United States District Court, D. Hawaii
FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY
IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT ON PROOF
AS TO DEFENDANT WELLCARE DISABILITY, LLC
Richard L. Puglisi, United States Magistrate Judge
the Court is Plaintiff's Motion for Default Judgment on
Proof as to Wellcare Disability, LLC (“Motion”).
ECF No. 25. On December 4, 2018, the Court directed
supplemental briefing, which was filed on December 18, 2018.
ECF Nos. 27, 28.
Court found this matter 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. 26. After carefully reviewing the
pleadings and relevant legal authority, the Court FINDS and
RECOMMENDS that the district court GRANT IN PART AND DENY IN
PART Plaintiff's Motion.
Praphan Puapong, M.D. filed this action on December 29, 2017,
to recover unpaid wages for medical services that he rendered
on behalf of Defendant Wellcare Disability, LLC
(“Defendant Wellcare”) and Defendant Veterans
Evaluation Services. See ECF No. 1. Plaintiff
alleges that he entered into a written contract with
Defendants to provide medical services in April 2015 (the
“Contract”). Id. ¶ 10. The Contract
was effective on April 13, 2015, and expired on April 30,
2017. Id. After the Contract expired on April 30,
2017, Defendants continued to provide Plaintiff with patient
schedules and referred patients to Plaintiff. Id.
¶ 13. Beginning in June 2017, the paychecks Plaintiff
received from Defendant Wellcare as payment for his services
were returned due to insufficient funds. Id. ¶
14. Plaintiff contacted Bruce Cheek, President of Defendant
Wellcare, regarding the paycheck he received in June that was
returned due to insufficient funds and his continued
employment with Defendant Wellcare. Id. ¶ 15.
Mr. Cheek informed Plaintiff that he would issue another
check to him and that Plaintiff should continue providing
patient services for Defendants. Id. ¶ 16. On
September 12, 2017, Mr. Cheek advised Plaintiff in writing
(the “Termination Letter”) that his employment
agreement had been terminated because Defendant Wellcare
could no longer afford to stay in business and that every
effort would be made to pay his accrued fees from unpaid
receivables. Id. ¶ 17. After Plaintiff received
the Termination Letter, he contacted Defendants regarding his
unpaid fees but received no response. Id.
¶¶ 18, 19. In his Complaint, Plaintiff asserts
claims for breach of contract, quantum meruit, and fraud.
Id. ¶¶ 20-38.
filed a notice of dismissal as to Defendant Veterans
Evaluations Services on March 21, 2018. ECF No. 11. Plaintiff
filed a Waiver of Service signed by Mr. Cheek on March 16,
2018. ECF No. 16. On April 9, 2018, a “Response to
Complaint for Damages” was filed by Mr. Cheek
“representing Wellcare Disability, LLC as its former
owner.” ECF No. 17. In that Response, Mr. Cheek states
that Defendant Wellcare was licensed in Kentucky and was
dissolved in September 2017. Id. Further, Mr. Cheek
states that Plaintiff “is owed $17, 615.00 by Wellcare
Disability, LLC for clinic services ending in August
Court issued an Order to Show Cause on June 5, 2018. ECF No.
20. The Order to Show Cause explained that Defendant Wellcare
cannot represent itself in this proceeding, nor can its
owners, managers, members, or employees file papers in this
case on its behalf unless they are licensed attorneys.
Id. at 2. Further, the Court stated that Defendant
Wellcare must retain counsel if it wishes to defend against
this action. Id. The Court ordered Defendant
Wellcare to show cause, if any, why default should not be
entered against it for its failure to defend this action and
be represented by counsel. Id. Defendant Wellcare
did not appear at the show cause hearing or otherwise respond
to the Court's Order to Show Cause. See ECF No.
22. Accordingly, the Court directed the Clerk's Office to
enter default against Defendant Wellcare and directed
Plaintiff's counsel to file the appropriate motion for
default judgment. ECF No. 23. Default was entered against
Defendant Wellcare on July 17, 2018. ECF No. 23.
present Motion, Plaintiff asks the Court to enter default
judgment against Defendant Wellcare on all claims and to
award damages “between $75, 000 and $100, 000.”
See ECF No. 28-1 at 8-9.
judgment may be entered for the plaintiff if the defendant
has defaulted by failing to appear and the plaintiff's
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).
preliminary matter, this Court has an affirmative obligation
to determine whether or not it has subject matter
jurisdiction over this action and personal jurisdiction over
Defendant Wellcare. See In re Tuli, 172 F.3d 707,
712 (9th Cir. 1999)(“To avoid entering a default
judgment that can later be successfully attacked as void, a
court should determine whether it has the power, i.e., the
jurisdiction, to enter the judgment in the first
Subject Matter Jurisdiction
the Court has subject matter jurisdiction pursuant to 28
U.S.C. § 1332. Plaintiff is a resident of Hawaii;
Defendant Wellcare is a Kentucky limited liability company.
ECF No. 1 ¶¶ 3, 5. Plaintiff's Complaint seeks
damages that “exceed $75, 000.” Id. at
8. Accordingly, the Court has diversity jurisdiction over
this matter. See 28 U.S.C. § 1332.
jurisdiction is proper if it is consistent with Hawaii's
long-arm statute and it comports with due process. See
Boschetto v. Hansing, 539 F.3d 1011, 1021-22 (9th Cir.
2008). Because Hawaii's long-arm statute, Hawaii Revised
Statute § 634-35, reaches to the full extent permitted
by the United States Constitution, the Court need only
determine whether due process permits the exercise of
personal jurisdiction. Television Events & Mktg.,
Inc. v. Amcon Distrib. Co., 416 F.Supp.2d 948, 958 (D.
Haw. 2006) (citing Schwarzenegger v. Fred Martin Motor
Co., 374 F.3d 797, 800-01 (9th Cir. 2004)). For due
process to be satisfied, a non-resident defendant must have
“minimum contacts” with the forum state such that
the assertion of jurisdiction “does not offend
traditional notions of fair play and substantial
justice.” Pebble Beach Co. v. Caddy, 453 F.3d
1151, 1155 (9th Cir. 2006) (citing Int'l Shoe Co. v.
Wash., 326 U.S. 310, 315 (1945)). The Ninth Circuit
applies a three-part test to determine specific personal
jurisdiction: (a) did the defendant purposefully avail itself
of the privilege of conducting activities in the forum state;
(b) does the claim relate to the defendant's forum
related activities; and (c) is the exercise of jurisdiction
reasonable. See Boschetto, 539 F.3d at 1021 (citing
Schwarzenegger, 374 F.3d at 802).
purposeful availment requirement is satisfied if the
defendant “has taken deliberate action” toward
the forum state. Panavision Int'l L.P. v.
Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998) (citing
Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.
1995)). This requirement ensures that a nonresident defendant
will not be haled into court based upon “random,
fortuitous or attenuated” contacts with the forum
state. Id. (quoting Burger King Corp. V.
Rudzewicz, 471 U.S. 462, 475 (1985)). A defendant need
not have physical contacts with the forum, so long as its
efforts are “purposefully directed” toward forum
residents. Id. A defendant's efforts are
“purposefully directed” if the defendant (1)
committed an intentional act (2) expressly aimed at the forum
state that (3) caused harm that the defendant knew was likely
to be suffered in the forum state. See Bancroft &
Masters, Inc. v. Augusta Nat. Inc., 223 F.3d 1082, 1087
(9th Cir. 2000) (citing Calder v. Jones, 465 U.S.
taking all allegations as true, the Court finds that
Defendant Wellcare's efforts were purposefully directed
toward Hawaii residents. Defendant Wellcare's agent
approached Plaintiff, a resident of Hawaii, and solicited him
to enter into a written contract with Defendants. ECF No. 1
¶¶ 9-10. Further, Defendants continued to provide
Plaintiff with patient schedules and referred patients to
Plaintiff after his written contract expired. Id.
¶ 13. Defendant Wellcare's president also told
Plaintiff that he should continue providing patient services
for Defendants. Id. ¶ 16. These acts were
intentional and aimed at a resident of Hawaii. These acts
caused harm to Plaintiff who provided services, but did not
get paid by Defendants. Given these actions, Defendant
Wellcare knew that harm would have been suffered in Hawaii
where Plaintiff resides. Accordingly, the Court concludes
that Defendant Wellcare's contacts with Hawaii are
sufficient to show purposeful availment.
Claims Arise Out of Forum ...