Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-01804/USCOURTS-azd-2_11-cv-01804-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

Bankers Insurance Company, a Florida 

corporation, et al., 

Plaintiffs, 

v. 

Old West Bonding Company, LLC, et al., 

Defendants.

No. CV11-1804 PHX DGC

ORDER 

 Plaintiffs have filed a motion for default judgment pursuant to Rule 55(b) of the 

Federal Rules of Civil Procedure against Defendant Dana Schnell. Doc. 37. No response 

has been filed, and the time for doing so has expired. For reasons explained below, the 

Court will grant the motion. 

I. Background.

 Plaintiffs filed this case on September 14, 2011 after Defendant Schnell and others 

failed to honor the terms of a General Agency Agreement (“Agreement”). On 

September 23, 2011, Plaintiffs filed an Amended Complaint. The Amended Complaint 

includes four causes of action, three of which pertain to Defendant Schnell (Second 

Cause of Action, Third Cause of Action and Fourth Cause of Action). 

 Defendant Schnell was served with the amended complaint on November 11, 

2011. Doc. 20. Defendant Schnell has not answered or otherwise responded to the 

Amended Complaint. On December 8, 2011 the Clerk of the Court entered default 

against Defendant Schnell based on his failure to respond. Doc. 25. 

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II. Plaintiff’s Motion for Default Judgment.

 Plaintiffs’ motion seeks default judgment against Defendant Schnell in the amount 

of $377,831.00, representing reimbursement of Plaintiffs’ loss incurred as a result of 

Defendant Schnell’s breach of the terms of the Agreement, prejudgment interest pursuant 

to A.R.S. § 44-1201(B), beginning on May 13, 2011 until the date the judgment is 

entered, post-judgment interest pursuant to 28 U.S.C. § 1961, attorneys’ fees in the 

amount of $10,971.50, and costs in the amount of $2,888.00. Because Defendant 

Schnell’s default has been properly entered pursuant to Rule 55(a), the Court has 

discretion to grant default judgment under Rule 55(b). See Aldabe v. Aldabe, 616 F.2d 

1089, 1092 (9th Cir. 1980). 

 Factors the Court should consider in deciding whether to grant default judgment 

include (1) the possibility of prejudice to Plaintiff, (2) the merits of the claims, (3) the 

sufficiency of the complaint, (4) the amount of money at stake, (5) the possibility of a 

dispute concerning material facts, (6) whether default was due to excusable neglect, and 

(7) the policy favoring a decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 

1471-72 (9th Cir. 1986). In applying these Eitel factors, “the factual allegations of the 

complaint, except those relating to the amount of damages, will be taken as true.” 

Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977); see Fed. R. Civ. P. 8(d). 

 The first Eitel factor weighs in favor of granting Plaintiffs’ motion because they 

will be prejudiced if this case remains unresolved. Plaintiffs served Defendant Schnell 

more than seven months ago. Doc. 20. Defendant Schnell has not answered or otherwise 

responded to the complaint. If Plaintiffs’ motion for default judgment is not granted, 

Plaintiffs “will likely be without other recourse for recovery.” PepsiCo, Inc. v. Cal. 

Security Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). 

 The second and third Eitel factors favor a default judgment where the complaint 

sufficiently states a claim for relief under Rule 8. See Cal. Security Cans, 238 F. Supp. 

2d at 1175; Danning v. Lavine, 572 F.2d 1386, 1388-89 (9th Cir. 1978)). Plaintiffs’ 

Amended Complaint states plausible claims for relief. See Doc. 7. 

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 Under the fourth Eitel factor, the Court considers the amount of money at stake in 

relation to the seriousness of Defendant Schnell’s conduct. See Cal. Security Cans, 238 

F. Supp. 2d at 1176. On October 12, 1998, Plaintiffs and Old West Bonding Co., LLC 

dba Liberty Bail Bonds, LLC (“Liberty”) entered into the Agreement, pursuant to which 

Plaintiffs authorized Liberty to issue bail bonds underwritten by Plaintiffs. The 

Agreement required Liberty to indemnify Plaintiffs against any loss as a result of the 

issuance of bail bonds. Doc. 37 at 3-4. On February 23, 2006, Plaintiffs and Defendant 

Schnell entered into an Addendum to the General Agreement to which Defendant Schnell 

agreed to be added as an Indemnitor to the Agreement. The Agreement, as modified by 

the Addendum, authorized Liberty to underwrite and issue bail bonds that were binding 

on Plaintiffs pursuant to the specific terms set forth therein including the obligation of 

Defendant Schnell and the others to reimburse the surety for any loss, costs and expenses 

arising out of issuance of the bonds. 

 As a result of the bonds issued by Liberty, Plaintiffs have incurred a loss in the 

principal amount of $377,831.00. Pursuant to the terms of the Agreement and 

Addendum, Defendant Schnell agreed to indemnify Plaintiffs against the loss. On 

May 13, 2011, demand was made on Defendant Schnell to reimburse Plaintiffs. To date, 

Defendant Schnell has failed to reimburse Plaintiffs for the loss and therefore has 

breached his contractual obligations under the Agreement. This factor weighs in favor of 

a default judgment. See Bd. of Trs. of Cal. Metal Trades v. Pitchometer Propeller, No. 

C-97-2661-VRW, 1997 WL 7979222, at *1 (N.D. Cal. Dec. 15, 1997) (granting default 

judgment where amount of money at stake was reasonable, justified, and properly 

documented). 

 The fifth Eitel factor also favors a default judgment. Given the sufficiency of the 

Amended Complaint and Defendant Schnell’s default, “no genuine dispute of material 

facts would preclude granting [Plaintiff’s] motion.” Cal. Security Cans, 238 F. Supp. 2d 

at 1177; see Geddes, 559 F.2d at 560. 

 Applying the sixth factor, the Court cannot conclude that Defendant Schnell’s 

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default is due to excusable neglect. Defendant Schnell was properly served with the 

summons and Amended Complaint pursuant to Rule 4. Doc. 20. Defendant Schnell’s 

failure to answer or otherwise respond to the Amended Complaint cannot be attributed to 

excusable neglect. See Gemmel v. Systemhouse, Inc., No. CIV 04-187-TUC-CKJ, 2008 

WL 65604, at *5 (D. Ariz. Jan. 3, 2008).

 The final Eitel factor weighs against default judgment. “Cases should be decided 

upon their merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. But the mere 

existence of Rule 55(b) “indicates that this preference, standing alone, is not dispositive.” 

Cal. Security Cans, 238 F. Supp. at 1177 (citation omitted). Moreover, Defendant 

Schnell’s failure to answer or otherwise respond to the complaint “makes a decision on 

the merits impractical, if not impossible.” Id. 

 Having reviewed Plaintiffs’ motion and supporting exhibits, and having 

considered the Eitel factors as a whole, the Court concludes that the entry of default 

judgment is appropriate against Defendant Dana Schnell in the amount of $377,831. 

IT IS ORDERED:

 1. Plaintiffs’ motion for default judgment (Doc. 37) is granted. 

 2. Default judgment is entered in favor of Plaintiffs and against Defendant 

Dana Schnell in the amount of $377,831.00, plus prejudgment interest at a rate allowed 

by Arizona law pursuant to A.R.S. § 44-1201(B) beginning on May 13, 2011 until the 

date the judgment is entered, post-judgment interest at a rate allowed by 28 U.S.C. 

§ 1961 accruing from the date of entry of judgment, attorneys’ fees in the amount of 

$10,971.50; and costs in the amount of $2,888.00. 

Dated this 13th day of July, 2012. 

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