Gutierrez v. Webcollex, LLC

District Court, E.D. California·Decided May 15, 2025·No. 2:23-cv-00988·Unknown

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 FOR THE EASTERN DISTRICT OF CALIFORNIA 9 10 LISA GUTIERREZ, individually and on No. 2:23-cv-0988 AC behalf of all others similarly situated, 11 Plaintiff, 12 ORDER v. 13 WEBCOLLEX, LLC d/b/a CKS Financial, 14 Defendant. 15 16 This matter is before the court on plaintiff’s motion for default judgment. ECF No. 45 17 The case is before the undersigned for all purposes on the consent of the parties. ECF No. 16.1 18 The motion was taken under submission on the papers. ECF No. 46. For the reasons set forth 19 below, the motion is GRANTED, and judgment shall be entered in favor of plaintiff. 20 I. Relevant Background 21 Plaintiff initiated this action for violations of the Fair Debt Collection Practices Act, 15 22 U.S.C. §§ 1692, et seq. (“FDCPA”), the Rosenthal Fair Debt Collection Practices Act, California 23 Civil Code §§ 1788, et seq. (the “Rosenthal Act” or “RFDPCA”), a state statute modeled after the 24 FDCPA, by filing a complaint with the court on May 25, 2023 against defendant. ECF No. 1. 25 After defendant’s prior counsel failed to execute a request for waiver of service, on September 7, 26 2023, defendant was served with the Summons and Complaint in this action, as shown by 27 1 As the procedural history indicates, consent to magistrate judge jurisdiction was obtained prior 28 to the conduct constituting default. 1 the Proof of Service that plaintiff filed with this court September 28, 2023. ECF No. 7. Later in 2 this litigation, defendant’s counsel filed a motion to withdraw as counsel for defendant, which the 3 court ultimately granted. ECF No. 37. Thereafter, on December 3, 2024, plaintiff filed Motion to 4 Strike Defendant’s Answer and enter default against defendant in light of defendant’s status as a 5 corporation or LLC which cannot represent itself in court, and the lack of any new counsel 6 appearing in the action on defendant’s behalf. ECF No. 40. 7 On January 14, 2025, the court issued an order granting Plaintiff’s Motion to Strike 8 Defendant’s Answer and ordering the Clerk to enter default against Defendant. ECF No. 42. The 9 Clerk’s Entry of Default was issued as to Defendant on January 14, 2025. ECF No. 43. Plaintiff 10 moved for entry of default judgment on all counts on April 2, 2025. ECF No. 45. 11 II. Motion 12 Plaintiff now moves for default judgment on all counts, seeking statutory damages of 13 $1,000 under the FDCPA (ECF No. 1 at ¶ 61), $1,000 under the Rosenthal Act (Id. ¶ 64), along 14 with an award of costs of litigation and reasonable attorney’s fees pursuant to 15 U.S.C. § 15 1692k(a)(3) and Cal. Civ. Code § 1788.30(c) (Id. ¶¶ 61, 64). 16 III. Analysis 17 A. Legal Standard 18 Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party 19 against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend 20 against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not 21 automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 22 238 F.Supp.2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th 23 Cir. 1986)); see Fed. R. Civ. P. 55(b) (governing the entry of default judgments). Instead, the 24 decision to grant or deny an application for default judgment lies within the district court’s sound 25 discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this 26 determination, the court may consider the following factors:

27 the possibility of prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum 28 1 of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to 2 excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 3 4 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 5 disfavored. Id. at 1472. 6 Once default is entered, well-pleaded factual allegations in the operative complaint are 7 taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v. 8 Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. 9 Group, 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)); see also Fair Housing of Marin v. 10 Combs, 285 F.3d 899, 906 (9th Cir. 2002). Although well-pleaded allegations in the complaint 11 are admitted by a defendant’s failure to respond, “necessary facts not contained in the pleadings, 12 and claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. 13 of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 14 (9th Cir. 1978)); accord DIRECTV, Inc. v. Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (“[A] 15 defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law”) 16 (citation and quotation marks omitted); Abney v. Alameida, 334 F.Supp.2d 1221, 1235 (S.D. Cal. 17 2004) (“[A] default judgment may not be entered on a legally insufficient claim.”). A party’s 18 default conclusively establishes that party’s liability, although it does not establish the amount of 19 damages. Geddes, 559 F.2d at 560; cf. Adriana Int’l Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th 20 Cir. 1990) (stating in the context of a default entered pursuant to Federal Rule of Civil Procedure 21 37 that the default conclusively established the liability of the defaulting party). 22 B. The Eitel Factors 23 1. Factor One: Possibility of Prejudice to Plaintiff 24 The first Eitel factor considers whether the plaintiff would suffer prejudice if default 25 judgment is not entered, and such potential prejudice to the plaintiff weighs in favor of granting a 26 default judgment. See PepsiCo, Inc., 238 F.Supp.2d at 1177. Here, plaintiff would suffer 27 prejudice if the court did not enter a default judgment because it would be without recourse for 28 recovery. Accordingly, the first Eitel factor favors the entry of default judgment. 1 2.

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