Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-01605/USCOURTS-casd-3_05-cv-01605-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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1 The motion was inadvertently set on Magistrate Judge Louisa Porter’s December 6, 2006 calendar. However,

motions for default judgment are to be decided by the district court judge. See, e.g., Conetta v. Nat’l Hair Care Centers,

Inc., 236 F.3d 67, 72-73 (1st Cir. 2001). 

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

D&D LANDHOLDINGS, a California limited

partnership,

Plaintiff,

CASE NO. 05 CV 1605 JM (POR) 

ORDER DENYING PLAINTIFF’S

MOTION TO ENTER JUDGMENT

PURSUANT TO SETTLEMENT

AGREEMENT AGAINST

DEFENDANT JAMES G. OSSIE AND

NATION DIRECT CAPITAL

CORPORATION

vs.

NATION DIRECT CAPITAL CORPORATION,

a Georgia corporation; AXIOM CAPITAL, a New

York corporation; TODD A. DRAKE, an

individual; CHARLES M. CRONIN, an

individual; JAMES G. OSSIE, an individual,

Defendants.

Pending before the court is plaintiff D&D Landholdings’ (“Plaintiff”) Motion to Enter

Judgment Pursuant to Settlement Agreement Against Defendant James G. Ossie and Nation Direct

Capital Corporation, filed November 13, 2006. See Docket No. 23.1

 Although Plaintiff served

defendants James G. Ossie and Nation Direct Capital Corporation (collectively the “Defendants”) with

notice of the motion, id., Defendants have not responded and the time for response has expired. After

reviewing Plaintiff’s papers, the court hereby DENIES the motion for the reasons set forth below.

I. BACKGROUND

This is a diversity action alleging fraud in connection with a loan transaction between the

parties. Plaintiff filed its complaint on August 12, 2005, and return of service of the summons and

Case 3:05-cv-01605-JM-POR Document 26 Filed 01/23/07 Page 1 of 3
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2 At the time of the Agreement, Defendants had still not appeared in this action, nor have they since appeared.

3 Rule 55(b)(1) is inapplicable here. Under that rule, the clerk may enter default judgment when damages are for

a sum certain or for a sum which can by computation be made certain, so long as the defendant has been defaulted for

failure to appear and is not an infant or incompetent person. Fed. R. Civ. P. 55(b)(1). Defendants here have defaulted for

failure to appear, and there is no reason to think either of them is an infant or incompetent person. However, since the

complaint sought damages according to proof, damages are not for a sum certain or for a sum which can by computation

be made certain. Comp. at 9.

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complaint executed on the Defendants was filed on April 24, 2006. See Docket Nos. 9, 10. The

Defendants having failed to respond to the complaint within the time permitted by law, Plaintiff

moved the clerk to enter default against them on May 30, 2006 and gave notice to Defendants of the

same. See Docket No. 12. The clerk thereon entered default, also on May 30, 2006. See Docket

No. 14.

On September 12, 2006, Plaintiff and Defendants entered into a settlement agreement and

release (the “Agreement”).2

 Mot., Ex. A. The Agreement provided that Defendants 

shall pay [Plaintiff] D&D the total sum of forty-eight thousand dollars ($48,000) paid

incrementally as follows: $12,000 on September 15, 2006; $12,000 on October 15,

2006; $12,000 on November 15, 2006; and $12,000 on December 15, 2006 . . . . In the

event of default, Ossie agrees and stipulates that the Court will enter upon notice to

Ossie, judgment in the amount of $75,000.00.

Id. at 2. 

This motion for “default judgment” followed. Plaintiff argues that entry of default judgment

is appropriate because although Defendants timely made the first payment, the second payment due

on October 15, 2006 has not yet been paid. Therefore, according to Plaintiff, “[t]he undisputed facts

are that Ossie, as of the date of this motion is 29 days in default and Judgment ‘shall’ be entered as

[Defendants] agreed.” Id.

II. DISCUSSION

“When a party against whom a judgment for affirmative relief is sought has failed to plead or

otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise,

the clerk shall enter the party’s default.” Fed. R. Civ. P. 55(a). Once the clerk enters default, the

court may enter default judgment upon application by the party entitled to judgment and upon proof

of damages if such proof is required “to enable the court to enter judgment or to carry it into effect[.]”

Fed. R. Civ P. 55(b)(2).3 Whether default judgment should be entered is within the discretion of the

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district court. See Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). In exercising its discretion,

the court should consider

(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 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. 

Id. at 1471-72. 

Here, the clerk entered default in conformity with Rule 55(a). See Docket No. 14. However,

it is unclear whether Plaintiff now moves pursuant to Rule 55 or whether it seeks enforcement of the

terms of the Agreement against Defendants. If it is the latter, the court must deny the motion since

it lacks personal jurisdiction over Defendants, who have never appeared in this action. If it is the

former, the motion must still be denied because Plaintiff has not adequately proved damages or even

addressed Rule 55 and the Eitel factors at all. Given the ambiguous nature of Plaintiff’s motion, the

court finds the most prudent course is to deny it. Eitel, 782 F.2d at 1472 (noting the “general rule that

default judgments are ordinarily disfavored.”); TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691,

693 (9th Cir. 2001) (same). 

III. CONCLUSION

For the foregoing reasons, the court DENIES the motion without prejudice. Any future

application for relief must specify whether default judgment is sought on the basis of the original

complaint for which default has been entered–in which case the moving party must set forth arguments

with respect to Rule 55 and the Eitel factors – or breach of the “settlement agreement”. 

IT IS SO ORDERED.

DATED: January 23, 2007

 Hon. Jeffrey T. Miller

 United States District Judge

cc: All Parties 

Case 3:05-cv-01605-JM-POR Document 26 Filed 01/23/07 Page 3 of 3