United States District Court, D. Arizona
DAVID G. CAMPBELL, District Judge.
Plaintiff Best Western International, Inc. ("Best Western") has filed a motion for entry of default judgment. Doc. 39. The Court will grant the motion.
Best Western's complaint alleges that on November 12, 2000, Defendants BBW, LLC and Richard Knapp applied for a Best Western membership for "The Bartlesville Inn" located in Bartlesville, Oklahoma. Doc. 1, ¶ 26. The application was approved and the hotel became a Best Western member property known as "Best Western Bartlesville Inn." Id., ¶¶ 26-27. Defendants' relationship with Best Western was memorialized in a Membership Agreement. Id. Under the Agreement, Defendants were required to pay all fees, dues, charges, and assessments imposed on members by Best Western's board and to promptly pay the costs of all goods or services provided by or ordered through Best Western. Id., ¶ 28. For a variety of reasons, Best Western's board voted to cancel Defendants' membership on February 19, 2013. Id., ¶ 35. Pursuant to the Membership Agreement, termination of Defendants' Best Western membership triggered an obligation to immediately satisfy their payment obligations to Best Western. Id., ¶ 36. In addition, the Membership Agreement required Defendants to remove all Best Western marks displayed at the Bartlesville Inn and from any advertising for the Bartlesville Inn within fifteen days of termination. Id.
Best Western's complaint alleges that Defendants failed to pay off their account balance and remove Best Western symbols from the Bartlesville Inn and from advertising for the Bartlesville Inn. Id., ¶¶ 39-42. The complaint asserts twelve claims, including breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and trademark infringement. Id., ¶¶ 48-122.
Best Western filed a motion for Default Judgment on October 2, 2013. Doc. 12. The Court denied the motion because Defendants filed an answer to the complaint on October 11, 2013. Doc. 23. A settlement conference was held on February 19, 2014 before Magistrate Judge Steven Logan but a settlement was not reached. Doc. 30. On April 22, 2014, Defendant BBW, LLC's attorney filed a motion to withdraw as attorney. Doc. 33. The Court held a hearing on May 7, 2014, after which it granted the motion to withdraw. Doc. 35. On May 8, 2014, the Court ordered Defendant Knapp to file a memorandum showing cause why default judgments should not be entered against the Defendants. Doc. 36. No memorandum was filed. The Court held a hearing on May 28, 2014, but Defendants did not appear. Doc. 38.
II. Legal Standard.
The Court has discretion to grant default judgment against Defendants pursuant to Rule 55(b). See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980); Draper v. Coombs, 792 F.2d 915, 924 (9th Cir. 1986). Factors the Court should consider include (1) the possibility of prejudice to Plaintiff, (2) the merits of the claims, (3) the sufficiency of the complaint, (4) the amount of money at stake, if any, (5) the possibility of a dispute concerning material facts, (6) whether default was due to excusable neglect, and (7) the policy favoring a decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
A. Possible Prejudice to Best Western.
The first Eitel factor favors entry of default judgment because Defendants have refused to participate in the litigation after being properly served with process and previously participating in the case.
B. The Merits of the Claims and the Sufficiency of the Complaint.
The second and third Eitel factors favor entry of default judgment because Best Western's claims are each legally sufficient as pled and can be evaluated given Best Western's factual allegations. Best Western's breach of contract claim alleges facts to support each element of a breach of contract claim. Chartone, Inc. v. Bernini, 83 P.3d 1103, 1111 (Ariz.Ct.App. 2004) (stating that a breach of contract claim contains three elements: (1) the existence of a contract, (2) its breach, and (3) resulting damages). Best Western has also substantiated the correctness of each charge on the open account as required to prove its claim of open account. See Merrick v. U.S. Rubber Co., 440 P.2d 314, ...