LPL Financial, LLC v. Lossing
2:19-cv-00120
D. Nev.Jun 2, 2020Background
- LPL alleges former employee Christopher Lossing converted $291,565 that Nevada state court awarded to his ex‑wife, Gabriela Canales, in their divorce.
- LPL paid Canales $291,565 plus her attorneys’ fees and obtained an assignment of her claims against Lossing.
- LPL sued Lossing asserting eight claims (conversion; breach of fiduciary duty; breach of contract; breach of implied covenant; fraudulent/intentional misrepresentation; unjust enrichment; indemnity/contribution; and a pre‑judgment writ of attachment/garnishment) and sought $316,262.50 (principal plus fees/costs) and interest.
- Lossing was properly served, failed to answer, and the clerk entered default. LPL moved for default judgment.
- The district court found jurisdiction (diversity/amount in controversy), applied the Eitel factors, and recommended granting default judgment as to claims 1–7 but denying relief on claim 8 (pre‑judgment writ).
- Recommended relief: final judgment against Lossing for $291,565.00 (principal), $24,697.50 (attorneys’ fees and costs), and statutory interest from the date of judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject‑matter and personal jurisdiction | Diversity jurisdiction exists (parties diverse; > $75,000) and Lossing is Nevada resident | No responsive pleading; no jurisdictional challenge | Court found both subject‑matter and personal jurisdiction exist |
| Appropriateness of default judgment | Default is proper; Eitel factors favor judgment because Lossing was served and failed to defend | No response/defense (default) | Eitel factors weigh in favor; default judgment recommended for claims 1–7 |
| Sufficiency/merits of claims 1–7 (conversion, fiduciary breach, contract, fraud, unjust enrichment, indemnity) | Complaint alleges plausible, well‑pleaded facts supporting each cause of action; plaintiff paid Canales and has assignment | No defense; factual allegations accepted as true on default | Court treated allegations as true and found claims 1–7 sufficiently pleaded and meritorious |
| Pre‑judgment writ of attachment / garnishment (claim 8) | Requested pre‑judgment writ as part of complaint | No response | Court held a pre‑judgment writ of attachment is not a proper claim; denied default relief on claim 8 (post‑judgment remedies available under Nevada law) |
Key Cases Cited
- Eitel v. McCool, 782 F.2d 1470 (default judgment factors)
- Televideo Video Sys., Inc. v. Heidenthal, 826 F.2d 915 (court accepts well‑pleaded allegations as true on default)
- In re Tuli, 172 F.3d 707 (jurisdictional requirement before entering default judgment)
- Aldabe v. Aldabe, 616 F.2d 1089 (district court discretion under Rule 55)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for pleadings)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must cross line from conceivable to plausible)
- Scaffidi v. United Nissan, 425 F. Supp. 2d 1159 (definition of conversion under Nevada law)
- Office Depot Inc. v. Zuccarini, 596 F.3d 696 (state law procedures apply to post‑judgment enforcement)