Commercial Credit Group, Inc. v. No Limit Logistics, Inc.

District Court, E.D. California·Decided August 23, 2023·No. 1:21-cv-00936·Unknown

Opinion

COMMERCIAL CREDIT GROUP, INC., Case No. 1:21-cv-00936-JLT-SKO

Plaintiff, FINDINGS AND RECOMMENDATIONS THAT PLAINTIFF’S AMENDED MOTION v. FOR DEFAULT JUDGMENT AND APPLICATION FOR WRIT OF POSSESSION BE NO LIMIT LOGISTICS, INC., et al., GRANTED

(Docs. 28, 65) Defendants. OBJECTIONS DUE: 21 DAYS _________________________________ ____ /

I. INTRODUCTION On June 13, 2023, Plaintiff Commercial Credit Group, Inc. (“Plaintiff”) filed an amended motion for default judgment (the “Motion”) against Defendant No Limit Logistics, Inc. (“Defendant No Limit Logistics”) and Defendant Oupkarpreet Singh Jugpal (“Defendant Jugpal”) (collectively, “Defendants”). (Doc. 65.) No opposition to the Motion has been filed. (See Docket.) The Motion is therefore deemed unopposed. The hearing set for July 19, 2023, on the Motion was vacated and the matter was taken under submission. (Doc. 67.) For the reasons set forth below, the undersigned RECOMMENDS that the Motion be GRANTED.1 II. FACTUAL BACKGROUND2 Plaintiff provides heavy equipment and accounts receivable financing to construction, manufacturing, transportation, and waste industries. (Doc. 1 (“Compl.”) ¶ 2.) Defendant Jugpal is the president of Defendant No Limit Logistics and signed the agreement that serves as the basis for this litigation. (Compl. ¶¶ 3–4.) On October 29, 2018, Defendants entered into an agreement for a loan secured by personal property collateral from Plaintiff. (Compl. ¶¶ 1, 8; see also Ex. 1 pp. 1–5; Ex. 2 at p. 1.) According to the terms of the agreement, Defendant granted Plaintiff a lien in collateral consisting of three 2016 Utility Reefer Trailers with Carrier 7400Xs identified as follows: (1) VIN No. 1UYVS2538GU406823 with Carrier serial no. 0615UA4116; (2) VIN No. 1UYVS2534GU406821 with Carrier serial no. 0115UO6477; and (3) VIN No. 1UYVS2532GU406817 with Carrier serial no. 0115U06550 (“the Trailers”). (Compl. ¶¶ 1, 8, 12; see also Ex. 1 pp. 1–5; Ex. 2 at p. 1.) The Trailers have a combined approximate total value of $185,850 based on market comparisons for trailer models of similar type and age. (Comp. ¶ 11.) The agreement provided that Defendants would pay Plaintiff in consecutive monthly installments. (Ex. 1 at p. 1.) The first installment was due on October 29, 2018, the second installment was due on December 15, 2018, and each consecutive installment thereafter was due on the same date of each month until the total amount of the debt was paid in full. (Id.) The agreement also set forth the rates for charges as to late installments and interest upon default. (Id.) Pursuant to the agreement, Plaintiff filed a UCC Financing Statement on November 1, 2018. (Compl. ¶ 9; Ex. 3 at pp. 1–2.) Each Trailer’s Certificate of Title issued by the State of California listed Plaintiff as the registered lienholder, thereby confirming Plaintiff’s security interest in the 1 The motion for default judgment is referred to the undersigned by E.D. Cal. Local Rule 302(c)(19) for the entry of findings and recommendations to the assigned district judge. See 28 U.S.C. § 636(b)(1)(B). 2 Upon entry of default, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987) (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)); see also Fed. R. Civ. P. 8(b)(6) (“An allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not denied.”). Trailers as collateral and the lien pursuant to the agreement between the parties. (Compl. ¶ 9; Ex. 4 at pp. 1–3.) Almost immediately after signing the agreement, Defendants stopped making the monthly payments. (Compl. ¶ 10.) The last payment by Defendants was received on January 15, 2019, and was applied to the past-due installment due on the December 15, 2018. (Id.) The loan remained past due for the installment due on January 15, 2019, and for all subsequent payments. (Id.) On April 9, 2019, Plaintiff demanded payment of the outstanding amounts, but Defendants failed to make any payment. (Id.) Plaintiff filed a complaint against Defendants on June 11, 2021. The complaint asserts one claim for possession of personal property, the Trailers, and the prayer for relief seeks possession of the Trailers, as well as time, energy, and costs incurred in pursuing recovery of the Trailers “according to proof,” for costs of suit incurred, and for such other relief as the Court may deem proper. (Doc. 1 at 4.) On August 28, 2022, Plaintiff filed a notice of application for writ of possession as to the three Trailers. (Doc. 28.) Defendants were served with the complaint and the writ of possession on September 13, 2022. (See Docs. 34–37.) Neither Defendant has filed an answer or taken any action expressing an intent to defend against the lawsuit. (See Docket.) Plaintiff requested entry of default against Defendants on October 12, 2022, which was entered by the Clerk of Court that same day. (See Docs. 40, 41.) Plaintiff then filed its original motion for default judgment on October 19, 2022 (“the Original Motion”). (Doc. 42.) The next day, the Court issued a minute order setting forth the deadlines for responses to the Original Motion, and directed Plaintiff to file on the Court’s docket proofs of service upon Defendants of (1) the Original Motion and (2) the minute order. (Doc. 43.) Over the following months, Plaintiff filed multiple status reports detailing its inability to serve Defendant Jugpal. (See Docs. 44, 47, 49, 51, 54.) To afford Plaintiff more time to serve Defendants, the Court continued the deadlines for briefing on the Original Motion and repeatedly ordered Plaintiff to file proof of service of a copy of the Original Motion on Defendants. (See Docs. 45, 48, 50, 52, 55.) The Court also granted Plaintiff’s request to file a motion for alternate service under Federal Rule of Civil Procedure 5(b)(2)(D), setting forth its efforts to serve Defendant Jugpal. (Doc. 52.) Plaintiff filed neither a proof of service of the Original Motion nor a motion for alternate service under Rule 5(b)(2)(D). (See Docket.) On May 25, 2023, an order issued for Plaintiff to show cause (“OSC”) within twenty-one days why the action should not be dismissed for its failure to comply with the Court’s orders and for failure to prosecute this case. (Doc. 56.) Upon receipt of Plaintiff’s reply to the OSC (Doc. 57), the Court discharged the OSC and granted Plaintiff’s request for an extension of time to serve Defendants. (Doc. 59.) Plaintiff filed the present Motion on June 13, 2023, requesting that the Court award Plaintiff possession of the Trailers.3 (Doc. 65.) No opposition to the Motion has been filed. (See Docket.) In the Motion, Plaintiff contends that service of the Motion on Defendants is not required under Federal Rule of Civil Procedure 5(a)(2) and Local Rule 135(d) because Defendants were served with the complaint, they have failed to appear, they are in default, and the Motion does not assert a new claim against them.4 (Id. at 2.) In support of the Motion, Plaintiff also filed a declaration from its attorney, Douglas Smurr (Doc. 65 at 9–10 (“Smurr Decl.”)), and a declaration from Sonia Zahid, Plaintiff’s Assistant Vice President for Operations (Doc 65 at 11–14 (“Zahid Decl.”)), which was executed on June 1, 2021. In the declaration, Sonia Zahid states that Defendants are wrongfully with

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Commercial Credit Group, Inc. v. No Limit Logistics, Inc., (E.D. Cal. 2023).

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