Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-01415/USCOURTS-casd-3_06-cv-01415-4/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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1 Elite Sports Group, Inc. and the similarly-named Elite Sports Marketing, Inc. were

both named as Defendants.

2 The proof of service shows that ESG was served through its agent, Joseph

Werwage.

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

GMAC,

Plaintiff,

CASE NO. 06cv1415-LAB (JMA)

ORDER ON APPLICATION FOR

vs. DEFAULT JUDGMENT

ELITE SPORTS GROUP, a corporation;

ELITE SPORTS MARKETING, INC., a

corporation; JOSEPH WERWAGE, an

individual; LAURA BROWN-WERWAGE,

an individual; and GREGORY J.

LEONARD, an individual,

Defendants.

On July 13, 2006, Plaintiff filed its complaint, bringing claims in diversity for damages

in connection with alleged breaches of contract. Defendant Elite Sports Group, Inc. (“ESG”)1

failed to timely answer in this case. Plaintiff filed a proof of service showing that ESG was

served on August 14, 2006. In response to Plaintiff’s request on September 5, 2006, the

clerk entered default against Defendants Joseph Werwage and ESG on September 8,2 and

Plaintiff moved on September 14 for entry of default judgment as to both. Defendant Joseph

Werwage moved to set aside the default “for himself and himself alone.” (Notice of Motion

Case 3:06-cv-01415-LAB-JMA Document 25 Filed 11/22/06 Page 1 of 4
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28 3 In her answer, this Defendant says that her correct name is Laura Brown, rather than

Laura Brown-Werwage as stated in the complaint.

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and Motion for Order Setting Aside Default Judgment (“Motion to Set Aside Default”), filed

September 27, 2006.) 

Defendant ESG did not oppose the motion for entry of default judgment. Defendants

other than ESG have not attempted to answer or appear on ESG’s behalf. See Answer of

Defendants Elite Sports Marketing, Inc. (“ESM”) and Gregory J. Leonard (“Leonard”), at 1

(stating that Defendants ESM and Leonard “hereby sever themselves from all other

Defendants”); Answer by Laura Brown,3

 filed September 7, 2006; Motion to Set Aside Default

Judgment, at 1 (stating that it was filed by Joseph Werwage “for himself and himself alone”).

Defendant ESG has never filed an answer or otherwise appeared in this action.

On November 15, 2006, the Court granted Mr. Werwage’s motion to set aside default,

and denied Plaintiff’s motion for default judgment as to him. The Court did not rule on

Plaintiff’s motion requesting entry of default judgment against Defendant ESG.

The Ninth Circuit has enumerated the following factors the court may consider in

exercising discretion as to the entry of default judgment: 

(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.

Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). "In applying this discretionary

standard, default judgments are more often granted than denied." PepsiCo v. Triunfo-Mex,

Inc., 189 F.R.D. 431, 432 (C.D.Cal. 1999).

Plaintiff alleges that it entered into contracts with all Defendants, including ESG, but

that Defendants breached those contracts and did not perform the services they were paid

for. Plaintiff alleges that Defendants knew at the time they entered into the contracts that

they could not perform. Plaintiff alleges that ESG was the alter ego of Defendants Joseph

Werwage and Laura Brown, and that ESM was the alter ego of ESG. 

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4 The Court makes this finding without prejudice to the other Defendants. 

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Plaintiff seeks $139,960 plus interest, punitive damages, and costs. The Court has

reviewed the complaint and finds it sufficiently states a cause of action against Defendant

ESG.4

 It is unclear whether ESG has funds or other assets out of which to satisfy the

judgment. The possibility that ESG has such funds or other assets, however, and the fact

that ESG is a corporation create the possibility that the corporate form of ESG could be used

to shelter assets, leaving Plaintiff without recourse if default judgment is not entered.

Therefore, Eitel factors 1–3 appear to be satisfied.

The Court must consider the sum of money at stake in relation to the seriousness of

Defendant ESG’s conduct. Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp.2d 1172, 1176

(C.D.Cal. 2002). Because the amount sought appears to be commensurate with the money

the Defendants allegedly received from Plaintiff, the fourth Eitel factor is satisfied.

Upon entry of default, all well-pleaded facts in the complaint are taken as true, except

those relating to the amount of damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915,

917–18 (9th Cir. 1987). As noted, all material facts appear to be adequately pleaded in the

complaint. Accordingly, no genuine dispute of material facts in this case would appear to

preclude granting default judgment. Cal. Sec. Cans, 238 F. Supp.2d at 1177. This satisfies

the fifth Eitel factor.

 Because Defendant ESG has never appeared, there is no indication the default was

due to excusable neglect. For the same reason, a decision on the merits appears to be

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

Thus, all Eitel factors are satisfied.

In its application for entry of default judgment, Plaintiff has requested an award of

damages arising from services allegedly paid for but not rendered. (Decl. of Julian Bellinghi

in Support of Application for Default Judgment (“Bellinghi Decl.”), at 3.) Upon entry of

default, the well-pleaded allegations of the complaint are taken as true, except for the

allegations as to the amount of damages. TeleVideo Sys., 826 F.2d at 917–18. Thus, the

/ / /

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party seeking entry of a default judgment must provide proof of all damages sought in the

complaint. Cal. Sec. Cans, 238 F. Supp.2d at 1175.

Although Plaintiff has named the sum of $139,960 as the amount it is contractually

owed, Plaintiff also requests interest, costs, and punitive damages, bringing the total it to

$184,560.68. (Bellinghi Decl., at 3.) Plaintiff is ORDERED to serve and file proof of damages

on or before Friday, December 15, 2006. Defendant ESG may, if it wishes, serve and file

a reply in opposition on or before Friday, December 29, 2006. Following filing of the

foregoing, this matter will be under submission.

If Defendant ESG fails to file a reply, the Court may award all damages sought

by Plaintiff without further notice to Defendant ESG.

IT IS SO ORDERED.

DATED: November 22, 2006

HONORABLE LARRY ALAN BURNS

United States District Judge

Case 3:06-cv-01415-LAB-JMA Document 25 Filed 11/22/06 Page 4 of 4