United States District Court, D. Arizona
HONORABLE STEVEN P. LOGAN UNITED STATES DISTRICT JUDGE
September 20, 2016, Best Western International, Inc. d/b/a
Best Western Hotels & Resorts filed a first amended
complaint against N3A Manufacturing, Inc. d/b/a Hotelure,
Inc. for breach of contract, breach of the covenant of good
faith and fair dealing, and unjust enrichment, claiming that
N3A failed to comply with the terms of the parties'
February 1, 2014 Endorsed Supplier Direct Order Agreement.
(Doc. 27.) On September 30, 2016, N3A filed an answer (Doc.
30) which subsequently was stricken pursuant to Rule 37(b) of
the Federal Rules of Civil Procedure. (Docs. 48, 52.) On
August 14, 2017, the Clerk of Court entered default. (Doc.
August 18, 2017, counsel for N3A filed a motion to withdraw,
which was denied. (Docs. 60, 63-65.) Shortly thereafter, Best
Western moved for default judgment pursuant to Rule 55(b) of
the Federal Rules of Civil Procedure. (Doc. 61.) In response,
on September 20, 2017, N3A submitted a letter through
non-counsel, asking for extension of time. (Doc. 66.) For the
reasons that follow, the request for an extension will be
denied and default judgment will be granted.
Motion for Extension of Time
requests an extension of time to respond to Best
Western's motion because counsel has “relieved
himself of the responsibilities of representing” N3A,
and requests additional time to find replacement counsel.
(Doc. 66.) As an initial matter, N3A's motion is improper
because current counsel has not in fact been withdrawn from
this case, and “[a] corporation may appear in federal
courts only through licensed counsel.” Rowland v.
Cal. Men's Colony, Unit II Men's Advisory
Council, 506 U.S. 194, 201-202 (1993). See also
D-Beam Ltd. Partnership v. Roller Derby Skates, Inc.,
366 F.3d 972, 973-74 (9th Cir. 2004) (“It is a
longstanding rule that [c]orporations and other
unincorporated associations must appear in court through an
attorney.” (internal quotation omitted)).
the Court finds that N3A has failed show that its failure to
timely respond to the motion for default judgment, or
otherwise take appropriate action is due to excusable
neglect. See Fed. R. Civ. P. 6(b)(1)(B);
Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253,
1261 (9th Cir. 2010) (setting out factors for evaluating
excusable neglect); Pioneer Inv. Servs. Co. v. Brunswick
Assocs. Ltd. P'ship, 507 U.S. 380, 395 (1993);
Briones v. Riviera Hotel & Casino, 116 F.3d 379,
381 (9th Cir.1997); Bateman v. U.S. Postal Serv.,
231 F.3d 1220 (9th Cir. 2000); Pincay v. Andrews,
389 F.3d 853 (9th Cir. 2004). To date, current counsel has
taken no action, and no notice of appearance by new counsel
has been filed. N3A has had ample opportunity to obtain
alternative representation and move to set aside the default
or otherwise defend against default judgment. Further, Best
Western would be prejudiced by any further extension given
the time that the case has been pending and the likelihood
that extending the timeline would only serve to delay and add
further expense before resolving this action. The Court has
no reason to believe that alternative counsel would bring
about a different result and set this action on course to be
adjudicated on its merits. In light of the undue delay in
filing the motion, the reason for the delay, and the
resulting prejudice, the Court concludes that the untimely
request for an extension will be denied.
Motion for Entry of Default Judgment
party's default has been entered, the district court has
discretion to grant default judgment. See Fed. R.
Civ. P. 55(b)(2); Aldabe v. Aldabe, 616 F.2d 1089,
1092 (9th Cir. 1980). Factors the court may consider 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 policy favoring a
decision on the merits. See Eitel v. McCool, 782
F.2d 1470, 1471-72 (9th Cir. 1986). In applying the
Eitel 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).
Possible Prejudice to Plaintiff
first Eitel factor weighs in favor of granting Best
Western's motion. N3A has repeatedly failed to timely
defend this action. If the motion for default judgment is not
granted, Best Western will likely be without other recourse
Merits of Plaintiff's Claims and the Sufficiency of the
second and third Eitel factors favor a default
judgment where the complaint sufficiently states a claim for
relief. See Danning v. Lavine, 572 F.2d 1386,
1388-89 (9th Cir. 1978). As outlined in Best Western's
Motion (Doc. 61), the Complaint (Doc. 1) shows that it has
stated valid causes of action against N3A.
Amount of Money at Stake
the fourth Eitel factor, the Court considers the
amount of money at stake in relation to the seriousness of
the N3A's conduct. The Court concludes that the nature ...