Reliance Hospitality LLC v. 5251 S Julian Drive LLC
4:22-cv-00149
D. Ariz.May 30, 2025Background
- Reliance Hospitality LLC, a hotel management company, sued 5251 S. Julian Drive LLC, the owner of a Tucson hotel, for breach of contract related to hotel management services.
- The parties litigated in federal court after removal from state court, actively participating until Defendant's counsel withdrew and Defendant failed to obtain new representation.
- The Court entered default against Defendant because, as an LLC, it could not proceed pro se in federal court and did not hire new counsel.
- Plaintiff moved for default judgment, seeking damages for unreimbursed operating expenses, attorney’s fees, and costs.
- Plaintiff substantiated its damages via a declaration and billing records, requesting over $122,000 in direct damages and over $95,000 in attorneys’ fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject matter jurisdiction | Diversity and amount in controversy are satisfied. | Not articulated | Court has jurisdiction under 28 U.S.C. § 1332. |
| Default judgment appropriateness | Meets Eitel factors: Plaintiff prejudiced without, claim merits, proportional damages, no fact dispute, Defendant abandoned case. | Not articulated | Eitel factors favor entering default judgment. |
| Breach of contract | Contract existed, Defendant breached, damages resulted. | Not articulated | Plaintiff’s allegations suffice for default judgment. |
| Attorney’s fees and costs | Entitled under Arizona law as prevailing party; rates and hours are reasonable. | Not articulated | Plaintiff awarded full requested attorneys’ fees/costs. |
Key Cases Cited
- Benny v. Pipes, 799 F.2d 489 (9th Cir. 1986) (well-pleaded allegations are taken as admitted on default; appearance waives personal jurisdiction)
- Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (factors for granting default judgment in federal court)
- Steinberger v. McVey ex rel. County of Maricopa, 318 P.3d 419 (Ariz. Ct. App. 2014) (elements for breach of contract under Arizona law)
- Geddes v. United Fin. Grp., 559 F.2d 557 (9th Cir. 1977) (plaintiff must prove damages after default)