Hessenn Group LLC v. InnerScope Hearing Technologies, Inc.
2:24-cv-00794
E.D. Cal.Jun 3, 2025Background
- Hessenn Group LLC (a Texas LLC) sued InnerScope Hearing Technologies, Inc. (a Nevada corporation with its principal place of business in California) for breach of contract and account stated, seeking over $2.2 million in damages.
- The purported contract was not a formal written agreement, but based on invoices and email confirmations accompanying them.
- Hessenn claimed it supplied goods to InnerScope, issued invoices, and sent a demand letter after nonpayment, but received no payments.
- InnerScope never appeared nor responded in the litigation; clerk’s default was entered.
- Hessenn moved for default judgment, but the court required briefing and evidence supporting the existence of an enforceable contract; Hessenn failed to produce emails or signed invoices confirming InnerScope’s assent.
- The magistrate judge recommended denying Hessenn’s amended motion for default judgment without prejudice due to insufficient evidence of contract formation or agreement on the account stated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of Contract | Contract was formed through invoices and emails | No response (defaulted) | Insufficient evidence of valid contract; motion denied |
| Breach of Contract | Defendant failed to pay for delivered goods and storage | No response (defaulted) | Not established due to lack of proven contract |
| Account Stated | Invoices and demand letter established amount due | No response (defaulted) | No showing that defendant agreed to amounts |
| Default Judgment Standards | Default judgment warranted since defendant unresponsive | No response (defaulted) | Denied; complaint insufficiently pleads claims |
Key Cases Cited
- Aldabe v. Aldabe, 616 F.2d 1089 (9th Cir. 1980) (Default judgment is in the discretion of the district court)
- TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915 (9th Cir. 1987) (Well-pleaded allegations in the complaint are taken as true except as to damages on default)
- Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (Identifies factors to consider in deciding default judgment motions)
- In re Tuli, 172 F.3d 707 (9th Cir. 1999) (Court must affirmatively assess jurisdiction before entering default judgment)
- Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261 (9th Cir. 1992) (Default does not establish legally insufficient claims)
- Danning v. Lavine, 572 F.2d 1386 (9th Cir. 1978) (Allegations must state a claim on which relief can be granted for default judgment)