Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-00955/USCOURTS-azd-2_07-cv-00955-5/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

John Covington, et al.,

Plaintiffs, 

v.

Patriot Motorcycles Corporation, et al.,

Defendants. _________________________________

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No. CV-07-955-PHX-FJM

ORDER

This matter has been referred to the undersigned to conduct a Rule 55(b)(2),

FED.R.CIV.P., default evidentiary damages hearing pursuant to the Hon. Frederick J.

Martone’s Order, entered on July 7, 2008, subsequent to the entry of default against

Defendants Patriot Motorcycles Corporation and Michael Attias. (docket # 63 and # 64)

To assist the undersigned in conducting the subject hearing and establishing

the correct amount of compensatory, punitive damages and injunctive relief, if any, to

which Plaintiff may be entitled, the Court will require Plaintiff’s counsel to timely file in

advance of the subject hearing the following documents:

1. Proposed Findings of Fact and Conclusions of Law,

2. A Default Hearing Memorandum which sets forth the legal and

Case 2:07-cv-00955-FJM Document 67 Filed 07/15/08 Page 1 of 4
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This memorandum shall comply with the motion requirements for an award of

reasonable attorney’s fees set forth in LRCiv) 54.2(d) and (e), Rules of Practice of the United

States District Court for the District of Arizona.

2

 See, LRCiv 54.1(e).

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factual basis of all claims for damages; the reasonable attorney’s fees,1

 if requested and

authorized by law; and costs,2

 including citations to appropriate authorities to support the

damages and injunctive relief Plaintiff seeks from the Court at the subject hearing, 

3. An appropriate affidavit for reasonable attorney’s fees, if requested and

authorized by law, and related non-taxable expenses in compliance with Local Rule 

LRCiv 54.2(d) and (e), and,

4. A proposed Default Judgement for District Judge Martone’s signature

with the identity of the specific damages; reasonable attorney’s fees, if requested and

authorized by law; non-taxable expenses; and costs specifically itemized therein. The

injunctive relief, if any, sought by Plaintiff shall also be set forth therein.

Default judgments are governed by Rule 55 of the Federal Rules of Civil

Procedure. Under certain circumstances, default judgment can be entered by the clerk of

the court. Fed. R. Civ. Proc. 55(b)(1). Where, as here, Plaintiff’s claim is not for a sum

certain, a default judgment can only be entered by the Court. Rule 55(b)(2), FED.R.CIV.P.

Since the default damages hearing will be an on-the-record evidentiary

hearing, Plaintiff’s counsel shall call one or more witnesses to prove Plaintiff’s damages

sought in his Second Amended Complaint, docket # 31, except that reasonable attorney’s

fees, non-taxable expenses, and costs may be proven by appropriate affidavit. The former

Rule 55(b)(2), FED.R. CIV.P., permitted a district court to conduct a default hearing “as it

deems necessary and proper.” Per the Supplementary Note to Rule 55(b)(2), the 2007

amendments to the Rules of Civil Procedure were “intended to be stylist only.” 

Supplementary Note to amendments to Rule 55. The Court, therefore, possesses the

authority under either the current Rule or pursuant to its inherent authority to ensure fair

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notice and an opportunity to be heard are extended to Defendants despite their apparent

“abandonment” of this case. (docket # 63) Even though these Defendants are not likely

entitled to notice of the subject hearing, notice will nevertheless be extended to them.

Ringgold Corp. v. Worrall, 880 F.2d 1138, 1141-42 (9th Cir. 1989) (notice requirement

of Rule 55(b)(2) does not apply where party is defaulted for failing to attend the first day

of a trial scheduled for months). 

Since Defendants initially appeared through counsel in this matter when

they filed their Answer on October 2, 2007, and to ensure fundamental fairness to

Defendants Patriot Motorcycles Corporation and Michael Attias and to the integrity of the

truth-finding process, the Court will also permit these Defendants through new counsel or

Defendant Michael Attias pro se to cross examine and present evidence solely on the

issue of the amount of damages and scope of injunctive relief sought by Plaintiff to

establish the truth of Plaintiff’s averment by evidence. Fed.R.Civ.P. 55(b)(2); Christy A.

v. Arizona Department of Economic Security, 217 Ariz. 299, 173 P.3d 463, 470

(Ariz.App.Ct. 2007) (citing Mayhew v. McDougall, 16 Ariz.App. 125, 130, 491 P.2d 848,

853 (1971) (holding that a defaulted defendant has the right to contest the issue of

damages); Dungan v. Superior Court, 20 Ariz.App. 289, 290, 512 P.2d 52, 53

(Ariz.App.Ct. 1973) (“Since we are committed to an adversary system of justice, we do

not construe [Rule 55(b)(2)] to mean that a ‘hearing’ ipso facto means a one-sided

presentation by the party seeking the default judgment.”). Discovery will not be

permitted on the liability, damages or injunctive relief issues because after default has

been entered, the well- pleaded factual allegations of the complaint are taken as true,

except for those allegations relating to damages. Philip Morris USA, Inc. v. Castworld

Prods., Inc., 219 F.R.D. 494, 498 (C.D.Cal. 2003) (citing TeleVideo Sys., Inc. v.

Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); Geddes v. United Financial Group, 559

F.2d 557, 560 (9th Cir. 1977); Beck v. Atlantic Contracting Co., 1994 WL 608598, at *1

(D.Kan. 1994) (entering default judgment and accepting as true the allegations regarding

the defendant's willful and wanton conduct, entitling the plaintiff to recover punitive

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3

 Defendants Patriot Motorcycles Corporation and Michael Attias former counsel were

withdrawn as their counsel on June 4, 2008. (docket # 57)

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damages). Each side shall be allocated one hour for direct and cross examination at the

subject hearing. To the extent Defendants will cooperate with Plaintiff’s counsel, the

parties are encouraged to attempt to stipulate to as many facts, relief or such damages as

they may agree.

Accordingly,

IT IS ORDERED hereby setting a default damages evidentiary hearing for

1:30 p.m. on Wednesday, August 27, 2008 before the undersigned at the Sandra Day

O’Connor U.S. Courthouse, Courtroom 302, 401 W. Washington, Phoenix, Az. Allotted

time: 2 hours. Plaintiff’s counsel shall also file with the Court those default damages

documents itemized herein on or before Monday, August 18, 2008.

IT IS FURTHER ORDERED that Plaintiff’s counsel shall exercise their

best efforts to serve a copy of this Order via mail on Defendants Patriot Motorcycles

Corporation and Michael Attias’ new attorney of record, if any,3

 or on Defendants

themselves at their last known addresses within 10 days of today’s date and the aforesaid

default hearing documents on or before Monday, August 18, 2008. Plaintiff shall

demonstrate compliance with this Order at the subject hearing as a condition to any

recommendation for default judgment. Defendants Patriot Motorcycles Corporation and

Michael Attias may file written responses to the damage and injunctive relief issues on or

before Monday, August 25, 2008. Untimely responses may not be considered. Replies

will not be permitted.

DATED this 15th day of July, 2008.

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