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Liberty West Regional Center LLC v. Carpanzano

United States District Court, D. Arizona

March 3, 2014

Liberty West Regional Center LLC, Plaintiff,
Salvatore Carpanzano, Marisa Belcastro Carpanzano, Samba Financial Group Escrow & Consulting Services U.S.A. LLC, Defendants.


DAVID G. CAMPBELL, District Judge.

Plaintiff Liberty West Regional Center, LLC has filed a motion pursuant to Rule 55(b) of the Federal Rules of Civil Procedure requesting the entry of default judgment against Defendants Salvatore Carpanzano, Marisa Belcastro Carpanzano, (collectively the "Carpanzanos"), and Samba Financial Group Escrow & Consulting Services U.S.A., LLC ("Samba"). Doc. 44. For the reasons that follow, the Court will grant in part and deny in part the motion.

I. This Suit.

On July 22, 2011, Plaintiff deposited $2, 700, 000 into an escrow account with Defendant JP Morgan Chase Bank, N.A. ("JP Morgan"), pursuant to an escrow agreement. Doc. 1, ¶¶ 14-15. The following year, JP Morgan notified Plaintiff that it was planning to "get out of the business" of providing escrow services. Id., ¶ 17. Plaintiff was subsequently introduced to Samba and its representative, Salvatore Carpanzano. Id., ¶ 1. Mr. Carpanzano allegedly represented that Samba would place Plaintiff's funds "in an account at Citibank at its branch office in Scarsdale, New York, " and further represented that Samba was a subsidiary of Samba Financial Group. Id., ¶ 19, 20. On December 10, 2012, JP Morgan wired the $2, 700, 000 in Plaintiff's account to Citibank. Id., ¶ 26, Doc. 1-5 at 2. Mr. Carpanzano is alleged to have converted Plaintiff's funds for his own personal benefit. Doc. 1, ¶ 33. Plaintiff commenced this action on October 4, 2013. See id.

II. Plaintiff's Motion for Default Judgment.

Default was entered as to the Carpanzanos and Samba on November 5, 2013. Doc. 21. Once a party's default has been entered, the district court has discretion to grant default judgment against that party. See Fed.R.Civ.P. 55(b)(2); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Factors the court must consider in deciding whether to grant default judgment include (1) the possibility of prejudice to the plaintiff, (2) the merits of the claim, (3) the sufficiency of the complaint, (4) the amount of money at stake, (5) the possibility of a dispute concerning material facts, (6) whether default was due to excusable neglect, and (7) the strong policy favoring a decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In applying these factors, "the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977); see Fed.R.Civ.P. 8(d) ("Averments in a pleading to which a responsive pleading is required, other than those as to the amount of damage, are admitted when not denied in the responsive pleading."). "However, necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default." Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992).

Unless "the amount claimed is liquidated or capable of ascertainment from definite figures, " the Court generally should hold a hearing to determine the proper amount of damages. Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); see Fed.R.Civ.P. 55(b)(2); 10 James Wm. Moore, Moore's Federal Practice § 55.20[1][b] at 55-23 (3d ed. 1998). Finally, "[a] judgment by default shall not be different in kind from or exceed in amount that prayed for in the demand for judgment" in the complaint. Fed.R.Civ.P. 54(c); Fed.R.Civ.P. 55(d) ("In all cases a judgment by default is subject to the limitations of Rule 54(c)."); see Fed.R.Civ.P. 8(a)(3).

A. Possible Prejudice to Plaintiff.

The first Eitel factor weighs in favor of granting Plaintiff's request for an award of monetary damages because Plaintiff will be prejudiced if default judgment is not entered. Plaintiff served process on Defendants more than four months ago. Docs. 11, 12. Defendants have not answered or otherwise responded to the complaint. If Plaintiff's motion for default judgment is not granted, Plaintiff "will likely be without other recourse for recovery." PepsiCo, Inc. v. Cal. Security Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002).

B. The Merits of the Claim and the Sufficiency of the Complaint.

The second and third Eitel factors favor a default judgment where the complaint sufficiently states a claim for relief under Rule 8. See Cal. Security Cans, 238 F.Supp.2d at 1177; Danning v. Lavine, 572 F.2d 1386, 1388-89 (9th Cir. 1978). Plaintiff's Complaint states plausible claims for relief as to Counts One through Eight and Count Ten.

Count Nine asserts a claim for "Scheme or Artifice to Defraud using Interstate Commerce in violation of 18 [U.S.C.] § 1343, and 18 U.S.C. §§ 1962 & 1964." Doc. 1 at 15. "To state a civil claim for a RICO violation under 18 U.S.C. § 1962(c), a plaintiff must show (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.'" Rezner v. Bayerische Hypo-Und Vereinsbank AG, 630 F.3d 866, 873 (9th Cir. 2010) (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985)). Standing under civil RICO requires a plaintiff "to show that the racketeering activity was both a but-for cause and a proximate cause of his injury." Id. (citation omitted). Plaintiff has not alleged the existence of an enterprise or a pattern of racketeering activity, and has therefore failed to state a claim as to Count Nine.

C. The Amount of Money at Stake.

Under the fourth Eitel factor, the Court considers the amount of money at stake in relation to the seriousness of Defendants' conduct. See Cal. Security Cans, 238 F.Supp.2d at 1176. Plaintiff seeks $2, 700, 000 in actual damages, "multiple damages in the amount of $8, 100, 000 pursuant to 18 U.S.C. § 1964, and punitive damages in the amount of $10 million, together with prejudgment and post-judgment interest, attorneys' fees and costs." Doc. 44 at 4. Plaintiff has alleged that Defendants ...

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