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JP Morgan Chase Bank NA v. U.S. Metal Buildings Corporation

United States District Court, D. Arizona

October 16, 2019

JPMorgan Chase Bank NA, Plaintiff,
v.
U.S. Metal Buildings Corporation, et al., Defendants.

          ORDER

          MICHAEL T. LIBURDI JUDGE

         Plaintiff JPMorgan Chase Bank NA moves for default judgment against Defendants U.S. Metal Buildings Corp. (“U.S. Metal”) and U.S. Building Systems Corp. (“U.S. Building”) pursuant to Fed.R.Civ.P. 55(b)(2). (Doc. 19.) Neither Defendant has filed a response. For the reasons stated below, Plaintiff's motion is granted.

         I. BACKGROUND

         This case arises out of Defendants' alleged breach of a lease agreement (the “Lease”) involving commercial real estate in Tempe, Arizona. (Doc. 1.) Plaintiff filed its Complaint on March 1, 2019.[1] (Id.) The Complaint states that on or about January 12, 2012, BREOF BNK 2 Southwest, LLC (“BREOF”) entered into the Lease, as landlord, with U.S. Building as tenant. On or about January 14, 2013, U.S. Building and U.S. Metal executed an “Assignment and Assumption of Lease and Consent to the Landlord, ” which transferred the tenant obligations to U.S. Metal but did not release U.S. Building from liability. (Id. ¶ 14-15.) The Lease was extended through July 31, 2018 (the “Amendment”). (Id. ¶ 18-19.) Plaintiff states that it is the successor-in-interest to BREOF in connection with the Lease. (Id. ¶ 20.) Plaintiff also states that Defendants failed to make any rent payments beginning August 1, 2016. (Id. ¶ 21.) The Complaint prays for relief in the form of late rent payments, reimbursement of rental incentives, liquidated damages, and attorneys' fees and costs. (Id. ¶ 24-25.)

         Defendants failed to file an answer, a motion to dismiss, or any other response to the Complaint.[2] Upon application (Doc. 14), the Clerk of the Court entered default against Defendants on June 19, 2019. (Doc. 15.) Plaintiff filed the pending motion on September 18, 2019. (Doc. 19.) Defendants have failed to respond.

         II. DISCUSSION

         A. Default Judgment

         Once a default has been entered and a defendant fails to move to set aside the default, the Court may enter a default judgment. Fed.R.Civ.P. 55(b)(2). Following an entry of default, the Complaint's factual allegations-other than those relating to the amount of damages-are taken as true. See Fair Housing of Marin. v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). The entry of default judgment is within the Court's discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980).

         In determining whether default judgment is appropriate, the Court considers 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 underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). The Court will address these factors in turn.

         1. Possible Prejudice to Plaintiff

         The first Eitel factor weighs in favor of granting the motion because Plaintiff will be prejudiced if default judgment is not entered. The record reflects that Plaintiff gave proper notice (Docs. 2, 11, 12), but Defendants have not responded to this action. If the motion 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. Cal. 2002).

         2. Merits of Plaintiff's Claim

         The second Eitel factor also weighs in favor of granting the motion. This factor requires a plaintiff to “state a claim on which the [plaintiff] may recover.” PepsiCo, Inc., 238 F.Supp.2d at 1175. Plaintiff has alleged that Defendants breached the underlying Lease. (Doc. 1.) To prevail on a breach of contract claim under Arizona law, “a plaintiff must show a contract, a breach of contract, and damages.” Best W. Int'l, Inc. v. Patel, 523 F.Supp.2d 979, 988 (D. Ariz. 2007) (citing Graham v. Asbury, 112 Ariz. 184, 185 (1975)). Based on the facts described above and in the Complaint, Plaintiff has pled a prima facia case that Defendants breached the Lease.

         3. Sufficiency ...


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