Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-02980/USCOURTS-cand-3_14-cv-02980-3/pdf.json

Parties Involved:
Bitesize Networks, Inc.
Defendant
Mevio, Inc.
Defendant
Vertamedia LLC
Plaintiff

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

VERTAMEDIA LLC,

Plaintiff,

v.

BITESIZE NETWORKS, INC.,

Defendant.

Case No. 14-cv-02980-WHO 

ORDER GRANTING VERTAMEDIA, 

LLC'S MOTION FOR DEFAULT 

JUDGMENT

Re: Dkt. No. 42

Plaintiff’s motion for entry of default judgment is scheduled for hearing on March 30, 

2016. Pursuant to Civil Local Rule 7-1(b), this matter is appropriate for resolution without oral 

argument and I VACATE the hearing. Plaintiff’s motion is GRANTED.

BACKGROUND

I. Factual Background

Plaintiff Vertamedia LLC is a Nevada limited liability company that specializes in pay-perclick (“PPC”) and cost-per-view (“CPV”) advertisements. First Amended Complaint (“FAC”) ¶ 

8. Vertamedia generates traffic on its clients’ websites by redirecting visitors who click on these 

advertisements to clients’ websites. Id. ¶¶ 22, 23. This action arises out of defendant’s breach of 

a contract formed between Vertamedia and Mevio, Inc. Id. ¶ 2. Plaintiff alleges that defendant 

BiteSize Networks, Inc. (“BiteSize”) is “formerly known as” Mevio, Inc., and that they are the 

same entity and/or BiteSize is a continuation of or successor to Mevio, Inc. Id. ¶ 9. BiteSize is a 

Delaware corporation that maintains its principal place of business in Los Angeles, California. Id.

¶ 5. 

On October 1, 2012, Vertamedia entered into a contract with Mevio, Inc. agreeing to 

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deliver website traffic to Mevio in accordance with a daily payment cap set by Mevio.

1

 See FAC 

¶¶ 30, 33, Ex. T (Traffic Vendor Agreement). Between October 2012 and August 2013, 

Vertamedia asserts that it delivered website traffic to BiteSize and received timely payment in 

return. FAC ¶ 37. BiteSize failed to pay its September 2013 invoice, which was overdue as of 

October 16, 2013. Id. ¶ 43. On October 18, 2013, Vertamedia stopped providing services under 

the contract. Id. ¶ 45, Ex. Q. 

Between October 2013 and January 2014, Vertamedia spoke to Jennifer White, BiteSize’s 

Senior Vice President of Sales and Business Development, several times regarding the unpaid 

September invoice. Id. ¶¶ 44-49.2 Ms. White assured Vertamedia that the payment would be 

made as soon as BiteSize resolved certain financial issues with a client. Id. ¶¶ 44-49, Ex. R. On 

January 9, 2014, BiteSize’s COO/CFO Holli Bohren notified Vertamedia that it would not pay 

Vertamedia for the October and September invoices (“the Invoices”) because it believed 

Vertamedia had provided BiteSize with fraudulent traffic. Id. ¶ 50, Ex. S. As of September 23, 

2015, when Vertamedia filed its First Amended Complaint, BiteSize had not paid the Invoices, 

which together amount to $489,700.52. FAC ¶ 59. 

II. Procedural Background

Vertamedia asserts claims for breach of contract, and in the alternative, quantum meruit. 

FAC ¶¶ 60-65, 66-72. Vertamedia seeks monetary damages in the amount of $489,700.52, plus 

prejudgment interest and attorneys’ fees and costs. Id. ¶ A-C. Vertamedia engaged in pre-suit 

discussions with BiteSize to attempt to settle the dispute (FAC, Exs. A – H), but when Vertamedia 

filed this action on June 27, 2014, BiteSize ceased communication completely. FAC ¶ 10, Exs. AG.3

 Vertamedia attempted to serve BiteSize’s Agent for Service of Process but was told that “he 

 

1 Vertamedia entered into a Traffic Vendor Agreement with Mevio, Inc. See FAC ¶¶ 30, 33, Ex. T 

(Traffic Vendor Agreement). However, Vertamedia alleges that BiteSize and Mevio are the same 

entity and/or BiteSize is a continuation of or successor to Mevio. FAC ¶ 9. Accepting this 

allegation as true, I will regard BiteSize and Mevio as the same entity and refer to defendant as 

“BiteSize” hereinafter. 

2 Ms. White’s (whose email address was jwhite@bitesizetv.com) responded to Vertamedia’s 

Advertising Director Alex Volker’s emails regarding the Invoices. See FAC, Ex. R. 

3

In response to Vertamedia’s counsel’s correspondence to “Mevio” on April 17, 2014 regarding 

the Invoices, counsel for “BiteSize Networks, Inc. (“BiteSize”) f/k/a Mevio, Inc.” responded. 

BiteSize’s counsel never contended that BiteSize was not party to the Vertamedia contract, but 

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would not come out or was not available for service.” Id., Ex. J. Vertamedia served BiteSize by 

substituted service, leaving copies of the summons and complaint with production manager Jaci 

Darling. FAC ¶ 10, Ex. J. 

Vertamedia filed its first motion for default judgment on February 9, 2015. Dkt. No. 15. 

Magistrate Judge Kandis Westmore requested supplemental briefing on: (i) the connection 

between Mevio and BiteSize; (ii) the citizenship of Vertamedia’s LLC members; (iii) whether 

substitute service on BiteSize was sufficient; (iv) whether correspondence between Vertamedia 

and BiteSize after the complaint was filed constitutes an appearance by defendant; (v) the legal 

basis for plaintiff’s request for attorney fees; and (vi) the Eitel v. McCool, 782 F.2d 1470 (9th Cir. 

1986) factors that the court must consider in determining whether default judgment may be 

entered. Dkt. No. 17. 

Vertamedia submitted its response on May 12, 2015. Dkt. No. 21. On August 8, 2015 

Judge Westmore denied Vertamedia’s motion for default judgment without prejudice. Order 

Denying Motion for Default Judgment Dkt. No. 27. Judge Westmore granted leave to amend, 

instructing Vertamedia that in order to cure the deficiencies in its complaint, it must: (i) adequately 

allege that the court has subject matter jurisdiction over the action, (ii) adequately allege that 

BiteSize Networks is the correct Defendant because it is the same entity as Mevio, and (iii)

identify a proper legal basis for an award of attorneys’ fees. Id., at 6. 

Vertamedia filed its First Amended Complaint against BiteSize on September 23, 2015. 

Dkt. No. 28. The Clerk’s office entered default against BiteSize on December 10, 2015. Dkt. No. 

34. The case was reassigned to me on January 21, 2016. Dkt. No. 38.

LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) allows the court to enter a final judgment in a 

case following a defendant’s default. Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 

2d 995, 999 (N.D. Cal. 2001). There is no right to entry of default judgment; its entry is entirely 

within the court’s discretion. Id. at 999. When entry of judgment is sought against a party who 

 

instead asserted that payment on the Invoices was being withheld while BiteSize investigated 

whether Vertamedia sent fraudulent traffic to BiteSize. FAC, Exs. B, D. 

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has defaulted, a district court has an affirmative duty to establish its jurisdiction over both the 

subject matter and the parties. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). Federal courts are 

courts of limited jurisdiction; the party seeking to invoke the court’s jurisdiction bears the burden 

of establishing that such jurisdiction exists. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 

375, 377 (1994). “Upon default, the well-pleaded allegations of the complaint relating to liability 

are taken as true” (but not allegations as to the amount of damages). Dundee Cement Co. v. 

Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); TeleVideo Systems, 

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

DISCUSSION

Vertamedia’s First Amended Complaint addressed Judge Westmore’s jurisdictional 

concerns and her concerns about the named defendant, but failed to establish the legal basis for an 

award of attorneys’ fees. 

I. Vertamedia Established the Court’s Jurisdiction Over this Case

Vertamedia contends that the court has subject matter jurisdiction, specifically diversity 

jurisdiction, over this case. FAC ¶ 5. Diversity jurisdiction exists where (i) the amount in 

controversy exceeds the sum of $75,000, exclusive of interests and costs, and (ii) the parties are 

completely diverse--i.e., citizens of different states. 28 U.S.C. § 1332. Both elements are satisfied 

here. Vertamedia requests relief in the amount of $489,700.52 exclusive of interests and costs, 

which is greater than $75,000. Id. ¶ 5, A. It is a limited liability company organized under the 

laws of Nevada. FAC ¶ 3. The single member of Vertamedia is an individual who is a citizen of 

the State of Nevada. Id. BiteSize Networks, Inc. f/k/a Mevio, Inc. is incorporated in Delaware 

and has its principal place of business in California. Id. ¶ 4. Thus, Vertamedia has sufficiently 

alleged that diversity jurisdiction exists and that the court has subject matter jurisdiction. The 

Court also has personal jurisdiction over the parties because both Vertamedia and BiteSize 

consented to personal jurisdiction in California in their contract and because BiteSize has its 

principal place of business in California. Id. ¶ 6, Ex. T at 8. 

Vertamedia’s First Amended Complaint cured the deficiencies Judge Westmore identified 

regarding subject matter jurisdiction. 

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II. BiteSize is the Proper Defendant Because it is an “f/k/a” of Mevio

Because Vertamedia is moving for default judgment against BiteSize but signed the 

relevant contract with Mevio, Judge Westmore directed Vertamedia to include sufficient 

allegations to establish that BiteSize is the same entity as Mevio in its amended complaint. Order 

Den. Mot. for Default J. at 6. Vertamedia asserts that the details of the corporate relationship 

between BiteSize and Mevio are unconfirmed due to defendant’s failure to respond, but that “on 

information and belief” BiteSize and Mevio are the same entity and/or BiteSize is a continuation 

of or successor to Mevio, Inc. FAC ¶ 9. It also alleges “on information and belief” that BiteSize 

has assumed the liabilities of Mevio. Id. ¶ 9. 

Vertamedia provides nine good reasons why it believes that BiteSize and Mevio are the 

same entity. Id. ¶¶ 12-20. Its attorneys refer to defendant as “BiteSize Networks, Inc. (f/k/a 

Mevio)” with no objection or correction from defendant, and defendant’s lawyers refer to 

defendant as “BiteSize Networks, Inc. (f/k/a Mevio)” as well. FAC ¶¶ 12-13, Exs. B, D, G. A

trademark for “BITE SIZE TV” was registered with the United States Patent and Trademark 

Office on behalf of Mevio on November 5, 2012. FAC ¶ 14, Ex. L. Two publications published 

articles in 2012-2013 discussing Mevio’s transformation to BiteSize. FAC ¶¶ 15-16, Exs. M, N. 

And, several employees have communicated to Vertamedia on behalf of Mevio using email 

addresses with a “bitesizetv.com” domain name, including Holli Bohren, who is listed as 

BiteSize’s Agent for Service of Process. FAC ¶¶ 18-20, Exs. O, P, Q, R, K, S. The information 

alleged in Vertamedia’s First Amended Complaint, including the attached exhibits, supports a 

finding that BiteSize is the same entity as Mevio and the proper defendant in this case.

III. Vertamedia Failed to Establish a Legal Basis for an Award of Attorneys’ Fees

Vertamedia requests both monetary damages and attorneys’ fees. Vertamedia’s Mot. for 

Default J. at 19. By entering default, the factual allegations in the First Amended Complaint, 

except those relating to damages, are taken as true. Geddes v. United Fin. Grp., 559 F.2d 557, 560 

(9th Cir. 1977). The court has discretion to establish damages. Id. 

The invoices total the amount Vertamedia requests as the breach of contract award, 

$489,700.52, plus prejudgment interest of 10 percent per annum pursuant to Section 3289(b) of 

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the California Civil Code. Vertamedia’s Mot. for Default J. n.12. Section 3289(b) provides “[i]f a 

contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation 

shall bear interest at a rate of 10 percent per annum after a breach.” Cal. Civ. Code § 3289(b)

(West 1986).

The parties entered into the Traffic Vendor Agreement on October 1, 2012, so the interest 

rate of 10 percent per annum is proper. Ex. T. Footnote 12 of Vertamedia’s motion for default 

judgment outlines the correct calculation of 10 percent per annum on the outstanding sum BiteSize 

owes Vertamedia. Vertamedia’s Mot. for Default J. n.12. Based on these calculations, the total 

amount BiteSize owes to Vertamedia as of January 19, 2015 on the breach of contract claim is 

$550,819.32. Id.

Vertamedia also requests $43,233.70 in attorneys’ fees and costs. Vertamedia’s Mot. for 

Default J. at 14. In her Order denying Vertamedia’s previous motion for default judgment, Judge 

Westmore instructed Vertamedia to establish a legal basis for an award of attorneys’ fees in its 

renewed motion. Order Den. Mot. for Default J. at 6. It failed to do so. 

. Vertamedia argues that it is entitled to an award of $43, 233.70 in attorneys’ fees because 

“[d]efendant has been willfully avoiding any resolution of this matter,” but fails to provide a legal 

basis for this entitlement. Vertamedia’s Mot. for Default J. at 14. Vertamedia provides no case 

law or statutory support for its assertion that it is entitled to attorneys’ fees. Instead, in a footnote

Vertamedia contends that “[a]t a minimum, the Court should compensate Plaintiff for expenses 

related to Defendant’s failure to waive service of the Summons and the original Complaint. See

Fed. R. Civ. P. 4(d)(2).” Id. at n.13. Rule 4(d)(2) provides that if a defendant fails, without good 

cause, to sign and return a waiver requested by a plaintiff, the court must impose on the defendant 

the expenses incurred in making service and the reasonable expenses, including attorneys’ fees, of 

any motion required to collect those service expenses. Fed. R. Civ. P. 4(d)(2). Vertamedia fails to 

show why it is entitled to $43,233.70 in overall attorneys’ fees, when it has at most established a 

legal basis for costs and limited attorneys’ fees relating to BiteSize’s failure to return a service 

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waiver.4

Vertamedia’s Traffic Vendor Agreement with BiteSize does not establish that either party 

is responsible for the attorneys’ fees of the other in the event of a lawsuit. See Ex. T. Absent a 

legal or contractual basis, I will not award attorneys’ fees. 

CONCLUSION

For the foregoing reasons, I GRANT Vertamedia’s motion for default judgment, awarding 

$489,700.52, to plaintiff for breach of contract, plus prejudgment interest of 10 percent per annum

through January 19, 2015 (as requested by plaintiffs), for a total award of $550,819.32.

IT IS SO ORDERED.

Dated: March 21, 2016

______________________________________

WILLIAM H. ORRICK

United States District Judge

 

4 However, Vertamedia fails to identify what specific portion of its fees and costs it incurred 

because of BiteSize’s failure to return a waiver of service. I will not award them these 

unspecified and unsubstantiated fees and costs. 

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