United States District Court, W.D. Washington, Seattle
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT
Honorable Richard A. Jones United States District Judge.
matter is before the Court on Plaintiff's motion for
default judgment. Dkt. # 31. For the reasons below, the Court
GRANTS the motion.
State of Oregon (“Oregon”) filed an action
against Defendants in Oregon state court (the
“Underlying Suit”) asserting claims for
violations of the Oregon False Claims Act, ORS 180.750 et.
seq., and unjust enrichment. Dkt. # 20-1. Oregon alleges that
Defendants, acting in their capacity as consultants to the
Oregon University System (“OUS”) and OUS's
solar project developer, knowingly submitted false and
fraudulent documents to the Oregon Department of Energy
(“ODoE”) to obtain tax credits related to six
solar projects. Id. The Underlying Suit alleges that
ODoE's grant of tax credits based upon Defendants'
false applications and documents resulted in damages in
excess of $14, 000, 000. Id. Additionally, Defendant
Martin Shain, a co-founder and officer at Bacgen
Technologies, Inc. (“Bacgen”), was indicted and
prosecuted by Oregon for, among other charges, Racketeering
and Forgery in the First Degree in relation to documents
submitted to the ODoE. Dkt. # 20. Although Shain entered into
a plea agreement with Oregon in which he was allowed to plead
“no contest” to the Racketeering charges, he
admitted to meeting with ODoE employees on September 5, 2012
and knowingly uttering two forged documents. Id. One
of the forgeries purported to be an invoice from Solar
Foundation Systems for the installation of “solar
racking systems.” Id. The other forgery
purported to be a letter from one of the previous developers
indicating it had spent $210, 000 on various costs relating
to the construction. Id.
provided insurance coverage to Bacgen through Colony
Insurance Company Policy No. PKC303680 (the
“Policy”), effective from July 24, 2015 to July
24, 2016. Id. Defendants tendered the Underlying
Suit to Colony for defense against the claims alleged for and
indemnification of any damages judgment entered against them.
V of the Policy details exclusions to coverage, including any
claim, “[b]ased upon or arising out of . . .:
a. Any criminal, fraudulent, or dishonest act, omission or
offense; however, [Colony] shall defend any allegations
concerning this item a., against any insured if such
allegations involve a ‘claim' to which this
insurance otherwise applies until judgment or other final
adjudication establishes, or if such insured admits, that
such act, omission or offense was committed, or personally
acquiesced in, by such insured;
b. Any act, omission or offense committed with knowledge of
its wrongful nature or with the intent to cause damage; c.
The gaining by any insured of any personal profit, gain or
advantage to which the insured is not legally entitled
he was served with the complaint, Defendant Shain has not
appeared in this action. On October 20, 2019, Colony moved
for default judgment against Shain. Colony seeks a
declaration that the Policy does not provide coverage for the
conduct, circumstances, claims, damages, and liability
alleged against him in the Underlying Suit.
default judgment stage, the court presumes all well-pleaded
factual allegations are true, except those related to
damages. TeleVideo Sys., Inc. v. Heidenthal, 826
F.2d 915, 917-18 (9th Cir. 1987); see also Fair House. of
Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002).
Although the entry of default judgment under Rule 55(b) is
“an extreme measure, ” disfavored cases should be
decided upon their merits whenever reasonably possible.
Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1170
(9th Cir. 2002); also see Westchester Fire Ins. Co. v.
Mendez, 585 F.3d 1183, 1189 (9th Cir. 2009).
addition, Federal Rule of Civil Procedure 55(b)(1) permits
the court to 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). In
moving the court for default judgment, a plaintiff must
submit evidence supporting the claims for a particular sum of
damages. Fed.R.Civ.P. 55(b)(2)(B). If the plaintiff cannot
prove that the sum it seeks is “a liquidated sum or
capable of mathematical calculation, ” the court must
hold a hearing or otherwise ensure that the damage award is
appropriate, reasonable and demonstrated by evidence.
Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir.
1981); see also Getty Images (US), Inc. v. Virtual
Clinics, 2014 WL 358412 (W.D. Wash. 2014). In
determining damages, a court can rely on the declarations
submitted by the plaintiff. Dr. JKL Ltd. v. HPC IT Educ.
Ctr., 749 F.Supp.2d 1046 (N.D. Cal. 2010). Where there
is evidence establishing a defendant's liability, the
court has discretion, not an obligation, to enter a default
judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th
Cir. 1980); see also Alan Neuman Productions, Inc. v.