Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-00218/USCOURTS-casd-3_13-cv-00218-0/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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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CALVIN BRIAN INTERNATIONAL

COMPANY, a Hong Kong

Corporation,

Plaintiff,

v.

GUSTTO, INC., a California

Corporation,

Defendant.

 

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Case No. 3:13-cv-0218-GPC-BLM

ORDER:

(1) GRANTING MOTION TO

CORRECT NAME, (ECF NO. 21);

(2) GRANTING MOTION FOR

DEFAULT JUDGMENT, (ECF

NO. 20)

This is an action for recovery of sums owed on goods sold and delivered by

Plaintiff to Defendant. The Court has subject-matter jurisdiction under 28 U.S.C. §

1332, as Plaintiff is Hong Kong corporation with its principal place of business in

China, Defendant is a California corporation with its principal place of business in

California, and the amount in controversy is over $300,000. And, because it is a

California corporation, the Court has personal jurisdiction over Defendant. See

Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2853-54 (2011)

(identifying place of incorporation as domicile of corporation for personal jurisdiction

purposes).

The Court has considered Plaintiff’s “Motion to Correct Typographical Error in

Name of Plaintiff.” (ECF No. 21.) Finding good cause therefor, the Court will grant

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the Motion to Correct.

After Defendant’s counsel withdrew from representation, the Court directed

Defendant to retain counsel as is required of a corporate parties. (ECF No. 16.) At the

status hearing set for determining whether Defendant had retained counsel, Defendant

failed to appear. (ECF No. 19.) The Court therefore directed Plaintiff to file and serve

a motion for default judgment, which Plaintiff did on January 2, 2014. (ECF No. 20.) 

On April 1, 2014, the Court directed Plaintiff to submit evidence in support of its

claimed damages. (ECF No. 22.) Plaintiff filed and served the evidence on April 2,

2014. (ECF Nos. 23, 24.) 

Because Plaintiff claims a liquidated amount of damages, the Court finds a

hearing on Plaintiff’s Motion for Default Judgment is unnecessary. See Davis v.

Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981) (“It is wellsettled that a default judgment

for money may not be entered without a hearing unless the amount claimed is a

liquidated sum or capable of mathematical calculation.”).

The Clerk of the Court must enter default “when a party against whom a

judgment for affirmative relief is sought has failed to plead or otherwise defend, and

that failure is shown by affidavit or otherwise.” Fed. R. Civ. P. 55(a). Default has not

yet been entered in this case. Given Defendant’s failure to defend in accordance with

applicable rules, the Court finds defaultshould now be entered against Defendant. See

id.; see also Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 506 U.S.

194, 201-02 (1993) (“It has been the law for the better part of two centuries . . . that a

corporation may appear in the federal courts only through licensed council.”).

Once default is entered, entry of default judgment may be appropriate. See Fed.

R. Civ. P. 55(b)(2). Granting or denying default judgment is within the court’s sound

discretion. Draper v. Coombs, 792 F.2d 915, 924–25 (9th Cir. 1986); Aldabe v.

Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Courts in the Ninth Circuit consider the

following factors in determining whether default judgment should be entered:

(1) the substantive merit of the plaintiff’s claims, (2) the sufficiency of the

complaint, (3) the amount of money at stake, (4) the possibility of

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prejudice to the plaintiff if relief is denied, (5) the possibility of disputes

to any material facts in the case, (6) whether default resulted from

excusable neglect, and (7) the public policy favoring resolutions of cases

on the merits.

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

“The general rule of law is that upon default the factual allegations of the

complaint, except those relating to the amount of damages, will be taken as true.” 

TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quotation

omitted). “Plaintiff is required to prove all damages sought in the complaint.” Phillip

Morris USA, Inc. v. Castworld Prods., 219 F.R.D. 494, 498 (CD. Cal. 2003) (citations

omitted). “A default judgment must not differ in kind from, or exceed in amount, what

is demanded in the pleadings.” Fed. R. Civ. P. 54(c). “In determining damages, a court

can rely on the declarations submitted by the plaintiff or order a full evidentiary

hearing.” Phillip Morris, 219 F.R.D. at 498 (citing Fed. R. Civ. P. 55(b)(2)).

Based on Defendant’s failure to defend in thislawsuit, the Court now regards the

facts alleged in Plaintiff’s Complaint as true. “[Plaintiff, a Hong Kong corporation,]

seeks damages from [Defendant, a California corporation,] for breach of contract,

goods sold and delivered at agreed price, open book account, and account stated for

non-payment of handbags purchased from [Plaintiff] by [Defendant].” (ECF No. 1,

Compl. ¶ 1.) “In and after February 2011, [Plaintiff] manufactured and shipped the

handbags to [Defendant] per orders received from [Defendant]. [Defendant] took

possession of the shipment, resold and disposed of the shipment, and did not pay

[Plaintiff]. This lawsuit is filed to collect on the unpaid invoices.” (Id. ¶ 4.) 

The Court finds Plaintiff’s allegations are, at a minimum, sufficient to recover

the unpaid amounts under a breach-of-contract theory. See, e.g., Oasis W. Realty, LLC

v. Goldman, 51 Cal. 4th 811, 821 (2011) (“[T]he elements of a cause of action for

breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or

excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to

the plaintiff.”). In the same vein, given the invoices discussed below, the Court finds

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little possibility of a dispute as to the material facts of this case.

To prove damages, Plaintiff provides a declaration by its President, Wong Chong

Chi, stating the total owed to Plaintiff under the unpaid invoicesis $302,196.96. (ECF

No. 20-1.) The Court has reviewed the invoices and finds that, along with the Wong

Declaration, the invoices are sufficient evidence of Plaintiff’s damages. The sum of

the invoices, however, is $302,169.96—not $302,196.96. This is a significant sumthat

Plaintiff should be entitled to recover and that Plaintiff no doubt expected it would

recover upon sending numerous shipments of handbags to Defendant. It may thus be

said that Plaintiff would be highly prejudiced were it not permitted to recover what it

is owed.

The Court further finds that, given Defendant’s knowing failure to comply with

the requirement that it be represented by counsel in federal court, Defendant’s default

cannot be explained by excusable neglect. Thus, while public policy favors resolution

of cases on the merits, the Court finds the foregoing factors weigh in favor of granting

Plaintiff’s Motion for Default Judgment.

Plaintiff also seeks pre and post-judgment interest on the amount owed. For

simplicity, Plaintiff seeks prejudgment interest only from the date of the last invoice,

October 18, 2011, through the date ofjudgment. CaliforniaCivil Code Section 3287(a)

provides in relevant part:

A person who is entitled to recover damages certain, . . . and the right to

recover which is vested in the person upon a particular day, is entitled

also to recover interest thereon from that day, except when the debtor is

prevented by law, or by the act of the creditor from paying the debt.

Given the certainty of Plaintiff’s damages, the Court finds Plaintiff is entitled to

prejudgment interest under Section 3287(a). Where a contract does not provide a

specific rate, the rate of interest chargeable after breach of contract is 10% per annum. 

Cal. Civ. Code § 3289. The formula for calculating prejudgment interest is: principal

× interest rate × number of days interest accrued ÷ 360. Cont’l Airlines, Inc. v.

McDonnel Douglas Corp., 216 Cal. App. 3d 388, 434 n.39 (1989). The number of days

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interest accrued is 900 (October 18, 2011, up to, and including, April 4, 2014). 

Prejudgment interest is thus calculated as follows: $302,169.96 × .10 × 900 ÷ 360 =

$75,542.49.

Plaintiff is also entitled to post-judgment interest. Unlike prejudgment interest,

however, post-judgment interest is governed by federal, not California, law. See 28

U.S.C. § 1961 (“Interest shall be allowed on any money judgment in a civil case

recovered in a district court.”). “Such interest shall be calculated from the date of the

entry of judgment, at a rate equal to the weekly average 1-year constant maturity

Treasury yield, as published by the Board of Governors ofthe Federal Reserve System,

for the calendar week preceding[] the date of the judgment.” Id.

Based on the foregoing, IT IS HEREBY ORDERED that:

1. Plaintiff’s Motion to Correct Typographical Error in Name of Plaintiff,

(ECF No. 21), is GRANTED. Accordingly, the Clerk of Court is directed

to modify the docket in this matter to reflect Plaintiff’s true name: Calvin

Brian International Company. The caption of all future filings in this

matter, including the final default judgment identified below, shall include

Plaintiff’s true name.

2. The Clerk of Court is directed to enter Defendant’s default.

3. Plaintiff’s Motion for Default Judgment, (ECF No. 20), is GRANTED.

Accordingly, the Clerk of Court is directed to enter final default judgment

in favor of plaintiff Calvin Brian International Company and against

defendant Gustto, Inc. in the total amount of $377,712.45, which includes

$75,542.49 in prejudgment interest. Post-judgment interest shall accrue

in accordance with 28 U.S.C. § 1961.

4. The hearing currently set for April 4, 2014, is VACATED.

DATED: April 3, 2014

HON. GONZALO P. CURIEL

United States District Judge

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