Ahdut Bean PLLC v. Echo Health Inc

[7] UNITED STATES DISTRICT COURT [8] WESTERN DISTRICT OF WASHINGTON AT SEATTLE [9] 10 AHDUT BEAN, PLLC, CASE NO. C24-1630 MJP 11 Plaintiff, ORDER GRANTING MOTION FOR DEFAULT JUDGMENT 12 v. 13 ECHO HEALTH, INC., and CHRISTINE A. IBANEZ , [14] Defendants. [16] 17 This matter comes before the Court on Plaintiff’s Motion for Default Judgment. (Dkt. No. 18 30.) Having reviewed the Motion and all supporting materials, the Court GRANTS the Motion 19 and DIRECTS ENTRY of DEFAULT JUDGMENT in Plaintiff’s favor against Defendant 20 Christine A. Ibanez. 21 BACKGROUND 22 Ahdut Bean, PLLC, a dentistry practice in Seattle that goes by the name of Green Leaf 23 Dental, alleges that its former administrative employee, Christine A. Ibanez, embezzled at least 24 $156,000 in insurance payments that should have been deposited in Plaintiff’s account. 1 (Amended Complaint ¶¶ 1, 15-19 (Dkt. No. 24).) According to Plaintiff, between May 2022 and 2 March 2024, Ibanez “diverted” virtual credit cards (VCC) issued by Defendant Echo Health Inc. 3 that were intended to be payments made by Echo on behalf of insurers. (Id. ¶¶ 7-19.) Plaintiff 4 pursues one claim of conversion against Ibanez. Plaintiff has served Ibanez, but she has not 5 appeared. The Court has entered default and Plaintiff now moves for default judgment on its 6 conversion claim against Ibanez. 7 ANALYSIS 8 A. Jurisdiction 9 Before entering default judgment, the Court must assure itself that it has subject matter 10 jurisdiction. The Court here finds that there is complete diversity jurisdiction. As alleged, Ibanez 11 is a resident of Nevada, while Plaintiff is a single-member professional LLC whose sole member 12 is a Washington resident. (Am. Compl. ¶¶ 1, 3-4.) Moreover, the amount in controversy exceeds 13 $75,000. As such, there is diversity jurisdiction. 28 U.S.C. § 1332 (d). 14 B. Legal Standard 15 The Court has discretion to default judgment. Fed. R. Civ. P. 55(b); see Alan Neuman 16 Prods., Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988). “Factors which may be considered 17 by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility 18 of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of 19 the complaint, (4) the sum of money at stake in the action; (5) the possibility of a dispute 20 concerning material facts; (6) whether the default was due to excusable neglect, and (7) the 21 strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” 22 Eitel v. McCool, 782 F.2d 1470 , 1471–72 (9th Cir. 1986). In performing this analysis, “the 23 general rule is that well-pled allegations in the complaint regarding liability are deemed true.” [24] 1 Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002) (quotation and citation 2 omitted). And “[t]he district court is not required to make detailed findings of fact.” Id. 3 C. Eitel Factors Favor Default Judgment 4 The Court reviews the Eitel factors to assess whether default judgment should be entered 5 and in what specific amounts. On balance, the seven Eitel factors weigh in favor of entry of 6 default judgment in Amazon’s favor. 7 1. Factor One: Prejudice to Plaintiff 8 Without entry of default judgment Plaintiff will be prejudiced. Plaintiff has attempted to 9 litigate this case and vindicate its rights under state law against Ibanez. Ibanez failed to appear or 10 participate in this litigation despite being served. Plaintiff faces prejudice by not being able to 11 obtain complete relief on its claims against Ibanez without entry of default judgment. This factor 12 weighs in favor of granting default judgment. 13 2. Factors Two and Three: Merits of Plaintiff’s Claim and Sufficiency of the Amended Complaint [14] Plaintiff has demonstrated the merit of its conversion claim and the sufficiency of the [15] Complaint. Conversion involves three elements: (1) willful interference with chattel belonging to [16] the plaintiff, (2) by either taking or unlawful retention, and (3) thereby depriving the owner of [17] possession. See Judkins v. Sadler-Mac Neil, 61 Wn.2d 1, 3 (1962). Plaintiff has adequately [18] alleged facts supporting all three elements. Plaintiff alleges that Ibanez wrongfully appropriated [19] the VCCs that were intended as payment to Plaintiff, and that this deprived it of possession. [20] 3. Factor Four: Sum of Money at Stake [21] Plaintiff alleges that based Ibanez diverted $156,869.44 in funds through the conversion. [22] Given the size of the money, this factor weighs in favor of default judgment. [24] 1 4. Factor Five: Possibility of Dispute of Material Facts 2 The Court finds little possibility that the core, material facts are in dispute. Not only has 3 Ibanez failed to appear in this action, but Plaintiff have provided detailed evidence in support of 4 its claims that is likely difficult to be rebutted. This factor favors entry of default judgment. 5 5. Factor Six: Whether Default is Due to Excusable Neglect 6 There is no evidence that Ibanez’s failure to appear is due to excusable neglect. This 7 factor favors entry of default judgment. 8 6. Factor Seven; Strong Policy in Favor of Decision on the Merits 9 The Court maintains a strong policy preference in favor of resolution of Plaintiff’s claims 10 on the merits. But Ibanez’s decision not to appear in this case vitiates against this policy. This 11 factor weighs in favor of entry of default judgment. 12 * * * 13 Having considered and balanced the Eitel factors, the Court finds that entry of default 14 judgment is proper on all claims as explained in detail above. On this basis, the Court GRANTS 15 the Motion. 16 D. Amount of the Default Judgment 17 Plaintiff asks the Court to award $156,869.44 in damages. The Court finds this amount 18 proper. 19 As to pre-judgment interest, under Washington law, “the general rule in actions of trover 20 and conversion is that interest is allowed from the date of the conversion.” Grays Harbor County 21 v. Bay City Lumber Co., 47 Wn.2d 879, 891 (1955). And where the amount is liquidated— 22 where it can be determined by a definite sum—then prejudgment interest is allowed. See 23 Colonial Imports v. Carlton Northwest, Inc., 83 Wn. App. 229, 245 (1996). Here, the damages [24] 1 are liquidated, which entitles Plaintiff to pre-judgment interest. The proper rate is set by RCW 2 4.56.110, which is two percentage points above the prime rate as published by the Federal 3 Reserve on the first business day of this month. RCW 4.56.110(3)(b). The applicable Federal 4 Reserve rate is 7.5%, which makes the total prejudgment interest rate 9.5% under state law. 5 Running from April 15, 2024 (the date Plaintiff confirmed the amount of the conversion with 6 Echo) to the date of this Order, the Court calculates total prejudgment interest at $16,739.90. 7 As to post-judgment interest, Plaintiff is entitled to such interest pursuant to 28 U.S.C. § 8 1961(a). 9 CONCLUSION 10 The Court GRANTS the Motion for Default Judgment. The Court AWARDS 11 $156,869.44 in damages and $16,739.90 in pre-judgment interest for a total award of 12 $173,609.34. The Court also awards post-judgment interest pursuant to 28 U.S.C. § 1961 (a). 13 The clerk is ordered to provide copies of this order to all counsel. 14 Dated May 30, 2025. A [15] 16 Marsha J. Pechman United States Senior District Judge