Opinion
2:21-cv-09608-CAS-PVCx
07-21-2022
New High Limited v. Global Merch Group, LLC
Present: The Honorable CHRISTINA A. SNYDER
CIVIL MINUTES-GENERAL
Proceedings: (IN CHAMBERS) - MOTION FOR DEFAULT JUDGMENT (Dkt. 14, filed on February 23, 2022)
I. INTRODUCTION & BACKGROUND
On December 10, 2021, plaintiff New High Limited ("New High") brought suit in this district against defendant Global Merch Group, LLC ("GMG"). See Dkt. 1 ("Compl."). New High is a Hong Kong corporation with its principal place of business in Hong Kong, and GMG is an LLC with its principal place of business in Nevada. Id. New High's complaint alleges that GMG failed to pay for apparel and personal protective equipment ("PPE") that New High delivered to it, that GMG wrongfully cancelled purchases for products after New High had already produced them pursuant to contracts entered into with GMG, and that New High was in the process of producing additional goods ordered by GMG at the time that GMG breached. Id. ¶¶ 8-10. New High began selling and shipping apparel and PPE to GMG in January 2020. Id. ¶6. New High asserts that each time it delivered products to GMG, New High would provide an invoice with information about the products, the payment due, and the instructions for payment. Id. ¶ 7. New High claims that GMG failed to pay for $ 1,451,168.49 in apparel and PPE, that GMG wrongfully cancelled purchases for $176,797.50 in goods, and that New High was in the process of producing additional apparel valued at $688,670.55 at the time of New High's complaint. Id.¶¶ 8-10. New High asserts claims for: (1) breach of written contracts; (2) account stated; and (3) goods sold and delivered. Id. ¶¶ 11-26.
On January 11, 2022, New High requested that the Clerk enter default against defendant for failure to appear or otherwise respond to New High's complaint within the time prescribed by the Federal Rules of Civil Procedure. Dkt. 12. On January 12, 2022, the Clerk entered default against GMG. Dkt. 13.
On February 23, 2022, New High filed a motion for default judgment against GMG. Dkt. 14 ("Pl's Mot"). On March 14, 2022, GMG filed a motion to set aside default. Dkt. 15 ("Def.'s Mot."). That same day, GMG also filed an opposition to New High's motion for default judgment. Dkt. 16 ("Def.'s Opp'n"). On April 11, 2022, the Court granted GMG's motion to set aside default, on the condition that GMG effectuate payment of the $7,500 in attorneys' fees New High incurred in drafting its motion for default judgment and opposing GMG's motion to set aside default, on or before April 25, 2022. Dkt. 19.
On April 28, 2022, New High's counsel submitted a declaration stating that "[a]s of April 27, 2022, Defendant had not complied with [the Court's April 11, 2022 order] in that it had neither paid the $7,500 fee award to Plaintiff, nor made any contact with Plaintiffs counsel to arrange for payment." Dkt. 20. On May 16, 2022, the Court ordered GMG to show cause, on or before May 23, 2022, why default judgment against it should not be entered as a result of its failure to pay the Court-imposed attorney fee award on or before the Court-ordered deadline. Dkt. 21. As of the date of this order, GMG has not filed a response to the Court's May 16, 2022 order.
On June 8. 2022, the Court reserved judgment on New High's motion for default judgment and ordered New High to file and serve supplemental information to support its claim for damages, attorneys' fees, and costs on or before July 5. 2022. See Dkt. 22. On June 24, 2022, in response to the Court's June 8, 2022 order. New High submitted a supplemental statement of damages in support of its motion for default judgment. Dkt. 23 ("Supplemental Damages Statement"). New High served the Supplemental Damages Statement on GMG through the Court's CM/ECF system on June 24, 2022, and via email on July 19, 2022. See Dkts. 24-25.
Having carefully considered the parties' arguments and submissions, the Court finds and concludes as follows.
II. LEGAL STANDARD
Pursuant to Federal Rule of Civil Procedure 55, when a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and the plaintiff does not seek a sum certain, the plaintiff must apply to the court for a default judgment. Fed.R.Civ.P. 55.
As a general rule, cases should be decided on the merits as opposed to by default, and, therefore, "any doubts as to the propriety of a default are usually resolved against the party seeking a default judgment." Judge Virginia A. Phillips et al., Rutter Group Prac. Guide Fed. Civ. Pro. Before Trial Ch. 6-A ¶ 6:11 (2021 ed.) (citing Pena v. Seguros La Comercial S.A.. 770 F.2d 811,814 (9th Cir. 1985)). Granting or denying a motion for default judgment is a matter within the court's discretion. Elektra Ent. Grp.. Inc. v. Crawford. 226 F.R.D. 388, 392 (CD. Cal. 2005); see also Sony Music Ent. Inc. v. Elias. No. CV03-6387DT(RCX), 2004 WL 141959, at *3 (CD. Cal. Jan. 20, 2004).
The Ninth Circuit has directed that courts consider the following factors in deciding whether to enter default judgment: (1) the possibility of prejudice to plaintiff; (2) the merits of 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 the material facts; (6) whether defendant's default was the product of excusable neglect; and (7) the strong policy favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986): see also Elektra. 226 F.R.D. at 392.
"Before a court can enter a default judgment against a defendant, the plaintiff must satisfy the procedural requirements set forth in Federal Rules of Civil Procedure 54(c) and 55, as well as Local Rule 55-1 and 55-2." Harman IntT Indus., Inc. v. Pro Sound Gear. Inc., No. 2:17-cv-06650-ODW-FFM, 2018 WL 1989518, at *1 (C.D. Cal. Apr. 24, 2018). Accordingly, when an applicant seeks a default judgment from the Court, the movant must submit a declaration specifying: "(a) When and against what party the default was entered; (b) The identification of the pleading to which default was entered; (c) Whether the defaulting party is an infant or incompetent person, and if so, whether that person is represented by a general guardian, committee, conservator or other representative; (d) That the Servicemembers Civil Relief Act (50 U.S.C App. § 521) does not apply; and (e) That notice has been served on the defaulting party, if required by [Federal Rule of Civil Procedure] 55(b)(2)." See C.D. Cal. L.R. 55-1. Under Local Rule 55-2, "where an application for default judgment seeks unliquidated damages, the party seeking entry of the default judgment is obligated to serve notice of the application on the defaulting party regardless of whether the latter has appeared in the action." Halicki v. Monfort. No. 2:08-cv-00351-PSG-JTL, 2009 WL 10672966, at *2 (CD. Cal. Nov. 19, 2009) (citing CD. Cal. L.R. 55-2).
III. Discussion
A. Procedural Requirements
To satisfy the procedural requirements for entry of default judgment, the plaintiff must follow the "requirements set forth in Federal Rules of Civil Procedure 54(c) and 55, as well as Local Rule 55-1 and 55-2." Harman Int'l Indus., Inc. v. Pro Sound Gear, Inc., No. 2:17-cv-06650-ODW-FFM, 2018 WL 1989518, at *1 (CD. Cal. Apr. 24, 2018). In the present case, in connection with its motion for default judgment, New High submitted a declaration attesting that: (a) On January 12, 2022, the Clerk entered default against defendant GMG after GMG failed to respond to the complaint; (b) GMG is a limited liability company and is neither an infant nor an incompetent person; (c) GMG is not in military service or otherwise exempt under the Servicemembers Civil Relief Act. Dkt. 14-2 (Declaration of Lawrence J. Hilton ("Hilton Decl.")) ¶¶ 3-4. New High also submitted a declaration attesting that GMG was served by mail on February 23, 2022 with a copy of its motion for default judgment. Dkt. 14-8.
Accordingly, New High has satisfied the procedural requirements for entry of default judgment under the Federal and Local Rules, and the Court proceeds to the merits of its motion.
B. Application of the Eitel Factors
1. Risk of Prejudice to Plaintiff
The first Eitel factor considers whether a plaintiff will suffer prejudice if a default judgment is not entered. PepsiCo. Inc. v. California Sec. Cans. 238 F.Supp.2d 1172, 1177 (CD. Cal. 2002); see also Eitel. 782 F.2d at 1471-72. On March 14, 2022, GMG argued that New High would not be prejudiced by the setting aside of the entry of default in this case because "[m]ere delay in resolution of the case or having to litigate an action on its merits do [sic] not constitute prejudice." Def.'s Mot. at 4:14-15 (citing Francois & Co.. LLC v. Nadeau. 334 F.R.D. 588, 599 (CD. Cal. 2020)). GMG claimed that it did not respond to the complaint in a timely fashion because its counsel "moved his office a few months before this action was filed, but neglected to inform Defendant's agent that counsel had moved or of counsel's new address," and thus GMG's counsel did not receive the Complaint from his agent for service of process. Def.'s Mot. at 4:3-5 (citing Dkt. 15-1 Declaration of Michael A. Bowse ("Bowse Decl.") ¶4).
GMG has not, however, participated in this action since the Court granted its motion to set aside default on April 11, 2022. Dkt. 19. As of the date of this order, GMG is in violation of a Court order requiring it to effectuate payment of $7,500 in reasonable attorneys' fees to plaintiff on or before April 25, 2022. Dkt. 20. Additionally, as of the date of this order, GMG has not responded to the Court's May 16, 2022 order to show cause on or before May 23, 2022 why default judgment against it should not be entered. Dkt. 21. GMG has provided no explanation for its lack of participation in this case. The Court therefore finds that New High will likely face an inability to recover in the absence of an entry of default judgment. See PepsiCo, 238 F.Supp.2d at 1175.
Accordingly, the first Eitel factor weighs in favor of the entry of default judgment.
2. Sufficiency of the Complaint and the Likelihood of Success on the Merits
Courts often consider the second and third Eitel factors together. See PepsiCo, 238 F.Supp.2d at 1175; HTS, Inc. v. Boley, 954 F.Supp.2d 927, 941 (D. Ariz. 2013). The second and third Eitel factors assess the substantive merits of the movant's claims and the sufficiency of its pleadings, which "require that a [movant] state a claim on which [it] may recover." PepsiCo. 238 F.Supp.2d at 1177 (quotation marks omitted); see also Panning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978) (stating that the issue is whether the allegations in the pleading state a claim upon which plaintiff can recover). For the purposes of default judgment, all well-pleaded allegations in the complaint, except those relating to damages, are assumed to be true. Geddes v. United Fin. Grp.. 559 F.2d 557, 560 (9th Cir. 1977). However, "necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default." Cripps v. Life Ins. Co. of N. Am.. 980 F.2d 1261, 1267 (9th Cir. 1992).
a. Breach of Contract
To prevail on a claim for breach of contract under California law, a plaintiff must establish "(1) the existence of the contract, (2) plaintiffs performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff." Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (2011) (citing Reichert v. Gen-Ins. Co.. 68 Cal. 2d. 822, 830 (1968)). A written contract may be pleaded either by its terms or by its legal effect. See Oingdao Tang-Buy Int'l Imp. & Exp. Co.. Ltd.. v. Preferred Secured Agents, Inc.. No. 15-cv-00624-LB, 2016 WL 6524396, at *3 (N.D. Cal. Nov. 13, 2016) (quoting Haskins v. Symantec Corp.. No. 13-cv-01834-JST, 2013 WL 6234610, *10 (N.D. Cal. Dec. 2, 2013). To plead a contract by its legal effect, a plaintiff must allege "the substance of its relevant terms." Id. But a plaintiff need not "plead the contract terms with unusual specificity." Id. (citing James River Ins. Co. v. DCMI. Inc.. No. C 11-06345 WHA, 2012 WL 2873763, *3 (N.D. Cal. July 12, 2012)). Rather, it is enough if the court is "able generally to discern at least what material obligation of the contract the defendant allegedly breached." Id. (quoting Langan v. United Servs. Auto. Ass'n, 69 F.Supp.3d 965, 979 (N.D. Cal. 2014)).
Here, New High sufficiently alleges the elements of a breach of contract claim with respect to the goods that it delivered to GMG. First, it alleges that New High and GMG entered valid contracts. New High alleges that GMG issued a purchase order each time it ordered goods from New High. Dkt. 14-1 ("Mem. of P. & A. in Supp. of Mot. for Default J.") at 6:9-10; Compl. ¶ 12. New High has attached a declaration attesting that each purchase order included a "description of the garments or PPE, the quantities, the unit price and the total price." Dkt. 14-3 (Declaration of Ka Hin Pi ("Ka Hin Pi Decl.")) ¶2. New High has included as an exhibit one such purchase order. Dkt. 14-4. New High further alleges that it delivered the goods to GMG and provided GMG with written invoices for each delivery, and that GMG never disputed the invoices. Mem. of P. & A. in Supp. of Mot. for Default J. at 6:13-16; Compl. ¶¶ 13, 15. New High's issuance of invoices and delivery of goods constitute acceptances of the offers made by GMG in its purchase orders. Pini USA. Inc. v. NB Glob. Commodities. LLC. No. 2:17-cv-04763-ODW-PLA, 2018 U.S. Dist. LEXIS 44726, at *9 (CD. Cal. 2018). New High alleges that GMG breached its contracts with New High by failing to pay the invoices. Compl. ¶ 16. Given that GMG has not disputed the existence of the contracts or its breach. New High's allegations are sufficient. See Philip Morris U.S.A. Inc. v. Castworld Prods.. 219 F.R.D 494, 499 (CD. Cal. 2003) (noting that a defaulting plaintiff is "deemed to have admitted the truth of the plaintiffs allegations).
New High also sufficiently alleges that GMG breached contracts with respect to contracts for custom goods that New High did not deliver. First, New High alleges that GMG wrongfully cancelled purchases for goods valued at $176,797.70 after the goods were produced by New High and identified to contracts with GMG. Mem. of P. & A. in Supp. of Mot. for Default J. at 1:12-14; Compl. ¶ 9. Second, New High alleges that GMG ordered additional custom goods that New High was producing and had identified to its contracts with GMG at the time of GMG's breach. Compl. ¶ 10. New High has alleged that it has made "several written demands for payment" and that GMG "refused to pay." Mem. of P. & A. in Supp. of Mot. for Default J. at 1:18-19; Compl. ¶ 25. GMG has not disputed the existence of contracts with respect to the custom goods that were not delivered. GMG's failure to dispute the existence of the contracts alleged by New High, New High's production of the goods and demand for payment, and the custom-made nature of the goods all point to the existence of contracts between New High and GMG regarding those goods and the breach of those contracts by GMG. See Philip Morris U.S.A. Inc., 219 F.R.D at 499; Restatement (Second) of Conts. § 62 cmt. d, illus. 1 (Am. L. Inst. 1981) (drawing on the facts and holding of White v. Corlies, 46 N.Y. 467, 467(1871)). See also Precise Aerospace Mfg. v. MAG Aerospace Indus., LLC, No. 2:17-cv-01239-RGK-AJW, 2018 U.S. Dist. LEXIS 119100, at *14 (explaining that "the custom-made nature of the goods provides a reliable indicator that a contract exists" in the statute-of-frauds context).
Finally, New High alleges resulting damages. New High alleges that GMG owed New High $1,451,168.49 for apparel and PPE that was delivered to GMG but for which GMG has not paid; $176,797.70 for goods ordered by GMG and then cancelled after they were produced; and $672,470.80 for custom goods identified to contracts between GMG and New High that were in the process of being produced at the time of GMG's breach. Mem. of P. & A. in Supp. of Mot. for Default J. at 10:9-22; Compl. ¶¶ 8-10.
Accordingly, the Court finds that New High sufficiently pleads a claim for breach of contract.
b. Account Stated
The elements of an account stated claim are: "(1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due." Leighton v. Forster. 8 Cal.App. 5th 467, 491 (2017) (quoting Zinn v. Fred R. Bright Co., 271 Cal.App. 2d 597, 600 (1969)). A defendant's consent to an account may be implied where the defendant, after receiving the account, "waits for an unreasonable time before making or without making any objection" to it. Cal. Bean Growers Ass'n v. Williams, 82 Cal.App. 434, 442 (1927).
Here, New High alleges previous transactions between it and GMG in which GMG issued purchase orders specifying certain goods to be delivered at an agreed price, and that New High shipped the goods and issued invoices reflecting the balance GMG owed for them. Compl. ¶¶ 6-7. New High alleges that GMG has not disputed any of the invoices that it has failed to pay. Id ¶ 15. The period of time during which GMG could reasonably have objected to the amounts included on the invoices furnished to it by New High has elapsed. Accordingly, the Court finds that New High sufficiently pleads a claim of account stated.
c. Goods Sold and Delivered
"For a goods sold and delivered claim, it is sufficient to allege that the defendant was indebted to the plaintiff at a specific time in a stated sum on an account for goods sold and delivered by the plaintiff to the defendant at the defendant's request, and no part of the debt was paid." United States ex rel. Hajoca Corp. v. Aeroplate Corp., No. 12-cv-1287-AWI-BAM, 2013 U.S. Dist. LEXIS 97753, at *9 (E.D. Cal. 2013) (citing Abadie v. Carrillo, 32 Cal. 172, 175 (1867)). See also Judicial Council of California Civil Jury Instructions ("CACI") No. 371 (2022) (identifying the following four elements: (1) That the defendant requested the plaintiff deliver goods for the benefit of the defendant; (2) and the plaintiff delivered the goods as requested; (3) and the defendant did not pay the plaintiff for the goods; and (4) the reasonable value of the goods provided).
Here, New High alleges that GMG is indebted to New High in the amounts listed in the invoices that New High issued to GMG. Compl. ¶ 8. New High alleges that the debt is for the goods that New High delivered to GMG at GMG's request. Id. ¶¶ 6-8. New High alleges that GMG has not paid the debt it incurred by ordering the goods. Id. ¶ 8. Accordingly, the Court finds that New High has sufficiently pleaded a claim of goods sold and delivered.
Because the Court finds that New High has sufficiently pleaded its claims of breach of contract, account stated, and goods sold and delivered, the second and third Eitel factors weigh in favor of granting the motion for default judgment.
3. Sum of Money at Stake in the Action
Pursuant to the fourth Eitel factor, courts balance "the amount of money at stake in relation to the seriousness of the [defaulting party's] conduct." PepsiCo, 238 F.Supp.2d at 1176; see also Eitel. 782 F.2d at 1471-72. "This determination requires a comparison of the recovery sought and the nature of defendant's conduct to determine whether the remedy is appropriate." United States v. Broaster Kitchen, Inc., No. 2:14-cv-09421-MMM-PJW, 2015 WL 4545360, at *6 (CD. Cal. May 27, 2015); see also Walters v. Statewide Concrete Barrier. Inc.. No. 3:04-cv-02559-JSW, 2006 WL 2527776, *4 (N.D. Cal. Aug. 30, 2006) ("If the sum of money at issue is reasonably proportionate to the harm caused by the defendant's actions, then default judgment is warranted.").
Here, New High is seeking $2,300,436.99 in compensatory damages, reflecting the amount owed to New High by GMG based on the contracts between the parties for the delivery of goods. Mem. of P. & A. in Supp. of Mot. for Default J. at 10:27; Compl. at 6:5-8. New High is also seeking prejudgment interest and costs. Compl. at 6:11-14. Under California contract law, "when one party breaches a contract the other party ordinarily is entitled to damages sufficient to make that party 'whole,' that is, enough to place the nonbreaching party in the same position as if the breach had not occurred." Postal Instant Press. Inc. v. Sealy. 43 Cal.App.4th 1704, 1708-09 (1996) (citing Applied Equip. Corp. v. Litton Saudi Arabia Ltd.. 7 Cal.4th 503, 515 (1994)). And "prejudgment interest is available to every person who is entitled to recover damages that are certain." Evanston Ins. Co. v. PEA. Inc., 566 F.3d 915, 921 (9th Cir. 2009); see also Cal. Civ. Code § 3287(b). Because the sum of money at issue is proportionate to the harm caused by GMG's actions, the Court concludes that the fourth Eitel factor weighs in favor of entry of default judgment.
4. Possibility of Dispute Concerning a Material Fact
The fifth Eitel factor considers the possibility that material facts are disputed. PepsiCo. 238 F.Supp.2d at 1177; see also Eitel, 782 F.2d at 1471-72. "Upon entry of default, all well-pleaded facts in the complaint are taken as true, except those relating to damages." PepsiCo. 238 F.Supp.2d at 1177.
Here, New High "filed a well-pleaded complaint alleging the facts necessary to establish its claims, and the court clerk entered default against" GMG. Philip Morris USA, Inc. v. Castworld Prods. Inc.. 219 F.R.D. 494, 500 (CD. Cal. 2003). GMG has failed to file an answer responsive to the allegations in New High's complaint and has not complied with the Court's April 11, 2022 order to pay reasonable attorneys' fees or the Court's May 16, 2022 order to show cause. Accordingly, "no dispute has been raised regarding the material averment of the complaint, and the likelihood that any genuine issue may exist is, at best, remote." Id.
Accordingly, the fifth Eitel factor weighs in favor of entry of default judgment.
5. Possibility of Excusable Neglect
The sixth Eitel factor considers whether the defendant's default may have been the product of excusable neglect. PepsiCo. 238 F.Supp.2d at 1177; see also Eitel 782 F.2d at 1471-72. Here, GMG did not file an answer to New High's complaint or respond to this Court's May 16, 2022 order to show cause, despite acknowledging that it is aware of New High's complaint. Def.'s Mot. at 3:1-11. Moreover, New High alleges it emailed GMG's counsel, on April 27, 2022, to inquire about whether GMG would comply with this Court's April 11, 2022 order requiring GMG to effectuate payment of $7,500 to New High in reasonable attorneys' fees. Hilton Decl. ¶5. As of April 28, 2022, GMG's counsel did not respond to New High's inquiry. Id. ¶6. Given GMG's "early participation in the matter, the possibility of excusable neglect is remote." See PepsiCo, Inc. 238 F.Supp.2d at 1177.
Accordingly, the sixth Eitel factor weighs in favor of the entry of default judgment.
6. Policy Favoring Decisions on the Merits
Under the seventh Eitel factor, the Court takes into account the strong policy favoring decisions on the merits. See Eitel, 782 F.2d at 1472. Of course, "this preference, standing alone, is not dispositive." PepsiCo, 238 F.Supp.2d at 1177 (citation omitted). "Notwithstanding the strong policy presumption in favor of a decision on the merits, where a defendant's failure to appear and respond 'makes a decision on the merits impractical, if not impossible,' default judgment is appropriate." Constr. Laborers Tr. Funds for S. Cal. Admin. Co. v. Black Diamond Contracting Grp.. Inc., No. S8:17-cv-00770-JLSDFM, 2017 WL 6496434, at *5 (CD. Cal. Dec. 18, 2017). Since GMG's failure to appear or otherwise respond makes a decision on the merits in this case "impractical, if not impossible," id, this factor does not preclude entry of default judgment.
7. Conclusion Regarding the Eitel Factors
Apart from the policy favoring decisions on the merits, all the remaining Eitel factors weigh in favor of default judgment, including the merits of New High's claims. See Fed. Nat. Mortg. Ass'n v. George. No. 5:14-cv-01679-VAP-SP, 2015 WL 4127958, *3 (CD. Cal. July 7, 2015) ("The merits of the plaintiffs substantive claim and the sufficiency of the complaint are often treated by courts as the most important Eitel factors.") (citation omitted). Therefore, weighing all the Eitel factors, the Court finds that entry of default judgment against GMG is appropriate.
C. Relief Sought by New High
"The general rule of law is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Tele Video Sys., Inc. v. Heidenthal 826 F.2d 915, 917-18 (9th Cir. 1987) (quotation marks omitted). The "[p]laintiff has the burden of proving damages through testimony or written affidavit." See Bd. of Trs. of the Boilermaker Vacation Tr. v. Skellv. Inc.. 389 F.Supp.2d 1222, 1226 (N.D. Cal. 2005). Moreover, the movant seeking default judgment must prove the damages sought, and although the Court may hold an evidentiary hearing to determine the amount of damages, no hearing is necessary "if the amount of damages can be determined from definite figures contained in the documentary evidence or in detailed affidavits." Bravado Int'l Grp. Merch. Servs.. Inc. v. Quintero. No. 2;13-cv-00693-SVW-SS, 2013 WL 12126750, at *4 (CD. Cal. Nov. 27, 2013) (citation omitted).
Here, New High seeks damages for (1) $1,451,168.49 in apparel and PPE that was delivered to GMG and for which GMG has not paid; (2) $176,797.70 for an order of custom goods that GMG cancelled after New High produced the goods pursuant to contracts between the parties; (3) $672,470.80 for custom goods ordered by GMG and identified to contracts between New High and GMG that were in the process of being produced when GMG breached; and (4) prejudgment interest and costs. Mem. of P. & A. in Supp. of Mot. for Default J. at 10:9-27.
In support of its damage calculations. New High initially submitted three exhibits and a declaration. First, it submitted an exemplar purchase order, dated January 11, 2021, for apparel in the amount of $61,740. Dkt. 14-4 ("Exhibit A"). Second, it submitted an exemplar invoice, unsigned, dated April 26, 2021, for apparel in the amount of $45,137.15. Dkt. 14-5 ("Exhibit B"). Third, it submitted an accounts receivable statement. Dkt. 14-6 ("Exhibit C"). To support the damages New High has asserted for overdue payments on apparel. Exhibit C references thirty invoices. Exhibit C at 13. For each invoice, Exhibit C provides the invoice number, the amount charged, the amount (if any) paid, the date paid, and the amount overdue, among other categories of information. Id. New High has provided the same categories of information in connection with the custom goods that it did not deliver. Id. at 15-16. In support of its claimed damages in connection with its deliveries of PPE, New High provided more detailed information. Id. at 14. In connection with its deliveries of PPE, New High submitted, in addition to the categories of information listed above, purchase order numbers, brief descriptions of the items, and the quantity of items that were delivered. Id. New High submitted a declaration from its manager attesting that Exhibit C is a "true and correct copy of an accounts receivable statement I prepared in the course and scope of my duties, from information recorded substantially contemporaneously with the subject transactions in New High's accounts receivable system." Decl. of Ka Hin Pi ¶ 4. The manager also attested that New High made "commercially customary efforts to resell the goods" that it did not deliver to GMG but that New High was unable to find a buyer. Id. ¶¶ 5-6.
In response to this Court's June 8, 2022 order, on June 24, 2022, New High submitted its Supplemental Damages Statement, two additional declarations, dkt. 23-1 & 23-2, and a spreadsheet, dkt. 23 at Ex. A ("Supplemental Spreadsheet"). The Supplemental Spreadsheet, prepared by New High's manager, includes the following information, identified by column: purchase order ("PO") date; PO number; PO amount; invoice number; due date; invoice amount; paid amount; overdue amount; number of full months since due date; and ten percent simple interest. See Supplemental Spreadsheet; see also Dkt. 23-2 ("Supplemental Ka Hin Pi Decl.") ¶ 2. The due date for each invoice reflects a date thirty days after the invoice date, pursuant to the "Net 30" terms identified in the POs. See Supplemental Ka Hin Pi Decl. ¶ 3; see also Exhibit A (exemplar PO noting "Net 30" terms). Since the invoices do not specify an interest rate, they accrue interest at the legal rate often percent pursuant to Cal Civ. Proc. Code § 3289. See, e.g., Teachers' Retirement Bd. v. Genest. 154 Cal.App.4th 1012, 1045 (2007). The interest amounts in the Supplemental Spreadsheet are calculated on a monthly basis from the due date, a methodology that "understates [the] maximum interest [New High] could claim, as the interest accrual for each unpaid [i]nvoice is added only at the end of each month for which the balance remains unpaid." Supplemental Damages Statement at 2:19-24; Supplemental Ka Hin Pi Decl. ¶ 3. The Court finds that the Supplemental Damages Statement, the Supplemental Spreadsheet, and the accompanying declarations sufficiently support New High's claimed damages of $2,300,436.99 and prejudgment interest of $216,477.51, in addition to daily interest of $630.26 from June 15, 2022 to the date of this order.
New High also seeks $1,200 in attorneys' fees pursuant to Cal. Civ. Code § 1717.5(a), and $402 for court filing fees. The latter amount is supported by a declaration from Lawrence J. Hilton, New High's counsel. See Dkt. 23-1 ¶ 2. The Court finds that New High's request for $1,200 in attorneys' fees and $402 in costs for filing fees is appropriate.
IV. CONCLUSION
In accordance with the foregoing, the Court GRANTS New High's motion for default judgment and awards $2,541,205.86 in damages.
Plaintiff is ordered to lodge a Proposed Judgment that conforms with this Court's order, no later than July 28, 2022.
IT IS SO ORDERED.