Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-04426/USCOURTS-cand-3_14-cv-04426-6/pdf.json

Parties Involved:
Michael Matthew Jarman
Defendant
VII Peaks Capital LLC
Plaintiff

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As the motion was served on defendant by mail on August 10, 2015, any opposition

was due no later than August 27, 2015. See Civil L.R. 7-3(a).

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

VII PEAKS CAPITAL LLC,

Plaintiff,

 v.

MICHAEL MATTHEW JARMAN,

Defendant. /

No. C-14-4426 MMC

ORDER GRANTING IN PART AND

DEFERRING RULING IN PART ON

PLAINTIFF’S MOTION FOR DEFAULT

JUDGMENT; SETTING FURTHER

BRIEFING SCHEDULE; VACATING

HEARING; CONTINUING CASE

MANAGEMENT CONFERENCE

Before the Court is plaintiff VII Peaks Capital LLC’s Motion for Entry of Default

Judgment, filed August 10, 2015. Defendant Michael Matthew Jarman has not filed

opposition thereto.1

 Having read and considered the papers filed in support of the motion,

the Court hereby VACATES the hearing, currently scheduled for September 18, 2015, and,

as discussed below, will afford plaintiff leave to supplement the motion.

Where, as here, the Clerk of Court has entered a defendant’s default, the district

court may grant a default judgment. See Fed. R. Civ. P. 55(b)(2). When considering a

motion for default judgment, “the factual allegations of the complaint, except those relating

to the amount of damages, will be taken as true” by the district court. See Televideo Sys.,

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

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omitted). The Court considers whether, assuming the factual allegations in the complaint

are true, plaintiff has shown it is entitled to damages.

A. Fraud/Negligent Misrepresentation Claims

In its complaint, plaintiff alleges that during “discussions” with defendant about

“creat[ing] a new technology company” (see Compl. ¶ 7), defendant stated “there was

nothing in his background that would be of concern to [plaintiff]” (see id. ¶ 8), and that, in

reliance thereon and at defendant’s request, plaintiff paid $23,000 to Connecting the Globe,

LLC (“CTG”) (see id. ¶¶ 11, 31, 37), a company “associated with” defendant (see id. ¶ 6). 

Plaintiff also alleges it later learned that plaintiff had “suppressed facts about his past

interactions with law enforcement, arrest history and criminal conviction” (see id. ¶¶ 30, 35)

and that it would not have paid the $23,000 to CTG had it known the true facts about

defendant’s background (see id. ¶¶ 32, 34). Based of said allegations, which, as noted

above, the Court assumes true, plaintiff asserts claims for fraud and negligent

misrepresentation.

In support of its claim for damages, plaintiff submits the declaration of its principal,

Gurpreet Chandhoke (“Chandhoke”), who states plaintiff paid CTG the total sum of $23,000

(see Chandhoke Decl. ¶ 8), which statement is supported by bank documents indicating

the total sum of $23,000 was transferred from an account held by plaintiff to an account

held by CTG (see id. Ex. 1).

The Court finds plaintiff has submitted sufficient evidence to show it was damaged in

the amount of $23,000 as a result of the misleading statements made by defendant, and,

consequently, will award plaintiff the sum of $23,000.

B. Defamation

In its complaint, plaintiff alleges that after it notified defendant “it had decided against

working with him” (see Compl. ¶ 12), defendant posted “statements on internet message

boards” (see Compl. ¶ 21) that “falsely impl[ied] [plaintiff] lied to [d]efendant about its own

assets and investing in a company he allegedly owned” and that defendant

//

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The statements are alleged to have appeared on “an internet message board

named Scamorg” and are quoted in the complaint. (See Compl. ¶ 13.)

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Plaintiff filed redacted versions of the emails, in which the names of the senders, as

well as what appears to be other identifying information, has been deleted.

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“unethically hired employees” (see Compl. ¶ 24).2

 Based on said allegations, which are

assumed true, plaintiff asserts a claim for defamation.

Plaintiff argues it is entitled to an award of $10,000,000 in damages, relying on the

declaration of Chandhoke, who states he is “convinced potential investors are aware of

[d]efendant’s false statements about [plaintiff] and decided to conduct business elsewhere,”

and that he “believe[s] [d]efendants’ false statements about [plaintiff] have caused [plaintiff]

to lose at least $10 million in revenue.” (See Chandhoke Decl. ¶ 14.) The sole explanation

for his belief is that “existing and potential clients,” after having learned of the abovereferenced statements made by defendant, have “question[ed] whether they should do

business with [plaintiff].” (See id. ¶ 13.) As “example[s],” Chandhoke provides an email

sent to plaintiff by a “potential client,” who stated he wished to “revisit [his company’s]

strategy around [plaintiff]” after reading defendant’s internet postings (see id. ¶ 13, Ex. 5),

and an email in which “an investor” advised Chandhoke that a “potential investor” had

learned of defendant’s internet posting and then “ask[ed] [the investor] how [he] got

comfortable working with [plaintiff]” (see id. ¶ 13, Ex. 6). As plaintiff knows the identity of

both the “potential client” and “potential investor” referenced in the emails,3

 and Chandhoke

does not state that either declined to invest or otherwise work with plaintiff, it would appear

that defendant’s statements did not cause plaintiff to incur business losses with respect to

the only examples identified by Chandhoke. Although the examples might suggest other

potential investors became aware of defendant’s statements, the Court finds it

inappropriate, on this limited record, to infer therefrom that plaintiff has lost $10,000,000, or

any amount, as a result of defendant’s statements.

At this conjuncture, however, rather than deny relief on the defamation claim, the

Court will afford plaintiff the opportunity to supplement its showing, if it can do so, to

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demonstrate it is entitled to an award of damages thereon.

CONCLUSION

For the reasons stated above, the Court hereby GRANTS in part and DEFERS

ruling in part on plaintiff’s motion for default judgment, as follows:

1. To the extent plaintiff’s motion seeks default judgment in its favor on its claims for

fraud and negligent misrepresentation, the motion is GRANTED, and the Court finds

plaintiff is entitled to judgment in the amount of $23,000.

2. To the extent plaintiff’s motion seeks default judgment in its favor on its claim for

defamation, the Court DEFERS ruling thereon, and affords plaintiff leave to file and serve,

no later than October 9, 2015, a supplement to its motion, for the purpose of supporting its

assertion that it is entitled to an additional award of damages.

3. In the event plaintiff does not file a supplement, the Court will direct the Clerk of

Court to enter judgment in favor of plaintiff in the amount of $23,000.

4. In the event plaintiff files a supplement, defendant, no later than October 26,

2015, shall file and serve any opposition, limited to a response to the content of the

supplement; unless the parties are otherwise advised, the Court will take the deferred

portion of the motion under submission as of that date.

5. In light of the above, the Case Management Conference is hereby CONTINUED

from October 9, 2015, to December 11, 2015, at 10:30 a.m. A Case Management

Conference Statement shall be filed no later than December 4, 2015.

IT IS SO ORDERED.

Dated: September 15, 2015 

MAXINE M. CHESNEY

United States District Judge

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