United States District Court, D. Arizona
ORDER RE DEFAULT JUDGMENT
G. Campbell United States District Judge
has filed a motion for default judgment against Defendant
Deborah Speziale (Docs. 12, 19), and no party has requested
oral argument. For the reasons that follow, the Court will
grant the motion.
Best Western International, Inc. is a non-profit corporation
consisting of individually owned hotels that operate under
the “Best Western” mark. Doc. 19 at 2. The rights
and duties of Plaintiff and its member hotels are created and
governed by a membership agreement that incorporates by
reference certain bylaws, rules, and regulations. Doc. 1 at
3. Plaintiff executed a membership agreement with American
Hospitality Solution, LLC and Defendant Deborah Speziale.
Doc. 1, ¶¶ 19-24. Defendant was the voting member
for this membership, binding her under the membership
agreement and making her “personally, jointly and
severally liable for all obligations owed to Best
Western.” Id., ¶ 4; Doc. 1-2 at 18. The
membership agreement provides that “if a member [hotel]
resigns or is terminated, fees and dues for the remainder of
the fiscal year will become immediately due and
payable[.]” Doc. 1, ¶ 12.
March 2016, Plaintiff terminated its membership agreement
with American Hospitality Solution and Defendant. Doc. 1 at
8. In May 2016, Plaintiff notified Defendant of the account
balance and demanded payment, which at the time was $93,
514.45. Id.; Doc. 1-3 at 24-26. Defendant did not
pay, and Plaintiff filed its complaint in October 2016,
asserting breach of contract, open account, unjust
enrichment, and stated account. Doc. 1 at 9-12.
was properly served in this case (Doc. 8), failed to appear,
and was notified of Plaintiff's motion for entry of
default (Doc. 10). On November 8, 2016, default was entered
against Defendant. Doc. 11. Plaintiff has now filed a motion
for default judgment pursuant to Rule 55(b) of the Federal
Rules of Civil Procedure (Doc. 12) seeking $103, 481.13 in
unpaid fees, plus 1.5% interest per month from November 1,
2016 until judgment is entered. Doc. 12 at 2. Plaintiff seeks
$3, 723.21 in attorneys' fees and costs pursuant to the
membership agreement, A.R.S. §§ 12-341 and
12-341.01, and 15 U.S.C. § 1117. Id. Plaintiff
also seeks post-judgment interest on all amounts awarded
pursuant to 28 U.S.C. § 1961. Id.
Defendant's default has been properly entered pursuant to
Rule 55(a), the Court has discretion to grant default
judgment against Defendant under Rule 55(b). See Aldabe
v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). 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, (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. 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.
Grp., 559 F.2d 557, 560 (9th Cir. 1977); see
Fed. R. Civ. P. 8(d).
considered Plaintiff's motion, which addresses each
Eitel factor (Doc. 12 at 4-9), and having reviewed
the supporting affidavits and documents provided by Plaintiff
(Docs. 1-3 at 15-30, 12-1, 12-2, 13, 13-1), the Court
concludes that default judgment is appropriate. See,
e.g., Best W. Int'l, Inc. v. Universal
Hospitality, Inc., No. CV-08-91-PHX-DGC, 2008 WL
2003784, at *3 (D. Ariz. May 8, 2008).
Possible Prejudice to Plaintiff.
first Eitel factor weighs in favor of granting
default judgment. Plaintiff served Defendant four months ago.
Doc. 8. Defendant has not answered or otherwise responded to
the complaint. Doc. 19 at 1. If Plaintiff's motion for
default judgment is not granted, Plaintiff “will likely
be without other recourse for recovery.” PepsiCo,
Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1177 (C.D.
The Merits of the Claim and the Sufficiency of the
second and third Eitel factors favor a default
judgment where the complaint states a claim for relief.
See Cal. Sec. Cans, 238 F.Supp.2d at 1175;
Danning v. Lavine, 572 F.2d 1386, 1388-89 (9th Cir.
1978). Plaintiff alleges breach of contract based on
Defendant's failure to pay amounts due under the
membership agreement for services and supplies Plaintiff
provided. Doc. 12 at 5-6. Plaintiff contends that Defendant
agreed to pay interest of 1.5% per month. Id. at 6.
Plaintiff has ...