Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02972/USCOURTS-casd-3_13-cv-02972-0/pdf.json

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

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CAPITAL PARTNERS FUNDING,

LLC,

Plaintiff,

CASE NO. 13-CV-2972 W (RBB)

SUPPLEMENTAL ORDER RE.

PLAINTIFF’S MOTION FOR

DEFAULT JUDGMENT

vs.

BMG LOGISTICS, INC., et al.,

Defendants.

On March 17, 2014, Plaintiff Capital Partners Funding, LLC filed a motion for

default judgment. On May 20, 2014, this Court entered an order granting the motion

as to Capital’s request for default judgment as to (1) BMI with respect to the causes of

action for breach of the Factoring Agreement, breach of the covenant of good faith and

fair dealing, intentional misrepresentation, negligent misrepresentation, accounts

stated, and unfair competition; and (2) Brianna Goodwin with respect to the second

cause of action for breach of the Guaranty Agreement. (See Default Judgement Order

[Doc. 10], 11:16–23.) The order denied the motion in all other respects, including the

request for damages, prejudgement interest and attorneys’ fees on the ground that

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Capital had not provided sufficient evidence establishing its damage claims. (Id.,

6:11–8:2.) However, the order granted Capital leave to file a supplemental brief in

support of its claimed damages, pre-judgment interest, and attorneys’ fees and costs.

(Id., 11:25–12:2.)

Capital has now filed its supplemental brief, along with additional evidence in

support of its damage claims.

 

I. BACKGROUND

The following facts are taken from this Court’s Default Judgment Order. 

Plaintiff Capital Partners Funding, LLC (“Capital”), is a factoring provider. 

(Compl. [Doc. 1] ¶ 11.) Factoring is a financial transaction whereby a business sells its

accounts receivables to a third party, such as Capital, in exchange for cash. (Id.) The

third party then collects the money owed (i.e., the account receivable) from the

customer. (Id.)

On or about November 18, 2011, Capital entered into the Factoring Master

Agreement (the “Agreement”) with BMG Logistics, Inc. (“BMG”) (Compl. Ex. A.) 

On the same day, Defendant Brianna Goodwin, BMG’s president, executed a

Continuing Guaranty and Security Agreement (the “Guaranty”). (Id. ¶ 5, Ex. B.) 

Under the Agreement, Capital agreed to purchase BMG’s accounts receivables. 

(Compl. ¶ 12.) Section 4, however, gives Capital the right to require that BMG

“repurchase, by payment of the unpaid Face Amount thereof, together with any unpaid

fees relating to the Purchased Account, on demand, or at the Purchaser’s option, by

Purchaser’s charge to the Reserve Account.” (Id. ¶ 14, Ex. A at ¶ 4.1.) Additionally,

section 16 further requires BMG to reimburse Capital for the actual amount of costs

and expenses incurred in connection with the enforcement of the Agreement. (Id. ¶

16, Ex. A at ¶ 16.1.) Under the Guaranty, Defendant Brianna Goodwin personally

guaranteed BMG’s prompt payment of any and all indebtedness arising under the

Agreement. (Id. ¶ 19, Ex. B at ¶ 2.1.)

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Shortly after entering the Agreement, Capital purchased accounts receivables

from BMG. (Compl. ¶ 12.) Several of the accounts became delinquent because they

remained unpaid past the late payment date specified in the Agreement. (Id. ¶ 13.) 

Capital alleges the delinquent accounts totaled $42,080.00 (the “Repurchase Price”).

(Id.) Additionally, as of January 9, 2013, BMG allegedly incurred service charges and

fees of $58,780.42 (the “Accrued Fees”). (Id. ¶ 14.) Despite Capital’s repeated

attempts to collect from BMG the Repurchase Price and Accrued Fees, BMG failed to

repurchase any delinquent accounts. (Id. ¶ 15.) 

On December 11, 2013, Capital filed this lawsuit. The Complaint asserts seven

causes of action for: (1) breach of the Agreement; (2) breach of the Guaranty;

(3) breach of the covenant of good faith and fair dealing; (4) intentional

misrepresentation; (5) negligent misrepresentation; (6) accounts stated; and (7) Unfair

Competition under California Business & Professions Code §§ 17200, et seq. 

On January 7, 2014, Defendants Joe Goodwin, Brianna Goodwin and BMG were

served with the Summons and Complaint. (See Summons [Docs. 4–6].) Despite being

served, Defendants did notrespond to the Complaint or otherwise appearin this action. 

Accordingly, on February 13, 2014, Capital filed a request for default, which was

entered on February 14, 2014. (See Entry of Default [Doc. 8].) 

As stated above, on May 20, 2014, this Court issued the Default Judgement

Order, which granted in part and denied in part Capital’s motion, and allowed Capital

leave to file a supplemental brief and evidence supporting its damage claims. On June

10, 2014, Capital filed its supplemental brief and evidence.

II. STANDARD.

Rule 55(b)(2) of the Federal Rules of Civil Procedure governs applications to the

court for default judgment. See Fed. R. Civ. P. 55(b)(2). Default judgment is available

as long as the plaintiff establishes (1) defendant has been served with the summons and

complaint and default was entered for their failure to appear; (2) defendant is neither

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a minor nor an incompetent person; (3) defendant is not in military service or not

otherwise subject to the Soldiers and Sailors Relief Act of 1940; and (4) if defendant

has appeared in the action, that defendant was provided with notice of the application

for default judgment at least seven days prior to the hearing. See, e.g., Fed. R. Civ. P.

55; Twentieth Century Fox Film Corp. v. Streeter, 438 F. Supp. 2d 1065, 1070 (D.

Ariz. 2006).

Entry of default judgment is within the trial court’s discretion. See Taylor Made

Golf Co. v. Carsten Sports, Ltd., 175 F.R.D. 658, 660 (S.D. Cal. 1997) (Brewster, J.)

(citing Lau Ah Yew v. Dulles, 236 F.2d 415, 416 (9th Cir. 1956)). In making this

determination, the court considers the following factors: (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 at stake in the action, (5) the possibility of a dispute

concerning the material 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 the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 

Upon entry of default,the factual allegations in plaintiff's complaint, except those

relating to damages, are deemed admitted. E.g., Televideo Sys., Inc. v. Heidenthal, 826

F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Grp., 559 F.2d 557,

560 (9th Cir. 1977)). Where the amount of damages claimed is a liquidated sum or

capable of mathematical calculation, the court may enter a default judgment without

a hearing. Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). When it is necessary

for the plaintiff to prove unliquidated or punitive damages, the court may require

plaintiff to file declarations or affidavits providing evidence for damages in lieu of a full

evidentiary hearing. Transportes Aereos De Angola v. Jet Traders Invest. Corp., 624

F.Supp. 264, 266 (D. Del. 1985).

//

//

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III. DISCUSSION

This Court’s DefaultJudgementOrder has already found that a default judgment

is appropriate as to (1) Defendant BMI with respect to the causes of action for breach

of the Factoring Agreement, breach of the covenant of good faith and fair dealing,

intentional misrepresentation, negligent misrepresentation, accounts stated, and unfair

competition; and (2) Defendant Brianna Goodwin with respect to the second cause of

action for breach of the Guaranty Agreement. (See Default Judgement Order, 11:16–23.) 

The sole issue remaining is Capital’s damages.

Capital seeks $193,597.38 in damages as a result of the breach of the Agreement

and Guaranty. (P&A [Doc. 9] 9:27.) This damages figure consists of the following:

(1) the Repurchase Price of $42,080; (2) the Accrued Fees of $58,780.42;

(3) $65,893.99 in pre-judgment interest; and $21,163.11 in attorneys’ fees and costs

incurred in enforcing the Agreement. (Id. 9:5–26.)

In order to prove-up the Repurchase Price and Accrued Fees, Capital relies on

the supplemental declaration of Juan Estrada. (Supp. Brief [Doc. 11],1:15–2:21 citing

Estrada Supp. Dec.[Doc. 11-1].) Mr. Estrada is the Senior Vice President of Operations

at Capital. (Estrada Supp. Dec., ¶ 1.) In his supplemental declaration, Mr. Estrada

explains how the Factoring Agreement operates, including the calculation of expenses

and interest, and explains how the attached BMG Client Activity Statement supports

the Repurchase Price and Accrued Fees. (See id., Ex. A.) Accordingly, the Court finds

that Mr. Estrada’s supplemental declaration, alongwith the attached activity statement,

supports the Repurchase Price, Accrued Fees and pre-judgement-interest components

of Capital’s claimed damages.

In support of the attorneys’ fees and costs, Capital relies on the supplemental

declaration of Norma Garcia. (Supp. Brief, 2:24–3:3, citing Garcia Supp. Dec.[Doc. 11-

4].) Ms. Garcia is the attorney in charge of representing Capital. (Garcia Supp. Dec.,

¶ 1.) In support of the claimed attorneys’ fees and costs, Ms. Garcia has submitted a

breakdown of the time spent on this matter by each billing attorney, with their

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respective billing rates. (Id., ¶ 3, Ex. C [Doc. 11-5].) Additionally, Ms. Garcia has

submitted an expense/cost report that details the out-of-pocket costs. (Id. ¶ 3, Ex. D

[Doc. 11-6].) Based on Ms. Garcia’s declaration and the submitted exhibits, the Court

also finds Capital is also entitled to an award of $21,163.11 in attorneys’ fees and costs.

IV. CONCLUSION & ORDER

For the reasons discussed above, as well as in this Court’s May 20, 2014 Default

Judgement Order (see id., 4:17–23, 5:1–6:9), the Court ORDERS judgment entered in

favor of Plaintiff Capital Partners Funding , LLC, and against Plaintiffs BMG Logistics,

Inc. and Brianna Goodwin, jointly and severally, as follows:

1. Monetary damages in the amount of $106,540.28;

2. Pre-judgment interest at the default rate of interest in the total amount of

$81,503.31;

3. Attorneys’ fees and costs in the amount of $23,181.64; and

4. Post-judgement interest in accordance with 28 U.S.C. § 1963.

IT IS SO ORDERED.

DATED: July 1, 2014

Hon. Thomas J. Whelan

United States District Judge

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