Court Opinion

ID: 2804472
Source: CourtListenerOpinion
Date Created: 2015-05-29 20:02:03.716134+00
Date Added: 2024-06-11T12:26:12.560379
License: Public Domain

NOT FOR PUBLICATION

                     UNITED STATES COURT OF APPEALS                           FILED
                            FOR THE NINTH CIRCUIT                             MAY 29 2015

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

YOON CHUL YOO, an individual, on                 No. 13-55670
behalf of himself and similarly situated
investors,                                       D.C .No. 2:09-cv-07483- MMM

               Plaintiff-counter-defendant -
Appellant,                                       MEMORANDUM*

 v.

MATTHEW ARNOLD, an individual;
DARK HALL PRODUCTIONS, LLC, a
California limited liability company,

               Defendants-counter-claimants
- Appellees.

                    Appeal from the United States District Court
                       for the Central District of California
                   Margaret M. Morrow, District Judge, Presiding

                        Argued and Submitted May 8, 2015
                              Pasadena, California

Before:       TASHIMA, TALLMAN, and NGUYEN, Circuit Judges.

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Appellant Yoon Chul Yoo appeals from the district court’s denial of his

motion to set aside default, and its entry of default judgment against him in favor

of Appellees Matthew Arnold and Dark Hall Productions, LLC (“DHP”).

Specifically, Yoo argues that the district court erred in determining that the default

was due to Yoo’s own culpable conduct and in its award of damages upon entry of

default judgment. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

      1.     The district court did not abuse its discretion in denying Yoo’s motion

to set aside default. “A district court’s denial of a motion to set aside . . . default

. . . is reviewed for abuse of discretion.” Brandt v. Am. Bankers Ins. Co. of Fla.,

653 F.3d 1108, 1110 (9th Cir. 2011). In evaluating such a motion, “a court must

consider three factors: (1) whether the party seeking to set aside the default

engaged in culpable conduct that led to the default; (2) whether it had no

meritorious defense; or (3) whether reopening the default judgment would

prejudice the other party.” United States v. Signed Pers. Check No. 730 of Yubran

S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (“Mesle”) (internal quotations and

alterations omitted). “[A] finding that any one of these factors is true is sufficient

reason for the district court to refuse to set aside the default.” Id.

      The district court denied the motion to set aside default based only on the

first factor, namely, because the default was the result of Yoo’s own culpable

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conduct. “[A] defendant’s conduct is culpable if he has received actual or

constructive notice of the filing of the action and intentionally failed to answer.”

Id. at 1092 (quoting TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 697 (9th

Cir. 2001)) (alteration in original). Put differently, conduct is culpable “where

there is no explanation of the default inconsistent with a devious, deliberate,

willful, or bad faith failure to respond.” TCI Grp. Life Ins. Plan, 244 F.3d at 698.

The district court relied on a laundry list of culpable conduct, including Yoo’s

failure to sit for a scheduled deposition, respond to motions, pay his attorneys,

address his attorneys’ requests to withdraw, and respond to the district court’s

order to show cause why his affirmative claims should not be dismissed for failure

to prosecute.

      Yoo’s proffered explanations for his conduct are unavailing. Yoo suggests

the district court should ignore his apparent indifference to the proceedings

because he does not speak English. However, there is no evidence in the record of

Yoo’s language abilities, and regardless, Yoo managed to meet with Arnold and

hire several American attorneys, indicating that he has some means of

communicating with English speakers. Additionally, Yoo argues that the district

court should have overlooked his missteps because he was unrepresented during

most of the proceedings below. While this court is normally especially “solicitous

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towards movants . . . whose actions leading to the default were taken without the

benefit of legal representation,” Mesle, 615 F.3d at 1089, Yoo is not deserving of

the court’s solicitude because his lack of representation was the direct result of his

culpable conduct in failing to pay his attorneys. Accordingly, the district court did

not abuse its discretion in finding that Yoo’s own culpable conduct led to the entry

of default.

         2.    The district court correctly calculated damages upon its entry of

default judgment. After an entry of default, the court accepts as true all factual

allegations in the complaint, except those as to the amount of damages. TeleVideo

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

may determine the amount of damages without a hearing where “the amount

claimed is a liquidated sum or capable of mathematical calculation.” Davis v.

Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). Here, the district court properly

based its damage award on evidence in Arnold’s affidavit. Cf. Fed. R. Civ. P.

55(b)(1) (clerk may enter default judgment “with an affidavit showing the amount

due”).

         The district court’s measure of damages was appropriate under a breach-of-

contract theory of liability. Yoo, working with his daughter, Sophia, agreed to

finance Arnold’s production of a film titled “The Door” with a total production

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budget of $4,500,000. Yoo deprived Arnold and DHP of the benefit of that

bargain by dispossessing Arnold and DHP of all the promised funds. Yoo induced

Arnold to return $1,761,141.82 based on false claims that the money would be

returned to investors. Then Yoo caused Sophia to withdraw $1,945,000 from

DHP’s accounts. Finally, Yoo refused to pass along $800,000 provided by a

Japanese investor. The district court properly determined that these sums were

compensable under a breach of contract theory in order to put Arnold and DHP “in

as good a position as [they] would have been had performance been rendered as

promised.” See Richards v. Sequoia Ins. Co., 124 Cal. Rptr. 3d 637, 641 (Ct. App.

2011) (quoting State v. Pac. Indem. Co., 75 Cal. Rptr. 2d 69, 79 (Ct. App. 1998)).

Because DHP had already recovered $1,945,000 from an earlier judgment against

Sophia based on the same harm, the district court correctly reduced its

compensatory damage award by that amount to prevent double recovery.1

       Because its damage award was supported by evidence and based in law, the

district court did not err.

                                       • ! •

       1
              Because we uphold the entire amount of damages under a breach-of-
contract theory, we need not determine whether the district court also correctly
determined that aspects of DHP’s recovery were alternatively compensable under a
tort theory of liability based on fraud.

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The judgment of the district court is

AFFIRMED.

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