Dameron Hospital Association v. Blue Shield of CA Life and Health Insurance Co. et al, No. 2:2007cv01818 - Document 341 (E.D. Cal. 2009)
Court Description: ORDER AND FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Dale A. Drozd on 9/11/09: ORDERING that within five days after these findings and recommendations are filed, plaintiff shall serve a copy of the findings and recommendations on each de faulted defendant by mail at the address where service of process was effected, or at any more recent address known to plaintiff, and shall file a proof of such service. RECOMMENDING that: Plaintiff's motion for default judgment against defendan t David Martinez be granted and judgment be entered against David Martinez and in favor of Dameron Hospital 314 . Plaintiff's motion for default judgment against defendant Margaret Lee be granted and judgment be entered against Margaret Lee an d in favor of Dameron Hospital 315 . Plaintiff's motion for default judgment against defendant Jayson Untalan be granted and judgment be entered against Jayson Untalan and in favor of Dameron Hospital 317 . Plaintiff's motion for default judgment against defendant Zarghoona Karimi be granted and judgment be entered against Zarghoona Karimi and in favor of Dameron Hospital 318 . This case be closed. Objections to F&R due within ten days. (Kaminski, H)
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Dameron Hospital Association v. Blue Shield of CA Life and Health Insurance Co. et al Doc. 341 1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 DAMERON HOSPITAL ASSOCIATION, Plaintiff, 11 12 13 14 15 16 No. CIV S-07-1818 GEB DAD v. ORDER AND PREMERA BLUE CROSS, et al., Defendants. FINDINGS AND RECOMMENDATIONS / This matter came before the court on February 6, 2009, for hearing of plaintiff’s 17 motions for default judgment against defendants David Martinez, Margaret Lee, Jayson Untalan, 18 and Zarghoona Karimi. (Doc. Nos. 314, 315, 317 & 318). Gregory M. Hatton and John A. 19 McMahon appeared on behalf of plaintiff. No appearance was made by or for the defendants. 20 Upon hearing argument, the court requested a written report concerning the status 21 of defendants and a supplemental brief addressing specific matters. Plaintiff filed a status report 22 on February 10, 2009, and a supplemental brief on February 13, 2009, whereupon the four 23 motions were submitted for decision. After hearing oral argument and after considering all 24 written materials submitted in connection with plaintiff’s motions, for the reasons set forth 25 below, the undersigned recommends that the motions be granted and that default judgment be 26 entered against defendants Martinez, Lee, Untalan, and Karimi. 1 Dockets.Justia.com 1 2 BACKGROUND Plaintiff Dameron Hospital Association, a California non-profit association, is a 3 hospital located in Stockton, California. Defendants David Martinez, Margaret Lee, Jayson 4 Untalan, and Zarghoona Karimi are patients who received hospital care at Dameron Hospital. 5 Each defendant was treated as an “out of network” patient and, as such, each was responsible for 6 satisfying all of the hospital’s unpaid billed charges for hospital care rendered to him or her. 7 Despite the fact that each defendant received payment of some amount from his or her health 8 insurer for the hospital care rendered by Dameron Hospital, each defendant failed to remit any of 9 those funds to Dameron Hospital and otherwise failed to pay his or her hospital bill. 10 Plaintiff initially brought this action against numerous corporate defendants for 11 the purpose of collecting the unpaid hospital bills for services provided to more than twenty-five 12 patients. The case was filed in the San Joaquin County Superior Court on June 22, 2007, and 13 was removed to the United States District Court for the Eastern District of California on August 14 31, 2007. Removal was grounded on jurisdiction arising under ERISA. By a First Amended 15 Complaint filed on November 20, 2007 (Doc. No. 47), plaintiff joined additional defendants, 16 including defendants David Martinez and Margaret Lee. Pursuant to the parties’ stipulation and 17 the court’s order filed April 11, 2008 , plaintiff filed a Second Amended Complaint on May 1, 18 2008 (Doc. No. 177). Once again, new defendants were joined, including defendants Jason 19 Untalan and Zarghoona Karimi. As the litigation proceeded, plaintiff reached settlement 20 agreements with many defendants and those defendants were voluntarily dismissed. As of May 21 12, 2009, defendants Martinez, Lee, Untalan, and Karimi were the sole remaining defendants. 22 Although service of process was effected on defendants Martinez, Lee, Untalan, 23 and Karimi, each defendant failed to appear in this action. On October 27, 2008, plaintiff 24 requested entry of default as to defendants Untalan and Karimi. (Doc. Nos. 286 & 287.) The 25 Clerk entered default against defendants Untalan and Karimi on October 28, 2008. (Doc. Nos. 26 288 & 289.) On October 28, 2008, plaintiff requested entry of default as to defendants Lee and 2 1 Martinez. (Doc. Nos. 291 & 292.) The Clerk entered default against defendant Lee on October 2 29, 2008 (Doc. No. 294) and against defendant Martinez on October 30, 2008 (Doc. No. 296). 3 On December 31, 2008, plaintiff filed its motions for default judgment against defendants 4 Martinez, Lee, Untalan, and Karimi. (Doc. Nos. 314, 315, 317 & 318.) Each motion includes 5 proof of service on the defendant. 6 7 LEGAL STANDARDS Federal Rule of Civil Procedure 55(b)(2) governs applications to the court for 8 entry of default judgment. Upon entry of default, the complaint’s factual allegations regarding 9 liability are taken as true, while allegations regarding the amount of damages must be proven. 10 Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th Cir. 1983) 11 (citing Pope v. United States, 323 U.S. 1 (1944); Geddes v. United Fin. Group, 559 F.2d 557 (9th 12 Cir. 1977)); see also TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). 13 Where damages are liquidated, i.e., capable of ascertainment from definite figures 14 contained in documentary evidence or in detailed affidavits, judgment by default may be entered 15 without a damages hearing. Dundee, 722 F.2d at 1323. Unliquidated and punitive damages, 16 however, require “proving up” at an evidentiary hearing or through other means. Dundee, 722 17 F.2d at 1323-24; see also James v. Frame, 6 F.3d 307, 310-11 (5th Cir. 1993). 18 Granting or denying default judgment is within the court’s sound discretion. 19 Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986). The court is free to consider a variety 20 of factors in exercising its discretion. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 21 Among the factors that may be considered by the court are 22 23 24 (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. 25 26 Eitel, 782 F.2d at 1471-72 (citing 6 Moore’s Federal Practice ¶ 55-05[2], at 55-24 to 55-26). 3 1 2 3 ANALYSIS I. Whether Default Judgment Should Be Entered The factual allegations of plaintiff’s second amended complaint, taken as true 4 pursuant to the entry of defaults against defendants Martinez, Lee, Untalan, and Karimi, establish 5 the following circumstances: (1) defendant Martinez entered into a valid, enforceable, and 6 binding written Conditions of Admission contract with plaintiff on December 1, 2005, was 7 admitted to Dameron Hospital for medical care on December 2, 2005, was discharged on 8 December 5, 2005, and incurred charges of $43,409, which is the outstanding balance on his 9 account; (2) defendant Lee entered into a valid, enforceable, and binding written Conditions of 10 Admission contract with plaintiff on July 24, 2007, was admitted to Dameron Hospital for 11 medical care on July 25, 2007, was discharged on the same day, and incurred charges of $6,570, 12 which is the outstanding balance on her account; (3) defendant Untalan entered into a valid, 13 enforceable, and binding written Conditions of Admission contract with plaintiff on July 12, 14 2007, was admitted to Dameron Hospital for medical care on July 16, 2007, was discharged on 15 the same day, and incurred charges of $36, 427, which is the outstanding balance on his account; 16 (4) defendant Karimi entered into a valid, enforceable, and binding written Conditions of 17 Admission contract with plaintiff on September 22, 2007, was admitted to Dameron Hospital for 18 medical care on September 22, 2007, was discharged on September 24, 2007, incurred charges of 19 $12,798, paid $598 to plaintiff, leaving an outstanding balance of $12,200 on her account; (5) 20 under the parties’ contracts, plaintiff agreed to provide medical care, and each defendant agreed 21 to pay plaintiff the billed charges, less any amount paid to plaintiff by the defendant’s health 22 insurer; (6) plaintiff performed all of its obligations under the contracts; (7) plaintiff sent each 23 defendant a hospital bill after the defendant’s health insurer processed payment on the 24 defendant’s claim; (8) each defendant breached the contract by refusing and failing to pay the 25 billed charges; (9) plaintiff has been damaged by each defendant’s breach of contract in the sum 26 of the full billed charges minus any amounts for which plaintiff has been compensated by the 4 1 defendant or the defendant’s health insurer; (10) plaintiff is entitled to an award of attorney fees 2 and costs pursuant to the terms of the Conditions of Admission contracts; and (11) plaintiff is 3 entitled to an award of prejudgment interest. (Pl.’s Second Amended Compl. ¶¶ 34-54, 83-96, 4 117, 120, 124, 193-99 & Exs. A & B.) 5 Plaintiff’s second amended complaint and summons were personally served on 6 defendant Karimi on June 7, 2008 (Doc. No. 233), on defendant Untalan on June 9, 2008 (Doc. 7 No. 231), and on defendant Lee on August 29, 2008 (Doc. No. 266). The undersigned finds that 8 these three defendants were properly served with the second amended complaint and that the 9 Clerk properly entered the default of these defendants. 10 Plaintiff’s second amended complaint and summons were served several times on 11 defendant Martinez by mail sent to his last known address, which was the address where he had 12 been personally served with plaintiff’s first amended complaint and summons on February 25, 13 2008. (Pl.’s Request for Entry of Default of Def’t Martinez (Doc. No. 292), Decl. of John A. 14 McMahon in Supp. of Request ¶ 5 & Exs. A & B.) Plaintiff has presented evidence that diligent 15 efforts were made to serve the second amended complaint and summons on defendant Martinez 16 by personal delivery, and extensive efforts were made to locate a new address for plaintiff. (Id.) 17 Federal Rule of Civil Procedure 5, which governs the service and filing of 18 pleadings and other papers, provides that “[n]o service is required on a party who is in default for 19 failing to appear,” except that “a pleading that asserts a new claim for relief against such a party 20 must be served on that party under Rule 4.” Fed. R. Civ. P. 5(a)(2). Plaintiff’s first amended 21 complaint was personally served on defendant Martinez on February 25, 2008, under Rule 4. 22 Defendant Martinez did not appear and defend against the first amended complaint and was in 23 default when plaintiff’s second amended complaint was filed on May 1, 2008. A comparison of 24 the pleadings reflects that the same facts are alleged against defendant Martinez in both of them. 25 (Compare First Amended Compl. (Doc. No. 47) ¶¶ 39-49 & 122 with Second Amended Compl. 26 (Doc. No. 177) ¶¶ 34-41 & 117.) The breach of contract claim at issue in the pending motion for 5 1 default judgment is identically alleged against plan enrollees, including defendant Martinez, in 2 both pleadings, as the seventh cause of action in the first amended complaint and as the eighth 3 cause of action in the second amended complaint, and the relief sought on that cause of action is 4 the same in both pleadings. (Compare First Amended Compl. ¶¶ 183-191 & 198 with Second 5 Amended Compl. ¶¶ 191-99 & 207.) 6 Plaintiff’s second amended complaint superseded his first amended complaint. 7 See Loux v. Rhay, 375 F.2d 55, 57 (9th Cir. 1967) (“The amended complaint supersedes the 8 original, the latter being treated thereafter as non-existent.”); Bullen v. De Bretteville, 239 F.2d 9 824 (9th Cir. 1956) (“It is hornbook law that an amended pleading supersedes the original, the 10 latter being treated thereafter as non-existent.”). Plaintiff’s service of the second amended 11 complaint on defendant Martinez pursuant to Rule 5 constitutes sufficient service because the 12 defendant had been personally served with the first amended complaint and was in default with 13 respect to that pleading. The second amended complaint does not assert a new claim for relief 14 against defendant Martinez such that he must be served under Rule 4. 15 Accordingly, the undersigned finds that all four defendants were properly served 16 with plaintiff’s second amended complaint, and their defaults were properly entered by the Clerk 17 of the Court. Defendants were also served with plaintiff’s requests for entry of default and 18 plaintiff’s motions for default judgment. Despite being served with all papers filed in connection 19 with plaintiff’s requests for entry of default and its motions for default judgment, defendants 20 Martinez, Lee, Untalan, and Karimi failed to respond to plaintiff’s second amended complaint, to 21 plaintiff’s requests for entry of default, or to plaintiff’s motions for default judgment. Nor did 22 any defendant appear at the hearing on plaintiff’s motions. The four defendants have failed to 23 participate in this action in any way. 24 After weighing the Eitel factors, the undersigned finds that the material 25 allegations of the second amended complaint support plaintiff’s claims. Plaintiff will be 26 prejudiced if default judgment is denied as to these defendants because plaintiff has already 6 1 litigated claims against defendants’ insurers, employee benefit plans, and/or benefit plan 2 sponsors and has entered into settlements with those parties where possible. It is not surprising 3 that settlements were not possible in all cases, in that the defendants’ insurers had already 4 provided the individual defendants with funds for payment of their hospital bills. Plaintiff has no 5 other recourse for recovery of the damages suffered due to the four defendants’ failure to pay 6 their hospital bills. 7 In light of the entry of default against the four defendants, there is no apparent 8 possibility of a dispute concerning the material facts underlying the action. Nor is there any 9 indication that any defendant’s default resulted from excusable neglect, as each defendant was 10 properly served with one or more of plaintiff’s pleadings as well as with plaintiff’s request for 11 entry of default and motion for default judgment. Defendants had ample notice of plaintiff’s 12 intent to pursue judgment against them. 13 Although public policy generally favors the resolution of a case on its merits, each 14 defendant’s failure to appear and defend against plaintiff’s claims has made a decision on the 15 merits impossible in this case. Because most of the Eitel factors weigh in plaintiff’s favor, the 16 undersigned, while recognizing the public policy favoring decisions on the merits, will 17 recommend that default judgment be entered against the four defaulted defendants. 18 II. Terms of Judgments to Be Entered 19 After determining that entry of default judgment is warranted, the court must next 20 determine the terms of the judgment. Plaintiff’s supplemental brief (Doc. No. 336) has clarified 21 plaintiff’s calculation of damages, interest, costs, and fees sought. Upon consideration of all of 22 plaintiff’s briefing, the undersigned will recommend that damages and pre-judgment interest be 23 awarded to plaintiff in the amounts requested in plaintiff’s supplemental brief. 24 Plaintiff seeks an award of costs in the amount of $970 and attorney fees in the 25 amount of $24,856.00 from each of the four defendants. The request is grounded on plaintiff’s 26 cause of action against individual enrollees/patients for breach of contract. The second amended 7 1 complaint includes the allegation that plaintiff “is entitled to an award of attorney fees and costs 2 pursuant to the contract stated in the Conditions of Admission.” (Pl.’s Second Amended Compl. 3 ¶ 198.) Plaintiff’s prayer for relief includes a request, specifically with regard to the cause of 4 action for breach of contract by enrollees/patients, for “an award of attorneys fees per contract” 5 and “costs of suit and other further relief as the court deems just.” (Id. ¶ 207.) Each defendant’s 6 Conditions of Admission contract provides as follows, under the heading “Financial Agreement”: 7 All delinquent accounts will be charged a finance charge of 10% per annum. Should the account be referred to an attorney or collection agency for collection the undersigned shall pay actual attorney’s fees and collection expenses. 8 9 10 (Pl.’s Mot. for Default J. Against Def’t David Martinez (Doc. No. 314), Decl. of Scott 11 Bernasconi, Ex. 3 at 1.) 12 The undersigned is mindful that the defendants were served with plaintiff’s 13 motions for default judgment and were placed on notice of the amounts sought by plaintiff for 14 attorney fees and costs. However, granting or denying default judgment is within the court’s 15 sound discretion, and one of the factors the court is free to consider in exercising its discretion is 16 the sum of money at stake. The undersigned finds that the amounts sought for attorney fees and 17 costs exceed the actual expenses contemplated by the contracts at issue. 18 The declarations of Scott Bernasconi in support of the default judgment motions, 19 one of which is cited supra, indicate that plaintiff’s total costs in this action are “well in excess of 20 $15,000” and that plaintiff has incurred “$300,000 - plus in legal fees” in this case. (Bernasconi 21 Decl. ¶¶ 18-19.) These amounts are not documented in plaintiff’s motion, but plaintiff seeks to 22 obtain $3,880 (four times $970), i.e., approximately 26% of the total costs incurred, and $99,424 23 (four times $24,856), i.e., approximately 33% of the total legal fees, from four enrollee/patient 24 defendants in a case that was commenced on June 22, 2007 and ultimately involved over sixty 25 defendants, according to the court’s docket. 26 ///// 8 1 No individuals were named as defendants in plaintiff’s original complaint. 2 (Notice of Removal of Action by Def’t Cal. Physicians’ Svc. dba Blue Shield of Ca. (Doc. No. 3 1), Ex. B.) Although plaintiff’s state court complaint named defendants DOES 1-100, the 4 pleading identified such defendants as unknown parties responsible in some manner for the 5 wrongful acts and damages alleged by plaintiff. (Id., Ex. B ¶ 13.) Obviously, the patients who 6 had not paid their bills were not unknown to plaintiff, which suggests that plaintiff did not 7 initially contemplate joining enrollees/patients as defendants. That inference is supported by 8 removing defendant’s summary of plaintiff’s state court complaint: 9 Plaintiff alleges that it at one time contracted with Blue Shield of California for processing and payment of Plaintiff’s hospital charges within the Blue Shield network. It also alleges that it requires all of its patients to sign a Conditions of Admission Agreement that includes the written assignment of the patient’s health plan benefits to Dameron. Plaintiff alleges that after cancellation of the contract with Blue Shield of California, all Defendants were required to pay the full billed rate rather than the previously contracted, allegedly discounted rate. Plaintiff furthermore alleges that Defendants have retaliated against Plaintiff for its refusal to contract with Blue Shield of California by paying Plaintiff’s claims to the health plan members who incurred the charges rather than to Plaintiff directly, and/or by paying less than the full amount billed. 10 11 12 13 14 15 16 17 Id. at 2-3 (citations omitted). Defendants Martinez and Lee, along with other “plan 18 enrollees/patients,” were joined as defendants in plaintiff’s first amended complaint, filed 19 November 20, 2007. Defendant Martinez was personally served with the first amended 20 complaint on February 25, 2008, and defendant Lee was served by substituted service on 21 February 27, 2008. Defendants Untalan and Karimi, along with other “plan enrollees/patients,” 22 were joined as defendants in plaintiff’s second amended complaint, filed May 1, 2008. 23 Defendants Karimi and Untalan were personally served with the second amended complaint on 24 June 7, 2008, and June 9, 2008, respectively. 25 ///// 26 ///// 9 1 A. Costs 2 The amount of $970 requested for costs from each of the four defendants consists 3 of $320 for the filing fee, $100 for copies, $50 for mailings (including overnight delivery), $400 4 for service of process (the first and second amended complaints), and $100 for a share of the 5 travel expenses (airplane, rental car, and lodging) incurred by the attorneys who appeared at the 6 hearing. 7 Plaintiff paid a single filing fee of $320 in state court but seeks to charge each of 8 the four defaulted defendants for the full amount of that fee. An award of $320 for the filing fee 9 against each defendant does not constitute an “actual” collection expense. The undersigned will 10 recommend that each defendant be assessed a share of the fee based on the total number of 11 defendants in the case. One sixtieth of $320 is approximately $5. 12 A total of $400 for copying and mailing expenses appears to be excessive for four 13 defendants who were not involved in the case from the beginning and were not served with all 14 documents in the case. It is unlikely that these defendants were served with any document by 15 overnight delivery. In the absence of documentation that would enable the court to determine 16 actual expenses or an appropriate amount attributable to each defendant, the undersigned will 17 recommend no award of costs for copying and mailing expenses. 18 The request for $400 for service of process as to each of the four defendants is 19 plainly excessive since two defendants were served only with the second amended complaint. 20 Moreover, the record contains documentation of the actual amounts charged for service of 21 process. The proofs of service filed by plaintiff reflect that the fees for service of process on 22 defendant Martinez were $137.50 for the first amended complaint and $175 for the second 23 amended complaint; the fees for service of process on defendant Lee were $137.50 for the first 24 amended complaint and $175 for the second amended complaint; the fees for service of process 25 on defendant Karimi were $150 for the second amended complaint; the fees for service of 26 process on defendant Untalan were $150 for the second amended complaint. (Doc. Nos. 148, 10 1 153, 231, 233, 266.) The undersigned will recommend that plaintiff be awarded “actual 2 collection expenses” for service of process as follows: $312.50 for defendant Martinez; $312.50 3 for defendant Lee; $150 for defendant Karimi; and $150 for defendant Untalan. 4 With respect to travel expenses, plaintiff seeks $100 from each defendant as one 5 sixth of the estimated expense of $600 for airfare, rental car, and lodging.1 The court has not 6 been provided with documentation of the actual expense. Two attorneys made personal 7 appearances at the hearing on the pending motion. In light of the fact that counsel were advised 8 by chambers staff prior to the hearing that telephonic appearance was available, the undersigned 9 will recommend that no award be made for travel expenses. 10 The undersigned will recommend that the total award of costs consist of the actual 11 fees incurred for service of process on each defaulted defendant and $5 for a portion of the filing 12 fee, as follows: 13 David Martinez Margaret Lee Zarghoona Karimi Jayson Untalan 14 $317.50 ($5.00 for filing fee and $312.50 for service of process) $317.50 ($5.00 for filing fee and $312.50 for service of process) $155.00 ($5.00 for filing fee and $150.00 for service of process) $155.00 ($5.00 for filing fee and $150.00 for service of process) 15 B. Attorney Fees 16 As noted above, plaintiff seeks approximately a third of its total legal fees from 17 18 the four defaulted defendants. As set forth supra, plaintiff seeks attorney fees pursuant to the 19 contract, and the contract authorizes only “actual attorney’s fees.” Plaintiff’s four motions for default judgment were not supported by memoranda 20 21 of points and authorities, and plaintiff’s supplemental brief does not cite legal authority that 22 supports an award of attorney fees far in excess of an individual defendant’s proportionate share 23 of plaintiff’s legal fees under a contract that authorizes “actual attorney’s fees.” 24 ///// 25 1 26 Plaintiff initially filed six motions for default judgment but entered into agreements with two defendants and therefore proceeded on only four of the motions. 11 1 In declarations filed in support of plaintiff’s motions, one of plaintiff’s attorneys 2 concedes that this lawsuit involved numerous defendants and claims, but he asserts that the 3 attorney fees requested is a reasonable amount because he reviewed all of the attorney fee bills 4 and omitted entries that did not directly involve the individual patient defendants, the pleadings, 5 or the trial setting schedule, arriving at a figure of $149,136.32 as the attorney fees “directly 6 associated with the individual patients.” (Pl.’s Mot. for Default J. Against Def’t David Martinez 7 (Doc. No. 314), Decl. of John A. McMahon ¶¶ 16, 20.) This amount was split among the six 8 defendants against whom motions for default judgment had been filed, for a proposed award of 9 $24,856 in attorney fees against each defaulted defendant. (Id., McMahon Decl. ¶ 20.) Counsel argues that the proposed amount “is reasonable because it focuses only 10 11 on fees and costs that are related to Dameron’s enforcement of this lawsuit that are relevant to 12 Mr. Martinez, and only for his share of the fees with respect to the remaining defaulted patient 13 defendants.” (Id., McMahon Decl. ¶ 21.) Counsel offers the following rationale: Dameron was forced to file this costly lawsuit because defendant patients such as Mr. Martinez refused to turn over money owed to Dameron that was paid to them by their health plan. Instead, individual patient defendants such as Mr. Martinez reaped five and even six-figure windfalls,2 despite their contractual obligation to pay for their hospital care. In the absence of Mr. Martinez’s and other’s [sic] misconduct, Dameron would not have incurred any of the $300,000 - plus in legal fees in this case. As the “sine qua non” of this lawsuit, Mr. Martinez is responsible for all of the fees incurred herein. 14 15 16 17 18 19 20 (Id., McMahon Decl. ¶ 19 (italics in original.) Plaintiff reiterates this argument in its 21 supplemental brief, asserting that the amount sought “is reasonable because the misconduct of the 22 patient defendants is the very reason this lawsuit was initiated” and that this lawsuit would never 23 have occurred if the patient defendants had paid plaintiff the funds paid to them by their insurers. 24 (Pl.’s Supplemental Brief at 9 (italics in original).) Plaintiff concludes that “[o]ther patient 25 2 26 Defendant Lee did not reap a five or six-figure windfall. Her billed charges for care on July 25, 2007, were $6,570.33. 12 1 defendants have either paid Dameron, or their insurers have done so,” leaving the four defaulted 2 defendants as “the most culpable defendants in this case.” (Id.) 3 The undersigned finds plaintiff’s arguments unpersuasive. The assertion that “the 4 misconduct of the patient defendants is the very reason this lawsuit was initiated” is contradicted 5 by the claims alleged solely against entity defendants in the complaint filed in the state court. 6 Patients were joined as defendants only later by plaintiff. The court’s docket shows 25 individual 7 defendants. Presumably, each of these defendants signed the same contract that provides for 8 attorney fees if a delinquent account is referred to an attorney. The four defaulted defendants do 9 not appear to be more culpable than the other twenty-one defendants whose delinquent accounts 10 were referred to an attorney for collection, thereby entitling plaintiff to actual attorney fees 11 incurred in collecting their accounts. 12 The undersigned is not entirely persuaded by plaintiff’s conclusion that 13 approximately half of the legal fees incurred in the entire litigation are attributable to the 14 individual defendants. However, plaintiff is entitled to attorney fees pursuant to the contracts 15 signed by all of the patient defendants. The undersigned will recommend that plaintiff be 16 awarded an amount against each defaulting defendant equal to 1/25 of the $149,136.32 calculated 17 by plaintiff as attributable to the patient defendants. That amount is $5,965.45. C. Summary of Recommended Terms of Default Judgment 18 The undersigned finds that judgment should be entered against the defaulted 19 20 defendants in the following amounts: 21 David Martinez $61,629.48 $43,409.04 in damages $11,937.49 in interest $ 317.50 in costs $ 5,965.45 in attorney fees 22 23 24 ///// 25 ///// 26 ///// 13 1 Margaret Lee 2 $13,510.31 $6,570.33 in damages $ 657.03 in interest $ 317.50 in costs $5,965.45 in attorney fees 3 4 5 Jayson Untalan $17,821.83 $7,148.00 in damages3 $4,553.38 in interest $ 155.00 in costs $5,965.45 in attorney fees 6 7 8 9 Zarghoona Karimi $16,320.45 $9,000.00 in damages4 $1,200.00 in interest $ 155.00 in costs $5,965.45 in attorney fees 10 11 12 13 CONCLUSION 14 In accordance with the above, IT IS ORDERED that within five days after these 15 findings and recommendations are filed, plaintiff shall serve a copy of the findings and 16 recommendations on each defaulted defendant by mail at the address where service of process 17 was effected, or at any more recent address known to plaintiff, and shall file a proof of such 18 service; and 19 ///// 20 ///// 21 ///// 22 3 23 24 25 26 Jason Untalan’s billed charges were $36,427.01. Plaintiff was paid $5,000.00 by defendant Untalan’s insurer, and the settlement agreement with the insurer provides that plaintiff’s ability to pursue defendant Untalan is limited to $12,148.00, offset by the $5,000.00 paid by the insurer. 4 Zarghoona Karimi’s billed charges were $12,798.00. Plaintiff was paid $798.00 by defendant Karimi and $3,000.00 by defendant Karimi’s insurer pursuant to a settlement agreement. 14 1 IT IS RECOMMENDED that: 2 1. Plaintiff’s December 31, 2008 motion for default judgment against defendant 3 David Martinez (Doc. No. 314) be granted and judgment be entered against David Martinez and 4 in favor of Dameron Hospital in the sum of $61,629.48, as follows: 5 6 a. b. c. d. $43,409.04 in damages; $11,937.49 in interest; $ 317.50 in costs; $ 5,965.45 in attorney fees. 7 8 9 10 11 12 2. Plaintiff’s December 31, 2008 motion for default judgment against defendant Margaret Lee (Doc. No. 315) be granted and judgment be entered against Margaret Lee and in favor of Dameron Hospital in the sum of $13,510.31, as follows: a. b. c. d. $6,570.33 in damages; $ 657.03 in interest; $ 317.50 in costs; $5,965.45 in attorney fees. 13 14 3. Plaintiff’s December 31, 2008 motion for default judgment against defendant 15 Jayson Untalan (Doc. No. 317) be granted and judgment be entered against Jayson Untalan and 16 in favor of Dameron Hospital in the sum of $17,821.83, as follows: 17 18 a. b. c. d. $7,148.00 in damages; $4,553.38 in interest; $ 155.00 in costs; $5,965.45 in attorney fees. 19 20 4. Plaintiff’s December 31, 2008 motion for default judgment against defendant 21 Zarghoona Karimi (Doc. No. 318) be granted and judgment be entered against Zarghoona Karimi 22 and in favor of Dameron Hospital in the sum of $16,320.45, as follows: 23 24 a. b. c. d. $9,000.00 in damages; $1,200.00 in interest; $ 155.00 in costs; $5,965.45 in attorney fees. 25 26 5. This case be closed. 15 1 These findings and recommendations will be submitted to the United States 2 District Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within 3 ten (10) days after these findings and recommendations are filed, any party may file written 4 objections with the court. A document containing objections should be titled “Objections to 5 Magistrate Judge’s Findings and Recommendations.” Any reply to objections shall be served 6 within five (5) days after service of the objections. The parties are advised that failure to file 7 objections within the specified time may waive the right to appeal the District Court’s order. See 8 Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). 9 DATED: September 11, 2009. 10 11 12 13 DAD:kw Ddad1\orders.civil\dameron1818.mdj.f&r 14 15 16 17 18 19 20 21 22 23 24 25 26 16
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