Wendy Bassett v. M/Y Yes Please, a 47.3 Foot Meridian Motor Yacht, et al.

Opinion

1 2 3 4 5 6 7 10 11 Case No.: 25-cv-02237-DMS-DDL WENDY BASSETT,

12 Plaintiff, ORDER VACATING ORAL 13 v. ARGUMENT; GRANTING PLAINTIFF’S MOTION FOR 14 M/Y YES PLEASE, a 47.3 Foot Meridian RECONSIDERATION OF DENIAL Motor Yacht, et al., Defendants. AGAINST DEFENDANT DC 16 INTERNATIONAL ENTERPRISES 17 LLC; ENTERING DEFAULT JUDGMENT 18

19 [ECF No. 9]

21 On January 9, 2026, the Court denied without prejudice Plaintiff’s motion for default 22 judgment. (ECF No. 8.) Plaintiff now moves for reconsideration of that Order. (Mot., 23 ECF No. 9.) The motion is set to be heard on March 27, 2026, at 1:30 p.m. (Id.) Defendant 24 DC International Enterprises LLC (“DC International”) has not appeared in this case and 25 did not respond to the motion. Because the matter is suitable for resolution without oral 26 argument, the Court vacates the hearing. S.D. Cal. Civ. R. 7.1(d)(1). For the following 27 reasons, the Court grants Plaintiff’s motion and enters default judgment. 28 2 Plaintiff is the beneficiary of a Marital Settlement Agreement and Judgment dated 3 October 31, 2024 (“Judgment”). (Compl., ECF No. 1, ¶ 7.) Per the Judgment, Plaintiff 4 was to be awarded all interest in the Vessel Yes Please, a 2003 Meridian 49 Motor Yacht, 5 U.S.C.G. Official No. 1137959 (“Vessel”) from Dwight Chornomud, and his company, 6 WD Enterprises, LLC (“WD Enterprises”). (Id.) The Vessel was to be transferred free 7 and clear of any liens. (Id. ¶¶ 8, 9.) The Judgment explicitly states that Chornomud must 8 remove any and all mechanic’s liens recorded against the Vessel and cannot, by himself or 9 through a third party, place additional liens or encumbrances on the Vessel. (Id. ¶ 9.) On 10 or about April 24, 2025, DC International filed with the United States Coast Guard Vessel 11 Documentation Center a Notice of Claim of Lien on the Vessel in the amount of $150,000 12 (“Lien”). (Id. ¶ 10.) Chornomud was the “Organizer” and sole member and manager of 13 DC International. (Id. ¶¶ 12, 13.) The Lien was filed “solely for the purpose of frustrating 14 the transfer of the Vessel’s interests from W.D. Enterprises to [Plaintiff].” (Id. ¶ 15.) 15 Plaintiff argues that the Lien is invalid because DC International “never provided any 16 goods or services on the order of owner of the [Vessel] or any person authorized by the 17 owner”; “never had a maritime contract with the owner of the [Vessel] or any person 18 authorized by the owner”; and “does not hold a Ship’s Preferred Mortgage on the [Vessel].” 19 (Id. ¶ 16.) The Lien is a cloud on the title of the Vessel and is preventing the transfer of 20 the interest owned by WD Enterprises to Plaintiff. (Id. ¶ 17.) Further, Plaintiff cannot 21 locate Chornomud because he passed away in May 2025. (See id. ¶ 14; Mot. 3.) 22 Plaintiff filed her Complaint on August 28, 2025, seeking declaratory judgment that 23 the purported Lien asserted by DC International against the Vessel is invalid and 24 unenforceable. She served DC International on September 4, 2025. (ECF No. 3.) 25 Following DC International’s failure to respond, the Clerk of Court entered default on 26 September 30, 2025. (ECF No. 5.) Plaintiff thereafter moved for default judgment. (ECF 27 No. 4.) The Court denied without prejudice Plaintiff’s motion for default judgment because 28 Plaintiff failed to adequately address the Eitel factors. 2 A. Motion for Reconsideration 3 The Federal Rules of Civil Procedure do not expressly provide for motions for 4 reconsideration.1 However, a motion for reconsideration may be construed as a motion to 5 amend judgment under Federal Rule of Civil Procedure 60(b). See In re Arrowhead Estates 6 Development Co., 42 F.3d 1306, 1311 (9th Cir. 1994). Rule 60(b) states that a court may 7 relieve a party or its legal representative from a final judgment, order, or proceeding for: 8 (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been 9 discovered in time to move for a new trial under Rule 59(b); (3) fraud . . . , 10 misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged; it is based 11 on an earlier judgment that has been reversed or vacated; or applying it 12 prospectively is no longer equitable; or (6) any other reason that justifies relief. 13 14 Fed. R. Civ. P. 60(b). Plaintiff argues the Court should reconsider her motion for default 15 judgment because she has now come forward with “new and clarifying information 16 addressing all seven Eitel . . . factors.” (Mot. 2.) The Court agrees. 17 B. Default Judgment 18 The Clerk of the Court is required to enter default “when a party against whom a 19 judgment for affirmative relief is sought has failed to plead or otherwise defend, and that 20 failure is shown by affidavit or otherwise.” Fed. R. Civ. P. 55(a). Federal Rule of Civil 21 Procedure 55(b)(2) allows for entry of default judgment by the Court. However, “[a] 22 plaintiff does not receive default judgment as a matter of right; rather, a court has discretion 23 as to whether it should be granted.” United States v. Boyce, 148 F. Supp. 2d. 1069, 1093 24 (S.D. Cal. 2001) (internal citations omitted). 25

26 1 Local Rule 7.1(i) permits a party to move for reconsideration “[w]henever any motion . . . has been made 27 to any judge and has been refused in whole or in part.” S.D. Cal. Civ. R. 7.1(i). The party seeking reconsideration must show “what new or different facts and circumstances are claimed to exist which did 28 1 In exercising that discretion, courts consider the following factors: 2 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money 3 at stake in the action[,] (5) the possibility of a dispute concerning material 4 facts[,] (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on 5 the merits. 6 Id. (citing Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986)). 7 When analyzing motions for default judgment, “well-pled allegations in the 8 complaint regarding liability are deemed true,” and the “district court is not required to 9 make detailed findings of fact.” Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th 10 Cir. 2002) (citations omitted). However, “necessary facts not contained in the pleadings, 11 and claims which are legally insufficient, are not established by default.” Cripps v. Life 12 Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992). While “default judgments are 13 ordinarily disfavored,” Eitel, 782 F.2d at 1472, “[a]s a practical matter, default judgments 14 are granted more often than denied.” Judge Karen L. Stevenson & James E. Fitzgerald, 15 Rutter Practice Guide: Federal Civil Procedure Before Trial (Calif. and 9th Cir. Edition) 16 ¶ 6:102 (April 2024). 17 III. DISCUSSION 18 A. Possibility of Prejudice to Plaintiff 19 Plaintiff contends that she will suffer prejudice without default judgment because 20 she “is the rightful owner” of the Vessel and the “fraudulent lien . . . prevents ownership 21 and enjoyment of her property rights.” (Mot. 2.) The Court agrees. A denial of default 22 judgment would prejudice Plaintiff by “clouding the title of the Vessel and impairing its 23 use and marketability.” Ripka v. Robert E. Landweer & Co., No. 6:24-CV-01638-MTK, 24 2025 WL 1084262, at *1 (D. Or. Apr. 10, 2025). Thus, the first factor weighs in favor of 25 default judgment. 26 27 28 1 B. Merits and Sufficiency of Claims 2 The second and third Eitel factors—the merits of Plaintiff’s claims and the 3 sufficiency of the Complaint—are considered together “given the close relationship 4 between the two inquiries.” Kemper Indep. Ins. Co. v. Boyer, No. 22-cv-1458 MCE DB, 5 2023 WL 4014658, at *3 (E.D. Cal. June 15, 2023). “These two factors will favor entry of 6 default judgment where the complaint sufficiently states a claim for relief upon which the 7 plaintiff may recover.” Id. Here, Plaintiff brought a cause of action for declaratory relief, 8 alleging that the Lien is invalid under maritime law. (Compl. ¶ 18; Mot. 3.) As alleged, 9 the Vessel was to be transferred to Plaintiff free and clear of any liens, (Compl. ¶¶ 8, 9), 10 and yet DC International filed the Lien. (Id. ¶ 10.) DC International “never provided any 11 goods or services on the order of owner of the [Vessel] or any person authorized by the 12 owner”; “never had a maritime contract with the owner of the [Vessel] or any person 13 authorized by the owner”; and “does not hold a Ship’s Preferred Mortgage on the [Vessel].” 14 (Id. ¶ 16.) Thus, the Lien is invalid. Accepting the factual allegations as true—as is 15 required of the Court—Plaintiff adequately pled a cause of action for declaratory relief. 16 Accordingly, the second and third Eitel factors weigh in favor of Plaintiff. 17 C. Sum of Money at Stake 18 “Where a large sum of money is at stake,” the fourth factor “disfavors default 19 judgment.” Kemper, 2023 WL 4014658, at *4; see also Indian Hills Holdings, LLC v. 20 Frye, 572 F. Supp. 3d 872, 889 (S.D. Cal. 2021) (“Default judgment is disfavored when a 21 large amount of money is involved, or the amount sought appears unreasonable in light of 22 the potential loss caused by the defendant’s actions.”). Here, Plaintiff does not seek 23 monetary judgment, but rather a declaration that the Lien is invalid. (Mot. 3); see also 24 Ripka, 2025 WL 1084262, at *2. Further, while the Lien is valued at $150,000, (Mot. 3), 25 “[r]elief is proportional to the harm caused because Plaintiff is seeking only to clear the 26 vessel of the liens, and is not seeking any additional amount for [DC International’s] failure 27 to pursue [her] claims or respond to the Complaint. Gunn Pac. Reflection LLC v. Johnsen, 28 1 No. 218CV06842ODWJPRX, 2019 WL 2501476, at *3 (C.D. Cal. June 17, 2019). Thus, 2 the fourth Eitel factor favors default judgment. 3 D. Possibility of Dispute 4 When “a defendant fails to answer and provide the court with any material facts,” 5 “courts routinely find that no material issue of fact exists.” Epstein v. Cooley, No. 22-cv- 6 273 AJB JLB, 2023 WL 6371026, at *6 (S.D. Cal. Apr. 18, 2023); T-C F. at Carlsbad, 7 LLC v. Thomas Enters., Inc., No. 16-cv-2119 DMS (BGS), 2017 WL 3492159, at *2 (S.D. 8 Cal. Aug. 14, 2017) (deciding “because Defendant has refused to participate in this lawsuit, 9 no possibility of dispute concerning material facts has been presented”). So too here; DC 10 International has not appeared in this action. This factor supports Plaintiff’s motion. 11 E. Whether Default was Due to Excusable Neglect 12 The question of what conduct “constitutes ‘excusable neglect’ under Rule 60(b)(1) 13 and similar rules ‘is at bottom an equitable one, taking account of all relevant circumstances 14 surrounding the party’s omission.’” Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108, 15 1110 (9th Cir. 2011) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd., 507 U.S. 16 380, 395 (1993)). There is “little possibility of excusable neglect and default judgment is 17 favored when defendants fail to respond after being properly served.” Constr. Laborers 18 Tr. Funds for S. Cal. Admin. Co. v. Anzalone Masonry, Inc., 316 F. Supp. 3d 1192, 1201– 19 02 (C.D. Cal. 2018). Here, Plaintiff contends that Plaintiff was properly served on 20 September 4, 2025. (Mot. 3; ECF No. 3.) Plaintiff provided adequate notice of this action, 21 yet Defendant failed to appear and defend itself. See S.E.C. v. Internet Sols. for Bus. Inc., 22 509 F.3d 1161, 1166 (9th Cir. 2007) (holding “a signed return of service constitutes prima 23 facie evidence of valid service which can be overcome only by strong and convincing 24 evidence”). This factor thus weighs in favor of default judgment. 25 F. Strong Policy Favoring Decisions on the Merits 26 The final Eitel factor considers the strong policy that cases should decided on the 27 merits “whenever reasonably possible.” Eitel, 782 F.2d at 1472. While this factor weighs 28 1 when the other . . . factors weigh in its favor.” Rio Properties, Inc. v. Rio Int’l Interlink, 2 F.3d 1007, 1022 (9th Cir. 2002); see also Kelly v. Hickman, No. 19-cv-01733-JAD- 3 || DJA, 2021 WL 9316350, at *4 (D. Nev. Aug. 24, 2021) (finding default judgment is 4 || warranted because although the “final Fite/ factor usually weighs against entry of default 5 || judgment, it does not preclude me from entering one and is outweighed by the other factors 6 here”). The other factors weigh in favor of default judgment. As a result, the Court finds 7 || default judgment is warranted. 9 For the foregoing reasons, the Court VACATES the March 27, 2026 hearing; 10 ||GRANTS Plaintiffs motion for reconsideration; and ENTERS default judgment 11 |/declaring that DC International’s purported Lien against the Vessel is invalid and 12 ||}unenforceable. The Clerk shall enter Judgment in favor of Plaintiff. 14 || Dated: March 24, 2026 2» 15 Zn Yn. Woy Hon. Dana M. Sabraw 16 United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28