Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-01982/USCOURTS-azd-2_13-cv-01982-0/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 

Kenneth C. Taylor, 

Plaintiff, 

v. 

Gouri G. Nair, 

Defendant.

No. CV-13-01982-PHX-DGC

ORDER 

 Plaintiff Kenneth C. Taylor has filed a motion for default judgment pursuant to 

Rule 55 of the Federal Rules of Civil Procedure. Doc. 15. The Court will deny the 

motion. 

I. Background. 

 Plaintiff filed a complaint against Defendant Gouri G. Nair asserting various 

claims arising from Defendant’s alleged breach of contract and failure to fulfill her 

fiduciary duty by committing fraud. Doc. 1, ¶ 6. Plaintiff’s complaint seeks damages of 

$1,500,000 and a permanent injunction preventing Defendant from “performing any act 

or duties as a licensed attorney in any court in the United States.” Id. at 2. 

 Default was entered by the Clerk on February 20, 2014. Doc. 11. On March 6, 

2014, Plaintiff filed a motion for default judgment. Doc. 12. Because Plaintiff failed to 

address the proper legal standard, the Court denied his motion without prejudice. Doc. 

14. Plaintiff has filed a new motion seeking a default judgment. Doc. 15. 

II. Legal Standard. 

 Once a party’s default has been entered, the district court has discretion to grant 

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default judgment. See Fed. R. Civ. P. 55(b)(2); Aldabe v. Aldabe, 616 F.2d 1089, 1092 

(9th Cir. 1980). Factors the court may consider include (1) the possibility of prejudice to 

the plaintiff, (2) the merits of the claim, (3) the sufficiency of the complaint, (4) the 

amount of money at stake, (5) the possibility of a dispute concerning material facts, 

(6) whether default was due to excusable neglect, and (7) the strong policy favoring a 

decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In 

applying these factors, “the factual allegations of the complaint, except those relating to 

the amount of damages, will be taken as true.” Geddes v. United Fin. Grp., 559 F.2d 

557, 560 (9th Cir. 1977); see Fed. R. Civ. P. 8(d) (“Averments in a pleading to which a 

responsive pleading is required, other than those as to the amount of damage, are 

admitted when not denied in the responsive pleading.”). “However, necessary facts not 

contained in the pleadings, and claims which are legally insufficient, are not established 

by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992). 

III. Analysis. 

A. Possible Prejudice to Plaintiff. 

 The Court cannot determine that the first Eitel factor favors Plaintiff. Plaintiff, 

who is appearing pro se in this action, filed a return of service stating that he served the 

complaint on Defendant by certified mail. Doc. 6. The return attached a document 

showing that Defendant was served in Vermont. Id. at 2. 

 Rule 4 of the Federal Rules of Civil Procedure does not expressly permit service 

on an individual defendant by certified mail. Fed. R. Civ. P. 4(e). The rule provides, 

however, that service may be completed in accordance with the law of the state where 

service is made. Id., Rule 4(e)(1). Thus, if the state where a defendant is located permits 

service by certified mail, Plaintiff may use this means of service. LSJ Inv. Co. v. O.L.D., 

Inc., 167 F.3d 320, 322 (6th Cir. 1999). 

 Plaintiff does not address the law of Vermont and has made no showing that 

service by certified mail is permitted there. The Court’s review of Rule 4(f) of the 

Vermont Rules of Civil Procedure suggests that service by certified mail is permitted 

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only in limited circumstances, none of which applies here.1 

 In addition, Plaintiff asserts in his motion that Defendant Gouri Nair signed and 

acknowledged certified receipt of the summons and complaint. Doc. 15 at 1. The 

document attached to the return of service, however, shows that it was signed by a Rewj 

Raj. Doc. 6 at 2. Plaintiff has not shown that Defendant received actual notice of this 

lawsuit. 

 Because the record before the Court suggests that service may not have been 

completed in accordance with law or in a manner that provided actual notice to 

Defendant, the Court cannot conclude Plaintiff will be prejudiced if default judgment is 

not entered. Prejudice results from a defendant’s refusal to participate only when the 

defendant is properly served with process. 

B. The Merits of the Claim and the Sufficiency of the Complaint. 

 The second and third Eitel factors weigh against entry of a default judgment. 

Plaintiff’s complaint asserts claims for breach of contract and breach of fiduciary duty. 

Both claims are legally insufficient as pled, and the merits cannot be evaluated given the 

bare-bone factual allegations in the record. 

 A breach of contract claim contains three elements: (1) the existence of a contract, 

(2) its breach, and (3) resulting damages. Chartone, Inc. v. Bernini, 83 P.3d 1103, 1111 

(Ariz. Ct. App. 2004). Plaintiff’s complaint alleges no facts to support any of the 

elements of a breach of contract claim. Although his complaint alleges that a contract 

existed, it states only that Defendant was “hired by Plaintiff as his legal counsel for a 

family court case” and that Defendant breached the “written contract with intentional 

 

1

 Vermont Rule 4(f)(1) provides that “[w]here service cannot with due diligence be made personally within or outside the state, service of the summons and complaint may be made by mail upon a person described in subdivision (e) in the following cases: (A) Where the person to be served has an interest in, title to, or right to the possession of goods, chattels, rights, credits, land, tenements, or hereditaments in the state which has 

been or on pending motion may be attached or secured by trustee process in the commencement of the action, or will be affected by a judgment in the action; (B) Where the person to be served is one against whom a judgment for divorce or annulment of marriage is sought.” Vt. R. Civ. P. 4(f)(1). Plaintiff has made no showing that personal service could not be made on Defendant with due diligence, nor is this a divorce or 

annulment case or one where a specific asset may be attached, secured, or affected. 

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negligence by intentionally misrepresenting her co-worker position with her company.” 

Doc. 1, ¶¶ 3, 6. Legal conclusions are not facts, and the Court cannot conclude from 

facts allegedly admitted in the complaint that Plaintiff has a valid claim. 

 Plaintiff’s claim for breach of fiduciary duty by committing fraud is also legally 

insufficient. Claims alleging fraud must be pled with precision. Neilson v. Union Bank 

of Cal., N.A., 290 F. Supp. 2d 1101, 1141 (C.D. Cal. 2003) (“It is well established in the 

Ninth Circuit that both claims for fraud and negligent misrepresentation must meet 

Rule 9(b)’s particularity requirements.”). Rule 9(b) imposes a heightened pleading 

standard for fraud claims: “In alleging fraud . . . , a party must state with particularity the 

circumstances constituting fraud[.]” Fed. R. Civ. P. 9(b). A plaintiff “must state the 

time, place, and specific content of the false representations as well as the identities of the 

parties to the misrepresentation.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., Inc., 

806 F.2d 1393, 1401 (9th Cir. 1986). Plaintiff’s complaint does not meet Rule 9(b)’s 

heightened pleading standard and therefore does not provide a body of allegedly admitted 

facts from which the Court can determine that Plaintiff has a valid claim for breach of 

fiduciary duty. 

 Plaintiff has also failed to plead facts necessary to recover punitive damages. For 

punitive damages, “a plaintiff must prove by clear and convincing evidence that the 

defendant engaged in aggravated and outrageous conduct with an ‘evil mind.’” Hyatt 

Regency v. Winston & Strawn, 907 P.2d 506, 518 (Ariz. Ct. App. 1995). Plaintiff has not 

satisfied this pleading requirement. 

C. The Amount of Money at Stake. 

 The fourth Eitel factor weighs against entry of default judgment. The Court must 

consider the amount of money at stake in relation to the seriousness of Defendant’s 

conduct. See Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d. 1172, 1176 (9th Cir. 

2002). Plaintiff seeks $1,500,000, including $15,000 in fees paid to Defendant, $80,000 

in lost income since 2011, $30,000 to compensate for a vehicle lost as a result of a job 

loss, $1,000 for evaluation by court order, $3,500 in court fees, $500 in postage fees, and 

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$1,400,000 in punitive damages for Defendant’s fraudulent conduct that has caused 

Plaintiff severe anguish. Doc. 15 at 4-5. Plaintiff has not provided evidence to 

substantiate his alleged damages. 

D. Possible Dispute Concerning Material Facts. 

 The fifth Eitel factor weighs against entry of default judgment. Plaintiff provided 

only threadbare factual allegations in his complaint, and the Court therefore has accepted 

very few allegations as true. This fact, plus the potentially defective service discussed 

above, make it wholly possible that Defendant, if properly served, would dispute 

Plaintiff’s claim to $1,500,000 and injunctive relief. 

E. Whether Default Was Due to Excusable Neglect. 

The sixth Eitel factor weighs against entry of default. As noted above, the Court 

cannot conclude from this record that Defendant was properly served or received actual 

notice of this lawsuit. The Court therefore cannot rule out the possibility that 

Defendant’s failure to answer was the result of lack of knowledge or excusable neglect. 

F. Policy Underlying Federal Rules of Civil Procedure. 

The final Eitel factor weighs against default. “Cases should be decided upon their 

merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. Entry of a default 

judgment when proper service of process is in doubt would not be consistent with the 

policy of the Federal Rules of Civil Procedure. 

G. Conclusion. 

 Having reviewed Plaintiff’s motion and considered the Eitel factors, the Court 

concludes that entry of default judgment is not appropriate. The Court recognizes that 

Plaintiff is proceeding pro se, but the Court cannot overlook the requirements for proper 

service. In addition, even if the Court were to find that service was proper, or even if the 

current complaint were to be served on Defendant in accordance with Rule 4, the 

complaint is too lacking in factual allegations to state a claim or support a default 

judgment. 

 

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IV. Further Proceedings.

 If Plaintiff wishes to pursue this case, he may file an amended complaint by 

July 3, 2014. If Plaintiff believes that his original complaint was properly served in 

accordance with Rule 4 of the Federal Rules of Civil Procedure, he may send a copy of 

the amended complaint to Defendant by any method approved in Federal Rule of Civil 

Procedure 5(b). If service was not properly completed, he must serve Defendant in 

accordance with Rule 4 by August 15, 2014. Plaintiff is warned that failure to file an 

amended complaint or to meet this service deadline will result in dismissal of this action 

without further order of the Court. 

 For purposes of preparing an amended complaint, the Court provides the following 

guidance: Plaintiff must familiarize himself with the elements of each claim that he 

wishes assert in his amended complaint. He must then provide specific factual 

allegations to support and substantiate each claim. Part III.B of this order outlines 

deficiencies in the way Plaintiff pled his claims and can be used as a guide to revise the 

complaint. 

IT IS ORDERED that Plaintiff’s motion for entry of default judgment (Doc. 15) 

is denied. 

 Dated this 13th day of June, 2014. 

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