334 F. Supp. 2d 1221, 1235 (S.D. Cal. 2004) (“[A] default judgment may not 5 be entered on a legally insufficient claim”). A party’s default does not establish the amount of 6 damages. Geddes, 559 F.2d at 560. 7 III. DISCUSSION 8 A. Appropriateness of the Entry of Default Judgment Under the Eitel Factors 9 1.

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Bluebook (online)
Ascentium Capital, LLC v. Indu Motel, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ascentium-capital-llc-v-indu-motel-llc-caed-2022.