William Consalo & Sons Farms Incorporated v. Drobnick Distributing, Inc., 4:10-cv-00049

Drobnick Distributing, Inc. (broker) processed invoices and charged a $0.25 per-carton transaction fee for Babaluci Fresh Fruit & Vegetables LLC (Babaluci) and its principal Marco Siqueiros; Babaluci received produce directly from plaintiff William Consalo & Sons Farms, a PACA licensee.
Drobnick alleged Babaluci failed to pay transaction fees and unpaid produce invoices between Sept–Dec 2009; Drobnick sued on a cross-complaint after plaintiff sued the same defendants under PACA.
Babaluci and Siqueiros were properly served but never answered the cross-complaint; Siqueiros previously admitted owing money at an evidentiary hearing.
The court found service of the cross-complaint adequate and treated factual allegations as admitted after the clerk entered default under Fed. R. Civ. P. 55(a).
Applying the Eitel factors, the court concluded Drobnick adequately pled breach of contract and breach of the PACA trust and that default was not due to excusable neglect.
The court granted default judgment: jointly and severally Babaluci and Siqueiros owe Drobnick $379,230.72 in damages, $63,866.46 in attorneys’ fees/costs, interest at the federal judgment rate on the $443,097.18 total, and indemnity for a prior $1,525,896.88 judgment owed by Drobnick to plaintiff.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Adequacy of service / personal jurisdiction for default	Service of the cross-complaint was effected by mailing to last known addresses under Rule 5, so service is adequate.	No response; no argument presented.	Service was proper; court had jurisdiction to enter default judgment.
Whether default judgment is appropriate under Eitel factors	Default should be entered because defendants failed to respond, claims are meritorious, and Drobnick would be prejudiced without relief.	No response; no excusable neglect shown.	Court applied Eitel factors and found default judgment appropriate.
Sufficiency of claims: breach of contract and PACA trust breach	Cross-complaint sufficiently pleads existence/performance/breach of contract and alleges PACA trust breach/dissipation of trust assets.	No response.	Claims were sufficiently pleaded; allegations taken as true on default.
Damages, fees, and indemnity requested	Seeks transaction fees, unpaid produce invoices with contractual interest, attorneys’ fees/costs, and indemnity for prior judgment Drobnick owes plaintiff.	No response.	Court awarded $379,230.72 damages, $63,866.46 fees/costs, interest on $443,097.18, and required indemnity for the $1,525,896.88 judgment.

Aldabe v. Aldabe, 616 F.2d 1089 (9th Cir. 1980) (default-judgment entry is discretionary and courts consider multiple factors)
Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (articulates seven-factor test for default-judgment discretion)
Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915 (9th Cir. 1987) (after clerk-entered default, factual allegations are taken as true except damages)
Danning v. Lavine, 572 F.2d 1386 (9th Cir. 1978) (defendant’s failure to respond deemed admission of complaint’s allegations)
Boulder Fruit Exp. v. Transportation Factoring, Inc., 251 F.3d 1268 (9th Cir. 2001) (elements and nature of a PACA trust claim)
SEC v. Internet Solutions for Business, Inc., 509 F.3d 1161 (9th Cir. 2007) (default judgment voidness reviewed de novo where service or personal jurisdiction is challenged)