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William Consalo & Sons Farms Inc. v. Drobnick Distributing Inc.

United States District Court, Ninth Circuit

December 6, 2013

William Consalo & Sons Farms Incorporated, Plaintiff,
v.
Drobnick Distributing Incorporated; Edward Drobnick; Deborah Drobnick; Babaluci Fresh Fruit & Vegetables LLC; Marco Antonio Siqueiros; Veronica Siqueiros, Defendants. Drobnick Distributing Incorporated, a California corporation Cross-Complainant,
v.
Marco Antonio Siquerios, and Babaluci Fresh Fruit & Vegetables, LLC aka Whole Foods & Vegetables, Cross-Defendants.

ORDER

CINDY K. JORGENSON, District Judge.

Pending before the Court is Cross-Complainant Drobnick Distributing Inc.'s ("Drobnick") Supplemental Notice of Application and Application for Entry of Default Judgment as to Cross-Defendants Babaluci Fresh Fruit & Vegetables LLC aka Whole Foods & Vegetables and Marco Antonio Siquerios. (Doc. 159).

I. Background

Plaintiff William Consalo & Sons Farms, Inc. is a wholesale buyer and seller of fresh fruits and vegetables located in Vineland, New Jersey. Plaintiff has held a PACA license since 1962. In approximately June 2008, Defendant Marco Siqueiros started Babaluci Fresh Fruit & Vegetables, LLC ("Babaluci"). Babaluci is a buyer and seller of fresh fruits and vegetables. In January 2009, Plaintiff hired Marco Siqueiros to act as its agent to buy and sell produce on behalf of Plaintiff in its Nogales, Arizona office.

Defendant Drobnick Distributing, Inc. is a brokerage firm in the business of buying and selling fresh fruits and vegetables located in Salinas, California. Defendant Edward Drobnick is its principal. Defendant Drobnick Distributing, Inc. has held a PACA license since 2001.

On January 25, 2010, Plaintiff filed a Complaint against Babaluci and Marco Siqueiros (collectively "Babaluci Defendants"), and Drobnick Distributing, Inc., Edward and Deborah Drobnick (collectively "Drobnick Defendants") alleging breach of PACA trust. (Doc. 1). On March 5, 2010, the Drobnick Defendants filed their Answer. (Doc. 30). Drobnick also asserted a Cross-Complaint against the Babaluci Defendants.

The Cross-Complaint alleges that Drobnick entered into an agreement with Babaluci to process invoices for the purchase of produce from Plaintiff to Babaluci, in an effort to help Marco Siqueiros establish an industry credit rating. As compensation, Drobnick would receive a transaction fee of $.25 per carton. Invoices for the purchase of produce from Plaintiff were delivered to Drobnick, which processed the invoices and forwarded them to Babaluci. However, Babaluci received the purchased produce directly from Plaintiff.

Between September 17, 2009 and November 20, 2009, Drobnick sent Babaluci invoices for the produce purchased from Plaintiff as well as invoices for the agreed upon transaction fees. However, Babaluci never made payments on those invoices. In addition from November 3, 2009 through December 16, 2009, Drobnick agreed to sell Babaluci produce and Babaluci agreed to pay Drobnick for that produce. However, Babaluci failed to pay Drobnick for the produce.

The Babaluci Defendants have not filed an Answer in this cause of action or responded to the Cross-Complaint. At an April 2010 hearing Defendant Siqueiros admitted in open Court that he owes the outstanding balance to Plaintiff and that he owes Drobnick money as well. On June 2, 2010, Plaintiff filed an Amended Complaint adding Defendant Marco Siqueiros's wife, Veronica Siqueiros as a Defendant. (Doc. 85).

On June 3, 2010, Drobnick filed a Motion for Entry of Default as to the Cross-Defendants. (Doc. 87). On June 9, 2010, the Clerk of the Court entered an Amended Entry of Default pursuant to Rule 55(a), Federal Rules of Civil Procedure, against Cross-Defendants. (Doc. 94). On June 23, 2010, Drobnick filed a Motion for Entry of Default as to the Cross-Defendants. (Doc. 96).

On February 9, 2011, the Court denied Drobnick's Motion for Entry of Default with leave to resubmit. (Doc. 112). The Court reasoned that Drobnick's claims in the Cross-Complaint may affect Plaintiff's claims against Drobnick. As such, the Court found that Drobnick could resubmit its Motion for default judgment upon the resolution of the issues between Plaintiff and the Drobnick Defendants.

On March 30, 2011, the Court granted Plaintiff's Motion for Summary Judgment against the Drobnick Defendants. (Doc. 118). In its Order, the Court found that the Drobnick Distributing and Edward Drobnick were liable to Plaintiff for $1, 525, 896.88 in produce sold to the Drobnick Defendants. On July 29, 2013, the Court denied the Drobnick Defendants Motion for Reconsideration. (Doc. 138). Judgment was entered on July 29, 2013. (Doc. 139). On November 15, 2013, Drobnick filed a Supplemental Motion for Default Judgment against Babaluci. (Doc. 159). No response has been filed.

II. Discussion

Rule 55, Federal Rules of Civil Procedure, provides for the entry of default judgment by the Court. Fed.R.Civ.P. 55(b)(2). "The district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). After entry of default by the Clerk of the Court pursuant to Fed.R.Civ.P. 55(a), the Court may grant default judgment pursuant to Fed.R.Civ.P. 55(b)(2). See Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986) (discussing the two-step process required by Rule 55). In exercising its discretion whether to grant default judgment, the Court may consider the following factors:

(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 ...

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