Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-00159/USCOURTS-azd-2_13-cv-00159-0/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

Silver Two Investments, LLC, 

Plaintiff, 

vs.

Arizona Greenway Hirani Investments,

LLC, Capon Acquisition, LLC, and The

Hirani Family Foundation, 

Defendants. 

_________________________________

The Hirani Family Foundation,

Counter-Claimant,

v.

Silver Two Investments, LLC, Zulfikar

Hirani and Sofi Hirani, and Abdul Hirani

and Soniya Hirani,

Counter-Defendants.

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No. CV-13-00159-PHX-FJM

ORDER

Before the court is plaintiff’s motion for entry of default judgment against defendant

Capon Acquisition, LLC (“Capon”) (doc. 38), defendants Arizona Greenway Hirani

Investments LLC (“Arizona Greenway”) and The Hirani Family Foundation’s objection (doc.

Case 2:13-cv-00159-FJM Document 47 Filed 01/15/14 Page 1 of 3
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It is doubtful Arizona Greenway has standing to defend Capon, but Plaintiff fails to

raise the issue. 

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43), and Plaintiff’s reply (doc. 46).1 Defaulting defendant Capon did not respond to the

motion.

Plaintiff filed this action against Capon and others on January 23, 2013. Capon was

served with the summons and complaint on April 17, 2013. Capon did not answer or

otherwise file a responsive memorandum. The clerk entered default against Capon on May

28, 2013. Plaintiff now seeks the entry of default judgment against Capon and seeks

damages in the amount of $392,670.00.

After an entry of default, we may grant default judgment pursuant to Rule 55(b)(2),

Fed. R. Civ. P. In exercising our discretion under Rule 55(b)(2), we may consider the

possibility of prejudice to the plaintiff, the merits of the claims, the sufficiency of the

complaint, the amount of money at stake, the possibility of a dispute of material facts,

whether default was due to excusable neglect, and the policy favoring a decision on the

merits. Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). 

According to the allegations in the Complaint, on or about March 16, 2009, the parties

signed a Settlement Agreement whereby Capon agreed to transfer a 28% interest in the

Greenway Shopping Center (the “Property”) to Arizona Greenway and Plaintiff. Because

of an ambiguity in the Settlement Agreement, Plaintiff and Nazy Hirani–manager and agent

of Arizona Greenway–entered into a separate oral agreement whereby Nazy agreed that

Capon would transfer the entire 28% interest in the Property to Arizona Greenway, and in

turn Arizona Greenway would transfer a 22.4% membership interest in Arizona Greenway

to Plaintiff. Plaintiff contends that neither transfer has occurred, and now seeks default

judgment against Capon for its failure to transfer the 28% interest to Arizona Greenway. 

In response to the motion for entry of default judgment, defendants Arizona Greenway

and The Hirani Family Foundation contend that Capon has in fact complied with its

obligation under the Settlement Agreement by executing a deed in favor of Arizona

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Greenway of a 28% interest in the Property, but instead of recording the deed, has placed it

into escrow. Plaintiff acknowledges that this deed has been placed in escrow, but complains

that this does not constitute a transfer of Capon’s interest—Capon is still the record owner

of the 28% interest. 

The Settlement Agreement specifically provides that the transfer of Capon’s 28%

interest in the Property “shall occur solely conditioned upon, and not before, consent by

Wells Fargo,” the lender holding the deed of trust on the Property. Compl. ¶ 28. The escrow

instructions also recognize that the “Transaction is contingent on Wells Fargo (Existing

Financing) (“Lender”) approving of this transfer of property interest between the parties

pursuant to the governing loan documents.” Motion, ex. C. Because there is no showing that

Wells Fargo has consented to the transfer, we cannot say that Capon has breached its

obligation under the Settlement Agreement. 

Considering the Eitel factors, we conclude that the merits of Plaintiff’s claims against

Capon are questionable at best, the amount of money at stake is large, the possibility of

prejudice to Plaintiff is small given that Plaintiff’s primary claims lie against the remaining

defendants, and policy considerations favor a decision on the merits. Therefore, we conclude

that default judgment against Capon is not warranted. 

IT IS ORDERED DENYING plaintiff’s motion for entry of default judgment at this

time (doc. 38). 

DATED this 15th day of January, 2014.

Case 2:13-cv-00159-FJM Document 47 Filed 01/15/14 Page 3 of 3