IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

CRAFTED APPAREL, LLC, an 

Oregon limited liability 

company, 

Plaintiff, 

v. 

POW, INC., 

Defendant. 

BROWN, Judge. 

3:15-cv-01493-BR 

ORDER 

This matter comes before the Court on Plaintiff's Motion 

(#12) for Default Judgment in which Plaintiff seeks $108,802.74 

in damages on Plaintiff's claim for breach of contract (including 

pre-judgment interest), $2,100,000.00 in damages on Plaintiff's 

claim for anticipatory breach of contract, and costs in the 

amount of $696.80. 

Federal Rule of Civil Procedure 55(b) (2) authorizes the 

Court to enter a default judgment after an order of default has 

been entered by the Clerk of the Court. The court must consider 

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Case 3:15-cv-01493-BR Document 16 Filed 04/26/16 Page 1 of 5
the following factors when determining whether to enter a default 

judgment: 

Factors which may be considered by courts in exercising 

discretion as to the entry of a default judgment 

include: (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). See 

also Lasheen v. Embassy of The Arab Republic of Egypt, 625 F. 

App'x 338, 340 (9th Cir. 2015). 

"'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.'" Rubicon Global Ventures v. 

Chongquing Zongshen Group Import/Export Corp., 630 F. App'x 655, 

658 (9th Cir. 2015) (quoting Geddes v. United Fin. Grp., 559 F. 2d 

557, 560 (9th Cir. 1977)). "Upon entry of default, a plaintiff 

is required to prove the amount of his damages, because neither 

the default nor the allegations in the complaint can establish 

the amount of damages." Lasheen, 625 F. App'x at 341. "The 

district court may determine the amount of damages without an 

evidentiary hearing where 'the amount claimed is a liquidated sum 

or capable of mathematical calculation.'" Lasheen, 625 F. App'x 

at 341 (quoting Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 

1981) . 

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Case 3:15-cv-01493-BR Document 16 Filed 04/26/16 Page 2 of 5
The Clerk entered a default as to Defendant on January 6, 

2016. The Court has considered each of the factors outlined in 

Eitel and concludes entry of a default judgment in favor of 

Plaintiff is appropriate and that the amount of damages owed is 

capable of mathematical calculation. 

Nonetheless, the Court also concludes Plaintiff is not 

entitled to the full amount requested. In short, in 2013 

Plaintiff sold to Defendant assets that Plaintiff owned in Holden 

Outerwear, an outdoor clothing company. In the Asset Purchase 

Agreement (APA) executed between Plaintiff and Defendant, the 

parties agreed Defendant would pay Plaintiff 5% of Defendant's 

annual net revenue from the sales of products relating to Holden 

up to an "amount not to exceed $2,200,000." Hansen Deel. (#13-1) 

Ex. A, at 10. Although the APA contemplated Defendant making 

payments to Plaintiff annually based on revenues from Holden, it 

also set minimum payments that Defendant was required to make to 

Plaintiff for the first three years of the agreement: 

a) Fiscal Year Ending April 30, 2015 - $100,000.00 

b) Fiscal Year Ending April 30, 2016 - $125,000.00 

c) Fiscal Year Ending April 30, 2017 - $150,000.00 

Id. After the fiscal year ending April 30, 2017, however, 

Defendant was not required to make any minimum payment to 

Plaintiff. Defendant, however, was still required to fulfill its 

obligation to pay 5% of annual Holden-related revenues until it 

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Case 3:15-cv-01493-BR Document 16 Filed 04/26/16 Page 3 of 5
reached a total of $2.2 million paid. 

Defendant did not make its minimum payment of $100,000.00 on 

April 30, 2015. Shortly thereafter counsel for Defendant 

notified Plaintiff that Defendant had ceased all operations, 

terminated all employees, and only ~remains as a shell company 

with significant liabilities and no capacity to pay them." 

Henderson Deel. (#14-1) Ex. A. Moreover, Plaintiff has not 

submitted any evidence from which the Court could conclude 

Defendant will have any future revenues related to the sale of 

Holden products. Plaintiff, therefore, has not established 

entitlement to any damages beyond the minimum payments that 

Defendant was required to make for fiscal years ending April 

2015, 2016, and 2017 because any such payments were contingent on 

Defendant receiving revenue related to the sale of Holden 

products. 

Moreover, Plaintiff did not submit any documentation 

supporting the $696.80 that it seeks in court costs. The Court, 

therefore, cannot award those costs to Plaintiff at this time. 

Accordingly, on this record the Court GRANTS in part and 

DENIES in part Plaintiff's Motion (#12) for Default Judgment. 

The Court concludes Plaintiff is entitled to a default judgment 

in the amount of $108,802.74 in damages on Plaintiff's claim for 

breach of contract (including pre-judgment interest) and 

$275,00.00 in damages related to Plaintiff's claim for 

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Case 3:15-cv-01493-BR Document 16 Filed 04/26/16 Page 4 of 5
anticipatory breach of contract. The Court also grants Plaintiff 

leave to file a separate Bill of Costs with supporting 

documentation no later than May 16, 2016. 

IT IS SO ORDERED. 

DATED this 26th day of April, 2016. 

MARCO Mavt:4''~ A.1{~ for 

ANNA J. BROWN 

United States District Judge 

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