1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 EMPOWER RETIREMENT, LLC, No. 2:22-cv-0489-KJM-CKD 12 Plaintiff, FINDINGS AND RECOMMENDATIONS ON PLAINTIFF’S MOTION FOR DEFAULT 13 v. JUDGMENT 14 JOSEPH R. DIAZ, 15 Defendant. 16
17 18 Plaintiff, Empower Retirement, LLC, seeks default judgment for unjust enrichment and 19 conversion against defendant, Joseph R. Diaz, in the amount of $727,173.16, plus pre-judgment 20 and post-judgment interest. (ECF No. 13.) 21 The undersigned took plaintiff’s motion under submission without oral argument in 22 accordance with Eastern District Local Rule 230(g). Defendant has not filed an opposition in 23 accordance with Local Rule 230(c) to the motion for default judgment. The undersigned issues 24 the following findings and recommendations upon review of the documents in support of this 25 motion and good cause appearing. 26 //// 27 //// 28 1 I. Background 2 Plaintiff filed this lawsuit on March 15, 2022, alleging unjust enrichment and conversion 3 against defendant for defendant’s failure to return $727,173.16 in misdirected retirement plan 4 benefits. (ECF No. 1 at ¶ 22.) Plaintiff misdirected $727,173.16 in retirement benefits to 5 defendant after the death of his father, Edward J. Diaz. (Id. at ¶¶ 8-9.) Defendant was the named 6 beneficiary on the retirement plan of his father, Edward J. Diaz. (Id. ¶¶ 10-11.) However, on 7 August 29, 2020, two days before defendant’s father’s death, plaintiff received a form naming 8 Ms. Terri Lockwood (Edward J. Diaz’s sister) as the beneficiary of the plan. (Id. at ¶¶ 11-12.) 9 Plaintiff mistakenly believed that the August 29, 2020, form naming Ms. Lockwood as 10 beneficiary was invalid. (Id. ¶ 14.) Acting under this mistaken belief, plaintiff determined that 11 the retirement plan benefits should be issued to defendant based on the previous beneficiary form 12 naming defendant as beneficiary to his father’s plan. (Id.) Pursuant to plaintiff’s determination, 13 two payments were made to defendant from the plan in the amounts of $725,989.37 on March 2, 14 2021, and $1,183.79 on June 28, 2021, for a total of $727,173.16. (Id. ¶ 15.) 15 On August 24, 2021, plaintiff sent a letter to defendant informing him of Ms. Lockwood’s 16 competing claim to the retirement plan benefits and demanding that defendant return the payment 17 within thirty days. (Id. ¶ 17.) Defendant never returned the payment and in October 2021, 18 defendant represented, through counsel, that he would not return the misdirected retirement plan 19 benefits payment unless compelled to do so by a court. (Id. ¶ 19.) 20 After the plan had been dispersed to defendant, the administrator of the retirement benefits 21 plan determined that Ms. Lockwood was indeed the rightful beneficiary. (Id. at ¶ 20.) Plaintiff 22 then paid the plan $727,173.16, which was dispersed to Ms. Lockwood on February 16, 2022. 23 (Id. at ¶ 21; ECF No. 13-2 at 10.) 24 Plaintiff initiated this action on March 15, 2022. (ECF No. 1 at ¶ 2.) The court issued a 25 summons the following day. (ECF No. 2.) Promptly after issuance of the summons, plaintiff 26 attempted personal service via both a private process server and the Sheriff of San Joaquin 27 County. (See ECF No. 13-2 at 21-34.) Neither the private process server nor the Sheriff’s Office 28 was able to effect personal service on defendant. (See id.) 1 On March 23, 2022, plaintiff mailed a service packet with the summons, complaint, new 2 case documents, and corporate disclosure statement to defendant. (See ECF No. 13-2 at 3, ¶ 10.) 3 The service packet was delivered to defendant on March 25, 2022. (See id. at 39.) On April 8, 4 2022, defendant executed the acknowledgment of receipt of summons. (ECF No. 13-2 at 48-53, 5 signed acknowledgment of receipt of summons, sent by defendant to plaintiff’s counsel by mail 6 and email.) 7 On July 26, 2022, the clerk of court entered default as to defendant pursuant to Federal 8 Rule of Civil Procedure 55(a). (ECF No. 11.) Defendant has not appeared in the case, either pro 9 se or through counsel, filed an answer, or otherwise defended against plaintiff’s claims. 10 II. Legal Standards 11 Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party 12 against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend 13 against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant's default does not 14 automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 15 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 16 (9th Cir. 1986)). Instead, the decision to grant or deny an application for default judgment lies 17 within the district court's sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 18 1980). In making this determination, the court considers the following factors: (1) the possibility 19 of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of 20 the complaint, (4) the sum of money at stake in the action[,] (5) the possibility of a dispute 21 concerning material facts[,] (6) whether the default was due to excusable neglect, and (7) the 22 strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 23 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 24 disfavored. Id. at 1472. 25 Generally, once default is entered, well-pleaded factual allegations in the operative 26 complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. 27 v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). In addition, although well-pleaded 28 allegations in the complaint are admitted by a defendant's failure to respond, “necessary facts not 1 contained in the pleadings, and claims which are legally insufficient, are not established by 2 default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning 3 v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)). 4 III. Discussion 5 A. Jurisdiction and Service of Process 6 In considering whether to enter default judgment, a district court must first determine 7 whether it has jurisdiction over the subject matter and the parties to the case. In re Tuli, 172 F.3d 8 707, 712 (9th Cir. 1999). “[T]he district court is not restricted to the face of the pleadings, but 9 may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning 10 the existence of jurisdiction.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). 11 1. Subject Matter Jurisdiction 12 In its complaint, plaintiff asserted the existence of diversity jurisdiction. (ECF No. 1 at 13 ¶1 (citing 28 U.S.C.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 EMPOWER RETIREMENT, LLC, No. 2:22-cv-0489-KJM-CKD 12 Plaintiff, FINDINGS AND RECOMMENDATIONS ON PLAINTIFF’S MOTION FOR DEFAULT 13 v. JUDGMENT 14 JOSEPH R. DIAZ, 15 Defendant. 16
17 18 Plaintiff, Empower Retirement, LLC, seeks default judgment for unjust enrichment and 19 conversion against defendant, Joseph R. Diaz, in the amount of $727,173.16, plus pre-judgment 20 and post-judgment interest. (ECF No. 13.) 21 The undersigned took plaintiff’s motion under submission without oral argument in 22 accordance with Eastern District Local Rule 230(g). Defendant has not filed an opposition in 23 accordance with Local Rule 230(c) to the motion for default judgment. The undersigned issues 24 the following findings and recommendations upon review of the documents in support of this 25 motion and good cause appearing. 26 //// 27 //// 28 1 I. Background 2 Plaintiff filed this lawsuit on March 15, 2022, alleging unjust enrichment and conversion 3 against defendant for defendant’s failure to return $727,173.16 in misdirected retirement plan 4 benefits. (ECF No. 1 at ¶ 22.) Plaintiff misdirected $727,173.16 in retirement benefits to 5 defendant after the death of his father, Edward J. Diaz. (Id. at ¶¶ 8-9.) Defendant was the named 6 beneficiary on the retirement plan of his father, Edward J. Diaz. (Id. ¶¶ 10-11.) However, on 7 August 29, 2020, two days before defendant’s father’s death, plaintiff received a form naming 8 Ms. Terri Lockwood (Edward J. Diaz’s sister) as the beneficiary of the plan. (Id. at ¶¶ 11-12.) 9 Plaintiff mistakenly believed that the August 29, 2020, form naming Ms. Lockwood as 10 beneficiary was invalid. (Id. ¶ 14.) Acting under this mistaken belief, plaintiff determined that 11 the retirement plan benefits should be issued to defendant based on the previous beneficiary form 12 naming defendant as beneficiary to his father’s plan. (Id.) Pursuant to plaintiff’s determination, 13 two payments were made to defendant from the plan in the amounts of $725,989.37 on March 2, 14 2021, and $1,183.79 on June 28, 2021, for a total of $727,173.16. (Id. ¶ 15.) 15 On August 24, 2021, plaintiff sent a letter to defendant informing him of Ms. Lockwood’s 16 competing claim to the retirement plan benefits and demanding that defendant return the payment 17 within thirty days. (Id. ¶ 17.) Defendant never returned the payment and in October 2021, 18 defendant represented, through counsel, that he would not return the misdirected retirement plan 19 benefits payment unless compelled to do so by a court. (Id. ¶ 19.) 20 After the plan had been dispersed to defendant, the administrator of the retirement benefits 21 plan determined that Ms. Lockwood was indeed the rightful beneficiary. (Id. at ¶ 20.) Plaintiff 22 then paid the plan $727,173.16, which was dispersed to Ms. Lockwood on February 16, 2022. 23 (Id. at ¶ 21; ECF No. 13-2 at 10.) 24 Plaintiff initiated this action on March 15, 2022. (ECF No. 1 at ¶ 2.) The court issued a 25 summons the following day. (ECF No. 2.) Promptly after issuance of the summons, plaintiff 26 attempted personal service via both a private process server and the Sheriff of San Joaquin 27 County. (See ECF No. 13-2 at 21-34.) Neither the private process server nor the Sheriff’s Office 28 was able to effect personal service on defendant. (See id.) 1 On March 23, 2022, plaintiff mailed a service packet with the summons, complaint, new 2 case documents, and corporate disclosure statement to defendant. (See ECF No. 13-2 at 3, ¶ 10.) 3 The service packet was delivered to defendant on March 25, 2022. (See id. at 39.) On April 8, 4 2022, defendant executed the acknowledgment of receipt of summons. (ECF No. 13-2 at 48-53, 5 signed acknowledgment of receipt of summons, sent by defendant to plaintiff’s counsel by mail 6 and email.) 7 On July 26, 2022, the clerk of court entered default as to defendant pursuant to Federal 8 Rule of Civil Procedure 55(a). (ECF No. 11.) Defendant has not appeared in the case, either pro 9 se or through counsel, filed an answer, or otherwise defended against plaintiff’s claims. 10 II. Legal Standards 11 Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party 12 against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend 13 against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant's default does not 14 automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 15 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 16 (9th Cir. 1986)). Instead, the decision to grant or deny an application for default judgment lies 17 within the district court's sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 18 1980). In making this determination, the court considers the following factors: (1) the possibility 19 of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of 20 the complaint, (4) the sum of money at stake in the action[,] (5) the possibility of a dispute 21 concerning material facts[,] (6) whether the default was due to excusable neglect, and (7) the 22 strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 23 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 24 disfavored. Id. at 1472. 25 Generally, once default is entered, well-pleaded factual allegations in the operative 26 complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. 27 v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). In addition, although well-pleaded 28 allegations in the complaint are admitted by a defendant's failure to respond, “necessary facts not 1 contained in the pleadings, and claims which are legally insufficient, are not established by 2 default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning 3 v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)). 4 III. Discussion 5 A. Jurisdiction and Service of Process 6 In considering whether to enter default judgment, a district court must first determine 7 whether it has jurisdiction over the subject matter and the parties to the case. In re Tuli, 172 F.3d 8 707, 712 (9th Cir. 1999). “[T]he district court is not restricted to the face of the pleadings, but 9 may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning 10 the existence of jurisdiction.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). 11 1. Subject Matter Jurisdiction 12 In its complaint, plaintiff asserted the existence of diversity jurisdiction. (ECF No. 1 at 13 ¶1 (citing 28 U.S.C. § 1332)). Plaintiff has properly alleged that the amount in controversy 14 exceeds $75,000. (Id. at ¶ 2, indicating the jurisdictional amount is at least $727,173.16.) 15 For purposes of diversity jurisdiction, an individual is a citizen of the state in which that 16 individual is domiciled. Kanter v. Warner–Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). An 17 LLC is a citizen of every state of which its owners and members are citizens. Johnson v. 18 Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). Defendant is domiciled 19 in and a citizen of California, whereas plaintiff is a Colorado corporation with a principal place of 20 business in Colorado. (Id. at ¶¶ 3-4.) Accordingly, complete diversity exists among the parties 21 and the court has subject matter jurisdiction. 22 2. Personal Jurisdiction 23 a. Basis for Personal Jurisdiction 24 To enter default judgment, the court must have a basis for the exercise of personal 25 jurisdiction over the defendants in default. In re Tuli, 172 F.3d at 712. “Without a proper basis 26 for [personal] jurisdiction, or in the absence of proper service of process, the district court has no 27 power to render any judgment against the defendant's person or property unless the defendant has 28 consented to jurisdiction or waived the lack of process.” S.E.C. v. Ross, 504 F.3d 1130, 1138-39 1 (9th Cir. 2007). Traditional bases for conferring a court with personal jurisdiction include a 2 defendant's consent to jurisdiction, personal service of the defendant within the forum state, or a 3 defendant's citizenship or domicile in the forum state. J. McIntyre Mach., Ltd. v. Nicastro, 564 4 U.S. 873, 880 (2011). As plaintiff is domiciled in California, the court has personal jurisdiction 5 over him. 6 b. Service of Process 7 Personal jurisdiction requires notice that is “reasonably calculated, under all the 8 circumstances, to apprise interested parties of the pendency of the action and afford them an 9 opportunity to present their objections.” Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 10 306, 314 (1950). “A federal court does not have jurisdiction over a defendant unless the 11 defendant has been served properly under [Federal Rule of Civil Procedure 4].” Direct Mail 12 Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988). 13 Under Federal Rule of Civil Procedure 4, subsection (e), a person may be served 14 “pursuant to the law of the state in which the district court is located.” California Civil Procedure 15 Code § 415.30 provides for service by mail. Cal. Civ. Proc. Code § 415.30. Service by mail is 16 effectuated where a copy of the summons and complaint is sent via first-class mail or airmail to 17 the person to be served, together with two copies of a specific notice and acknowledgement, and a 18 return envelope, postage prepaid and addressed to the sender. Cal. Civ. Proc. Code § 415.30(a). 19 Service is deemed complete on the date a written acknowledgment of a receipt of summons is 20 executed by the party to be served, and the acknowledgment is returned to the sender. Cal. Civ. 21 Proc. Code § 415.30(c). 22 Here, plaintiff mailed a service packet with the summons, complaint, new case 23 documents, and corporate disclosure statement to defendant on March 23, 2022. (ECF No. 13-2 24 at 3, ¶ 10.) On April 8, 2022, defendant executed the acknowledgment of receipt, indicating that 25 he received the summons, complaint, new case documents, corporate disclosure statement and 26 pre-paid envelope from plaintiff. (ECF No. 13-2 at 48-53 (signed acknowledgment of receipt of 27 summons, sent by defendant to plaintiff’s counsel by mail and email).) Plaintiff therefore 28 1 completed service of process on defendant on April 8, 2022, the date defendant executed the 2 acknowledgment, satisfying Federal Rule of Civil Procedure 4. 3 B. Eitel Factors 4 Courts in this circuit use the Eitel factors to determine whether to grant default judgment. 5 The Eitel factors are: (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's 6 substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the 7 action[,] (5) the possibility of a dispute concerning material facts[,] (6) whether the default was 8 due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil 9 Procedure favoring decisions on the merits. Eitel, 782 F.2d at 1471-72. 10 1. Factor One: Possibility of Prejudice to Plaintiff 11 Potential prejudice to the plaintiff weighs in favor of granting default judgment. 12 See PepsiCo, Inc., 238 F. Supp. 2d at 1177. Here, plaintiff filed suit on March 15, 2022, and 13 defendant has failed to appear, respond to the complaint, or otherwise put forth a defense in this 14 action. (See ECF No. 13.) Without default judgment, the litigation would remain at a standstill, 15 prejudicing plaintiff. Accordingly, the first factor weighs in favor of default judgment. 16 2. Factors Two and Three: The Merits of the Substantive Claim and the 17 Sufficiency of the Complaint 18 Factors two and three are considered together due to the relatedness of the inquiries. The 19 court must consider whether the allegations in the complaint are sufficient to state a claim that 20 supports the relief sought. See Danning, 572 F.2d at 1388; PepsiCo, Inc., 238 F. Supp. 2d at 21 1175. Here, plaintiff has alleged unjust enrichment and conversion. 22 A. Unjust Enrichment 23 “To allege unjust enrichment as an independent cause of action, a plaintiff must show that 24 the defendant received and unjustly retained a benefit at the plaintiff's expense.” ESG Cap. 25 Partners, LP v. Stratos, 828 F.3d 1023, 1038–39 (9th Cir. 2016). Here, plaintiff misdirected 26 $727,173.16 in benefits to defendant and when plaintiff requested that defendant return the 27 misdirected benefits within thirty days, defendant failed to do so. (ECF No. 1 at ¶¶ 14-18.) The 28 undersigned finds that plaintiff’s claim for unjust enrichment is adequately plead and meritorious. 1 B. Conversion 2 Under California law, conversion is “the wrongful exercise of dominion over the property 3 of another.” Lee v. Hanley, 61 Cal. 4th 1225, 1240 (Cal. 2015). To succeed on a claim for 4 conversion, a plaintiff must establish: “(1) the plaintiff's ownership or right to possession of the 5 property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and 6 (3) damages.” Id. A conversion action may lie against the defendant who unjustifiably refuses to 7 return property on demand, even where the defendant originally obtained possession of property 8 lawfully. Chase Inv. Servs. Corp. v. L. Offs. of Jon Divens & Assocs., LLC, 748 F. Supp. 2d 9 1145 (C.D. Cal. 2010), aff'd, 491 F. App'x 793 (9th Cir. 2012). 10 Here, plaintiff alleges having misdirected $727,173.16 in retirement plan benefits to 11 defendant. (ECF No. 1 at ¶¶ 14-22; 34-37.) On August 24, 2021, plaintiff informed defendant of 12 the potential error and demanded return of the money. Despite repeated requests, defendant 13 knowingly and intentionally failed and refused to return the $727,173.16. By refusing to return 14 the benefits, defendant has wrongfully deprived plaintiff of the sum of $727,173.16, and plaintiff 15 has sustained damages. Plaintiff’s claim for conversion is thus adequately plead and meritorious. 16 Accordingly, the second and third Eitel factors favor default. 17 3. Factor Four: The Sum of Money at Stake 18 Under the fourth factor cited in Eitel, “the court must consider the amount of money at 19 stake in relation to the seriousness of defendant's conduct.” PepsiCo, Inc., 238 F. Supp. 2d at 20 1176-77; see also Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 500 (C.D. 21 Cal. 2003). “This requires . . . the court [to] assess whether the recovery sought is proportional to 22 the harm caused by [the] defendant’s conduct.” Landstar Ranger, Inc. v. Parth Enters., Inc., 725 23 F. Supp. 2d 916, 921 (C.D. Cal. 2010). 24 Plaintiff seeks $727,173.16 in principle, plus pre-judgment interest from August 24, 2021, 25 and post-judgment interest. (ECF No. 13-1 at 2.) The principal sought by plaintiff is proportional 26 to the harm caused by defendant’s conduct because plaintiff paid $727,173.16 to defendant and 27 defendant has refused to return the $727,173.16. (See ECF No. 13-2 at 7-8 (copies of bank 28 1 statements reflecting electronic payments to defendant in the amounts of $725,989.37 and 2 $1,183.79, for a total of $727,173.16).) 3 Although the amount plaintiff seeks to recover from defendant is significant, it is 4 proportionate to the harm alleged. Johnson v. Advanced Air Sols. Inc., No. 19-CV-00613-LHK, 5 2020 WL 2084898, at *8 (N.D. Cal. Apr. 30, 2020) (“[c]ourts have found that this factor 6 ‘presents no barrier to default judgment’ even when millions of dollars were at stake, as long as 7 the potential damages were ‘proportional to the harm alleged.’”) Accordingly, the fourth Eitel 8 factor favors default judgment. 9 4. Factor Five: The Possibility of a Dispute Concerning Material Facts 10 Where the clerk has entered default and defendant has not appeared, there is no likelihood 11 that any genuine issue of material fact exists. See, e.g., Elektra Entm't Group Inc. v. Crawford, 12 226 F.R.D. 388, 393 (C.D. Cal. 2005) (“Because all allegations in a well-pleaded complaint are 13 taken as true after the court clerk enters default judgment, there is no likelihood that any genuine 14 issue of material fact exists.”); accord Philip Morris USA, Inc., 219 F.R.D. at 500; PepsiCo, Inc., 15 238 F. Supp. 2d at 1177. Here, the clerk of court entered default against defendant on July 26, 16 2022, and defendant has not appeared. (ECF No. 11.) Accordingly, there is no likelihood that a 17 genuine issue of material fact exists. Therefore, the fifth Eitel factor favors entry of default 18 judgment. 19 5. Factor Six: Whether the Default Was Due to Excusable Neglect 20 Defendant’s default is not due to excusable neglect. Defendant has not responded to any 21 of the filings in this case. Further, before filing this suit, plaintiff sent defendant two demand 22 letters in an effort to recoup the misdirected funds. (See ECF No. 13-2 at 12-13.) Accordingly, 23 the sixth Eitel favor weighs in favor of a default judgment. 24 6. Factor Seven: The Strong Policy Favoring Decisions on the Merits 25 “Cases should be decided upon their merits whenever reasonably possible." Eitel, 782 26 F.2d at 1472. However, this policy, standing alone, is not dispositive, especially where a 27 defendant fails to appear or defend itself in an action. PepsiCo, Inc., 238 F. Supp. 2d at 28 1 1177; see also Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1061 (N.D. Cal. 2 2010). Accordingly, the policy does not, by itself, preclude the entry of default judgment. 3 Pursuant to the above analysis, the Eitel factors weigh in favor of entering default 4 judgment for unjust enrichment and conversion against defendant. 5 IV. Pre-judgment and post-judgment interest 6 A. Pre-judgment Interest 7 Plaintiff seeks pre-judgment interest from August 24, 2021, the date of plaintiff’s initial 8 communication to defendant seeking return of the retirement plan benefits, through entry of 9 judgment at a rate of 7 percent per annum and based on a 365-day year (a daily rate of 10 approximately $139.46). “Pre-judgment interest in a diversity action is ... a substantive matter 11 governed by state law.” U.S. Fid. & Guar. Co. v. Lee Invs. LLC, 641 F.3d 1126, 1139 (9th Cir. 12 2011). Under California law, parties are entitled to recover pre-judgment interest on damages 13 where the principal amount is certain. Cal. Civ. Code § 3287(a). California law does not entitle 14 parties to pre-judgment interest on restitution awarded in quasi contract claims. See Keating v. 15 Jastremski, No. 3:15-CV-57-L-AGS, 2021 WL 1195868, at *5 (S.D. Cal. Mar. 30, 2021) 16 (plaintiff was not entitled to pre-judgment interest on a restitution award for a quasi-contract 17 claim). 18 Here, plaintiff is entitled to recover pre-judgment interest for the conversion claim. 19 “Under California law, a prevailing plaintiff in a conversion action is entitled to prejudgment 20 interest from the time of the taking to the judgment date” at a rate of 7 percent per annum. See 21 State Farm Mut. Auto. Ins. Co. v. Rodriguez (In re Rodriguez), 568 B.R. 328, 347 (Bankr. S.D. 22 Cal. 2017) () (citing Cal. Const., art. XV, § 1). Typically, pre-judgment interest accrues “from 23 the time the claim accrues until judgment is entered.” Schneider v. Cty. of San Diego, 285 F.3d 24 784, 789 (9th Cir. 2002). 25 Plaintiff requests pre-judgment interest from August 24, 2021, the date of plaintiff’s initial 26 communication to defendant seeking return of the retirement plan benefits, through entry of 27 judgment. (ECF No. 1 at ¶ 17.) However, the initial communication plaintiff sent to defendant 28 requested that defendant return the $727,173.16 within thirty days. (ECF No 13-2 at 12.) The 1 undersigned therefore finds that plaintiff’s cause of action for conversion began to accrue on 2 September 24, 2021, i.e., the date by which defendant was to return the retirement funds but 3 failed to do so. Mahajan v. Kumar, Case No. CV F 06-1728 AWI SMS, 2009 WL 3055225, at *5 4 (E. D. Cal. Sept. 21, 2009) (“The appropriate way of framing the tort in this case is that the 5 conversion occurred when Plaintiff approached ... Defendants that had control over the money 6 deposited in the accounts, asked for the money to be returned, and was refused.”). Accordingly, 7 plaintiff is entitled to pre-judgment interest on the $727,173.16 in damages, from September 24, 8 2021, through entry of judgment at a rate of 7 percent per annum and based on a 365-day year. 9 B. Post-judgment interest 10 Plaintiff is entitled to receive post-judgement interest. “Under the provisions of 28 U.S.C. 11 § 1961, post-judgment interest on a district court judgment is mandatory.” Air Separation, Inc. v. 12 Underwriters at Lloyd's of London, 45 F.3d 288, 290 (9th Cir.1995) (citing Perkins v. Standard 13 Oil Co., 487 F.2d 672, 674 (9th Cir.1973)). Post-judgment interest applies to the entire judgment, 14 including principal, pre-judgment interest, attorneys' fees, and costs. Id. at 291. The post- 15 judgment interest rate is set “at a rate equal to the weekly average 1–year constant maturity 16 Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the 17 calendar week preceding ... the date of the judgment.” 28 U.S.C. § 1961(a). 18 V. Conclusion 19 The undersigned recommends that plaintiff's motion for default judgment against 20 defendant for unjust enrichment and conversion be granted and that plaintiff be awarded 21 $727,173.16 in damages for conversion, plus pre-judgment interest from September 24, 2021, 22 through entry of judgment at a rate of 7 percent per annum and based on a 365-day year, and any 23 post-judgment interest accruing after the entry of judgment in accordance with federal law. 24 FINDINGS AND RECOMMENDATIONS 25 Accordingly, it is HEREBY RECOMMENDED that: 26 1. Plaintiff's motion for default judgment against defendant for unjust enrichment and 27 conversion (ECF No. 13) be GRANTED; 28 ] 2. Plaintiff be awarded final judgment in the amount of $727,173.16, representing 2 damages for conversion, plus 3 a. Pre-judgment interest from September 24, 2021, through entry of judgment at a 4 rate of 7 percent per annum and based on a 365-day year (a daily rate of 5 approximately $139.46); and 6 b. Any post-judgment interest accruing after the entry of judgment in accordance 7 with federal law. 8 These findings and recommendations are submitted to the United States District Judge 9 || assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within seven (7) days 10 || after being served with these findings and recommendations, any party may file written 11 || objections with the court and serve a copy on all parties. Such a document should be captioned 12 || “Objections to Magistrate Judge's Findings and Recommendations.” Any reply to the objections 13 || shall be served on all parties and filed with the court within seven (7) days after service of the 14 || objections. The parties are advised that failure to file objections within the specified time may 15 || waive the right to appeal the District Court's order. Turner v. Duncan, 158 F.3d 449, 455 (9th 16 | Cir. 1998); Martinez v. YIst, 951 F.2d 1153, 1156-57 (9th Cir. 1991). 17 | Dated: February 13, 2023 / ae □□ / a Ly a I8 CAROLYNK.DELANEY 19 UNITED STATES MAGISTRATE JUDGE 20 | 21.empo.04s9 21 22 23 24 25 26 27 28 1]