Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_23-cv-00834/USCOURTS-azd-2_23-cv-00834-1/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

Before the Court is Plaintiff RunBuggy OMI, Inc.’s Third Motion for Default 

Judgment (Doc. 20), in which it asks the Court to enter a default judgment against 

Defendant Direct Logistic Transport, LLC. For the following reasons, the Motion is 

granted.

I. BACKGROUND

Plaintiff runs and maintains an online technology platform that provides a 

marketplace where those seeking to have vehicles transported, including individuals, 

vehicle manufacturers, finance companies, leasing and rental companies, car dealerships, 

and vehicle auctions can connect with vehicle carriers who provide transportation services 

and self-arrange for transportation. (Doc. 1 at ¶ 2; Doc. 20-1 at ¶ 13). Defendant created an 

account to use the Plaintiff’s online technology platform and accepted the Terms of 

Service. (Doc. 1 at ¶ 17; Doc. 20-1 at ¶ 19). Defendant thereafter incurred charges pursuant 

to the Terms of Service in an amount of at least $171,664.27. (Doc. 20-1 at ¶ 20). 

On November 14, 2022, Plaintiff sent Defendant a notice demanding payment in 

RunBuggy OMI Incorporated,

 

Plaintiff, 

vs. 

Direct Logistic Transport LLC,

Defendant. 

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No. CV-23-00834-PHX-SPL

ORDER

Case 2:23-cv-00834-SPL Document 21 Filed 01/17/24 Page 1 of 8
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full and informing Defendant of its breach of the Terms of Service. (Doc. 1 at ¶ 21; Doc. 

20-1 at ¶ 23). Although Defendant made partial payments, Defendant still owed at least 

$141,664.27 for its use of the Service. (Doc. 1 at ¶¶ 24–25; Doc. 20-1 at ¶¶ 24–25). To 

date, Defendant has failed or refused to pay the full amount due. (Doc. 20at 3; Doc. 20-1 

at ¶ 25).

II. DISCUSSION

a. Subject Matter Jurisdiction, Personal Jurisdiction, and Service

When default judgment is sought against a non-appearing party, a court has “an

affirmative duty to look into its jurisdiction over both the subject matter and the parties.” 

In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (“To avoid entering a default judgment that 

can later be successfully attacked as void, a court should determine whether it has the 

power, i.e., the jurisdiction, to enter judgment in the first place.”). A court has a similar 

duty with respect to service of process. See Fishman v. AIG Ins. Co., No. CV 07-0589-

PHX-RCB, 2007 WL 4248867, at *3 (D. Ariz. Nov. 30, 2007) (“Because defendant has 

not been properly served, the court lacks jurisdiction to consider plaintiff’s motions for 

default judgment.”). These considerations are “critical because ‘[w]ithout a proper basis 

for jurisdiction, or in the absence of proper service of process, the district court has no 

power to render any judgment against the defendant’s person or property unless the 

defendant has consented to jurisdiction or waived the lack of process.’” Id. (citing S.E.C. 

v. Ross, 504 F.3d 1130, 1138–39 (9th Cir. 2007)).

The Court has jurisdiction over the subject matter. Pursuant to 28 U.S.C. § 

1332(a)(1), district courts have subject-matter jurisdiction in civil matters that are between 

citizens of different states and include an amount in controversy that exceeds $75,000. See 

Weeping Hollow Ave. Tr. v. Spencer, 831 F.3d 1110, 1112 (9th Cir. 2016) (“[A] federal 

court may exercise diversity jurisdiction only if there is no plaintiff and no defendant who 

are citizens of the same State.”) (citation and quotation omitted). Here, Plaintiff and 

Defendant are citizens of different states. Plaintiff is a Delaware corporation with its 

principal place of business in California. (Doc. 20-1 at ¶ 4). See Johnson v. Columbia 

Case 2:23-cv-00834-SPL Document 21 Filed 01/17/24 Page 2 of 8
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Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[A] corporation is a citizen 

only of (1) the state where its principal place of business is located, and (2) the state in 

which it is incorporated.”). Defendant, however, is a limited liability company with 

members in only New York and Florida. (Doc. 17 at ¶¶ 3–5). Id. (“[A]n LLC is a citizen 

of every state of which its owners/members are citizens.”). Moreover, Plaintiff has plead 

that the amount in controversy is at least $141,664.27. (Doc. 1 at ¶ 25). Accordingly, the 

Court has subject-matter jurisdiction.

Further, the Court has personal jurisdiction over Defendant. By accepting the Terms 

of Service, Defendant agreed to submit to the personal and exclusive jurisdiction of 

Arizona. (Doc. 20-3 at 11); see Dow Chem. Co. v. Calderon, 422 F.3d 827, 831 (9th Cir. 

2005) (“‘parties to a contract may agree in advance to submit to the jurisdiction of a given 

court.’”) (quoting Nat’l Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 316 (1964)). Finally, 

Defendant was properly served. (Doc. 10).

b. Default Judgment Analysis: Eitel Factors

“A defendant’s default does not automatically entitle a plaintiff to a default 

judgment.” Hartford Life & Accident Ins. Co. v. Gomez, No. CV-13-01144-PHX-BSB, 

2013 WL 5327558, at *2 (D. Ariz. Sept. 24, 2013). Instead, once a default has been entered, 

the district court has discretion to grant a default judgment. See Fed. R. Civ. P. 55(b)(2); 

Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Factors the Court may consider 

include: (1) the possibility of prejudice to the plaintiff; (2) the merits of the claim; (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 the 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. Grp., 559 F.2d 557, 560 (9th Cir. 1977).

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i. First, Fifth, Sixth, and Seventh Eitel Factors

In a case such as this, where the defendant has failed to meaningfully participate in 

the litigation, the first, fifth, sixth, and seventh factors generally favor the plaintiff. See

Zekelman Indus. Inc. v. Marker, No. CV-19-02109-PHX-DWL, 2020 WL 1495210, at *3 

(D. Ariz. Mar. 27, 2020). The first factor—the possibility of prejudice to Plaintiff—weighs 

in favor of granting default judgment. Defendant has failed to appear in this action, despite 

having been served in June 2023. (Doc. 10). If Plaintiff’s Motion is denied, then Plaintiff 

will likely be without other recourse for recovery. See Zekelman, 2020 WL 1495210, at *3 

(citing PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002)).

The fifth and sixth factors—the possibility of a dispute concerning material facts 

and whether default was due to excusable neglect—also weigh in favor of granting default 

judgment. Given the allegations of the Complaint (further discussed below) and 

Defendant’s default, the Court finds that no genuine dispute of material facts would 

preclude granting the Motion. And because Defendant was properly served and has never 

appeared in this case, the Court finds it unlikely that Defendant’s failure to appear and the 

resulting default was the result of excusable neglect. See id. at *4 (“Due to Defendants’ 

failure to participate, there is no dispute over material facts (except as to damages) and no 

indication that default is due to excusable neglect.”).

The seventh factor—the policy favoring a decision on the merits—generally weighs 

in favor of denying default judgment because “[c]ases should be decided upon their merits 

whenever reasonably possible.” Eitel, 782 F.2d at 1472. But the mere existence of FRCP 

55(b) “indicates that this preference, standing alone, is not dispositive.” PepsiCo, 238 F. 

Supp. 2d at 1177 (citation omitted). Moreover, Defendant’s unexplained absence at this 

juncture of the case makes it impractical to decide on the merits. See id. Thus, the Court is 

not precluded from entering default judgment against Defendant. See Emp. Painters’ Tr. v. 

Ethan Enters., Inc., 480 F.3d 993, 1000–01 (9th Cir. 2007); Zekelman, 2020 WL 1495210, 

at *4 (citation omitted) (“[T]he default mechanism is necessary to deal with wholly 

unresponsive parties who could otherwise cause the justice system to grind to a halt. 

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Defendants who appear to be ‘blowing off’ the complaint should expect neither sympathy 

nor leniency from the court.”).

ii. Second and Third Eitel Factors

The second and third factors—the merits of the claims and the sufficiency of the 

Complaint—weigh in favor of granting default judgment. “These two factors are often 

analyzed together and require courts to consider whether a plaintiff has stated a claim on 

which it may recover.” Zekelman, 2020 WL 1495210, at *5 (citation omitted). When the 

complaint sufficiently states a claim for relief, these factors favor a default judgment. See

Danning v. Lavine, 572 F.2d 1386, 1388–89 (9th Cir. 1978). “Of all the Eitel factors, courts 

often consider the second and third factors to be the most important.” Zekelman, 2020 WL 

1495210, at *5 (citation omitted).

Taking Plaintiff’s factual allegations as true, this Court finds that the Complaint 

sufficiently states a claim for relief against Defendant for breach of contract.1“To state a 

cause of action for breach of contract, the Plaintiff must plead facts alleging (1) a contract 

exists between the plaintiff and defendant; (2) the defendant breached the contract; and (3) 

the breach resulted in damage to plaintiff.” Little v. Grand Canyon Univ., 516 F. Supp. 3d 

958, 964 (D. Ariz. 2021) (internal citations omitted). As to the first element, Plaintiff pleads 

in the Complaint that a contract (the Terms of Service) exists between the parties. (Doc. 1 

at ¶¶ 4, 6, 17, 29; Doc. 20-1 at ¶¶ 13–19). Plaintiff also meets the second element because 

it alleges that Defendant breached the contract by failing to pay for the services rendered. 

(Doc. 1 at ¶¶ 7, 8, 24–27, 30–32; Doc. 20-1 at ¶¶ 20, 25). Finally, as to the third element, 

the Complaint sets forth damages Plaintiff has suffered because of Defendant’s breach.

(Doc. 1 at ¶¶ 21, 25–26, 33; Doc. 1-2; Doc. 20-1 at ¶¶ 12, 25–27). Accordingly, Plaintiff’s 

claims are meritorious and sufficiently plead in the Complaint.

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1 The Complaint asserts two counts, however, Plaintiff explained that Count Two of 

the Complaint was filed in the alternative to Count One and therefore need not be ruled 

upon. (Doc. 20 at n.2).

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iii. Fourth Eitel Factor

Under the fourth factor, this Court “must consider the amount of money at stake in 

relation to the seriousness of Defendant’s conduct.” Philip Morris USA, Inc. v. Castworld 

Prods., Inc., 219 F.R.D. 494, 500 (C.D. Cal. 2003) (citation omitted). “[A] default 

judgment must be supported by specific allegations as to the exact amount of damages 

asked for in the complaint.” Id. at 499. “When the money at stake in the litigation is 

substantial or unreasonable, default judgment is discouraged.” Zekelman, 2020 WL 

1495210, at *4 (internal quotations omitted) (citation omitted). Here, Plaintiff asserts that 

“Defendant [owes] at least $141,664.27 for its use of the Service.” (Doc. 20 at 3 (emphasis 

added)). This amount is derived from the total of the invoice for the services rendered less 

the amount Defendant has already paid. (Doc. 1-2 at 12; Doc. 1 at ¶¶ 21–25). Plaintiff is 

not claiming punitive damages or other special damages. (Doc. 20 at 6). Given the 

supporting documentation and the overall reasonableness of Plaintiff’s requested relief, the 

Court finds that the fourth factor, too, weighs in favor of default judgment.

c. Relief Sought

Unlike the Complaint’s other factual allegations, those pertaining to damages are 

not taken as true upon default. Geddes, 559 F.2d at 560. Thus, a plaintiff “is required to 

prove all damages sought in the complaint.” Tolano v. El Rio Bakery, No. CV-18-00125-

TUC-RM, 2019 WL 6464748, at *6 (D. Ariz. Dec. 2, 2019) (internal quotations omitted)

(quoting Philip Morris USA, Inc, 219 F.R.D. at 498). A plaintiff must “provide evidence 

of its damages, and the damages sought must not be different in kind or amount from those 

set forth in the complaint.” Fisher Printing Inc. v. CRG LTD II LLC, No. CV-16-03692-

PHX-DJH, 2018 WL 603299, at *3 (D. Ariz. Jan. 22, 2018) (citing Amini Innovation Corp. 

v. KTY Int’l Mktg., 768 F. Supp. 2d 1049, 1054 (C.D. Cal. 2011)). Courts may rely on 

declarations submitted by the plaintiff in determining appropriate damages. Tolano, 2019 

WL 6464748, at *6 (citing Philip Morris USA, Inc., 219 F.R.D. at 498).

Here, Plaintiff submitted a sworn declaration asserting that Defendants failed to pay

the remaining amount due for the services rendered. The total on the invoice was 

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$171,664.27. (Doc. 20-1 at ¶ 22; Doc. 20-6 at 12). However, Defendant has only made six 

partial payments to Plaintiff in the amount of $5,000 each for the total of $30,000. (Doc. 

20-1 at ¶ 24). Based on these figures, Plaintiff asserts it is owed the remaining $141,664.27.

(Id. at ¶ 25). Accordingly, the Court finds that Plaintiff has proven actual damages in the 

amount of $141,664.27.

Additionally, Plaintiff asserts that the Terms of Service entitles Plaintiff to recover 

attorneys’ fees and costs. (Doc. 20 at 2). More specifically, the Terms of Service provides 

that “[i]n the event a dispute arises regarding this Agreement or the use of the RunBuggy 

Service, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs 

incurred.” (Doc. 20-3 at 11). Plaintiff has not made it clear whether it intends to file a 

motion to recover attorneys’ fees and costs incurred in this action upon entry of default 

judgment. To the extent that it does, the Court directs Plaintiff to file a motion for attorneys’ 

fees and costs in accordance with FRCP 54(d) and LRCiv 54.2.

III. CONCLUSION

Having reviewed Plaintiff’s motion and supporting documents, and having 

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

judgment is appropriate. Accordingly, 

IT IS ORDERED:

1. That Plaintiff’s Third Motion for Default Judgment (Doc. 20) is granted. 

Default judgment, pursuant to FRCP 55(b)(2), is entered in favor of Plaintiff

RunBuggy OMI Incorporated—and against Defendant Direct Logistic Transport 

LLC—on Count One, Breach of Contract.

2. That Plaintiff shall be awarded $141,664.27 in actual damages.

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3. That Plaintiff shall have until January 30, 2024 to file a motion for attorneys’ 

fees in accordance with FRCP 54(d)(2) and LRCiv 54.2; and

4. That the Clerk of Court shall enter judgment accordingly and terminate this 

action.

Dated this 16th day of January, 2024.

Honorable Steven P. Logan

United States District Judge

Case 2:23-cv-00834-SPL Document 21 Filed 01/17/24 Page 8 of 8