Constance Jones v. James Trading Company Limited

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 8, 2023
• Docket: 21-55896
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 8 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

CONSTANCE JONES, No. 21-55896

Plaintiff-Appellee, D.C. No. 2:19-cv-02674-MWF-JEM v.

JAMES TRADING COMPANY LIMITED; MEMORANDUM * et al.,

Defendants-Appellants,

and

DOES, 1 through 50, inclusive,

Defendant.

Appeal from the United States District Court for the Central District of California Michael W. Fitzgerald, District Judge, Presiding

Submitted June 6, 2023** Pasadena, California

Before: WALLACE and OWENS, Circuit Judges, and FITZWATER,*** District

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Sidney A. Fitzwater, United States District Judge for Judge.

James Trading Company, Ltd., James Industry Group Co., Ltd., Every

Industry, LLC, and Li Shuang Qi appeal from the district court’s denial of their

motion to set aside a $7.95 million default judgment against them and in favor of

Constance Jones in her action alleging, inter alia, wrongful termination and breach

of contract. We will reverse a district court’s order denying a motion to set aside a

default judgment only upon a “clear showing of abuse of discretion,” Pena v.

Seguros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985), and we review

factual findings underlying these orders (including computation of damages) for

clear error, NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 617 (9th Cir. 2016). We

have jurisdiction under 28 U.S.C. § 1291, and we affirm.

The district court has discretion to deny a motion to vacate its default

judgment if “(1) the plaintiff would be prejudiced if the judgment is set aside, (2)

defendant has no meritorious defense, or (3) the defendant’s culpable conduct led

to the default.” In re Hammer, 940 F.2d 524, 525–26 (9th Cir. 1991). Because the

test is disjunctive, a denial of a motion to vacate a default judgment will be

affirmed on the basis of any of the factors alone. Id.; see also Meadows v.

Dominican Republic, 817 F.2d 517, 521 (9th Cir. 1987) (citing Pena, 770 F.2d at

814).

the Northern District of Texas, sitting by designation.

2 The district court did not abuse its discretion in denying the motion to set

aside its default judgment when it held that defendants’ culpable conduct led to the

default. “[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.”

TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 697 (9th Cir. 2001) (quoting

Alan Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988)).

“Intentionally” means “something more like . . . ‘willful, deliberate, or evidence of

bad faith.’” Id. at 697 (quoting Am. All. Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 61

(2d Cir. 1996)). The district court did not clearly err when it found that

defendants’ receipt of the ultimate default judgment was evidence that they had

been receiving previous filings in the case and were simply waiting to see how the

district court would rule on the motion for default judgment before obtaining

substitute counsel or responding to the filings. Nor did the district court clearly err

when it implicitly rejected defendants’ claims that they believed an attorney they

retained was representing their interests in the case, despite not being able to

contact the attorney for over eight months. These factual findings support the

district court’s culpable conduct finding, such that its refusal to vacate its default

judgment was not an abuse of discretion.

The district court did not clearly err in imposing $7.95 million in damages.

Evidence of damages in support of a request for default judgment may come in the

3 form of declarations specifying how damages were computed. See NewGen, 840

F.3d at 617 (affirming imposition of damages in default judgment where the

district court relied on a declaration from the plaintiff that provided an estimate of

defendant company’s net profits and a “detailed account of how he calculated each

figure” in the damages request). A prove-up hearing to determine damages may be

held but is not required. See Fed. R. Civ. P. 55(b)(2) (“The court may conduct

hearings . . . when, to enter or effectuate judgment, it needs to . . . determine the

amount of damages.”). Plaintiff and her counsel submitted two declarations with

supporting exhibits substantiating their calculations of damages, attorney’s fees,

and costs. These calculations, including for emotional distress damages and

plaintiff’s share of defendant company’s profits, were necessarily based on

estimates due to defendants’ own culpable conduct and failure to participate in the

discovery process. See NewGen, 840 F.3d at 617 (rejecting defaulting defendant’s

claim that evidence underlying damages calculations was “unreliable” because the

defaulting defendant itself was “in the best position to have the accurate records

required to refute [plaintiff’s] estimates”). Plaintiff was not required to submit

medical evidence to support her claim for emotional distress damages. See

Johnson v. Hale, 940 F.2d 1192, 1193 (9th Cir. 1991) (citing Phiffer v. Proud

Parrot Motor Hotel, Inc., 648 F.2d 548, 552–53 (9th Cir. 1980)).

AFFIRMED.