Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_15-cv-00086/USCOURTS-azd-2_15-cv-00086-1/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7401 IRS: Tax Liability

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

United States of America, 

Plaintiff, 

v. 

 Today.com Incorporated, et al., 

Defendants.

No. CV-15-00086-PHX-DGC

ORDER 

 Plaintiff United States of America seeks entry of a default judgment against 

Defendant Today.com, Inc. under Rule 55(b) of the Federal Rules of Civil Procedure. 

Doc. 38. Today.com has failed to appear in this case. Defendants Nathan Gwilliam and 

Dale Gwilliam object to the entry of default judgment. Docs. 44, 45. The Court will 

grant the motion for default judgment.1

 

I. Background. 

 Today.com was formed in approximately February 1998. See Doc. 13, ¶¶ 9-11. 

Nathan Gwilliam (“Nathan”) acted as President and Treasurer, and Dale Gwilliam 

(“Dale”), who appears to be Nathan’s father, was Secretary and Vice President. Id., 

¶¶ 12-13. The government alleges that Today.com failed to pay-over to the IRS federal 

employment taxes it had withheld from employees during the quarters ending 

December 31, 1998, March 31, 1999, and June 30, 1999, and also failed to pay the 

 

1

 The issues are fully briefed, and the Court finds that oral argument will not aid in the resolution of this matter. See LR Civ. 7.2(f); Fed. R. Civ. P. 78(b). 

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employer’s share of taxes under the Federal Insurance Contributions Act for these same 

quarters. Id., ¶ 51. Today.com also allegedly failed to pay federal unemployment taxes 

for the year ending December 31, 1998. Doc. 13, ¶ 51. As of October 15, 2015, the 

government had assessed back taxes and penalties of $291,386.59 against Today.com. 

Doc. 38 at 8. 

 The government served Today.com with the complaint and summons in this action 

on April 28, 2015. Doc. 18. Today.com did not respond, and the Clerk of the Court 

entered a default against Today.com pursuant to Fed. R. Civ. P. 55(a). Doc. 34. 

II. Legal Standard. 

 Once the Clerk has entered default, a plaintiff may request entry of a default 

judgment. See Fed. R. Civ. P. 55(b). “The district court’s decision whether to enter 

default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th 

Cir. 1980). A court should consider several factors in deciding whether to enter a default 

judgment: (1) the possibility of prejudice to the plaintiff, (2) the merits of the 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 material facts, (6) whether 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). 

III. Analysis. 

 The first Eitel factor weighs in favor of granting default judgment. Today.com 

was served on April 28, 2015. Doc. 18. Today.com has not answered the complaint or 

otherwise appeared in this action. If the motion for default judgment is not granted, the 

government “will likely be without other recourse for recovery” against Today.com. 

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

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

sufficiently states a claim for relief. See id. at 1175; Danning v. Lavine, 572 F.2d 1386, 

1388-89 (9th Cir. 1978). A review of the complaint (Doc. 13), the Court’s ruling on the 

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motion to dismiss (Doc. 36), the motion for default judgment (Doc. 38), and the Kittrell 

Declaration (Doc. 39) shows that the government has stated a claim for relief against 

Today.com. 

 The fourth factor considers the amount of money at stake in relation to the 

seriousness of the defendant’s conduct. See PepsiCo, Inc., 238 F. Supp. 2d at 1176. The 

government seeks $291,386.59 under 26 U.S.C. §§ 6656(a) and 6651(a)(2). Doc. 38. 

The Court finds this request to be appropriate in light of the alleged failure to pay taxes. 

This factor favors default judgment. 

 The fifth Eitel factor weighs in favor of default judgment. Given the sufficiency 

of the complaint and Today.com’s default, “no genuine dispute of material facts would 

preclude granting [Plaintiff’s] motion.” PepsiCo, Inc., 238 F. Supp. 2d at 1177; see 

Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977). 

 The sixth Eitel factor favors default judgment. Today.com was properly served 

with the summons and complaint. Doc. 18. It therefore is “unlikely that [Today.com’s] 

failure to answer and the resulting default was the result of excusable neglect.” Gemmel 

v. Systemhouse, Inc., No. CIV 04-187-TUC-CKJ, 2008 WL 65604, at *5 (D. Ariz. Jan. 3, 

2008).

 As for the seventh factor, it is true that “[c]ases 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,” PepsiCo, 

Inc., 238 F. Supp. at 1177 (citation omitted). Today.com’s failure to respond to the 

complaint “makes a decision on the merits impractical, if not impossible.” Id. 

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

judgment against Today.com is warranted. Although Nathan and Dale have filed 

objections to such a default judgment, they do not represent Today.com and they do not 

dispute that Today.com has failed to answer or appear. The Court will not withhold 

default judgment on the basis of their objections, but neither does this order decide what 

defenses Nathan and Dale may assert in this case. 

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 IT IS ORDERED: 

 1. Plaintiff’s motion for default judgment (Doc. 38) is granted. 

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

Today.com in the amount of $291,386.59. 

Dated this 17th day of November, 2015. 

Case 2:15-cv-00086-DGC Document 48 Filed 11/18/15 Page 4 of 4