United States District Court, D. Nevada
R. HICKS UNITED STATES DISTRICT JUDGE.
the court is plaintiff Tropicana Entertainment Inc.'s
(“Tropicana”) motion for default judgment. ECF
Facts and Procedural Background
core, this is a breach of contract action. Plaintiff
Tropicana owns and operates a number of hotels, resorts, and
casinos throughout the world. As part of its business
operations, Tropicana operates an online supplier portal
known as SWS Direct. The supplier portal allows the Tropicana
to procure goods and services directly from registered
vendors. Prior to transacting business on SWS Direct, each
vendor must submit a verified registration packet. As part of
the registration packet, each vendor agrees to certain
contractual terms and conditions. All purchases and sales
through SWS Direct are conducted via purchase orders.
N3A Manufacturing, Inc., d/b/a Hotelure, Inc.
(“Hotelure”) is a company which supplies various
hotel goods and furnishings. Defendant Niall Alli is the
owner of Hotelure. On or about April 3, 2014, Hotelure,
through defendant Jay Kalman, submitted a verified vendor
registration packet and became a registered vendor on SWS
Direct. ECF No. 3, Ex. 1. Thereafter, on six different
occasions from April through September 2015, Tropicana
submitted purchase orders to Hotelure through SWS Direct for
the purchase of hotel furniture and equipment. See
ECF No. 3, Exs. 3-6. On each occasion, Hotelure issued a
confirming invoice accepting each purchase order and
requested either full or partial payment of the order prior
to delivery. In satisfaction of each purchase order, the
Tropicana submitted payments in excess of $1, 700, 000.00
directly to Hotelure which were accepted and deposited.
However, Hotelure failed to deliver the contracted goods.
17, 2016, Tropicana filed a complaint against defendants. ECF
No. 1. Then, on June 23, 2016, the Tropicana filed an amended
complaint. ECF No. 26. Finally, on May 5, 2017, Tropicana
filed a verified second amended complaint with leave of court
alleging seven causes of action against defendants: (1)
breach of contract; (2) violation of the Nevada Uniform
Commercial Code (“Nevada UCC”); (3) breach of the
implied covenants of good faith and fair dealing; (4) unjust
enrichment; (5) conversion; (6) fraud and misrepresentation;
and (7) negligent misrepresentation. ECF No. 40. Despite
being served with the second amended complaint on August 2,
2017, defendants did not file an answer or otherwise respond
to the complaint.
December 7, 2017, Tropicana filed an application for entry of
clerk's default against defendants (ECF No. 59) which was
entered by the court clerk on December 11, 2017 (ECF No. 61).
Thereafter, on March 9, 2018, Tropicana filed the present
motion for default judgment. ECF No. 64.
a default judgment is a two-step process governed by Rule 55
of the Federal Rules of Civil Procedure. Eitel v.
McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). First, the
moving party must seek an entry of default from the clerk of
court. Fed.R.Civ.P. 55(a). Then, after the clerk of court
enters default, a party must separately seek entry of default
judgment from the court in accordance with Rule 55(b).
Fed.R.Civ.P. 55(b). Upon entry of a clerk's default, the
court takes the factual allegations in the complaint as true.
Nonetheless, while entry of default by the clerk is a
prerequisite to an entry of default judgment, “a
plaintiff who obtains an entry of default is not entitled to
default judgment as a matter of right.” Warner
Bros. Entm't Inc. v. Caridi, 346 F.Supp.2d 1068,
1071 (C.D. Cal. 2004) (citation omitted). Instead, whether to
grant a default judgment is in the court's discretion.
Ninth Circuit has identified several relevant factors in
determining whether to grant default judgment including: (1)
the possibility of prejudice to the plaintiff; (2) the merits
of the plaintiff's substantive claims; (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 the
excusable neglect; and (7) the strong policy favoring
decisions on the merits. Eitel, 782 F.2d at 1471-72.
court has reviewed the documents and pleadings on file in
this matter and finds that the Eitel factors support
entering a default judgment in favor of Tropicana in this
action. First, Tropicana will be severely prejudiced if a
default judgment is not entered because defendants have shown
an unwillingness to appear or otherwise defend themselves in
this action since the filing of the second amended complaint.
Second, Tropicana's claims are sufficiently pled and
supported in its verified complaint and the attached purchase
orders and copies of cashed checks support its request for
monetary relief. Third, the monetary relief requested by
Tropicana is directly related to its claims for breach of
contract and the unfulfilled purchase orders. Fourth,
defendants have failed to provide any excusable neglect for
their failure to participate in this action. Finally,
although public policy favors a resolution on the merits, the
court finds that a default judgment is warranted in light of
the other Eitel considerations. Therefore, the court
shall grant Tropicana's motion for default judgment.
THEREFORE ORDERED that plaintiffs motion for default judgment
(ECF No. 64) is GRANTED.
FURTHER ORDERED that plaintiff Tropicana Entertainment Inc.
shall have ten (10) days after entry of this order to prepare
an appropriate judgment against ...