United States District Court, E.D. Washington
KRISTY N. SLEEPER and RANDALL J. SLEEPER, wife and husband, Plaintiffs,
RENT RECOVER, LLC., Defendant.
ORDER DENYING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT
THOMAS O. RICE, District Judge.
BEFORE THE COURT is Plaintiffs' Motion for Default Judgment (ECF No. 15). This matter was submitted for consideration without oral argument. The Court has reviewed the motion and record and files herein and is fully informed.
This is an action concerning alleged unlawful action in connection with the collection of a debt. In November 2011, Plaintiffs Randall J. Sleeper and Kristy N. Sleeper entered into a lease agreement with Sterling Holdings, LLC. In March 2012, Plaintiffs notified Sterling Holdings that they were terminating the lease. Sterling Holdings provided two different move-out statements indicating two different amounts owing. Plaintiffs assert in their first amended complaint that the difference between the two was an $815.00 "early termination fee." However, that is not apparent on the face of the two move-out statements themselves. Sometime in June 2012, Sterling Holdings assigned to Defendant for collection $2, 058.36 due and owing from Plaintiffs.
Plaintiffs allege that in June 2012 one of Defendant's collection agents contacted Randall Sleeper at work by representing to a receptionist that there was an emergency for which he needed Mr. Sleeper's phone number. The agent demanded payment of the $2, 058.36 owing. Mr. Sleeper, being at work, gave the agent Mrs. Sleeper's number and hung up. The agent then allegedly contacted Mrs. Sleeper and threatened legal action against the couple unless they paid the amount owing. The Plaintiffs further allege that at one point the agent began screaming into the phone such that neighbors on an adjoining balcony could hear the conversation. Plaintiffs refused to pay the $2, 058.36.
Plaintiffs further allege that in September 2012, one of Defendant's employees contacted Sterling Holdings and requested that the move-out statements be amended to include an additional $1, 630.00 "insufficient notice to vacate" fee. In October 2012, Defendant filed a complaint against Plaintiffs in the Spokane County District Court seeking $3, 410.36.
Plaintiffs filed this action in the U.S. District Court for the Eastern District of Washington on January 6, 2014, alleging violation of (1) the Fair Debt Collection Practices Act,  (2) the Washington Collection Agency Act,  and (3) the Washington Consumer Protection Act. On May 5, 2014, Plaintiffs voluntarily dismissed all other Defendants, leaving Rent Recovery, LLC, an Illinois company, as the sole defendant in the action.
The Clerk of Court has entered an order of default for Defendant. Despite being properly served, as of the date of this Order, the Defendant has not filed an answer or moved to set aside its default. Plaintiff now moves for default judgment seeking statutory relief under the Fair Debt Collection Practices Act.
Motions for entry of default are governed by Federal Rule of Civil Procedure 55(b). Rule 55(b)(1) provides that the Clerk of Court may enter default judgment when the plaintiff's claim "is for a sum certain or a sum that can be made certain by computation." Fed.R.Civ.P. 55(b)(1). When the value of the claim cannot be readily determined, or when the claim is for non-monetary relief, the plaintiff must move the court for entry of default judgment. Fed.R.Civ.P. 55(b)(2). In such circumstances, the court has broad discretion to marshal any evidence necessary in order to calculate an appropriate award. See Fed.R.Civ.P. 55(b)(2)(A)-(D). At the default judgment stage, well-pleaded factual allegations are considered admitted and are sufficient to establish a defendant's liability, but allegations regarding the amount of damages must be proven. Geldes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977); Microsoft Corp. v. Lopez, 2009 WL 959219 (W.D. Wash. April 7, 2009). The court must ensure that the amount of damages is reasonable and demonstrated by the evidence. See Fed.R.Civ.P. 55(b); Getty Images (US), Inc. v. Virtual Clinics, 2014 WL 358412 (W.D. Wash. 2014).
The entry of default judgment under Rule 55(b) is "an extreme measure." Cmy. Dental Servs. v. Tani, 282 F.3d 1164, 1170 (9th Cir. 2002). "As a general rule, default judgments are disfavored; cases should be decided upon their merits whenever reasonably possible." Westchester Fire Ins. Co. v. Mendez, 585 F.3d 1183, 1189 (9th Cir. 2009). In determining whether to enter default judgment, a court should consider the following factors: "(1) the possibility of prejudice to the plaintiff; (2) the merits of the 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." Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986); see also United States v. VanDenburgh, 249 F.Appx. 664, 665 (9th Cir. 2007). The Court considers each of the factors in turn.
1. Possibility of Prejudice to the Plaintiffs
Despite having been properly served, Defendant has failed to plead or otherwise defend. As a result, Plaintiffs' claims against them cannot move forward on the merits, and Plaintiffs' ability to obtain effective relief has been ...