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Alaka'i Mechanical Corp. v. Rma Land Construction, Inc.

United States District Court, D. Hawaii

January 15, 2016

ALAKA'I MECHANICAL CORPORATION, Plaintiff,
v.
RMA LAND CONSTRUCTION, INC. - ECC A JOINT VENTURE; RMA LAND CONSTRUCTION, INC.; and ENVIRONMENTAL CHEMICAL CORPORATION, Defendants.

ORDER REFERRING THE MAGISTRATE JUDGE’S FINDINGS AND RECOMMENDATION BACK TO THE MAGISTRATE JUDGE (ECF NO. 51)

HELEN GILLMOR UNITED STATES DISTRICT JUDGE

Plaintiff Alakai Mechanical Corporation has filed a collection action against a joint venture. The joint venture is comprised of two entities. Only one of the two entities has appeared before the Court.

The Motion before the Court moves for default judgment against the non-appearing party, RMA Land Construction, Inc. The Magistrate Judge has filed a Findings and Recommendation addressing the default judgment motion. (ECF No. 51). No party has filed an objection to the Magistrate Judge’s Findings and Recommendation.

The Court REFERS the December 8, 2015 Findings and Recommendation (ECF No. 51) back to the Magistrate Judge for consideration of the issues raised herein.

BACKGROUND

Defendants RMA Land Construction, Inc. (“RMA”) and Environmental Chemical Corporation (“ECC”) are partners in a joint venture, Defendant RMA Land Construction, Inc. - ECC (A Joint Venture) (“Joint Venture”). (Morgan Decl. at ¶ 2, ECF No. 42-2).

On March 10, 2011, Plaintiff Alakai Mechanical Corporation (“Plaintiff”) entered into a contract with Defendant Joint Venture for construction-related work at Ford Island, Hawaii. (Morgan Decl. at ¶ 4, ECF No. 42-2; ECF No. 7-2). Plaintiff alleges that it performed its contractual duties, but the Joint Venture has failed to pay an invoiced amount of $102, 630.80. (Amended Complaint at ¶¶ 14-15, ECF No. 7; Morgan Decl. at ¶¶ 6-7, ECF No. 42-2).

On March 24, 2014, Plaintiff filed suit against the Joint Venture and the two partners which formed the Joint Venture, RMA and ECC. (ECF No. 7). ECC and the Joint Venture have appeared before the Court. RMA has not appeared.

On June 26, 2014, ECC and the Joint Venture asked Plaintiff to dismiss the suit and agree to an arbitration. (Chung Decl. at ¶¶3-4, ECF No. 8-1). On November 14, 2014, Plaintiff, ECC, and the Joint Venture stipulated to a stay in the case proceedings. (Stipulation to Stay Proceedings Pending Arbitration; Order at ¶ 1, ECF No. 35). The stay of proceedings was requested to allow the parties to resolve Plaintiff’s claims through arbitration. (Stipulation to Stay Proceedings Pending Arbitration; Order at ¶ 1, ECF No. 35).

On February 6, 2015, Plaintiff entered into a settlement agreement with ECC. (ECF No. 42-6). The settlement agreement required ECC to pay Plaintiff $102, 630.80 in three installments. (Settlement Agreement. at ¶ 1, ECF No. 42-6). As consideration for these payments, Plaintiff agreed to release ECC from any known claims relating to the collection action. (ECF No. 42-6). The settlement agreement did not involve RMA or the Joint Venture. (Settlement Agreement at ¶¶ 7; 19, ECF No. 42-6).

On April 6, 2015, pursuant to a stipulated request by Plaintiff, ECC, and the Joint Venture, the Magistrate Judge lifted the stay of proceedings. (ECF No. 39).

On August 31, 2015, Plaintiff filed a motion for default judgment as to Defendant RMA. (ECF No. 42).

STANDARD OF REVIEW

Federal law affords district courts with considerable discretion as to the treatment of unchallenged magistrate findings and recommendations. Thomas v. Arn, 474 U.S. 140, 149 (1985). The district court “may accept, reject, or modify, in whole or in part, ” the magistrate judge’s findings and recommendation. 28 U.S.C. § 636(b)(1)(C). This broad grant of review recognizes that the district court, not the magistrate judge, holds the duty of making a final determination of the facts and the law. Campbell v. U.S. Dist. Court for N. Dist. of Cal., 501 F.2d 196, 206 (9th Cir. 1974).

The district court may accept unobjected portions of a magistrate judge's findings and recommendation if it is satisfied that there is no clear error on the face of the record. Stow v. Murashige, 288 F.Supp.2d 1122, 1127 (D. Haw. 2003); Abordo v. State of Hawaii, 938 F.Supp. 656, 658 (D. Haw. 1996).

ANALYSIS

The Magistrate Judge’s Findings and Recommendation (ECF No. 51) addresses Plaintiff Alakai Mechanical Corporation’s (“Plaintiff”) Renewed Motion for Default Judgment against RMA Land Construction, Inc. (“RMA”) (ECF No. 42), and Supplemental Memorandum in Support (ECF No. 47) (collectively, “Plaintiff’s Motion”). Plaintiff is seeking to recover breach of contract damages, attorneys’ fees and costs, and prejudgment interest from RMA. (ECF Nos. 42; 47).

Plaintiff’s Motion contained a proposed Findings and Recommendation that was adopted by the Magistrate Judge. The Motion and the Findings and Recommendation both state that default judgment is warranted in this case, as RMA “has failed to answer, appear or otherwise defend, and the time to otherwise move or plead has expired and has not been extended in this action.” (Renewed Motion for Default Jdgmt. at p. 2, ECF No. 42; F & R at ¶ 10, ECF No. 51).

The Magistrate Judge’s Findings and Recommendation recommends a default judgment amount of $62, 687.23. (F & R at ¶¶ 13-14, ECF No. 51). In support of this amount, the Findings and Recommendation attaches an exhibit provided by Plaintiff. Exhibit A is a table that explains the methodology applied in the default judgment calculation. (ECF No. 51-1). An examination of the table reveals that the recommended default judgment amount includes the principal damage figure Plaintiff sued upon, Plaintiff’s attorneys’ fees and costs, and prejudgment interest on those amounts. (ECF Nos. 47-1; 51-1).

Default Judgment

The Federal Rules of Civil Procedure allow for entry of default or default judgment when a party against whom affirmative relief is sought fails to plead or otherwise defend against the claim. Fed.R.Civ.P. 55. A defendant's default does not automatically entitle the plaintiff to a court-ordered judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The ...


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