Kaur, et al., v Singh, et al.,, No. 2:2013cv00089 - Document 85 (E.D. Cal. 2015)
Court Description: FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Edmund F. Brennan on 9/10/2015 RECOMMENDING that plaintiffs' 71 application for default judgment be denied. Motion referred to Judge Kimberly J. Mueller. Objections to F&R due within 14 days. (Zignago, K.)
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Kaur, et al., v Singh, et al., Doc. 85 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 FOR THE EASTERN DISTRICT OF CALIFORNIA 9 10 KULWINDER KAUR, et al., 11 12 No. 2:13-cv-89-KJM-EFB Plaintiffs, v. FINDINGS AND RECOMMENDATIONS 13 RAKWINDER SINGH, et al., 14 Defendants. 15 16 This matter was before the court on plaintiffs’ motion for default judgment against 17 defendant Cloud 9 Logistics (“Cloud 9”).1 Attorney Philip Ganong appeared on behalf of 18 plaintiffs; attorney Grace Nguyen appeared telephonically on behalf of defendant Rakwinder 19 Singh. No appearance was made by defendant Cloud 9. The supporting papers failed to address 20 several issues material to the motion, including the standard for entry of default judgment. 21 Accordingly, at the hearing the court ordered further briefing on the applicable legal standard and 22 as to whether California or Washington law governed this action in light the court’s May 28, 2014 23 order, which applied Washington law in granting defendant Rakwinder Singh’s motion for 24 summary judgment. See ECF No. 55. Supplemental briefing was filed, ECF No. 84, which 25 remains inadequate to support entry of a default judgment. Accordingly, as explained below, it is 26 recommended that plaintiffs’ motion be denied. 27 28 1 This case, in which plaintiff is proceeding pro se, is before the undersigned pursuant to Eastern District of California Local Rule 302(c)(21). See 28 U.S.C. § 636(b)(1). 1 Dockets.Justia.com 1 2 I. Background On January 16, 2013, plaintiffs, the heirs of Makhan Singh (“the decedent”), initiated this 3 wrongful death action against defendants Rakwinder Singh and Cloud 9 Logistics (“Cloud 9”). 4 ECF No. 1. The complaint alleges that Cloud 9 is a Washington State business with its principal 5 place of business in Custer, Washington. Id. ¶ 9. Although Cloud 9 was located in Washington, 6 it engaged in interstate transportation of goods for hire, which included regular routes into 7 California. Id. 8 In July 2011, the decedent was hired by Cloud 9 as a commercial truck driver. Id. ¶¶ 3, 8. 9 On July 21, 2011, the decedent was the passenger in a truck operated by defendant Singh and 10 owned by defendant Cloud 9. Id. ¶ 10. While traveling southbound on interstate 5 near Kern 11 County, California, the truck veered off the highway and overturned, killing the decedent. Id. 12 Plaintiffs allege Singh’s negligent operation of the truck was the cause of the decedent’s death. 13 Id. ¶¶ 10, 11. Plaintiffs claim that they sought to file a workers compensation death claim, but 14 were informed that there was no workers compensation insurance provided by Cloud 9. Id. ¶ 12. 15 Plaintiffs’ complaint alleges a single claim for wrongful death under California Labor 16 Code § 3706 against defendants Singh and Cloud 9. ECF No. 1. According to the return of 17 service for the summons, plaintiff served Maninder Kataria, Cloud 9’s agent for service of 18 process, by way of substitute mail service of a copy of the summons and complaint on February 19 6, 2013. ECF No. 13. Cloud 9 failed to timely file an answer. Plaintiffs requested the entry of 20 Cloud 9’s default (ECF No. 35), which the Clerk entered on February 5, 2014 (ECF No. 36). 21 Defendant Singh filed an answer to the complaint. ECF No. 11. 22 Prior to plaintiff seeking default judgment against Cloud 9, defendant Singh moved for 23 summary judgment on the ground that Washington’s workers’ compensation statute applies to 24 this action and bars plaintiffs’ claim against Singh. ECF No. 37. Singh’s motion was granted in 25 a written opinion holding that Washington’s Industrial Insurance Act precludes civil causes of 26 action against negligent coworkers for personal injuries suffered during the course of 27 employment. ECF No. 55 at 13-15. Plaintiffs now seek default judgment against Cloud 9, the 28 only remaining defendant. ECF No. 71. 2 1 II. 2 Legal Standard Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party 3 against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend 4 against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not 5 automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 6 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 7 (9th Cir. 1986)). Instead, the decision to grant or deny an application for default judgment lies 8 within the district court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 9 1980). In making this determination, the court considers the following factors: 10 (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 the 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. 11 12 13 14 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 15 “In applying this discretionary standard, default judgments are more often granted than 16 denied.” Philip Morris USA, Inc. v. Castworld Products, Inc., 219 F.R.D. 494, 498 (C.D. Cal. 17 2003) (quoting PepsiCo, Inc. v. Triunfo-Mex, Inc., 189 F.R.D. 431, 432 (C.D. Cal. 1999)). 18 As a general rule, once default is entered, the factual allegations of the complaint are taken as 19 true, except for those allegations relating to damages. TeleVideo Systems, Inc. v. Heidenthal, 826 20 F.2d 915, 917-18 (9th Cir. 1987) (citations omitted). However, although well-pleaded allegations 21 in the complaint are admitted by defendant’s failure to respond, “necessary facts not contained in 22 the pleadings, and claims which are legally insufficient, are not established by default.” Cripps v. 23 Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992). A party’s default conclusively 24 establishes that party’s liability, although it does not establish the amount of damages. Geddes v. 25 United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (stating that although a default established 26 liability, it did not establish the extent of the damages). 27 ///// 28 3 1 2 III. Discussion Plaintiffs’ claim under California Labor Code section 3706 is predicated on the allegation 3 that Cloud 9 failed to secure payment of workers’ compensation benefits on the date of the 4 decedent’s death. ECF No. 84 at 9-10. Whether plaintiffs should be granted a default judgment 5 on that claim turns on the application of the several Eitel factors. 6 A. 7 The first Eitel factor considers whether the plaintiff would suffer prejudice if default Factor One: Possibility of Prejudice to Plaintiffs 8 judgment is not entered, and such potential prejudice to the plaintiff militates in favor of granting 9 default judgment. See PepsiCo, Inc., 238 F. Supp. 2d at 1177. Here, plaintiffs would potentially 10 face prejudice if the court did not enter a default judgment. Absent entry of a default judgment, 11 plaintiffs would be unable to obtain relief for defendant’s alleged misconduct. 12 13 B. Factors Two and Three: The Merits of Plaintiffs’ Substantive Claims and the Sufficiency of the Complaint 14 The next two factors present a related inquiry; i.e. whether the facts pleaded in the 15 complaint are legally sufficient to establish liability on plaintiffs’ substantive claims. The court 16 must consider whether the allegations in the complaint are sufficient to state a claim that supports 17 the relief sought. See Danning, 572 F.2d at 1388; PepsiCo, Inc., 238 F. Supp. 2d at 1175. 18 In granting defendant Singh’s motion for summary judgment, the court held that because 19 Cloud 9 is a Washington based company and the decedent was killed during the course and scope 20 of his employment with Cloud 9, Washington’s Industrial Insurance Act (“WIIA”) applies to this 21 action. ECF No. 55 at 13-15. That ruling now governs as to this motion. See United States v. 22 Cuddy, 147 F.3d 1111, 1114 (9th Cir. 1997) (Under the law of the case doctrine, “a court is 23 generally precluded from reconsidering an issue that has already been decided by the same court, 24 or a higher court in the identical case.”). 25 As was previously held in this action, the WIIA “abolished all common-law actions by 26 employees against their employers,” leaving workers’ compensation as the exclusive remedy for 27 injuries sustained during the course of employment. Taylor v. Redmond, 89 Wn.2d 315, 317 28 (1977) (citing Rev. Code Wash. § 51.04.010). To provide relief for injured workers, the WIIA 4 1 establishes a system of compulsory state industrial insurance. Hidahl v. Bringolf, 101 Wn. App. 2 634, 640 (2000); RCW § 51.04.060. The state system provides the exclusive remedy for workers 3 injured during the course of their employment and covers “all employments which are within the 4 legislative jurisdiction of the state.” Rothwell v. Nine Mile Falls Sch. Dist., 149 Wn. App. 771, 5 777 (2009) (citing RCW § 51.04.010); RCW § 51.12.010. This includes workers employed in 6 Washington and injured while out of state. Hilding v. Dep’t of Labor & Indus., 162 Wash. 168, 7 174 (1931). “Under Washington’s industrial insurance scheme, an employer is immune from 8 civil lawsuits by its employees for non-intentional workplace injuries.” Hidahl, 101 Wn. App. at 9 642. 10 The complaint alleges that the decedent was a commercial truck driver employed by 11 Cloud 9, and that the accident occurred while the decedent was acting within the course and scope 12 of employment. ECF No. 1. ¶¶ 8, 10. Further, plaintiffs allege that the accident was the result of 13 defendant Singh’s negligent operation of the truck. Id. ¶ 11. Under Washington law, employers 14 are immune from suit by their employees for non-intentional workplace injuries, see Wash. Rev. 15 Code. § 51.04.010. The allegations in the complaint fail to allege precisely such a claim against 16 the decedent’s employer. Accordingly, they fail to demonstrate that plaintiffs are entitled to relief 17 on their common law claim for wrongful death. 18 Therefore, the second and third Eitel factors weigh against granting plaintiffs’ motion for 19 default judgment. 20 C. 21 Under the fourth factor cited in Eitel, “[t]he court must consider the amount of money at Factor Four: The Sum of Money at Stake in the Action 22 stake in relation to the seriousness of Defendant’s conduct.” PepsiCo, Inc., 238 F. Supp. 2d at 23 1177; see also Philip Morris USA, Inc., 219 F.R.D. at 500. 24 Here, the sum of money at stake is large. Plaintiffs argue that they are entitled to 25 economic damages in the amount of $846,278.00, plus general damages in the amount of 26 $2,153,722.00. ECF No. 71 at 2. Thus, plaintiffs seek a total of $3 million in damages. Id. 27 Given the large sum of money at stake, this factor weighs against default judgment. 28 ///// 5 1 D. 2 The court may assume the truth of well-pleaded facts in the complaint (except as to Factor Five: The Possibility of a Dispute Concerning Material Facts 3 damages) following the clerk’s entry of default. See, e.g., Elektra Entm’t Group, Inc. v. 4 Crawford, 226 F.R.D. 388, 393 (C.D. Cal. 2005) (“Because all allegation in a well-pleaded 5 complaint are taken as true after the court clerk enters default judgment, there is no likelihood that 6 any genuine issue of material fact exists.”); accord Philip Morris USA, Inc., 219 F.R.D. at 500; 7 PepsiCo, Inc., 238 F. Supp. 2d at 1177. 8 9 Accepting plaintiffs’ allegations as true, there is little likelihood that any dispute concerning material facts exist. 10 E. 11 The record indicates that Cloud 9’s default was not due to excusable neglect. The docket 12 reflects that Cloud 9 was served with a copy of the complaint on February 6, 2013. ECF No. 13. 13 Furthermore, Cloud 9 was served a copy of plaintiffs’ application for default judgment. ECF No. 14 73-1. Accordingly, Cloud 9 has received notice of the instant action, but has declined to appear 15 and defend. Thus, the factor weighs in favor of default judgment. Factor Six: Whether the Default Was Due to Excusable Neglect 16 F. 17 “Cases should be decided upon their merits whenever reasonably possible.” Eitel, 782 Factor Seven: The Strong Policy Favoring Decisions on the Merits 18 F.2d at 1472. However, district courts have concluded with regularity that this policy, standing 19 alone, is not dispositive, especially where a defendant fails to appear or defend itself in an action. 20 PepsiCo, Inc., 238 F. Supp. 2d at 1177; see also Craigslist, Inc. v. Naturemarket, Inc., 694 F. 21 Supp. 2d 1039, 1061 (N.D. Cal. 2010); ACS Recovery Servs., Inc. v. Kaplan, 2009 U.S. Dist. 22 LEXIS 122710, at *18 (N.D. Cal. Dec. 17, 2009); Hartung v. J.D. Byrider, Inc., 2009 U.S. Dist. 23 LEXIS 54415, at *14 (E.D. Cal. June 26, 2009). 24 Although this factor is not dispositive, it does weigh against entering default judgment. 25 Upon weighing the Eitel factors, the court finds that plaintiffs have not demonstrated that they are 26 entitled to default judgment. Significantly, the allegations in the complaint fail to demonstrate 27 plaintiffs’ right to relief under Washington’s workers’ compensation statute, which this court has 28 previously found applicable to this case. 6 1 IV. Conclusion 2 For the reasons stated above, even with supplemental briefing plaintiffs have yet to 3 demonstrate that they are entitled to default judgment. Accordingly, it is RECOMMENDED that 4 plaintiffs’ application for default judgment (ECF No. 71) be denied. 5 These findings and recommendations are submitted to the United States District Judge 6 assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fourteen days 7 after being served with these findings and recommendations, any party may file written 8 objections with the court and serve a copy on all parties. Such a document should be captioned 9 “Objections to Magistrate Judge’s Findings and Recommendations.” Failure to file objections 10 within the specified time may waive the right to appeal the District Court’s order. Turner v. 11 Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). 12 DATED: September 10, 2015. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7
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