US Foods, Inc. v. Lalla Holding Corp
5:13-cv-02328
N.D. Cal.Sep 25, 2014Background
- US Foods, Inc. sues Lalla Holding Corp. in a diversity action for unpaid goods totaling $93,283.78 under a Credit Agreement requiring prompt payment and interest on past due amounts.
- Lalla Holding allegedly breached the Credit Agreement by not paying for goods and services supplied by US Foods.
- Defendants Chani Modi and Ravi Lalla face related claims but are in bankruptcy; default judgment sought only against Lalla Holding.
- Court entered default against Lalla Holding after no defendant answered or appeared.
- Plaintiff seeks $93,283.78 principal, $5,245.35 interest, and $10,305.00 in attorney’s fees; court evaluates default judgment under Eitel factors.
- The magistrate judge recommends granting the default judgment in part and denying it in part and reassignment to a District Judge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment is appropriate here | US Foods | Lalla Holding | Yes; factors favor judgment |
| Amount due for past due sums | Principal plus interest owed | N/A | Granted for $93,283.78 principal and $5,245.35 interest ($98,529.13 total) |
| Reasonableness of attorneys’ fees | Fees justified | N/A | Fees awarded partially; $7,065.00 at $450/hr for McMillion denied; McMillion’s rate deemed excessive; Wullschleger’s rate not fully supported; overall reasonable fees awarded for McMillion only |
| Reassignment to a District Judge | N/A | N/A | Case reassigned to a District Judge; default judgment recommended for entry |
| Interest on past due amounts | Interest calculated per agreement | N/A | Included in total; interest amount recognized in calculation |
Key Cases Cited
- Aldabe v. Aldabe, 616 F.2d 1089 (9th Cir. 1980) (Eitel factors guide default judgment considerations)
- Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (establishes factors for default judgment review)
- TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915 (9th Cir. 1987) (ties damages to pleadings; default damages require evidence)
- Blum v. Stenson, 465 U.S. 886 (1984) (fee-shifting: reasonableness of rates and documentation)
- Ingram v. Oroudjian, 647 F.3d 925 (9th Cir. 2011) (courts may rely on their experience in evaluating fee requests)
- Barjon v. Dalton, 132 F.3d 496 (9th Cir. 1997) (relevant community for rates in the forum)