United States District Court, D. Hawaii
FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY
IN PART PLAINTIFFS' APPLICATION OF ENTRY OF DEFAULT
JUDGMENT BY CLERK 
Richard L. Puglisi United States Magistrate Judge.
the Court is Plaintiffs' Application of Entry of Default
Judgment by Clerk, filed February 23, 2018. ECF No. 20.
Because Plaintiffs included a request for reasonable
attorneys' fees in their Application, the Court must
treat Plaintiffs' Application as a motion for default
judgment pursuant to Rule 55(b)(2). See Branded Online
Inc. v. Holden LLC, No. SACV150390DOCDFMX, 2016 WL
8849024, at *1 (C.D. Cal. Jan. 8, 2016) (denying request for
clerk to enter default judgment where the plaintiff sought
attorney's fees in connection with the default judgment);
Phillips 66 v. Grainer, No. 1:13cv1890LJOBAM, 2015
WL 3797396, at *2 (E.D. Cal. June 18, 2015) (holding that the
calculation of reasonable attorneys' fees is not a sum
certain calculation and rejecting clerk's entry of
default judgment). Plaintiffs filed a supplemental
declaration regarding attorneys' fees on March 16, 2018.
ECF No. 24. The Court found the Motion suitable for
disposition without a hearing pursuant to Rule 7.2(d) of the
Local Rules of Practice of the United States District Court
for the District of Hawaii. ECF No. 22. After careful
consideration of the Motion, the declarations, exhibits, and
the record established in this action, the Court FINDS AND
RECOMMENDS that the Motion be GRANTED IN PART and DENIED IN
filed this action against Defendant Kaanapali Tours, LLC
alleging breach of promissory note on September 28, 2017. ECF
No. 1. In their Complaint, Plaintiffs allege that Defendant
entered into a loan agreement with Plaintiffs on or about
December 15, 2010, in order to purchase a new vessel.
Id. ¶ 9. Defendant concurrently executed a
promissory note for $950, 000. Id. ¶ 10.
Defendant took possession of the new vessel, a 64-foot
catamaran named the Queen's Treasure, in May 2011.
Id. ¶ 11. On January 30, 2014, Defendant
executed a second promissory note in the amount of $1, 610,
000, with interest accruing at the rate of 1.75% and a
maturity date of December 31, 2022 (“Promissory
Note”), which replaced the prior promissory note issued
on December 15, 2010. Id. ¶ 13; ECF No. 1-4.
Promissory Note provides that Defendant will be in default if
Defendant “becomes unable, or admits in writing its
inability to pay its debts as they fall due.”
Id. ¶ 14. The Promissory Note also provides
that Defendant will be in default if Defendant “applies
for or consents to the appointment of a receiver, trustee, or
liquidator of itself, or of all or substantial part of its
assets.” Id. ¶ 15. In the event of a
default, pursuant to the Promissory Note, Plaintiffs had the
right to declare the entire outstanding principal balance and
any accrued but unpaid interest to be immediately due and
payable, without notice, “whereupon the same shall
become forthwith due and payable.” Id. ¶
early 2017 a dispute arose between the member-managers of
Defendant, Janice Nolan and Amy Sutherland, concerning the
operation of Defendant. Id. ¶ 17. Amy
Sutherland subsequently made a demand for the dissolution of
Defendant. Id. On September 18, 2017, Amy Sutherland
filed an action against Janice Nolan, the only other
member-manager of Defendant, in state court seeking
dissolution of Defendant and the appointment of a receiver.
Id. ¶¶ 20-21 ECF No. 1-5.
the terms of the Promissory Note, Defendant is in default
because it has applied for the appointment of a receiver of
all of its assets and is unable to pay its debts. ECF No. 1
¶ 24. Pursuant to the Promissory Note, Plaintiffs have
made a demand for the entire principal balance and any
accrued interest to be immediately due and payable, but have
not received payment or any response from Defendant.
to Rule 55(a) of the Federal Rules of Civil Procedure, the
Clerk entered default against Defendant on November 6, 2017.
ECF No. 14. Plaintiff then filed the instant Motion, seeking
default judgment against Defendant for $1, 346, 904.51, the
amount due on the Promissory Note including interest, and for
$6, 262.00 in attorneys' fees. ECF No. 20.
judgment may be entered against a party from whom affirmative
relief is sought and the claim is for a “sum certain or
for a sum which can by computation be made certain[.]”
Fed.R.Civ.P. 55(b)(1), (2). The granting or denial of a
motion for default judgment is within the discretion of the
court. Haw. Carpenters' Trust Funds v. Stone,
794 F.2d 508, 511-12 (9th Cir. 1986). Entry of default does
not entitle the non-defaulting party to a default judgment as
a matter of right. Valley Oak Credit Union v.
Villegas, 132 B.R. 742, 746 (9th Cir. 1991). Default
judgments are ordinarily disfavored, and cases should be
decided on their merits if reasonably possible. Eitel v.
McCool, 782 F.2d 1470, 1472 (9th Cir. 1986). The court
should consider the following factors in deciding whether to
grant a motion for default judgment:
(1) the possibility of prejudice to the moving party;
(2) the merits of the 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 ...