Albert v. Noelani Yacht Charters, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
KEVIN S. ALBERT, TRUSTEES OF
THE ALBERT REVOCABLE TRUST
UAD 6/3/1997 AND RESTATED
1/7/2020; AND KIMBERLY
LEBLANC ALBERT, TRUSTEES OF
THE ALBERT REVOCABLE TRUST
UAD 6/3/1997 AND RESTATED
1/7/2020;
Plaintiffs,
vs.
NOELANI YACHT CHARTERS,
LLC, A HAWAII LIMITED
LIABILITY COMPANY; JIM JONES;
KIMBERLEY KALALANI HIGA,
JOHN DOES 1-50, JANE DOES 1-50,
DOE PARTNERSHIPS 1-50, DOE
CORPORATIONS 1-50, DOE
GOVERNMENTAL AGENCIES 1-50,
DOE ENTITIES 1-50,
Defendants.
CIV. NO. 23-00132 SOM-RT
FINDINGS AND
RECOMMENDATION TO DENY
PLAINTIFFS’ MOTION FOR
ENTRY OF DEFAULT
JUDGMENT AGAINST
DEFENDANTS NOELANI YACHT
CHARTERS AND KIMBERLEY
KALALANI HIGA
FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS’ MOTION
FOR ENTRY OF DEFAULT JUDGMENT AGAINST DEFENDANTS
NOELANI YACHT CHARTERS AND KIMBERLEY KALALANI HIGA
Before the Court is Plaintiffs Kevin S. Albert and Kimberly Leblanc Albert,
Trustees of the Albert Revocable Trust UAD 6/3/1997 and Restated 1/7/2020’s
(collectively “Plaintiffs”) Motion for Entry of Default Judgment Against
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Defendants Noelani Yacht Charters and Kimberley Kalalani Higa (“Motion for
Default Judgment” or “Motion”), filed on May 26, 2023. ECF No. 26. Upon
careful review of the Motion for Default Judgment, the Court found that the
Motion was deficient. In an Entering Order dated June 30, 2023, the Court
directed Plaintiffs to file a supplemental memorandum addressing
(1) the Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), factors the Court
must evaluate when considering default judgment requests; and (2) why
there is no just reason for delay under Fed. P. Civ. P. 54(b) for the court to
enter final judgment against fewer than all claims or parties.
ECF No. 32. The Court cautioned Plaintiffs that “[a]bsent legal authority and
analysis on these issues, the Court is inclined to recommend denial of the Motion
without prejudice.” Id. On July 17, 2023, Plaintiffs filed a Supplemental
Memorandum in Support of [the Motion for Default Judgment] (“Supplemental”).
ECF No. 37. In their two-page Supplemental, Plaintiffs attempt to factually
distinguish Eitel v. McCool from this case. Plaintiffs state,
Unlike Defendant McCool in Eitel, there can be no misunderstanding about
the status of this case. There has been no settlement agreement or other
agreement for tolling the claims. After entry of Default Judgment against
Defendants [Kimberley Kalalani Higa] and [Noelani Yacht Charters],
Defendant Jones will still be a party in the case and his interests will not be
adversely affect by these judgments against other parties.
Id. at PageID.137. In their Supplemental, Plaintiffs failed to address the Eitel
factors and why there is no just reason for delay to enter final judgment against
fewer than all claims or parties. Because Plaintiffs were provided with an
opportunity to supplement their deficient Motion and failed to address the Court’s
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concerns, the Court elects to decide the Motion for Default Judgment without a
hearing pursuant to Rule 7.1(c) of the Local Rules of Practice for the United States
District Court for the District of Hawaii (“LR”). After careful consideration of the
Motion, Supplemental, records in this case and applicable law, the Court cannot
find that default judgment is appropriate and RECOMMENDS that the Motion for
Default Judgment be DENIED.
BACKGROUND
Plaintiffs commenced this action on March 13, 2023. ECF No. 1. The
Complaint names three defendants: Defendant Noelani Yacht Charters, LLC, a
Hawaii limited liability company (“Defendant NYC”), Defendant Jim Jones
(“Defendant Jones”) and Defendant Kimberley Kalalani Higa (“Defendant Higa”)
(collectively “Defendants”). Id. In their Complaint, Plaintiffs allege (1) a breach
of contract claim against Defendants NYC and Jones; (2) a misrepresentation claim
against Defendants NYC and Jones; (3) an unfair and deceptive acts and practices
claim against Defendants NYC and Jones; (4) a claim for exemplary damages
against Defendants NYC and Jones; (5) a negligence claim against Defendants
Jones and Higa; and (6) a claim for a maritime lien against Defendant NYC. Id.
The summons and Complaint were served on Defendant Jones on March 15,
2023 (ECF No. 10), Defendant Higa on March 17, 2023 (ECF No. 11) and
Defendant NYC on March 21, 2023 (ECF No. 12). On April 11, 2023, Defendant
Jones filed an Answer to the Complaint. ECF No. 13. On April 17, 2023,
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Plaintiffs filed an Ex Parte Request to Clerk for Entry of Default of Defendants
[NYC] and [Higa]. ECF No. 14. On April 18, 2023, an entry of default was
entered against Defendants NYC and Higa. ECF No. 15. However, on May 8,
2023, a telephonic Rule 16 Scheduling Conference was held, and Defendants Jones
and Higa made appearances. ECF No. 19. The Court issued its Rule 16
Scheduling Order that same day. ECF No. 20. Shortly thereafter on May 26,
2023, Plaintiffs filed the Motion for Default Judgment presently before this Court.
DISCUSSION
I. 	Eitel v. McCool Factors
Rule 55(b) of the Federal Rules of Civil Procedure (“Fed. R. Civ. P.”)
provides that a court may enter default judgment following the Clerk’s entry of
default pursuant to Fed. R. Civ. P. 55(a). The Court notes that “[t]he district
court’s decision whether to enter a default judgment is a discretionary one.”
Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (citations omitted).
“Entry of default does not entitle the non-defaulting party to a default
judgment as a matter of right.” In re Villegas, 132 B.R. 742, 746 (9th Cir. 1991)
(citing Gordon v. Duran, 895 F.2d 610, 612 (9th Cir. 1990)) (citations omitted).
“The Clerk’s entry of default . . . does not mean that the Court will automatically
grant default judgment.” Lanaʽi Resorts, LLC v. Maris Collective, Inc., Civ. No.
21-00401 HG-KJM, 2022 WL 3084574, at *2 (D. Haw. July 13, 2022), report and
recommendation adopted, Civ. No. 21-00401 HG-KJM, 2022 WL 3083728 (D.
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Haw. Aug. 3, 2022). Default judgments are ordinarily disfavored, and cases
should be decided on their merits if reasonably possible. Eitel v. McCool, 782 F.2d
1470, 1472 (9th Cir. 1986) (citation omitted).
To determine whether default judgment should be entered in this case, the
Court should consider the following factors:
(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.
Id. at 1471-72 (citation omitted). The Court notes that at the very least, “[a] party
seeking default judgment bears the burden of demonstrating to the Court that the
complaint is sufficient on its face and that the Eitel factors weigh in favor of
granting default judgment.” Szabo v. Sw. Endocrinology Assocs. PLLC, No. CV-
20-01896-PHX-DWL, 2021 WL 3411084, at *2 (D. Ariz. July 27, 2021). The
Motion failed to address any of the Eitel factors, and despite given the opportunity
to supplement their Motion to include argument addressing the Eitel factors,
Plaintiffs deliberately failed to make any such analysis in its Supplemental.
Accordingly, the Court FINDS that Plaintiffs’ request for default judgment against
Defendants NYC and Higa should be DENIED.
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II. 	Default Judgment on Fewer than All Defendants and Claims
The Complaint involves multiple parties and claims, and the Motion for
Default Judgment seeks default judgment against two out of three Defendants,
Defendants NYC and Higa. Fed. R. Civ. P. 54(b) states:
When an action presents more than one claim for relief . . . or when multiple
parties are involved, the court may direct entry of a final judgment as to one
or more, but fewer than all, claims or parties only if the court expressly
determines that there is no just reason for delay.
“In cases involving requests for default judgment against fewer than all of the
defendants in an action, the Supreme Court has held that default judgment should
not be entered where liability against all the defendants is joint.” Transwest Cap.,
Inc. v. Cashless Concepts, Inc., No. 1:12-CV-00049-SAB, 2013 WL 2286106, at
*1 (E.D. Cal. May 23, 2013) (citing Frow v. DeLa Vega, 82 U.S. 552, 554 (1872)).
“The Ninth Circuit extended this holding to prohibit default judgment against
fewer than all of the defendants in an action where the co-defendants are ‘similarly
situated, even if not jointly and severally liable.’” Transwest Cap., Inc., 2013 WL
2286106, at *1 (citing In re First T.D. & Inv., Inc., 253 F3d 520, 532 (9th Cir.
2001) & Garamendi v. Henin, 683 F.3d 1069, 1082 (9th Cir. 2012)). The rationale
for this rule is “to prevent inconsistent judgments between the defaulting
defendants and the non-defaulting defendants, which ‘would be incongruous and
illegal.’” Transwest Cap., Inc., 2013 WL 2286106, at *1 (citing Frow, 82 U.S. at
554).
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The Motion for Default Judgment seeks default judgment against fewer than
all parties and claims. Based on this Court’s review of the Complaint, it appears
that under various claims, Defendants NYC and Higa are similarly situated with
Defendant Jones, who the Complaint alleges is liable under several different claims
with either Defendant NYC or Defendant Higa. Accordingly, this Court cannot
find that there is no just reason for delay for entering default judgment against
Defendants NYC and Higa. Plaintiffs have also not provided any argument
regarding this issue despite being directed to Supplement their Motion. The Court
thus RECOMMENDS that the district court DENY the Motion for Default
Judgment.
CONCLUSION
Based on the foregoing, the Court FINDS that Plaintiffs failed to establish
that default judgment is warranted despite given the opportunity to supplement
their Motion. The Court is unable to find that there is no just reason for delay to
enter default judgment against fewer than all parties and claims. The Court thus
RECOMMENDS that the district court DENY the Motion for Default Judgment.
//
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//
//
//
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IT IS SO FOUND AND RECOMMENDED.
DATED: Honolulu, Hawaii, August 2, 2023.
Civ. No. 23-00132 SOM-RT; Kevin S. Albert, Trustees of the Albert Revocable
Trust UAD 6/3/1997 and Restated 1/7/202 et al. vs. Noelani Yacht Charters, LLC,
a Hawaii Limited Liability Company, et al.; Findings and Recommendation to
Deny Plaintiffs’ Motion for Entry of Default Judgment Against Defendants
Noelani Yacht Charters and Kimberley Kalalani Higa
Rom A. Trader
United States Magistrate Judge
Andrade
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