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Ferrari Financial Services, Inc. v. Yokoyama

United States District Court, D. Hawaii

March 18, 2019

FERRARI FINANCIAL SERVICES, INC., Plaintiff,
v.
JASON YOKOYAMA; SEN MING LIN a.k.a. SAM LIN; AUTO X-CHANGE, INC., ET AL., Defendants.

          FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFF FERRARI FINANCIAL SERVICES, INC.'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANTS SEN MING LIN A.K.A. SAM LIN AND AUTO X-CHANGE, INC. [1]

          RICHARD L. PUGLISI, UNITED STATES MAGISTRATE JUDGE.

         Before the Court is Plaintiff Ferrari Financial Service, Inc.'s Motion for Default Judgment Against Defendants Sen Ming Lin a.k.a. Sam Lin and Auto X-Change, Inc., filed February 11, 2019. ECF No. 44. The Court found the Motion suitable for disposition without a hearing pursuant to Local Rule 7.2(d). ECF No. 45. After careful consideration of the Motion and the record in this action, the Court FINDS AND RECOMMENDS that the Motion be GRANTED IN PART AND DENIED IN PART.

         BACKGROUND

         Plaintiff filed this action against Defendants alleging various causes of action related to the purchase and financing of a 2014 Lamborghini Gallardo in 2015 by Defendant Jason Yokoyama. ECF No. 11. In the First Amended Complaint, Plaintiff alleges that it entered into a contract in the amount of $168, 417.78 with Defendant Yokoyama to finance the vehicle purchase (the “Contract”). Id. ¶¶ 10, 15. Plaintiff alleges Defendant Yokoyama granted Plaintiff a security interest in the vehicle to secure repayment. Id. ¶ 12. Plaintiff alleges that if Defendant Yokoyama fails to make payments under the Contract, the Contract allows Plaintiff to take possession of and to sell the vehicle. Id. ¶ 14. Plaintiff alleges that Defendant Yokoyama is in default under the Contract because he failed to make payments after January 2018. Id. ¶ 16.

         Plaintiff alleges that Defendant Yokoyama transferred possession of the vehicle to Defendant Auto X-Change, Inc. and/or Defendant Sen Ming Lin pursuant to an agreement. Id. ¶ 21. Plaintiff alleges that Defendant Auto X-Change and/or Defendant Lin and/or Defendant Yokoyama remain in possession of the vehicle. Id. ¶¶ 22, 27, 38. Plaintiff alleges that it has demanded that Defendant Yokoyama, Defendant Auto X-Change, and Defendant Lin deliver possession of the vehicle to Plaintiff, but Defendants have refused. Id. 36-37, 39-40.

         Plaintiff asserts claims for breach of contract and money lent against only Defendant Yokoyama. Id. ¶¶ 10-19, 43-46. Plaintiff asserts claims for replevin and conversion against all Defendants. Id. ¶¶ 20-42.

         Defendant Yokoyama filed his Answer to the First Amended Complaint on May 30, 2018. ECF No. 16. In his Answer, he denied the allegations related to all of the claims asserted against him, including the claims for replevin and conversion. See ECF No. 16 ¶¶ 1, 4, 6-9. Pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, the Clerk entered default against Defendant Auto X-Change and Defendant Lin on June 27, 2018, and July 13, 2018. ECF No. 19, 22.

         On August 3, 2018, Plaintiff filed its first motion seeking default judgment against Defendant Auto X-Change and Defendant Lin. ECF No. 26. The Court denied Plaintiff's first motion for default judgment without prejudice reasoning that default judgment cannot be entered against Defendant Auto-X-Change and Defendant Lin while the same claims and a breach of contract claim against Defendant Yokoyama regarding the same vehicle remained pending. See ECF Nos. 35, 36.

         Based on Plaintiff's filings, Plaintiff repossessed the Vehicle on August 13, 2018. ECF No. 44-1 at 13. Thereafter, Plaintiff and Defendant Yokoyama entered into a Stipulated Judgment against Defendant Yokoyama in the amount of $149, 914.76, plus post-judgment interest, which was approved by the Court on September 26, 2018. ECF No. 37.

         In the present Motion, Plaintiff asks the Court to grant default judgment in favor of Plaintiff against Defendant Auto X-Change and Defendant Lin and to enter judgment awarding Plaintiff $7, 397.01 in damages, $11, 584.20 in attorneys' fees, $257.81 in costs, and prejudgment interest. ECF No. 44-1.

         ANALYSIS

         Default 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). 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 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.

Id. at 1471-72.

         On default “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)). The allegations in the complaint regarding liability are deemed true, but the plaintiff must establish the relief to which it is entitled. Fair Hous. ofMarin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Also, ‚Äúnecessary facts not contained in the pleadings, and claims which are legally insufficient, are not ...


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