Unreported / Non-Citable
Background
Plaintiff SevenOaks Capital Associates is a finance company engaged in factoring, purchasing accounts receivable from clients at a discount and taking a security interest in other assets. Non-party Globetrotter Transportation, Inc. was a factoring client of SevenOaks, and Defendant Bizon Group, Inc. (dba Conexwest) was the account debtor on invoices Globetrotter factored for services rendered from June to September 2025, totaling $214,610. SevenOaks sent a Notice of Assignment directing Bizon to pay all amounts owed directly to SevenOaks. Despite the notice and payment demands in November and December 2025, Bizon failed to pay. SevenOaks filed its complaint on February 3, 2026, alleging breach of contract and seeking $214,610 in damages plus fees, costs, and prejudgment interest. Bizon was served on March 3, 2026, but failed to respond. The Clerk entered default on April 22, 2026. SevenOaks moved for default judgment on August 24, 2026, seeking $204,189.80, reflecting a $21,135 partial payment by Bizon reducing the principal to $193,475, plus $484.49 in costs and $10,230.31 in prejudgment interest at 10% per annum under California Civil Code §§ 3287(b), 3289(b). The motion was heard on October 1, 2026, with no appearance by Bizon.
The Court’s Holding
The Magistrate Judge recommends granting SevenOaks' motion for default judgment in full. Applying the seven Eitel factors, the court found: (1) prejudice to SevenOaks if judgment is denied, as Bizon's default leaves SevenOaks without recourse; (2) the complaint adequately states a breach of contract claim and SevenOaks proved the liquidated damages through documentary evidence (invoices, statements, payment demands, and counsel's declaration); (3) the $204,189.80 sought is proportionate to the proven debt and not unreasonable; (4) no disputed material facts exist because Bizon defaulted and all well-pleaded allegations are deemed true; (5) Bizon was properly served with the complaint, summons, request for entry of default, and the motion for default judgment, so its failure to appear was not excusable neglect; (6) the policy favoring decisions on the merits does not weigh strongly against default judgment where the defendant's absence makes a merits determination impossible. The court recommends judgment of $193,475 in compensatory damages, $484.49 in costs, and $10,230.31 in prejudgment interest, totaling $204,189.80. The findings are submitted to the assigned District Judge under 28 U.S.C. § 636(b)(1), with 14 days for objections.
Because this was a recommendation, the assigned district judge retained the final decision. Objections were due within 14 days after the findings were filed, and replies were due within 14 days after service of objections. The proposed award separated principal damages, taxable costs, and accrued prejudgment interest rather than presenting an unexplained lump sum.
Key Takeaways
- Default judgment was recommended where the defendant was properly served at every stage (complaint, entry of default, motion for default judgment) but never appeared.
- Liquidated damages in a breach of contract case can be established on default without an evidentiary hearing through documentary evidence (invoices, account statements, payment demands) and counsel declarations.
- Prejudgment interest at 10% per annum under California Civil Code §§ 3287(b), 3289(b) is available on contract damages made certain by calculation from the filing of the complaint.
- The Eitel factors weigh in favor of default judgment when the plaintiff proves a liquidated claim, the defendant had full notice, and no excusable neglect is shown.
- A partial payment by the defendant after default but before judgment reduces the principal owed and must be credited.
Why It Matters
This Findings and Recommendations order illustrates the standard application of the Ninth Circuit's Eitel factors in a routine commercial default judgment. It confirms that factoring assignees can enforce assigned invoices against account debtors on default by proving the assignment, notice, and liquidated amount due. The decision reinforces that prejudgment interest under California law accrues from the filing of the action on contract claims with ascertainable damages. The order is not a final judgment; it is submitted to the District Judge for adoption, and the 14-day objection period preserves appellate rights under Martinez v. Ylst. No separate opinions were filed.