“‘[A] trial court may dismiss a claim sua sponte under Fed. R. Civ. P. 12(b)(6).’” 23 (quoting Omar v. Sea-Land Serv., Inc., 813 F.2d 986, 991 (9th Cir. 1987))
How later courts described this case
- “‘[A] trial court may dismiss a claim sua sponte under Fed. R. Civ. P. 12(b)(6).’” 23 (quoting Omar v. Sea-Land Serv., Inc., 813 F.2d 986, 991 (9th Cir. 1987))
- “A default judgment 18 entered when there has been no proper service of the complaint is, a fortiori, void, and 19 should be set aside.”
- “For an individual, the paradigm forum for the exercise of 12 general jurisdiction is the individual’s domicile.”
- holding that an employer owes its employees a 11 duty of “ordinary care”
Written by the judges who cited it.
The opinion
1
2
3
4
5
6
7
8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
10
11 MICHAEL J. FORBUSH, an individual, Case No.: 22-cv-00141-H-RBB
12 Plaintiff,
ORDER GRANTING IN PART AND
13 v. DENYING IN PART PLAINTIFF’S
MOTION FOR DEFAULT
14 NTI-CA INC., a Nevada corporation, dba
JUDGMENT
NTI GROUND TRANS; JOHN E.
15
KINDT, an individual; and DOES 1
[Doc. No. 34.]
16 through 10 inclusive
17 Defendants.
18
On November 26, 2024, Plaintiff Michael J. Forbush filed a motion for default
19
judgment against Defendants NTI-CA, Inc. doing business as NTI Ground Trans (“NTI”)
20
and John E. Kindt. (Doc. No. 34.) On December 17, 2024, the Court issued an order
21
requiring Plaintiff to serve Defendants and general counsel for Defendant NTI with a copy
22
of the order and Plaintiff’s motion for default judgment. (Doc. No. 35.) On December 26,
23
2024, Plaintiff filed proofs of service showing that it complied with the Court’s December
24
17, 2024 Order. (Doc. Nos. 36-38.)
25
A hearing on Plaintiff’s motion is currently scheduled for Monday, February 10,
26
2025 at 10:30 a.m. The Court, pursuant to its discretion under Civil Local Rule 7.1(d)(1),
27
determines the matter is appropriate for resolution without oral argument, submits the
28
1 motion on the parties’ papers, and vacates the hearing. For the reasons below, the Court
2 grants in part and denies in part Plaintiff’s motion for default judgment against Defendants
3 NTI and Kindt.
4 Background
5 The following factual background is taken from the allegations in Plaintiff’s
6 complaint. Defendant NTI is a national transportation company that provides airport
7 shuttle and luxury sedan and SUV transportation services in San Diego, California, Los
8 Angeles, California, Las Vegas, Nevada, and New York City, New York. (Doc. No. 1,
9 Compl. ¶ 13.) Defendant John E. Kindt is the Executive Vice-President and Chief
10 Operating Officer of NTI. (Id. ¶ 10.)
11 In January 2020, Plaintiff began working as a full-time employee of NTI as a
12 manager for NTI’s San Diego office. (Id. ¶¶ 14, 15.) On January 29, 2021, Kindt informed
13 Plaintiff that he was being furloughed from his employment at NTI due to a reduction in
14 work force. (Id. ¶ 16.) At the time of Plaintiff’s furlough and/or termination, Kindt
15 promised that NTI would continue to provide Plaintiff with health insurance coverage
16 under NTI’s group health plan. (Id. ¶ 17.)
17 Plaintiff alleges that his furlough and/or termination on January 29, 2021, was a
18 “qualifying event” under NTI’s group health plan. (Id. ¶¶ 18, 30.) Plaintiff further alleges
19 that, in light of that, NTI had an obligation under 29 U.S.C. § 1166 to provide Plaintiff with
20 notice of his rights under COBRA within 44 days of his furlough and/or termination. (Id.
21 ¶ 32.)
22 On March 28, 2021, NTI provided Plaintiff with an enrollment form for NTI’s group
23 health plan effective April 1, 2021. (Id. ¶ 19.) Plaintiff completed the enrollment form
24 and submitted it to NTI the next day. (Id.)
25 On March 30, 2021, Kindt emailed Plaintiff and asked him to obtain alternative
26 health insurance. (Id. ¶ 20.) Plaintiff then became concerned that NTI was ending his
27 coverage under NTI’s group health plan, so Plaintiff contacted James Gleich, NTI’s CEO,
28 to clarify his coverage status. (Id.) Later that same day, Kindt sent an email to Plaintiff
1 “stating that he ‘was not going to push [Forbush] off until and unless [he found]
2 something.’” (Id.) Based on that statement, Plaintiff reasonably believed that NTI would
3 continue to provide him with health insurance under NTI’s group health plan. (Id.)
4 On June 8, 2021, Plaintiff suffered a heart attack which required emergency heart
5 surgery. (Id. ¶ 21.) Plaintiff was billed $511,223.56 for the medical services he received
6 related to his heart surgery. (Id. ¶ 23; see Doc. No. 11-3, Hallet Decl. Ex. A.)
7 On July 30, 2021, Plaintiff received a notice from NTI’s human resources manager
8 stating that his medical benefits were to be terminated effective August 1, 2021, due to a
9 COBRA qualifying event (“termination”) and provided information regarding his COBRA
10 rights. (Doc. No. 1, Compl. ¶ 22; see Doc. No. 11-6, Hallet Decl. Ex. D.) Plaintiff never
11 received notification of his COBRA rights prior to the July 30, 2021 notice. (Doc. No. 1,
12 Compl. ¶ 22.)
13 Plaintiff received an Explanation of Benefits letter dated October 22, 2021 from
14 Employer Driven Insurance Services (“EDIS”) – the claim administrator for NTI’s health
15 plan during the time of the heart attack and the surgery. (Id. ¶ 23; Doc. No. 11-3, Hallet
16 Decl. Ex. A.) The letter stated that coverage for the medical services related to Plaintiff’s
17 emergency heart surgery was being denied on the grounds that Plaintiff was not an eligible
18 member of the plan at the time of service. (Id.) Plaintiff appealed EDIS’s denial of the
19 claims. (Doc. No. 1, Compl. ¶ 24; Doc. No. 11-6, Hallet Decl. Ex. D.) In a letter dated
20 December 1, 2021, EDIS affirmed its denial of the claims based on information from NTI
21 stating that Plaintiff’s termination date and “last date actively at work” was January 29,
22 2021. (Doc. No. 1, Compl. ¶ 25; Doc. No. 11-6, Hallet Decl. Ex. E.)
23 On February 1, 2022, Plaintiff filed a complaint against Defendants NTI and Kindt,
24 alleging claims for: (1) failure to provide notification of COBRA rights in violation of 29
25 U.S.C. § 1166; (2) failure to provide notification of Cal-COBRA rights in violation of
26 California Insurance Code § 10128.55; (3) breach of contract; (4) negligence; (5) negligent
27 misrepresentation; (6) intentional misrepresentation; and (7) declaratory relief. (Doc. No.
28 1, Compl. ¶¶ 27-84.) On February 18, 2022, Plaintiff filed a proof of service as to NTI.
1 (Doc. No. 3.) On March 3, 2023, Plaintiff filed a proof of service as to Kindt. (Doc. No.
2 4.)
3 On April 26, 2022, Plaintiff filed a notification of bankruptcy proceedings as to NTI.
4 (Doc. No. 6.) On April 27, 2022, the Clerk of Court entered default against Defendant
5 Kindt. (Doc. No. 7.) On July 14, 2022, Plaintiff filed a notice stating that NTI’s Chapter
6 11 bankruptcy proceedings had been dismissed. (Doc. No. 8.) On July 15, 2022, the Clerk
7 of Court entered a default against Defendant NTI. (Doc. No. 10.)
8 On December 8, 2022, Plaintiff filed a motion for default judgment against
9 Defendants. (Doc. No. 11.) On May 3, 2023, the Court denied Plaintiff’s motion for
10 default judgment without prejudice on the grounds that Plaintiff failed to demonstrate that
11 he properly served either of the Defendants in this action. (Doc. No. 18.) On June 1, 2023,
12 Plaintiff filed new proofs of service as to Defendants NTI and Kindt. (Doc. Nos. 20, 21.)
13 On August 7, 2023, the Court denied Plaintiff’s motion for reconsideration of the Court’s
14 May 3, 2023 order denying his motion for default judgment. (Doc. No. 23.) On February
15 6, 2024, the Court again entered a default against Defendant Kindt. (Doc. No. 27.)
16 On March 19, 2024, the Court granted Plaintiff’s motion for an order allowing
17 alternative service of process on Defendant NTI through the California Secretary of State
18 pursuant to Federal Rule of Civil Procedure 4(h)(1) and California Code of Civil Procedure
19 § 416.10(d). (Doc. No. 29.) On March 25, 2024, Plaintiff filed a new proof of service as
20 to Defendant NTI. (Doc. No. 30.) On May 6, 2024, the Court again entered a default
21 against Defendant NTI. (Doc. No. 32.)
22 By the present motion, Plaintiff moves pursuant to Federal Rule of Civil Procedure
23 55(b) for a default judgment against Defendants NTI and Kindt. (Doc. No. 34.)
24 Specifically, Plaintiff requests that the Court enter a joint and several default judgment
25 against Defendants NTI and Kindt and award Plaintiff damages, costs, attorney’s fees and
26 prejudgment interest in the total amount of $794,446.14. (Doc. No. 34-1 at 23.)
27 / / /
28 / / /
1 Discussion
2 I. Jurisdictional and Procedural Requirements
3 A. Subject Matter Jurisdiction and Personal Jurisdiction
4 Before evaluating the merits of a motion for default judgment, the Court has the
5 affirmative duty to ensure proper subject matter jurisdiction and personal jurisdiction when
6 a party seeks default judgment. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). Here, the
7 Court has subject matter jurisdiction – specifically, federal question jurisdiction under 28
8 U.S.C. § 1331 – over Plaintiff’s claim for failure to provide notification of COBRA rights
9 in violation of 29 U.S.C. § 1166 because that claim seeks relief under a federal law. (See
10 Doc. No. 1, Compl. ¶¶ 27-38.) See Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 378–
11 79 (2012) (“[W]hen federal law creates a . . . right of action and furnishes the substantive
12 rules of decision, the claim arises under federal law, and district courts possess federal-
13 question jurisdiction under § 1331.”).
14 In addition, the Court has supplemental jurisdiction pursuant to 28 U.S.C. § 1367
15 over Plaintiff’s remaining state law claims because all of Plaintiff’s claims derive from a
16 common nucleus of operative fact and are such that a plaintiff would ordinarily be expected
17 to try them in one judicial proceeding. See Arroyo v. Rosas, 19 F.4th 1202, 1209 (9th Cir.
18 2021); Trustees of Constr. Indus. & Laborers Health & Welfare Tr. v. Desert Valley
19 Landscape & Maint., Inc., 333 F.3d 923, 925 (9th Cir. 2003) (“Supplemental jurisdiction
20 is constitutional so long as the pendent state law claim is part of the same ‘case or
21 controversy’ as the federal claim. Nonfederal claims are part of the same ‘case’ as federal
22 claims when they derive from a common nucleus of operative fact and are such that a
23 plaintiff would ordinarily be expected to try them in one judicial proceeding.”). As such,
24 the Court has subject matter jurisdiction over all of the claims in Plaintiff’s complaint.
25 In addition, the Court has personal jurisdiction over Defendants NTI and Kindt.
26 “Because California’s long-arm jurisdictional statute is coextensive with federal due
27 process requirements, the jurisdictional analyses under state law and federal due process
28 are the same.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800–01 (9th Cir.
1 2004). “For a court to exercise personal jurisdiction over a nonresident defendant, that
2 defendant must have at least ‘minimum contacts’ with the relevant forum such that the
3 exercise of jurisdiction ‘does not offend traditional notions of fair play and substantial
4 justice.’” Id. at 801. Minimum contacts may be established via general jurisdiction or
5 specific jurisdiction. See Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008).
6 In the complaint, Plaintiff alleges that Defendant Kindt is an individual resident of
7 Los Angeles, California. (Doc. No. 1, Compl. ¶ 10.) Indeed, Plaintiff’s proof of service
8 lists Defendant Kindt’s usual place of abode as being in Torrance, California. (See Doc.
9 No. 21.) Because Defendant Kindt is a resident of and is domiciled in California, the Court
10 has general jurisdiction over him. See Goodyear Dunlop Tires Operations, S.A. v. Brown,
11 564 U.S. 915, 924 (2011) (“For an individual, the paradigm forum for the exercise of
12 general jurisdiction is the individual’s domicile.”).
13 In the complaint, Plaintiff alleges that Defendant NTI is a Nevada corporation that
14 is registered and authorized to do business in California and provides airport shuttle and
15 luxury sedan services in San Diego, California and Los Angeles, California. (Doc. No. 1,
16 Compl. ¶¶ 9, 13.) Plaintiff further alleges that he was employed by Defendant NTI as a
17 manager for NTI’s San Diego office. (Id. ¶ 14.) And all of Plaintiff’s claims arise out of
18 his employment by NTI in its San Diego office. (See generally id. ¶¶ 13-84.) These
19 allegations are sufficient to establish that the Court has specific jurisdiction over Defendant
20 NTI.
21 The Ninth Circuit has established a three-prong test for analyzing specific personal
22 jurisdiction:
23 (1) The non-resident defendant must purposefully direct his activities or
consummate some transaction with the forum or resident thereof; or perform
24
some act by which he purposefully avails himself of the privilege of
25 conducting activities in the forum, thereby invoking the benefits and
protections of its laws;
26
(2) the claim must be one which arises out of or relates to the defendant’s
27
forum-related activities; and
28
(3) the exercise of jurisdiction must comport with fair play and substantial
1 justice, i.e. it must be reasonable.
2 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004).
3 By registering to do business in California, having offices in California, and
4 employing California residents, Defendant NTI has purposefully availed itself of the
5 privilege of conducting activities in California and has also purposefully directed its
6 activities to California. Further, all of Plaintiff’s claims arise out of or are related to
7 Defendant NTI’s California contacts, specifically the San Diego office of its transportation
8 business. And the exercise of personal jurisdiction over Defendant NTI in these
9 circumstances would be reasonable. As such, the Court has specific jurisdiction over
10 Defendant NTI. In sum, subject matter jurisdiction and personal jurisdiction are proper in
11 this action.
12 B. Proper Service
13 Before evaluating the merits of a motion for default judgment, the Court must also
14 consider the adequacy of service of process on the parties against whom the default is
15 requested. Indian Hills Holdings, LLC v. Frye, 572 F. Supp. 3d 872, 884 (S.D. Cal. 2021);
16 DFSB Kollective Co. v. Bourne, 897 F. Supp. 2d 871, 877 (N.D. Cal. 2012); see also Gold
17 Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 19 (3d Cir. 1985) (“A default judgment
18 entered when there has been no proper service of the complaint is, a fortiori, void, and
19 should be set aside.”). This is because “[a] federal court does not have jurisdiction over a
20 defendant unless the defendant has been served properly under Fed. R. Civ. P. 4.” Direct
21 Mail Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir.
22 1988); see also Omni Cap. Int’l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987)
23 (“Before a federal court may exercise personal jurisdiction over a defendant, the procedural
24 requirement of service of summons must be satisfied.”); Mason v. Genisco Tech. Corp.,
25 960 F.2d 849, 851 (9th Cir. 1992) (“A person is not bound by a judgment in a litigation to
26 which he or she has not been made a party by service of process.”).
27 Plaintiff has provided the Court with a proof of service stating that he served
28 Defendant Kindt with the complaint and summons on May 26, 2023 pursuant to Federal
1 Rule of Civil Procedure 4 and California Code of Civil Procedure § 415.20. (Doc. No. 21.)
2 Federal Rule of Civil Procedure 4(e)(1) permits service on an individual by “following
3 state law for serving a summons in an action brought in courts of general jurisdiction in the
4 state where the district court is located or where service is made.” Fed. R. Civ. P. 4(e)(1).
5 California Code of Civil Procedure § 415.20 permits substituted service of an individual in
6 the following manner:
7 (b) If a copy of the summons and complaint cannot with reasonable diligence
be personally delivered to the person to be served, as specified in Section
8
416.60, 416.70, 416.80, or 416.90, a summons may be served by leaving a
9 copy of the summons and complaint at the person’s dwelling house, usual
place of abode, usual place of business, or usual mailing address other than a
10
United States Postal Service post office box, in the presence of a competent
11 member of the household or a person apparently in charge of his or her office,
place of business, or usual mailing address other than a United States Postal
12
Service post office box, at least 18 years of age, who shall be informed of the
13 contents thereof, and by thereafter mailing a copy of the summons and of the
complaint by first-class mail, postage prepaid to the person to be served at the
14
place where a copy of the summons and complaint were left. Service of a
15 summons in this manner is deemed complete on the 10th day after the mailing.
16 Plaintiff’s proof of service states that Defendant Kindt was served by leaving a copy
17 of the complaint and summons at his usual place of adobe in Torrance, California with
18 “Anna ‘DOE,’” a person pf suitable age who resides there. (Doc. No. 21.) The proof of
19 service further states that the process server thereafter mailed via first-class mail, postage
20 prepaid the complaint and summons to Kindt’s usual place of abode in Torrance. (Id.) The
21 proof of service also includes an affidavit of reasonable diligence completed by the process
22 server. (Id.) As such, Plaintiff has demonstrated proper service as to Defendant Kindt
23 pursuant to Federal Rule of Civil Procedure 4(e)(1) and California Code of Civil Procedure
24 § 415.20.
25 As to Defendant NTI, Federal Rule of Civil Procedure 4(h) governs service on
26 corporations and provides that a corporation must be served: “(1) in a judicial district of
27 the United States: (A) in the manner prescribed by Rule 4(e)(1) for serving an individual .
28 . . .” Fed. R. Civ. P. 4(h)(1). Federal Rule of Civil Procedure 4(e)(1) permits service on
1 an individual by “following state law for serving a summons in an action brought in courts
2 of general jurisdiction in the state where the district court is located or where service is
3 made.” Fed. R. Civ. P. 4(e)(1).
4 California Code of Civil Procedure § 416.10 provides:
5 A summons may be served on a corporation by delivering a copy of the
summons and the complaint by any of the following methods:
6
. . .
7
(d) If authorized by any provision in Section 1701, 1702, 2110, or 2111 of the
8
Corporations Code (or Sections 3301 to 3303, inclusive, or Sections 6500 to
9 6504, inclusive, of the Corporations Code, as in effect on December 31, 1976,
with respect to corporations to which they remain applicable), as provided by
10
that provision.
11
Cal. Code. Civ. Pro. § 416.10.
12
California Corporations Code § 2111(a) further provides:
13
If the agent designated for the service of process is a natural person and cannot
14 be found with due diligence at the address stated in the designation . . . then
the court may make an order that service be made by personal delivery to the
15
Secretary of State or to an assistant or deputy secretary of state of two copies
16 of the process together with two copies of the order . . . . Service in this
manner is deemed complete on the 10th day after delivery of the process to the
17
Secretary of State.
18 Cal. Corp. Code § 2111(a).
19 On March 19, 2024, the Court granted Plaintiff’s motion and authorized Plaintiff to
20 effective service of process on Defendant NTI through the California Secretary of State
21 pursuant to California Corporations Code § 2111(a). (Doc. No. 29.) Plaintiff has provided
22 the Court with a proof of service showing that it served Defendant NTI through the
23 California Secretary of State with the summons and complaint on March 20, 2024. (Doc.
24 No. 30.) As such, Plaintiff has demonstrated proper service as to Defendant NTI pursuant
25 to Federal Rules of Civil Procedure 4(h) ad 4(e)(1), California Code of Civil Procedure §
26
27
28
1 416.10(d), and California Corporations Code § 2111(a).
2 II. Review of Requested Default Judgment
3 A. Legal Standard
4 A court may enter default judgment against a defendant who has failed to plead or
5 otherwise defend an action. Fed. R. Civ. P. 55(b). “A default judgment must not differ in
6 kind from, or exceed in amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c).
7 In determining whether to exercise its discretion to grant default judgment, a district court
8 considers: “(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s
9 substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the
10 action, (5) the possibility of a dispute concerning material facts, (6) whether the default
11 was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of
12 Civil Procedure favoring decisions on the merits.” Eitel v. McCool, 782 F.2d 1470, 1471–
13 72 (9th Cir. 1986). At the default judgment stage, well-pleaded factual allegations of the
14 complaint are taken as true, except those related to damages. TeleVideo Sys., Inc. v.
15 Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987); see also Fed. R. Civ. P. 8(b)(6) (“An
16 allegation–other than one relating to the amount of damages–is admitted if a responsive
17 pleading is required and the allegation is not denied.”).
18 B. The Merits of Plaintiff’s Claim and the Sufficiency of the Complaint
19 In evaluating a motion for default judgment, the Court must consider: “the merits of
20 plaintiff’s substantive claim” and “the sufficiency of the complaint.” Eitel, 782 F.2d at
21 1471–72; see also Seismic Reservoir 2020, Inc. v. Paulsson, 785 F.3d 330, 335 (9th Cir.
22 2015) (“‘[A] trial court may dismiss a claim sua sponte under Fed. R. Civ. P. 12(b)(6).’”
23 (quoting Omar v. Sea-Land Serv., Inc., 813 F.2d 986, 991 (9th Cir. 1987))). “The Ninth
24 Circuit has suggested that the [] two Eitel factors involving the substantive merits of
25
26
27 1 In addition to properly serving Defendants with the summons and complaint in this
action, on December 20, 2024, Plaintiff served Defendants and general counsel for
28
1 plaintiff’s claim and the sufficiency of the complaint require that plaintiffs’ allegations
2 state a claim on which the [plaintiff] may recover.” Ewing v. Encor Solar, LLC, No. 18-
3 CV-2247-CAB-MDD, 2019 WL 4193363, at *2 (S.D. Cal. Sept. 3, 2019).
4 Federal Rule of Civil Procedure 8(a)(2) requires that a pleading that states a claim
5 for relief contain “a short and plain statement of the claim showing that the pleader is
6 entitled to relief.” The function of this pleading requirement is to “‘give the defendant fair
7 notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v.
8 Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
9 A complaint will be deemed sufficient if it contains “enough facts to state a claim to
10 relief that is plausible on its face.” Id. at 570. “A claim has facial plausibility when the
11 plaintiff pleads factual content that allows the court to draw the reasonable inference that
12 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
13 (2009). “A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the
14 elements of a cause of action will not do.’” Id. (quoting Twombly, 550 U.S. at 555).
15 “Threadbare recitals of the elements of a cause of action, supported by mere conclusory
16 statements, do not suffice.” Id. “While legal conclusions can provide the framework of a
17 complaint, they must be supported by factual allegations.” Id. at 679. Accordingly,
18 dismissal for failure to state a claim is proper where the claim “lacks a cognizable legal
19 theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela
20 Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008); see Los Angeles Lakers, Inc. v. Fed.
21 Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017).
22 In assessing the sufficiency of a complaint, a district court must “‘accept the factual
23 allegations of the complaint as true and construe them in the light most favorable to the
24 plaintiff.’” Los Angeles Lakers, 869 F.3d at 800 (quoting AE ex rel. Hernandez v. Cty. of
25 Tulare, 666 F.3d 631, 636 (9th Cir. 2012)). But a court need not accept “legal conclusions”
26 as true. Iqbal, 556 U.S. at 678. “Further, it is improper for a court to assume the claimant
27 “can prove facts which it has not alleged or that the defendants have violated the . . . laws
28 in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State
1 Council of Carpenters, 459 U.S. 519, 526 (1983).
2 i. Plaintiff’s Claim for Violation of 29 U.S.C. § 1166
3 In his complaint, Plaintiff alleges a claim against Defendants NTI and Kindt for
4 failure to provide him with notification of his COBRA rights in violation of 29 U.S.C. §
5 1166.2 (See Doc. No. 1, Compl. ¶¶ 27-38.) The Consolidated Omnibus Budget
6 Reconciliation Act of 1985 (“COBRA”) “amended ERISA, among other statutes, to require
7 an employer who sponsors a group health plan to give the plan’s qualified beneficiaries the
8 opportunity to elect continuation coverage under the plan when the beneficiaries might
9 otherwise lose coverage upon the occurrence of certain qualifying events, including the
10 termination of the covered employee’s employment (except in cases of gross misconduct).”
11 Jass v. CherryRoad Techs., Inc., 472 F. Supp. 3d 787, 801 (D. Haw. 2020) (quoting Geissal
12 v. Moore Med. Corp., 524 U.S. 74, 80 (1998)).
13 COBRA “in particular, provides that within 30 days of employment termination,
14 ‘the employer of an employee under a plan must notify the administrator of [the
15 employment termination].’” Id. (quoting 29 U.S.C. § 1166(a)(2)). “Then, ‘within 14 days
16 . . . of the date on which the administrator is notified,’ ‘the administrator shall notify . . .
17 [the] qualified beneficiary’ of his or her right under COBRA to elect continuation health
18 care coverage.” Id. (quoting 29 U.S.C. § 1166(a)(4)(A), (c)). “ERISA’s civil enforcement
19
20
21 2 It is unclear from the complaint whether Plaintiff’s claim for failure to provide him
with notification of his COBRA rights in violation of 29 U.S.C. § 1166 is being brought
22
against just Defendant NTI or both Defendants NTI and Kindt. The header for the § 1166
23 claim states that the claim is being brought “Against NTI-CA INC.” as opposed to the
headers for other claims in the complaint which specifically state that the claim is being
24
brought against “All Defendants.” (Compare Doc. No. 1, Compl. at p.6 with id. at pp. 9,
25 10.) But the allegations in support of Plaintiff’s claim for failure to provide notification of
COBRA rights in violation of 29 U.S.C. § 1166 refer to “Defendants.” (See, e.g., id. ¶¶
26
28, 31-33.) As such, out of an abundance of caution, the Court will construe Plaintiff’s
27 claim for failure to provide him with notification of his COBRA rights in violation of 29
U.S.C. § 1166 as being asserted against both Defendants NTI and Kindt in assessing the
28
1 provision grants a plan ‘participant or beneficiary’ a cause of action to sue ‘[a]ny
2 administrator’ who fails to comply with ‘the [notice] requirements’ in Section 1166(a)(4).”
3 Id. (quoting 29 U.S.C. § 1132(a)(1)(A), (c)(1)).
4 In the complaint, Plaintiff alleges that he was employed by Defendant NTI, and
5 Defendant Kindt was NTI’s Executive Vice President and Chief Operating Officer. (See
6 Doc. No. 1, Compl. ¶¶ 10, 14-15.) ERISA’s civil enforcement provision only provides a
7 plan participant or beneficiary a cause of action for failure to notify of COBRA rights
8 against a plan “administrator.” 29 U.S.C. § 1132(a)(1)(A), (c)(1); Jass, 472 F. Supp. 3d at
9 801. It does not provide for a cause of action for failure to notify of COBRA rights against
10 an “employer.” See Marceau v. Idaho, No. 1:09-CV-00514-N-EJL, 2011 WL 3439178, at
11 *11 (D. Idaho Aug. 5, 2011) (“While it is true that notification of such rights must be
12 provided to a ‘qualified beneficiary’ upon the occurrence of a ‘qualifying event,’ the clear
13 text of the statute provides that it is not the obligation of an employer to do so.”); see, e.g.,
14 Vincent v. Wells Fargo Guard Servs., Inc., 44 F. Supp. 2d 1302, 1304–05 (S.D. Fla. 1999)
15 (granting summary judgment of plaintiff’s § 1166 claim on the grounds that defendant was
16 his employer and not the plan administrator). And ERISA does not provide for a cause of
17 action for failure to notify of COBRA rights against a “supervisor.”
18 In the complaint, Plaintiff alleges that “Defendants were the Plan Sponsor and/or
19 Plan Administrator for NTI’s group health plan in effect at the time of Plaintiff’s furlough
20 and/or termination.” (Doc. No. 1, Compl. ¶ 31.) But conclusory allegations such as these
21 are insufficient to properly state a claim for relief, and a Court need not accept such
22 conclusory statements as true. See Iqbal, 556 U.S. at 678; see also Cripps v. Life Ins. Co.
23 of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (“[N]ecessary facts not contained in the
24 pleadings, and claims which are legally insufficient, are not established by default.”).
25 Further, a review of Plaintiff’s own exhibits attached to his motion for default judgment
26 appear to show that the “administrator” for NTI’s group health care plan during the relevant
27 period was “Anthem” and then later “EDIS.” (See Doc. No. 34-7, Hallett Decl. Ex. E; see
28 also Doc. No. 34-3, Hallett Decl. Ex. A.) And this is consistent with other allegations in
1 the complaint. (See, e.g., Doc. No. 1, Compl. ¶ 23 (“Plaintiff received an Explanation of
2 Benefits dated October 22, 2021, from Employer Driven Insurance Services (‘EDIS’), the
3 claim administrator for NTI’s health plan . . . .”).) Because Anthem and EDIS – not NTI
4 and Kindt – were the administrators of NTI’s heath care plan, Plaintiff’s claims against
5 Defendants NTI and Kindt for failure to provide him with notification of his COBRA rights
6 in violation of 29 U.S.C. § 1166 is defective as a matter of law. See Marceau, 2011 WL
7 3439178, at *11; Vincent, 44 F. Supp. 2d at 1304–05. In sum, because it appears that
8 Defendants were not the administrators of Plaintiff’s health care plan, Plaintiff is not
9 entitled to a default judgment on his claim against Defendants for violation of 29 U.S.C. §
10 1166.
11 ii. Plaintiff’s Claim for Violation of California Insurance Code § 10128.50
12 In the complaint, Plaintiff alleges a claim against Defendants for violation of
13 California Insurance Code § 10128.50. (Doc. No. 1, Compl. ¶¶ 39-49.) Plaintiff’s claim
14 against Defendants for violation of California Insurance Code § 10128.50 is derivative of
15 his claim for violation of 29 U.S.C. § 1166. (See Doc. No. 34-1 at 10 (“For the same
16 reasons Mr. Forbush’s Complaint sufficiently alleges a meritorious claim for violation of
17 29 U.S.C. § 1166, he has also sufficiently alleged a claim for violation of Cal-COBRA and
18 specifically California Insurance Code § 10128.55.”).) In light of this, because Plaintiff is
19 not entitled to a default judgment on his § 1166 claim, and Plaintiff’s § 10128.50 is
20 derivative of that claim, Plaintiff is also not entitled to a default judgment on his claim for
21 violation of California Insurance Code § 10128.50.
22 iii. Plaintiff’s Claim for Declaratory Relief
23 In the complaint, Plaintiff alleges a claim against Defendants for declaratory relief.
24 (Doc. No. 1, Compl. ¶¶ 82-84.) Plaintiff’s claim for declaratory relief is based on his
25 allegations that Defendants failed to timely provide him with notice of his rights under
26 COBRA and/or CAL-COBRA. (Id. ¶ 83.) As such, Plaintiff’s claim for declaratory relief
27 is derivative of his claims for violation of 29 U.S.C. § 1166 and California Insurance Code
28 § 10128.55. Because Plaintiff is not entitled to a default judgment on his § 1166 claim and
1 his § 10128.50 claim, and Plaintiff’s claim for declaratory relief is derivative of those
2 claims, Plaintiff is also not entitled to a default judgment on his claim for declaratory relief.
3 iv. Plaintiff’s Claim for Breach of Oral Contract
4 In the complaint, Plaintiff alleges a claim against Defendants for breach of oral
5 contract. (Doc. No. 1, Compl. ¶¶ 50-57.) Under California law, a breach of contract claim
6 has four elements: “‘(1) the existence of [a] contract, (2) plaintiff’s performance or excuse
7 for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the
8 plaintiff.’” Piedmont Cap. Mgmt., L.L.C. v. McElfish, 94 Cal. App. 5th 961, 968 (2023)
9 (quoting Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011)). In order for
10 there to be a valid contract between the parties, there must be “mutual assent (usually
11 accomplished through the medium of an offer and acceptance) and consideration.”
12 Berlanga v. Univ. of San Francisco, 100 Cal. App. 5th 75, 82 (2024); accord Levy v. Only
13 Cremations for Pets, Inc., 57 Cal. App. 5th 203, 211 (2020).
14 Consideration is “[a]ny benefit conferred, or agreed to be conferred, upon the
15 promisor, by any other person, to which the promisor is not lawfully entitled, or any
16 prejudice suffered, or agreed to be suffered, by such person, other than such as he is at the
17 time of consent lawfully bound to suffer, as an inducement to the promisor.” Cal. Civ.
18 Code § 1605; see Blonder v. Gentile, 149 Cal. App. 2d 869, 875 (1957) (“A consideration
19 is sufficient to support a contract if it is either beneficial to the promisor or detrimental to
20 the promise.”). The California Supreme Court has explained that “there are two
21 requirements in order to find consideration.” Steiner v. Thexton, 48 Cal. 4th 411, 420
22 (2010). First, “[t]he promisee must confer (or agree to confer) a benefit or must suffer (or
23 agree to suffer) prejudice.” Id. at 420–21. Second “the benefit or prejudice must actually
24 be bargained for as the exchange for the promise. Put another way, the benefit or prejudice
25 must have induced the promisor’s promise.” Id. at 421.
26 Here, Plaintiff has failed to allege sufficient facts showing that the alleged oral
27 agreement was supported by adequate consideration. In the complaint, Plaintiff alleges
28 that “Defendants promise to continue providing Plaintiff with health insurance coverage,”
1 and in exchange “Plaintiff agreed to his severance pay and benefits.” (Doc. No. 1, Compl.
2 ¶ 51.) This is insufficient constitute valid consideration. In order to for there to be valid
3 consideration, the promisee, here Plaintiff, must confer (or agree to confer) a benefit or
4 must suffer (or agree to suffer) prejudice. See Steiner, 48 Cal. 4th at 420. Plaintiff
5 accepting his severance pay and benefits does not confer any benefit on Defendant NTI. It
6 also is not a prejudice to Plaintiff. Rather, severance pay and benefits are a benefit to
7 Plaintiff, not a detriment.
8 Further, Plaintiff has not alleged any facts showing that the alleged consideration
9 was bargained for as the exchange for the promise. In complaint, Plaintiff alleges that he
10 was furloughed and/or terminated on January 29, 2021, and at that time, Kindt promised
11 that NTI would continue to provide Plaintiff with health insurance coverage. (See Doc.
12 No. 1, Compl. ¶¶ 16-17.) There are no facts showing that NTI offered to provide Plaintiff
13 with health insurance coverage in exchange for anything.
14 Because Plaintiff has failed to adequately allege that the alleged oral agreement was
15 supported by sufficient consideration, he has failed to adequately allege the existence of a
16 valid oral agreement between the parties – a necessary element of his claim for breach of
17 contract. See Oasis W. Realty, 51 Cal. 4th at 821. As such, Plaintiff is not entitled to
18 default judgment on his claim for breach of oral contract.
19 v. Plaintiff’s Claim for Intentional Misrepresentation
20 In the complaint, Plaintiff alleges a claim against Defendants for intentional
21 misrepresentation. (Doc. No. 1, Compl. ¶¶ 72-81.) “‘The elements of fraud, which give
22 rise to the tort action for deceit, are (a) misrepresentation (false representation,
23 concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to
24 defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” Lazar
25 v. Superior Ct., 12 Cal. 4th 631, 638 (1996); accord Geraghty v. Shalizi, 8 Cal. App. 5th
26 593, 597 (2017).
27 Here, Plaintiff has failed to allege sufficient facts showing that Defendant NTI or
28 Kindt had knowledge that the misrepresentation at issue was false at the time it was made.
1 In the complaint, Plaintiff bases his claim for intentional misrepresentation on the
2 following allegation: “On March 30, 2021, Defendant Kindt represented to Plaintiff that
3 Plaintiff would continue to be covered under NTI’s group health plan until Plaintiff found
4 an alternative health insurance plan.” (Doc. No. 1, Compl. ¶ 74.) As to scienter, Plaintiff
5 further alleges: “Defendants knew that their representation was false at the time they were
6 made to Plaintiff, or Defendants made the representations recklessly and without regard
7 for their truth.” (Id. ¶ 76.) This conclusory allegation of scienter is insufficient to properly
8 state a claim for intentional misrepresentation, and the Court need not accept such a
9 conclusory allegation as true. See Iqbal, 556 U.S. at 678.
10 Although intent may be averred generally under Federal Rule of Civil Procedure
11 9(b), a plaintiff must allege sufficient facts to support an inference or render plausible that
12 the defendant acted with the requisite intent. In re Hydroxycut Mktg. & Sales Pracs. Litig.,
13 299 F.R.D. 648, 659 (S.D. Cal. 2014); see United States v. Corinthian Colleges, 655 F.3d
14 984, 997 (9th Cir. 2011); Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327
15 (Fed. Cir. 2009). Plaintiff has not alleged any facts that would support an inference that
16 Defendants knew that the representation at issue was false at the time it was made by
17 Defendant Kindt. To the contrary, the evidence in the record submitted by Plaintiff,
18 supports the opposite inference. Plaintiff’s evidence shows that as of July 30, 2021, NTI’s
19 employees believed that Plaintiff was still covered under NTI’s health care benefits plan
20 and that his last day of benefits coverage would be July 31, 2021. (See Doc. No. 34-6,
21 Hallett Decl. Ex. D (Exhibit A); see also Doc. No. 34-7, Hallett Decl. Ex. E (letter from
22 EDIS noting that NTI “submitted an Employee Enrollment Form for Michael Forbush
23 signed 3/29/21”).) This evidence supports the inference that although Kindt’s March 2021
24 statement regarding Plaintiff’s enrollment in NTI’s health care plan was erroneous, NTI’s
25 employees did not believe that the statement was incorrect at the time it was made. In sum,
26 because Plaintiff has failed to allege sufficient facts to support the element of scienter for
27 his claim for intentional misrepresentation, Plaintiff is not entitled to a default judgment on
28 that claim.
1 vi. Plaintiff’s Claims for Negligence and Negligent Misrepresentation
2 In the complaint, Plaintiff alleges claims against Defendants for negligence and
3 negligent misrepresentation. (Doc. No. 1, Compl. ¶¶ 58-71.) Under California law, the
4 elements of negligence are: (1) duty, (2) breach, (3) causation, and (4) damages. Brown v.
5 USA Taekwondo, 11 Cal. 5th 204, 213 (2021); Gilead Tenofovir Cases, 98 Cal. App. 5th
6 911, 920 (2024). “Whether a duty exists is a question of law to be resolved by the court.”
7 Brown v. USA Taekwondo, 11 Cal. 5th 204, 213 (2021)
8 “The elements of negligent misrepresentation are ‘(1) the misrepresentation of a past
9 or existing material fact, (2) without reasonable ground for believing it to be true, (3) with
10 intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the
11 misrepresentation, and (5) resulting damage.’” Nat’l Union Fire Ins. Co. v. Cambridge
12 Integrated Servs. Group, Inc., 171 Cal. App. 4th 35, 50 (2009) (citation omitted).
13 “The elements of a cause of action for fraud and a cause of action for negligent
14 misrepresentation are very similar . . . . [B]oth torts are defined as deceit. However, the
15 state of mind requirements are different.’” Platt Elec. Supply, Inc. v. EOFF Elec., Inc., 522
16 F.3d 1049, 1055 (9th Cir. 2008) (quoting Intrieri v. Superior Court, 117 Cal. App. 4th 72,
17 85 (2004)). “‘Negligent misrepresentation lacks the element of intent to deceive.
18 Therefore, where the defendant makes false statements, honestly believing that they are
19 true, but without reasonable ground for such belief, he may be liable for negligent
20 misrepresentation, a form of deceit.’” Id. (quoting Intrieri, 117 Cal. App. 4th at 86).
21 “Under the doctrine of respondeat superior, an employer may be held vicariously
22 liable for torts committed by an employee within the scope of employment.” Mary M. v.
23 City of Los Angeles, 54 Cal. 3d 202, 208 (1991). “Under the respondeat superior doctrine,
24 the term “scope of employment” has been interpreted broadly.” Purton v. Marriott Int’l,
25 Inc., 218 Cal. App. 4th 499, 505 (2013) (citing Farmers Ins. Grp. v. Cnty. of Santa Clara,
26 11 Cal. 4th 992, 1004 (1995)). The employer’s liability extends beyond his actual or
27 possible control of the employee to include risks inherent in or created by the enterprise.
28 Id. An employer will be vicariously liable for an employee’s tort if the employee’s act was
1 an outgrowth of his employment, inherent in the working environment, typical of or
2 broadly incidental to the employer’s business, or, in a general way, foreseeable from the
3 employee’s duties. Id. “Thus, an employer’s vicarious liability may extend to the
4 employee’s negligence, willful and malicious torts, or acts that contravene an express
5 company rule and confer no benefit to the employer.” Id.
6 Plaintiff has adequately stated claims against Defendant NTI for negligence and
7 negligent misrepresentation. Plaintiff alleges that he was employed by Defendant NTI,
8 and as Plaintiff’s employer, Defendant NTI owed him a duty to use reasonable care in
9 discharging their obligations. (Doc. No. 1, Compl. ¶¶ 15, 59.) See Brown v. Sharphouser
10 Contracting Co., 159 Cal. 89, 93 (1910) (holding that an employer owes its employees a
11 duty of “ordinary care”); see also Brown, 11 Cal. 5th at 214 (explaining that “the law
12 imposes a general duty of care on a defendant . . . when it is the defendant who has created
13 a risk of harm to the plaintiff, including when the defendant is responsible for making the
14 plaintiff's position worse.”). Plaintiff further alleges that Defendant NTI breached this duty
15 by failing to timely and adequately provide proper notification of his termination under
16 ERISA as amended by COBRA. (See Doc. No. 1, Compl. ¶¶ 18, 22, 32-33, 60.) Section
17 1166(a)(2) “provides that within 30 days of employment termination, ‘the employer of an
18 employee under a plan must notify the administrator of [the employment termination] . .
19 .’” Jass, 472 F. Supp. 3d at 801 (quoting 29 U.S.C. § 1166(a)(2)). Plaintiff alleges, as
20 corroborated by the evidence in the record, that he experienced a qualifying event on
21 January 29, 2021, but NTI did not attempt to provide a COBRA notification until July 30,
22 2021. (See Doc. No. 1, Compl. 16, 18, 22; Doc. No. 34-6, Hallett Decl. Ex. D (Exhibit A);
23 Doc. No. 34-7, Hallett Decl. Ex. E.) NTI’s failure to provide proper notice under COBRA
24 is sufficient to demonstrate a breach by NTI under the doctrine of negligence per se. See
25 Quiroz v. Seventh Ave. Ctr., 140 Cal. App. 4th 1256, 1285 (2006) (listing the requirements
26 for establishing negligence per se).
27 In addition, Plaintiff alleges that NTI employees, specifically, Plaintiff’s supervisor
28 Defendant Kindt, represented to Plaintiff more than once that he would continue to be
1 covered under NTI’s group health care plan even after his furlough. (Doc. No. 1, Compl.
2 ¶¶ 17, 19-20, 64-65.) These representations were false, and Defendant NTI’s employees
3 should have known they were false and had no reasonable grounds for believing they were
4 true because Plaintiff was clearly not covered under the term of NTI’s health care plan with
5 EDIS since he was not a full-time employee at that time. (Id. ¶¶ 23, 25, 66-67; see also
6 Doc. No. 34-7, Hallett Decl. Ex. E.)
7 Further, NTI’s failure to provide proper COBRA notice and its misrepresentations
8 to Plaintiff were the actual and proximate cause of Plaintiff’s injuries. Plaintiff incurred
9 substantial medical bills when he suffered a heart attack which required emergency heart
10 surgery and those bills were not covered by any health insurance plan. (Doc. No. 1, Compl.
11 ¶ 21.) These medical bills would have been covered under a COBRA and/or CAL-COBRA
12 plan had NTI provided proper COBRA notice and had it not made the misrepresentations
13 at issue, which Plaintiff reasonably relied on. (Id. ¶¶ 26, 34-35, 61, 69-70.) Finally,
14 Plaintiff suffered damages in the form of the uncovered medical bills he incurred. (Id. ¶¶
15 62, 70; see also Doc. No. 34-3, Hallett Decl. Ex. A.) In sum, Plaintiff has adequately stated
16 claims against Defendant NTI for negligence and negligent misrepresentation
17 Although Plaintiff has adequately stated claims against Defendant NTI for
18 negligence and negligent misrepresentation, Plaintiff has not adequately stated those
19 claims against Defendant Kindt. Kindt was Plaintiff’s supervisor, not his employer. (See
20 Doc. No. 1, Compl. ¶¶ 10, 14.) As such, Kindt, unlike NTI, did not have any obligations
21 under ERISA as amended by COBRA to provide notice of Plaintiff’s termination. See 29
22 U.S.C. § 1166(a)(2). Further, although Plaintiff’s allegations and evidence when accepted
23 as true are sufficient to demonstrate that NTI employees made various negligent
24 misrepresentations to Plaintiff regarding the status of his coverage under NTI’s health care
25 plan, the allegations and evidence are insufficient to specifically show that those
26 misrepresentations are attributable specifically to Defendant Kindt as opposed to other
27 employees, such as NTI’s human resources employees or NTI’s corporate controller.
28 Indeed, there is evidence in the record showing that NTI’s human resources department
1 and corporate controller also mistakenly believed that Plaintiff was covered under NTI’s
2 group health care plan at the time of Plaintiff’s heart surgery and that NTI’s human
3 resources department also made representations to Plaintiff stating that he was covered
4 during that period. (See Doc. No. 34-6, Hallett Decl. Ex. D (Exhibit A); Doc. No. 34-7,
5 Hallett Decl. Ex. E.) In light of this, Plaintiff is not entitled to a default judgment against
6 Defendant Kindt on his claims for negligence and negligent misrepresentation.
7 vii. Conclusion
8 In sum, Plaintiff has adequately and sufficiently stated claims for negligence and
9 negligent misrepresentation against Defendant NTI. But Plaintiff has not adequately stated
10 any claims against Defendant Kindt. As such, the Court denies Plaintiff’s motion for
11 default judgment as to Defendant Kindt. See Ewing, 2019 WL 4193363, at *2 (“[I]f
12 assuming the truth of the factual allegations in the complaint, the complaint does not state
13 a claim against a defendant who is in default, the plaintiff is not entitled to default judgment
14 against that defendant.”); United States ex rel. Lesnik v. Eisenmann SE, No. 16-CV-01120-
15 LHK, 2021 WL 4243399, at *11 (N.D. Cal. Sept. 17, 2021) (“[A] court may not enter a
16 default judgment if, taking all well-pleaded factual allegations as true, the court finds that
17 Plaintiffs are not entitled to relief.”); see, e.g., DIRECTV, Inc. v. Hoa Huynh, 503 F.3d
18 847, 854–55 (9th Cir. 2007) (affirming the denial of a motion for default judgment where
19 the complaint failed to state a claim). The Court will proceed to analyze the remaining
20 Eitel factors as to Defendant NTI.
21 C. The Other Eitel Factors
22 As to the other Eitel factors, Plaintiff would be prejudiced absent a default judgment
23 on its well-pleaded claims against Defendant NTI because its failure to appear in this action
24 leaves Plaintiff with no other recourse. See Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp.
25 2d 1172, 1177 (C.D. Cal. 2002).
26 There is no dispute as to material facts because Defendant NTI has not appeared to
27 contest Plaintiff’s allegations. See Pepsico, 238 F. Supp. 2d at 1177. And Defendant NTI’s
28 failure to appear or otherwise defend does not appear to be due to excusable neglect. See
1 United States v. $148,145,00 In U.S. Currency, No. CV1800670SJOGJS, 2018 WL
2 6038303, at *8 (C.D. Cal. July 16, 2018) (“The possibility of excusable neglect is remote
3 where the defendant is provided proper notice of the pending suit, but does not contact the
4 court or the plaintiff in any manner.”).
5 As to the “amount of money at stake” factor, it requires a court to “consider the
6 amount of money at stake in relation to the seriousness of Defendant’s conduct.” Pepsico,
7 238 F. Supp. 2d at 1176. This is because “default judgments are disfavored where the
8 amount at stake “‘is too large or unreasonable in light of [the] defendant’s actions.’” Sec.
9 & Exch. Comm’n v. Pedras, No. CV137932GAFMRWX, 2014 WL 12597332, at *6 (C.D.
10 Cal. Apr. 16, 2014) (quoting Truong Giang Corp. v. Twinstar Tea Corp., 2007 WL
11 1545173, at *12 (N.D. Cal. May 29, 2007)). Although Plaintiff seeks a substantial damages
12 award in the amount of $498,223.56 against NTI, the amount sought by Plaintiff is
13 reasonable in light of the misconduct properly alleged.
14 Finally, although the Court recognizes the strong policy favoring decisions on the
15 merits, proceeding with the instant litigation would be futile given Defendant NTI’s failure
16 to appear. See Pepsico, 238 F. Supp. 2d at 1177; Elektra Entm’t Group, Inc. v. Crawford,
17 226 F.R.D. 388, 393 (C.D. Cal. 2005) (“‘[D]efendant[’]s failure to answer plaintiff[s’]
18 complaint makes a decision on the merits impractical if not impossible.’”); Pedras, 2014
19 WL 12597332, at *7 (“[T]he policy of deciding cases on the merits does not preclude the
20 Court from entering default judgment.”). Accordingly, the Court determines that default
21 judgment is appropriate on Plaintiff’s claims for negligence and negligent
22 misrepresentation against Defendant NTI.
23 D. Relief Sought
24 In his motion for default judgment, Plaintiff seeks the following forms of relief
25 against Defendant NTI: (1) statutory damages; (2) compensatory damages; (3) punitive
26 damages; (4) costs; (5) attorney fees; (6) prejudgment interest; and (7) post-judgment
27 interests. (Doc. No. 34-1 at 17-22.) The Court addresses each of these requests for relief
28 in turn below.
1 i. Statutory Damages and Attorney’s Fees
2 Plaintiff requests an award of statutory damages, including penalties, and attorney’s
3 fees pursuant to his ERISA claim, specifically pursuant to 28 U.S.C. §§ 1132(a)(1)(B), (c),
4 and (g)(1). (Doc. No. 34-1 at 17-18, 20-21.) Plaintiff is not entitled to a default judgment
5 against Defendant NTI on his ERISA claim. See supra Order at Section II.B.i. As such,
6 Plaintiff is not entitled to statutory damages or attorney’s fees based on that claim, and the
7 Court denies Plaintiff’s request for statutory damages and attorney’s fees against Defendant
8 NTI.
9 ii. Compensatory Damages
10 Plaintiff requests an award of $498,223.56 in compensatory damages for his claims
11 for negligence and negligent misrepresentation. (Doc. No. 34-1 a 18-19.) For tort claims
12 in California, the proper measure of damages “is the amount which will compensate for all
13 the detriment proximately caused thereby, whether it could have been anticipated or not.”
14 Cal Civ. Code § 3333. Under this provision, tort damages “are awarded to fully
15 compensate the victim for all the injury suffered.” Santa Barbara Pistachio Ranch v.
16 Chowchilla Water Dist., 88 Cal. App. 4th 439, 446 (2001). “There is no fixed rule for the
17 measure of tort damages under Civil Code section 3333. The measure that most
18 appropriately compensates the injured party for the loss sustained should be adopted.” Id.
19 at 446–47. “This broad measure of tort damages is consistent with the object of tort law
20 ‘to compensate the victim for injury suffered’ and ‘to vindicate social policy.’” W. Pac.
21 Elec. Co. Corp. v. Dragados/Flatiron, 534 F. Supp. 3d 1209, 1253 (E.D. Cal. 2021) (quoting
22 Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 514, 516 (1994)).
23 In his motion, Plaintiff correctly calculates his compensatory damages as the amount
24 of medical expenses that would have been covered under Defendant NTI’s health plan had
25 Defendant properly provided the required notice under COBRA. In addition, Plaintiff has
26 provided the Court with sufficient evidence to support the specific amount of compensatory
27 damages requested. The evidence submitted by Plaintiff shows that Plaintiff was billed a
28 total amount of $511,223.56 for medical services related to his heart surgery. (See Doc.
1 No. 34-2, 34-3 Hallett Decl. ¶ 3, Ex. A.) And had Plaintiff been covered under NTI’s group
2 health care plan, Plaintiff would have had an out-of-pocket maximum of $13,000.00,
3 meaning that at least $498,223.56 of the $511,223.56 total amount would have been
4 covered by the health care plan. (See Doc. No. 34-1 at 17, 18-19.) As such, the Court
5 grants Plaintiff’s request for $498,223.56 in compensatory damages against Defendant NTI
6 for Plaintiff’s claims for negligence and negligent misrepresentation.
7 iii. Punitive Damages
8 Plaintiff requests an award of $44,038.47 in punitive damages pursuant to his claim
9 for intentional misrepresentation against Defendant NTI. (Doc. No. 34-1 at 19-20.)
10 Plaintiff is not entitled to a default judgment against Defendant NTI on his claim for
11 intentional misrepresentation. See supra Order at Section II.B.v. As such, Plaintiff is not
12 entitled to punitive damages based on that claim, and the Court denies Plaintiff’s request
13 for punitive damages against Defendant NTI.
14 iv. Costs
15 Plaintiff requests an award of $1,078.14 in costs pursuant to Federal Rule of Civil
16 Procedure 54(d)(1). (Doc. No. 34-1 at 20.) Under Rule 54(d)(1), a prevailing party is
17 entitled to costs other than attorney’s fees. See Fed. R. Civ. P. 54(d)(1); S.D. Cal. Civ.
18 L.R. 54.1(a). “By its terms, [Rule 54(d)(1)] creates a presumption in favor of awarding
19 costs to a prevailing party, but vests in the district court discretion to refuse to award costs.”
20 Ass’n of Mexican-Am. Educators v. State of California, 231 F.3d 572, 591 (9th Cir. 2000).
21 Further, “a district court’s discretion to award costs is limited to particular types of costs
22 enumerated in 28 U.S.C. § 1920.” In re Online DVD-Rental Antitrust Litig., 779 F.3d 914,
23 926 (9th Cir. 2015).
24 Plaintiff has provided the Court with evidence showing that he incurred $402.00 in
25 fees related to the filing of the complaint and $247.53 in fees related to service of the
26 complaint and summons on the Defendants. (Doc. No. 34-2, Hallett Decl. ¶ 28.) Plaintiff
27 is entitled to these costs under 28 U.S.C. § 1920 and Civil Local Rule 54.1(b)(1). See 28
28 U.S.C. § 1920; S.D. Civ. L.R. 54.1(b)(1); see, e.g., Ameris Bank v. Soorma Trucking LLC,
1 No. 8:24-CV-02021 RGK (JDEX), 2025 WL 71081, at *5 (C.D. Cal. Jan. 8, 2025) (“As
2 the party awarded default judgment and damages, Balboa is the prevailing party and thus
3 may recover costs associated with the civil filing fee and service of process . . . .”).
4 Plaintiff has also provided the Court with evidence showing that he incurred $428.61
5 in fees for “obtaining the medical records of Plaintiff.” (Doc. No. 34-2, Hallett Decl. ¶ 28.)
6 But general fees incurred related to the obtaining of medical records are not taxable absent
7 a further showing. See 28 U.S.C. § 1920; S.D. Civ. L.R. 54.1(b)(6); Online DVD-Rental
8 Antitrust Litig., 779 F.3d at 927–28. As such, the Court denies Plaintiff’s request for
9 $428.61 in fees for obtaining Plaintiff’s medical records.
10 In sum, the Court grants Plaintiff’s request for costs pursuant to Federal Rule of Civil
11 Procedure 54(d)(1). The Court awards Plaintiff $649.53 in costs.
12 v. Pre-Judgment Interest
13 Plaintiff requests an award of pre-judgment interest for his ERISA claim, his breach
14 of contract claim, and his tort claims. (Doc. No. 34-1 at 21-22.) Plaintiff is not entitled to
15 a default judgment against Defendant NTI on his ERISA claim or his breach of contract
16 claim. See supra Order at Sections II.B.i, II.B.iv. As such, Plaintiff is not entitled to an
17 award of pre-judgment interest on either his ERISA claim or his breach of contract claim.
18 Nevertheless, Plaintiff is entitled to pre-judgment interest on his claims for
19 negligence and negligent misrepresentation against Defendant NTI. “Whether
20 prejudgment interest is permitted in a particular case is a matter of statutory interpretation,
21 federal common law, and, in some instances, state law.” Schneider v. Cnty. of San Diego,
22 285 F.3d 784, 789 (9th Cir. 2002). “Under California law, prejudgment interest is governed
23 by Civil Code section 3287 and is recoverable in any action in which damages are certain
24 or ‘capable of being made certain by calculation’ and the right to recover such damages is
25 vested in the plaintiff on a particular day.” Cataphora Inc. v. Parker, 848 F. Supp. 2d 1064,
26 1072 (N.D. Cal. 2012) (quoting Cal. Civ. Code § 3287(a)). The test for recovery of
27 prejudgment interest under § 3287(a) is whether the defendant actually knows the amount
28 owed or from reasonably available information could the defendant have computed that
1 amount. Children’s Hosp. & Med. Ctr. v. Bonta, 97 Cal. App. 4th 740, 774 (2002).
2 Prejudgment interest cannot be awarded under § 3287(a) when the amount of damages
3 cannot be ascertained except on conflicting evidence. Id.; Cataphora, 848 F. Supp. 2d at
4 1072. “The rationale behind the rule is that where a defendant does not know what amount
5 he owes and cannot ascertain it except by accord or judicial process, he cannot be in default
6 for not paying it.” Cataphora, 848 F. Supp. 2d at 1072.
7 Here, Plaintiff’s compensatory damages for his negligence and negligent
8 misrepresentation claims were capable of being made certain by calculation. The amount
9 of damages could have been calculated based on a review of Plaintiff’s medical bills and
10 his health care plan. And that calculation was ascertainable by at least October 22, 2021 –
11 the date in which Plaintiff received an explanation of benefits from EDIS stating that it was
12 denying coverage for the medical bills related to Plaintiff’s heart surgery. (See Doc. No.
13 34-2, 34-3 Hallett Decl. ¶ 3, Ex. A.) As such, Plaintiff is entitled to prejudgment interest
14 pursuant to by Civil Code § 3287(a). The Court awards Plaintiff prejudgment interest of
15 7% per annum beginning on October 22, 2021. See Yoon Chul Yoo v. Arnold, No. CV-
16 09-07483-MMM-CWX, 2013 WL 12335872, at *11 (C.D. Cal. Mar. 25, 2013) (“Where
17 tort damages are recovered, courts have generally applied a prejudgment interest rate of
18 7% per annum.” (citing Children’s Hosp. & Med. Ctr., 97 Cal. App. 4th at 775); uSens,
19 Inc. v. Chongqing Junma New Energy Auto. Co., No. 19-CV-00315-BLF, 2022 WL
20 410938, at *4 (N.D. Cal. Feb. 10, 2022) (“Under California law, the prejudgment interest
21 rate is set at 7 percent except in cases involving a contract entered into in 1986 or later.”
22 (citing Cal. Const. art. XV, § 1)).
23 vi. Post-Judgment Interest
24 Plaintiff requests an award of post-judgment interest pursuant to 28 U.S.C. §
25 1961(a). (Doc. No. 34-1 at 22.) Under 28 U.S.C. § 1961, “post-judgment interest on a
26 district court judgment is mandatory.” Air Separation, Inc. v. Underwriters at Lloyd’s of
27 London, 45 F.3d 288, 290 (9th Cir. 1995). “The post-judgment interest rate under the
28 statute is set at ‘a rate equal to the weekly average 1-year constant maturity Treasury yield,
1 published by the Board of Governors of the Federal Reserve System, for the calendar
2 || week preceding .. . the date of the judgment.””” DLI Assets, LLC v. Pirate Gem, LLC, No.
3 || 17-CV-02216-BAS-NLS, 2018 WL 1920219, at *6 (S.D. Cal. Apr. 23, 2018) (quoting 28
4 ||U.S.C. § 1961(a)); see Fid. Fed. Bank, FSB v. Durga Ma Corp., 387 F.3d 1021, 1023 (9th
5 || Cir. 2004). Because an award of post-judgment interest at the federal statutory rate is
6 ||mandatory, the Court grants Plaintiff's request for post-judgment interest pursuant to 28
7 ||U.S.C. § 1961(a) against Defendant NTI.
8 Conclusion
9 For the reasons above, the Court grants in part and denies in part Plaintiff's motion
10 || for default judgment. Specifically, the Court enters a default judgment in favor of Plaintiff
11 against Defendant NTI on Plaintiff's claims for negligence and negligent
12 ||misrepresentation, and the Court awards Plaintiff: (1) $498,223.56 in compensatory
13 ||damages; (2) $649.53 in costs; (3) prejudgment interest of 7% per annum beginning on
14 || October 22, 2021; and (4) post-judgment interest according to the statutory rate set forth in
15 U.S.C. § 1961 (a).
16 The Court declines to enter a default judgment against Defendant Kindt on any of
17 || Plaintiff's claims. The Clerk is directed to close the case.
18 IT IS SO ORDERED.
19 DATED: February 5, 2025 | | | l | | |
20 MARILYN W. HUFF, Distri ge
21 UNITED STATES DISTRICT COURT
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