United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
Lynn Winmill, Chief Judge
the Court is Plaintiff's Motion for Order of Default
Against Pilot West Corporation and Default Judgment Against
All Defendants (Dkt. 19), which includes a request for
attorney fees and costs. For the reasons stated below, the
Court will grant the Motion in part, and reserve in part.
an action for breach of an indemnity agreement. Berkley is a
commercial surety that issued various surety bonds on behalf
of Pilot West, a construction services company. In partial
consideration for the posting of the surety bonds, Defendants
executed in favor of Berkley a General Agreement of Indemnity
dated July 25, 2012. Under the Indemnity Agreement,
Defendants agreed to jointly and severally hold Berkley
harmless against any and all losses, liability, damages of
any type, costs, fees, and expenses that Berkley incurs in
connection with the Bonds.
West has failed to perform its obligations under six bonded
construction projects and, as a result, Berkley has made
claim payments and incurred other costs and expenses.
Defendants, upon Plaintiff's demand for indemnification
under the Indemnity Agreement, have failed and refused to
respond to the demand.
April 28, 2016, Berkley commenced the present action seeking
damages and specific performance under the Indemnity
Agreement. The summons and complaint were served on Defendant
Pilot West's registered agent on May 5, 2016. Dkt. 8.
After being informed that Pilot West's registered agent
had resigned, Berkley then served Pilot West with a copy of
its summons and complaint via certified mail on June 16,
2016, in accordance with Fed.R.Civ.P. 4(e)(1) and I.R.C.P
4(d)(4)(B). The remaining five Defendants were served with
the summons and complaint, but failed to file an answer or
otherwise defend, resulting in the Clerk's entry of
default on June 22, 2016. See Clerk's Entry of
Default, Dkt. 16.
now brings this Motion for an Order of Default against the
remaining Defendant, Pilot West Corporation, and for Default
Judgment against all Defendants. Dkt. 19. Plaintiff seeks
damages against Defendants, jointly and severally, totaling
$864, 741.17, to recover sums already expended by Plaintiff
in discharge of its obligations as payment bond surety,
together with supplemental judgments at such time and under
such circumstances as claims are adjusted and satisfied by
Plaintiff, and on further notice to Defendants. Plaintiff
also seeks a decree for specific performance of the terms and
conditions of the Indemnity Agreement, including: (a) the
posting of collateral security; (b) the procurement of a
discharge from the bond; and (c) the furnishing of competent
evidence of Berkley's discharge, without loss under the
bond. Finally, Plaintiff seeks attorney fees and costs.
all Defendants have been properly served with the complaint
in this matter and presumably also received the Motion for
Default, the Clerk's entry of default, and the pending
motion for default judgment, the Defendants have failed to
submit any pleadings or otherwise defend against this action
as of the date of this Order.
Federal Rule of Civil Procedure 55(b)(2), a party can apply
to the district court for entry of judgment by default after
the clerk has entered the party's default based on its
failure to plead or otherwise defend itself. Whether to enter
default judgment is in the sole discretion of the court.
See Lau Ah Yew v. Dulles, 236 F.2d 415 (9th Cir.
1956). In Eitel v. McCool, 782 F.2d 1470, 1471-72
(9th Cir. 1986), the Ninth Circuit identified seven factors
for the court to consider in exercising its discretion to
enter default judgment: (1) potential prejudice to the
plaintiff; (2) the merits of plaintiff's substantive
claim; (3) the sufficiency of the Complaint; (4) the amount
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 favoring a decision on the merits. Id.
where a party is in default, all well-pleaded factual
allegations in the complaint are taken as true, except as to
the amount of damages. TeleVideo Sys., Inc. v.
Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). Rule
55(b)(2) states that the Court “may” conduct a
hearing prior to entering a default judgment. The Court is
not required to do so if the record reveals no issue of
material fact. Kashin v. Kent, 457 F.3d 1033, 1043
(9th Cir. 2006).
Application of Eitel Factors
majority of the Eitel factors support a default
judgment on Plaintiff's claims. Regarding factor
(1)-prejudice to the Plaintiff-if the Court wholly denied the
motion, Berkley Insurance would be left without a remedy
given Defendants' failure to appear and defend
themselves. As for factors (5) and (6), by virtue of
Defendants' failure to appear, there is no evidence of a
potential disputed material fact or meritorious defense, or