1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 BMO BANK N.A., fka BMO HARRIS Case No. 1:24-cv-01114-JLT-BAM BANK N.A., a national association, 12 FINDINGS AND RECOMMENDATIONS Plaintiff, REGARDING PLAINTIFF’S MOTION 13 FOR ENTRY OF DEFAULT JUDGMENT v. 14 (Doc. 10) LALA TRUCKING INC, a California 15 corporation; VARINDER SINGH, an FOURTEEN-DAY DEADLINE individual resident and citizen of 16 California; DOES 1-10, 17 Defendants. 18 19 On December 31, 2024, Plaintiff BMO Bank N.A. (“Plaintiff”) filed a motion for entry of 20 default judgment against Defendants Lala Trucking Inc. and Varinder Singh. (Doc. 10.) No 21 opposition was filed, and the time in which to do so has expired. The motion was referred to this 22 Court pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302. 23 On January 2, 2025, the Court vacated the motion hearing and indicated that the matter 24 would be decided on the papers. (Doc. 14.) The matter is suitable for decision without oral 25 argument pursuant to Local Rule 230(g). 26 Having considered the moving papers and the Court’s file, and for the reasons detailed 27 below, the Court will recommend that Plaintiff’s motion for default judgment be granted. 28 1 I. BACKGROUND1 2 A. The Loan Agreements 3 1. Agreement 25001 – May 22, 2020 4 On May 22, 2020, Plaintiff and Defendant Lala Trucking entered into a Loan and Security 5 Agreement with contract number ending 25001 (“Agreement 25001”), pursuant to which Plaintiff 6 agreed to finance Defendant Lala Trucking’s purchase of certain vehicles for use in Defendant 7 Lala Trucking’s business (“25001 Vehicles”), and Defendant Lala Trucking agreed to pay 8 Plaintiff $99,171.00, including interest. (Doc. 1, Ex. 1.) 9 2. Agreement 75001 – January 26, 2023 10 On January 26, 2023, Plaintiff and Defendant Lala Trucking entered into a Loan and 11 Security Agreement with contract number ending 75001 (“Agreement 75001”), pursuant to which 12 Plaintiff agreed to finance Defendant Lala Trucking’s purchase of certain vehicles for use in 13 Defendant Lala Trucking’s business (“75001 Vehicles”), and Defendant Lala Trucking agreed to 14 pay Plaintiff $481,964.96, including interest. (Doc. 1, Ex. 2.) 15 B. The Guaranties 16 In connection with the Agreements 25001 and 75001, Defendant Singh executed 17 Continuing Guaranties on May 22, 2020, and January 26, 2023. By signing the Continuing 18 Guaranties, Defendant Singh guaranteed the full and timely performance of all of Defendant Lala 19 Trucking’s present and future liabilities to Plaintiff. (Doc. 1, Ex. 3.) 20 C. The Security Interest 21 In consideration for entering the above-described agreements, Defendant Lala Trucking 22 granted Plaintiff a first-priority security interest in the respective vehicles. The vehicles consist of 23 the following: 24 25001 Vehicles 25 a. 2020 Great Dane Refrigerated Van 53’, Vin: 1GR1A062XLW175891, and 2020 26 Thermo King S600, Serial: #6001315260 27 1 Background facts are derived from the allegations in the Complaint filed on September 19, 2024. (Doc. 28 1.) 1 75001 Vehicles 2 b. 2023 Peterbilt 579-Series Tractor, Vin: 1XPBD49X2PD837256 3 c. 2023 Peterbilt 579-Series Tractor, Vin: 1XPBD49X8PD837259 4 Plaintiff perfected its security interest in the vehicles by recording its liens on the 5 Certificate of Title for each vehicle. (Compl., ¶ 13, Ex. 4.) 6 D. Default by Defendants 7 Defendants are in default under the above-referenced Loan and Security Agreements 8 (“Agreements”) and Guaranties for their failure to pay the amounts due thereunder. (Compl., ¶ 9 14.) Defendant Lala Trucking failed to make payments due on Agreement 25001 commencing 10 July 6, 2024, and on Agreement 75001 commencing May 1, 2024. (Id. ¶ 15.) Pursuant to the 11 Agreements, the entire amounts due have been accelerated. As of the respective dates of default, 12 the principal amount due and owing after acceleration is as follows:
13 • Agreement 25001: $18,488.90 • Agreement 75001: $309,636.08 14 (Id. ¶ 16.) At the time of default, accrued and unpaid interest due and owing under the 15 Agreements is as follows: 16 • Agreement 25001: $8.63 17 • Agreement 75001: $2,468.51 18 (Id. ¶ 17.) Under the Agreements, calculated from the respective dates of defaults to the dates of 19 acceleration, accrued and unpaid interest due and owing under the Agreements is as follows:
20 • Agreement 25001: $344.76 • Agreement 75001: $9,547.96 21 (Id. ¶ 18.) 22 Defendants are obligated to pay interest on all unpaid amounts at the default interest rate 23 of 1.5% per month (18% per annum) or the maximum rate not prohibited by applicable law. 24 (Compl. ¶ 19.) The daily default rates of interest accruing since the dates of acceleration are as 25 follows: 26 • Agreement 25001: $9.24 27 • Agreement 75001: $154.82 28 (Id. ¶ 19) Under the Agreements, Defendants are obligated to pay late charges and other fees. 1 (Id. ¶ 20.) Through acceleration, late charges have accrued under the Agreements as follows:
2 • Agreement 25001: $766.69 • Agreement 75001: $3,410.34 3 (Id. ¶ 21.) Through acceleration, other fees, including but not limited to return item fees, have 4 accrued under the Agreements as follows: 5 • Agreement 25001: $50.00 6 • Agreement 75001: $50.00 7 (Id. ¶ 22.) 8 By letters dated September 10, 2024, Plaintiff notified Defendants of their defaults under 9 the Agreements, and of Plaintiff’s election to accelerate the loans evidenced by the Agreements. 10 In addition, Plaintiff demanded that Defendants pay the amounts due under the Agreements and 11 surrender the vehicles. (Compl. ¶ 25; Doc. 1, Ex. 5.) Despite demand, Defendants have failed 12 and refused to pay the amounts due and owing under the Agreements and Guaranties. (Compl. ¶ 13 26.) 14 Under the Agreements, Plaintiff has the right to enter any premises and take possession of 15 the Vehicles. (Compl. ¶ 27.) As of the filing of the lawsuit, the collateral vehicles remained in 16 Defendants’ possession or control. (Id. ¶ 28.) 17 Plaintiff initiated this action on September 19, 2024, asserting causes of action for 18 injunctive relief, specific performance, claim and delivery, and breach of contract against 19 Defendants. Plaintiff served Defendant Lala Trucking with the summons and complaint by 20 substituted service at a “home” located at “3660 W. San Jose Avenue, Apt. #216, Fresno, CA 21 93711,” by leaving a copy of the summons and complaint with John Doe, an employee/person 22 apparently in charge, on October 1, 2024. (Doc. 6.) Thereafter, a copy of the summons and 23 complaint were mailed to Defendant Lala Trucking at the same address on October 2, 2024. (Id.) 24 Similarly, Defendant Singh was served by substituted service on the same date at the same 25 address by also leaving a copy of the summons and complaint with John Doe. A copy of the 26 summons and complaint were mailed to Defendant Singh on October 2, 2024. (Doc. 7.) 27 Defendants did not respond to the complaint, and on November 5, 2024, Plaintiff filed a 28 request for entry of default. (Doc. 8.) On the same day, the Clerk of the Court entered default 1 against Defendants Lala Trucking and Varinder Singh. (Doc. 9.) 2 On December 31, 2024, Plaintiff filed the instant motion for default judgment. (Doc. 10.) 3 Plaintiff requests default judgment in the total amount of $364,738.19, which includes a request 4 for attorney’s fees in the amount of $3,672.50, court costs of $556.84, and repossession costs of 5 $2,120.00, less any net proceeds received from the sale of the collateral vehicles. Plaintiff also 6 seeks immediate possession of the following unrecovered collateral vehicles: 7 25001 Vehicle
8 2020 Great Dane Refrigerated Van 53’, Vin: 1GR1A062XLW175891 with 2020 Thermo King S600, Serial: #6001315260 9 75001 Vehicle 10 2023 Peterbilt 579-Series Tractor, Vin: 1XPBD49X2PD837256 11 (Doc. 8 at p. 7.) Plaintiff repossessed the 2023 Peterbilt 579-Series Tractor, Vin: 12 1XPBD49X8PD837259, and spent $2,120.00 in repossession costs. (Doc. 10 at 5, ¶ 6.). The 13 tractor will be sold in a commercially reasonable manner. A credit of the net proceeds of the sale 14 will be applied to interest, fees, and costs, then toward the remaining principal. (Doc. 12, 15 Declaration of Whitney Oliver (“Oliver Decl.”) at ¶ 15.) 16 II. LEGAL STANDARD FOR DEFAULT JUDGMENT 17 Pursuant to Federal Rule of Civil Procedure 55(b)(2), a plaintiff can apply to the court for 18 a default judgment against a defendant that has failed to plead or otherwise defend against the 19 action. Fed. R. Civ. P. 55(b)(2). “Upon default, the well-pleaded allegations of a complaint 20 relating to liability are taken as true.” Dundee Cement Co. v. Howard Pipe & Concrete Prods., 21 Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917- 22 18 (9th Cir. 1987). 23 Factors which may be considered by courts in exercising discretion as to the entry of a 24 default judgment include: (1) the possibility of prejudice to the plaintiff; (2) the merits of 25 plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in 26 the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was 27 due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil 28 1 Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 2 1986); PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) 3 III. DISCUSSION 4 A. Service of Process 5 In deciding whether to grant or deny a default judgment, a court must assess the adequacy 6 of the service of process on the party against whom default is requested. See, e.g., Trujillo v. 7 Harsarb, Inc., No. 1:21-cv-00342-NONE-SAB, 2021 WL 3783388, at *4 (E.D. Cal. Aug. 26, 8 2021) (“As a general rule, the Court considers the adequacy of service of process before 9 evaluating the merits of a motion for default judgment.”); Coach, Inc. v. Diva Shoes & 10 Accessories, No. 10-5151 SC, 2011 WL 1483436, at *2 (N.D. Cal. Apr. 19, 2011); Katzakian v. 11 Check Resolution Service, Inc., No. 1:10-cv-00716 AWI GSA, 2010 WL 5200912, at *1 (E.D. 12 Cal. Dec. 15, 2010). 13 Plaintiff is suing both a corporate entity and an individual in this action. The Complaint 14 identifies Defendant Lala Trucking’s principal place of business as located at 3660 W. San Jose 15 Avenue Apt. #216, Fresno, California 93711. (Compl. ¶ 5.) Defendant Singh is the alleged 16 owner, sole director, and CEO, Secretary and CFO of Defendant Lala Trucking. (Id. at ¶ 7.) The 17 Agreements at issue identify Defendant Singh as the President of Lala Trucking Inc with a 18 “Principal Residence/Chief Executive Office/Place of Business” at 3660 W. San Jose Ave Apt 19 216, Fresno CA 93711.” (Doc. 1, Exs. 1 and 2.) 20 Service on Defendant Lala Trucking Inc 21 Federal Rule of Civil Procedure 4(h) governs service on a domestic corporation, 22 partnership, or other unincorporated association that is subject to suit under a common name. 23 Under 4(h), a plaintiff may serve a corporation by following state law for service of a summons 24 on an individual or by delivering a copy of the summons and complaint to an officer or agent and 25 by a mailing a copy of each to the defendant. Fed. R. Civ. P. 4(h)(1). 26 Under California law, as a substitute to personal delivery of a copy of the summons and 27 complaint, service may be made on a corporation: (1) by leaving a copy of the summons and the 28 complaint during usual office hours in the office of the corporation's agent for service of process, 1 president, chief executive, vice president, secretary or assistant secretary, assistant treasurer, 2 controller or chief financial officer, general manager, or another head of the corporation; (2) with 3 a person “apparently in charge” of the office; and (3) “thereafter mailing a copy of the summons 4 and complaint by first-class mail, postage prepaid to the person to be served at the place where a 5 copy of the summons and complaint were left.” Cal. Code Civ. Proc. §§ 415.20(a), 416.10. 6 The proof of service indicates that Plaintiff served Defendant Lala Trucking with the 7 summons and complaint on its agent, Varinder Singh, by leaving a copy of the summons and 8 complaint at the Lala Trucking business address, 3660 W. San Jose Avenue Apt. #216, Fresno, 9 CA 93711, with an employee/person apparently in charge, John Doe, on October 1, 2024. (Doc. 10 6) The proof of service represents that the process server informed John Doe of the general nature 11 of the papers and, thereafter, mailed copies of the summons and complaint, as well as other 12 documents, to the same address, to the attention of Varinder Singh. (Id.) 13 Service on Defendant Singh 14 Federal Rule of Civil Procedure 4(e) governs service on an individual. Under 4(e), a 15 plaintiff may serve an individual within a judicial district of the United States by:
16 (1) following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where 17 service is made; or
18 (2) doing any of the following:
19 (A) delivering a copy of the summons and of the complaint to the individual personally; 20 (B) leaving a copy of each at the individual's dwelling or usual place of 21 abode with someone of suitable age and discretion who resides there; or 22 (C) delivering a copy of each to an agent authorized by appointment or by 23 law to receive service of process. 24 Fed. R. Civ. P. 4(e). According to the proof of service on file, Defendant Singh was served by 25 leaving a copy of the summons and complaint at the Lala Trucking business address, 3660 W. 26 San Jose Avenue Apt. #216, Fresno, CA 93711, with an employee/person apparently in charge, 27 John Doe, on October 1, 2024. (Doc. 7.) Thereafter, the summons and complaint were mailed to 28 Defendant Singh at the same address. (Id.) 1 California law permits substituted service on an individual if a copy of the summons and 2 complaint with reasonable diligence cannot be personally delivered by:
3 by leaving a copy of the summons and complaint at the person's dwelling house, usual place of abode, usual place of business, . . . in the presence of . . . a person 4 apparently in charge of his or her office, place of business, . . . at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a 5 copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint 6 were left. 7 Cal. Civ. Proc. Code § 415.20(b). Here, service was attempted at Defendant Singh’s business 8 address on three separate occasions before substituted service was completed on the person 9 apparently charge. (Doc. 7 at 3.) The summons and complaint were subsequently mailed to 10 Defendant Singh at the same address. (Id. at 5.) 11 Having considered the proofs of service, the Court finds that Defendants were properly 12 served with the summons and complaint pursuant to Federal Rule of Civil Procedure 4. 13 B. The Eitel Factors Weigh in Favor of Default Judgment 14 As discussed below, the Court finds that the Eitel factors weigh in favor of granting 15 default judgment. 16 1. Possibility of Prejudice to Plaintiff 17 The first factor considers whether a plaintiff would suffer prejudice if default judgment is 18 not entered. See PepsiCo, Inc., 238 F. Supp. 2d at 1177. Generally, where default has been 19 entered against a defendant, a plaintiff has no other means by which to recover damages. Id.; 20 Moroccanoil, Inc. v. Allstate Beauty Prods., 847 F. Supp. 2d 1197, 1200-01 (C.D. Cal. 2012). 21 Plaintiff contends that denying judgment would prejudice Plaintiff because Defendants “refused 22 to participate in the action and has made default judgment the sole avenue of relief available to 23 Plaintiff.” (Doc. 10 at 11.) The Court agrees that Plaintiff would be prejudiced if default 24 judgment were not granted. Default has been entered against Defendants and Plaintiff has no 25 other means to recover against them. This factor weighs in favor of default judgment. 26 2. Merits of Plaintiff’s Claims and Sufficiency of the Complaint 27 The second and third Eitel factors, taken together, “require that [the] plaintiff[s] state a 28 claim on which [they] may recover.” PepsiCo, Inc., 238 F. Supp. 2d at 1175. Notably a 1 “defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.” 2 DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007). Plaintiff’s complaint alleges 3 breach of contract. 4 The loan agreements at issue provide that they will be subject to the laws of the State of 5 Illinois. (Doc. 1, Ex. 1 ¶ 7.6; Ex. 2 ¶ 7.6.) In determining the enforceability of a choice-of-law 6 provision in a diversity action, such as this one, a federal court applies the choice of law rules of 7 the forum state, in this case California. Hatfield v. Halifax PLC, 564 F.3d 1177, 1182 (9th Cir. 8 2009). In California, “a freely and voluntarily agreed-upon choice of law provision in a contract 9 is enforceable ‘if the chosen state has a substantial relationship to the parties or the transaction or 10 any other reasonable basis exists for the parties' choice of law.’” 1–800–Got Junk? LLC v. 11 Super. Ct., 189 Cal. App. 4th 500, 513–14 (2010) (quoting Trust One Mortg. Corp. v. Invest Am. 12 Mortg. Corp., 134 Cal. App. 4th 1302, 1308 (2005) (emphasis in original). There is a strong 13 policy in favor of enforcing choice of law provisions. 1–800–Got Junk? LLC, 189 Cal. App. 4th 14 at 513. 15 Plaintiff does not address the choice-of-law provisions. Instead, Plaintiff identifies only 16 California’s substantive law. (See Doc. 10 at 11.) However, because the elements of breach of 17 contract in Illinois and California are identical, the Court need not determine which jurisdiction’s 18 law applies. First Am. Com. Bancorp, Inc. v. Vantari Genetics, LLC, No. 2:19-cv-04483-VAP- 19 FFM, 2020 WL 5027990, at *3 n. 1 (C.D. Cal. Mar. 12, 2020) (citing Gallagher Corp. v. Russ, 20 309 Ill. App. 3d 192, 199 (1999)); Ramirez v. Baxter Credit Union, No. 16-cv-03765-SI, 2017 21 WL 118859, at *4 (N.D. Cal. Jan. 12, 2017) (“The elements of a breach of contract claim under 22 California and Illinois law are the same.”). In California, “[t]o be entitled to damages for breach 23 of contract, a plaintiff must plead and prove (1) a contract, (2) plaintiff’s performance or excuse 24 for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff.” First Am. Com. 25 Bancorp, 2020 WL 5027990, at *3 (quoting Walsh v. W. Valley Mission Cmty. Coll. Dist., 66 Cal. 26 App. 4th 1532, 1545 (1998)). “Under Illinois law, a plaintiff suing for breach of contract must 27 prove: (1) the contract existed, (2) the plaintiff performed the conditions precedent required by the 28 contract, (3) the defendant breached the contract, and (4) damages.” Smart Oil, LLC v. DW Mazel, 1 LLC, 970 F.3d 856, 861 (7th Cir. 2020). 2 Here, Plaintiff alleges that Defendant Lala Trucking entered into the identified 3 Agreements, has failed to perform under the Agreements by failing to make payments when those 4 payments become due, and Plaintiff is entitled to contractual money damages under the 5 Agreements. (Compl. ¶¶ 55-58.) Plaintiff also alleges that Defendant Singh entered into the 6 identified Guaranties, has failed to perform under the Guaranties by failing to make payments 7 when those payments became due, and Plaintiff is entitled to recover contractual money damages. 8 (Id. ¶¶ 60-62.) 9 The Court finds that Plaintiff’s complaint sufficiently states a claim for breach of the 10 Agreements and Guaranties, which weighs in favor of default judgment. 11 3. The Sum of Money at Stake in the Action 12 Under the fourth factor cited in Eitel, “the court must consider the amount of money at 13 stake in relation to the seriousness of Defendant’s conduct.” PepsiCo, Inc., 238 F. Supp. 2d at 14 1176. Here, Plaintiff seeks judgment in the amount of $364,738.19, which includes attorneys’ 15 fees in the amount of $3,672.50, and court costs in the amount of $556.84, against Defendants, 16 less any net sales proceeds received from the sale of certain collateral vehicles. (Doc. 10 at 13; 17 Oliver Decl. ¶¶ 35-37.) The Court finds the amount at stake is not large, it is proportional to the 18 harm caused by Defendants’ failure to repay the loan amounts, and is subject to a reduction 19 based on any net sales proceeds from any recovered collateral. This factor therefore does not 20 weigh against entry of default judgment. 21 4. The Possibility of a Dispute Concerning Material Facts 22 The facts of this case are straightforward, and Plaintiff has provided the Court with well- 23 pled allegations and a declaration with exhibits in support. Here, the Court may assume the truth 24 of well-pled facts in the complaint following the Clerk’s entry of default and, thus, there is no 25 likelihood that any genuine issue of material fact exists. Defendants’ failure to file an answer in 26 this case or a response to the instant motion further supports the conclusion that the possibility of 27 a dispute as to material facts is minimal. See, e.g., Elektra Entm’t Grp. Inc. v. Crawford, 226 28 F.R.D. 388, 393 (C.D. Cal. 2005) (“Because all allegations in a well-pleaded complaint are taken 1 as true after the court clerk enters default judgment, there is no likelihood that any genuine issue 2 of material fact exists.”). This factor therefore weighs in favor of default judgment. 3 5. Whether the Default Was Due to Excusable Neglect 4 The sixth Eitel factor considers the possibility that Defendant’s default resulted from 5 excusable neglect. PepsiCo, Inc., 238 F. Supp. 2d at 1177. Courts have found that where 6 defendants were “properly served with the complaint, the notice of entry of default, as well as the 7 paper in support of the [default judgment] motion,” there is no evidence of excusable neglect. 8 Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 995, 1005 (N.D. Cal. 2001). Upon 9 review of the record, the Court finds that the default was not the result of excusable neglect. See 10 PepsiCo, Inc., 238 F. Supp. 2d at 1177. 11 Plaintiff properly served Defendants with the summons and complaint. (Docs. 6, 7.) 12 Moreover, Plaintiff served Defendants with a copy of the request for entry of default, the motion 13 for default judgment, and the declarations and exhibits in support of the motion for default 14 judgment. (Doc. 8 at 3; Doc. 8-1 at 18; Doc. 10 at 14; Doc. 12 at 33; Doc. 13 at 9.) Despite 15 ample notice of this lawsuit and Plaintiff’s intention to seek a default judgment, Defendants have 16 not appeared to date. Thus, the record suggests that they have chosen not to defend this action, 17 and not that the default resulted from any excusable neglect. Accordingly, this factor weighs in 18 favor of the entry of a default judgment. 19 6. The Strong Policy Favoring Decisions on the Merits 20 “Cases should be decided upon their merits whenever reasonably possible.” Eitel, 782 21 F.2d at 1472. However, district courts have concluded with regularity that this policy, standing 22 alone, is not dispositive, especially where a defendant fails to appear or defend itself in an action. 23 PepsiCo, Inc., 238 F. Supp. 2d at 1177; see also Craigslist, Inc. v. Naturemarket, Inc., 694 F. 24 Supp. 2d 1039, 1061 (N.D. Cal. Mar. 5, 2010). Although the Court is cognizant of the policy 25 favoring decisions on the merits, that policy is unavailable here because Defendants have not 26 responded. Accordingly, the Court finds that this factor does not weigh against entry of default 27 judgment. 28 /// 1 Upon consideration of the Eitel factors, the Court concludes that Plaintiff is entitled to the 2 entry of default judgment against Defendants. 3 IV. REQUESTED RELIEF 4 A. Damages 5 The loan agreements at issue all provide that in the event of default by the debtor or 6 guarantor, all indebtedness becomes immediately due and payable, Plaintiff is entitled to take 7 possession of and dispose of the equipment and to have the debtor pay all interest and expenses 8 incurred, including reasonable attorneys’ fees. (Doc. 1, Ex. 1 ¶¶ 5.1-5.3; Ex. 2 ¶¶ 5.1-5.3.) As of 9 the respective dates of default on the various agreements, Plaintiff declares that the principal 10 amounts due and owing total $328,124.98 ($18,488.90 + 309,636.08). (Oliver Decl. ¶ 19.) At 11 the time of default, accrued and unpaid interest due and owing under the agreements totaled 12 $2,477.14 ($8.63 + 2,468.51). (Id. ¶ 20.) Calculated from the respective dates of default to the 13 dates of acceleration, the amount of accrued and unpaid interest due and owing under the 14 Agreements is no less than $9,892.72 ($344.76 + $9,547.96) (Id. ¶ 21.) Through acceleration, 15 late charges in the amount of $4,177.03 ($766.69 + $3,410.34) have accrued. (Id. ¶ 24.) 16 Through acceleration, other fees, including return item fees, have accrued in the amount of 17 $100.00. (Id. ¶25.) 18 Calculated as of November 4, 2024, the amount due and owing under the Agreements, 19 not including attorneys’ fees and expenses, is an amount not less than $360,508.85. (Id. at ¶ 20 35(c).) These requested amounts are supported by declaration. (Doc. 12.) The agreements and 21 declaration constitute sufficient proof that Plaintiff has sustained damages for the breaches of the 22 Agreements. Plaintiff therefore seeks judgment in the amount of $360,508.85, plus post- 23 judgment interest and attorneys’ fees and costs, against Defendants. 24 B. Attorneys’ Fees and Costs 25 Plaintiff seeks a total amount of $3,672.50 in attorneys’ fees and $556.84 in court costs. 26 (Oliver Decl. ¶¶ 36-37; Doc. 13, Declaration of Ken I. Ito (“Ito Decl.”) ¶¶ 5, 7, 9.) California and 27 Illinois both enforce contractual provisions allowing the collection of reasonable attorneys’ fees. 28 Cal. Civ. Proc. Code § 1021 (“Except as attorney’s fees are specifically provided for by statute, 1 the measure and mode of compensation of attorneys and counselors at law is left to the 2 agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to 3 their costs, as hereinafter provided.”); Gil v. Mansano, 121 Cal. App. 4th 739, 742-43 (2004); 4 Cap. One Auto Fin., Inc. v. Orland Motors, Inc., No. 09-CV-4731, 2012 WL 3777025, at *3 5 (N.D. Ill. Aug. 27, 2012) (“Illinois recognizes the American Rule that ‘absent a statute or 6 contractual provision, a successful litigant must bear the burden of his or her own attorney’s 7 fees.’”). Under the Agreements, Defendant Lala Trucking is obligated to pay the attorneys’ fees 8 and costs incurred by Plaintiff in the enforcement of its rights, including expenses of filing and 9 prosecuting this action. (Oliver Decl. ¶ 27; Doc. 1, Ex. 1 ¶ 5.2, Ex. 2 ¶ 5.2.) Plaintiff is therefore 10 entitled to recovery of attorneys’ fees and costs. 11 To determine a reasonable attorneys’ fee, or “lodestar,” the starting point is the number of 12 hours reasonably expended multiplied by a reasonable hourly rate. See Hensley v. Eckerhart, 461 13 U.S. 424, 433 (1983). The Court, in considering what constitutes a reasonable hourly rate, looks 14 to the prevailing market rate in the relevant community. Blum v. Stenson, 465 U.S. 886, 895 15 (1984). The “relevant community” for the purposes of the lodestar calculation is generally the 16 forum in which the district court sits. Gonzalez v. City of Maywood, 729 F.3d 1196, 1205 (9th 17 Cir. 2013). Thus, when a case is filed in the Eastern District of California, this district “is the 18 appropriate forum to establish the lodestar hourly rate . . . .” See Jadwin v. County of Kern, 767 19 F. Supp. 2d 1069, 1129 (E.D. Cal. 2011). 20 Reasonable Hourly Rate 21 Hourly rates for attorney fees awarded in the Eastern District of California range from 22 $200 to $750, with hourly rates exceeding $600 reserved for attorneys who have been practicing 23 approximately 30 years. See, e.g., BMO Bank N.A. v. Cheema, No. 1:24-CV-00634-SAB, 2024 24 WL 4357004, at *9 (E.D. Cal. Oct. 1, 2024), report and recommendation adopted, No. 1:24-CV- 25 00634-KES-SAB, 2024 WL 4873520 (E.D. Cal. Nov. 22, 2024) (collecting cases and awarding 26 hourly rate of $325 to attorney with more than 28 years litigation experience); Olguin v. FCA US 27 LLC, No. 1:21-CV-1789 JLT CDB, 2024 WL 4012103, at *7 (E.D. Cal. Aug. 30, 2024) 28 (collecting cases and awarding hourly rates of $525 for attorneys practicing more than 20 years, 1 $500 for attorneys practicing between 18 and 19 years, $450 to attorney practicing for 2 approximately 13 years, $400 to attorney with 7-10 years of experience, $300 to attorney 3 practicing about 6 years, $275 to attorney practicing about 4 years, and $250 for attorney 4 practicing approximately 2 years); Owen v. Hyundai Motor Am., No. 2:22-CV-00882-KJM-CKD, 5 2024 WL 3967691, at *4 (E.D. Cal. Aug. 28, 2024) (collecting cases and finding typical rate for 6 attorneys who have been practicing for more than ten years but less than fifteen years is between 7 $350 and $375). 8 Plaintiff’s counsel was admitted to practice in California in 2011, and has more than13 9 years of experience. (Ito Decl. ¶ 7.) He is seeking $325.00 per hour for his work in this matter. 10 Given this information, the Court finds Mr. Ito’s hourly rate of $325.00 is reasonable. 11 Hours Reasonably Expended 12 According to the declaration of Attorney Ito and the corresponding invoice, Attorney Ito 13 has expended 7.80 hours of work. (Ito Decl. ¶ 5 and Ex. 9.) In addition, Attorney Ito declares 14 that to “prepare this Motion for Default Judgment, and assuming there is no need for an 15 appearance for this Motion for Default Judgment, it is anticipated and expected that it will take 16 minimum of 3.5 hours, respectively, at a rate of $325.00 for a total of $1,137.50. The total 17 attorney’s fees would be $3,672.50.” (Ito Decl. ¶ 7.) Based on the foregoing, the Court will 18 therefore recommend awarding Plaintiff $3,672.50 for 11.3 hours of work by Attorney Ito at a 19 rate of $325.00 per hour in attempting to collect and enforce the Agreements. 20 In addition to attorneys’ fees, Plaintiff seeks the recovery of court costs in the amount of 21 $556.84, consisting of costs for the Court filing fee and service of process. (Doc. 8 at pp. 6-7; Ito 22 Decl. ¶ 9.) The Court finds these costs reasonable. 23 V. CONCLUSION AND RECOMMENDATION 24 Based on the foregoing, IT IS HEREBY RECOMMENDED that: 25 1. Plaintiff’s motion for default judgment (Doc. 10) be granted. 26 2. Default judgment be entered in favor of Plaintiff and against Defendants Lala 27 Trucking Inc and Varinder Singh in the amount of $360,508.85, plus post- 28 judgment interest, less any net sales proceeds from collateral vehicles recovered. 1 3. Defendants be ordered to pay Plaintiff an amount of $4,229.34, which represents 2 the reasonable attorneys’ fees of $3,672.50 and costs of $556.84 incurred in 3 enforcing the Agreements and in collection of the amounts due. 4 4. Plaintiff be awarded final possession of the unrecovered vehicles identified and, 5 upon recovery, be authorized to sell the recovered collateral in a commercially 6 reasonable manner. 7 8 These Findings and Recommendation will be submitted to the United States District Judge 9 assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within fourteen 10 (14) days after being served with these Findings and Recommendation, Plaintiff may file written 11 objections with the Court. The document should be captioned “Objections to Magistrate Judge’s 12 Findings and Recommendation.” Objections, if any, shall not exceed fifteen (15) pages or 13 include exhibits. Exhibits may be referenced by document and page number if already in 14 the record before the Court. Any pages filed in excess of the 15-page limit may not be 15 considered. The parties are advised that failure to file objections within the specified time may 16 result in the waiver of the “right to challenge the magistrate’s factual findings” on 17 appeal. Wilkerson v. Wheeler, 772 F.3d 834, 838–39 (9th Cir. 2014) (citing Baxter v. Sullivan, 18 923 F.2d 1391, 1394 (9th Cir. 1991)). 19 IT IS SO ORDERED. 20
21 Dated: April 21, 2025 /s/ Barbara A. McAuliffe _ UNITED STATES MAGISTRATE JUDGE 22
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