1

2

3

4

5

6

7

8 UNITED STATES DISTRICT COURT

9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11

12 PROSPERITY RECOVERY, INC., Case No. 20-CV-03679-LHK

13 Plaintiff, ORDER DENYING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT 14 v. Re: Dkt. No. 62 15 IDC TECHNOLOGIES, INC, et al., 16 Defendants. 17 18 Before the Court is Plaintiff Prosperity Recovery, Inc.’s (“Plaintiff”) renewed motion for 19 default judgment as to Plaintiff’s claims against Defendants Innova Consulting Services LLC 20 (“Innova”) and Vivos Group, Inc. (“Vivos”). ECF No. 62.1 Having considered Plaintiff’s 21 submissions, the relevant law, and the record in this case, the Court DENIES Plaintiff’s motion for 22 default judgment and DISMISSES Plaintiff’s claims against Innova and Vivos with prejudice. 23 I. BACKGROUND 24 This case arises from the parties’ disputes over two related contracts: (1) a “Professional 25

26 1 Plaintiff’s motion for default judgment contains a notice of motion that is separately paginated from the points and authorities in support of the motion. Civil Local Rule 7-2(b) requires that the 27 notice of motion and the points and authorities in support of the motion be contained in one document with the same pagination for a total of no more than 25 pages. See Civ. Loc. R. 7-2(b). 1 Services Agreement” (“PSA”) between Innova and Defendant IDC Technologies, Inc. (“IDC”), 2 ECF No. 1 ¶¶ 16–17; and (2) a “Factoring and Security Agreement” (“FSA”) between Innova, 3 Vivos, and Plaintiff, id. ¶¶ 11–12. As relevant to the instant motion, Plaintiff asserts that Innova 4 and Vivos breached the FSA and that, pursuant to the FSA, Plaintiff has the exclusive right to 5 collect payments owed by IDC to Innova for work performed under the PSA. Below, the Court 6 describes in turn: (1) the parties; (2) the PSA; (3) the FSA; (4) the parties’ disputes regarding 7 payments owed by IDC to Innova for work performed under the PSA; and (5) the procedural 8 history of the instant case. 9 A. The Parties 10 Plaintiff Prosperity is a North Carolina corporation with its corporate headquarters in 11 North Carolina. ECF No. 1 ¶ 1 (“Compl.”). Plaintiff is in the “factoring” business, which 12 involves the buying and selling of assets called “Accounts.” Id. ¶ 9. In this context, the term 13 “Account” refers to a party’s right to demand payment for goods or services that the party already 14 has supplied. See id.;

(a)(2). Plaintiff purchases Accounts from 15 companies and then attempts to collect payments on the Accounts from the companies’ customers 16 (“Account Debtors”). Compl. ¶ 9;

(a)(3). 17 Defendant IDC is a California corporation with its corporate headquarters in California. 18 Compl. ¶ 2. IDC is “engaged in the business of providing information technology services.”

19 Exhibit C, Recitals. IDC’s clients are “located in USA and Canada.”

20 Defendant Innova is a Delaware limited liability company with two members.

. 21 Because both of Innova’s members are residents of Virginia, Innova is a resident of Virginia.

22 Innova provides consulting services to information technology companies.

Exhibit C, 23 Recitals. 24 Defendant Vivos is a Delaware corporation with its corporate headquarters in Delaware. 25

. According to a declaration submitted by Plaintiff with the instant motion, Vivos owned 26 “all of Innova’s membership interests” and “had control of Innova’s assets” during the period of 27 time that is relevant to the instant case. ECF No. 62-1 ¶ 18. B. The Professional Services Agreement 1 On July 15, 2018, Innova entered a “Professional Services Agreement” (“PSA”) with IDC. 2 See Compl. ¶ 16;

Exhibit C. Under the PSA, Innova agreed to supply IDC with consultants 3 who would perform work for IDC’s clients. See

;

Exhibit C, Recitals. “In return, IDC 4 agreed to pay Innova for the hours worked by Innova’s consultants for IDC’s end-clients.” See 5 ECF No. 21 ¶ 9. However, the PSA specified that Innova would continue to be responsible for 6 paying these consultants’ wages and that Innova’s failure to do so after seven days’ notice would 7 give IDC the right to terminate the PSA. See

; Compl., Exhibit C § 1. 8 The PSA also provided that, to receive payment for supplying consultants to IDC’s clients, 9 Innova would have to submit monthly invoices that met certain requirements. See Compl. ¶ 17. 10 Specifically, the invoices had to be based on hourly timesheets that were approved by IDC’s 11 clients. See id. The PSA also entitled IDC to withhold any payment that IDC’s clients disputed in 12 good faith. See id. 13 Pursuant to the PSA, Innova supplied IDC’s clients with multiple consultants from 14 August 2018 through September 2019. See id. ¶ 31. 15 C. The Factoring and Security Agreement 16 On August 13, 2018, Plaintiff entered a “Factoring and Security Agreement” (“FSA”) with 17 Innova and Vivos. Compl. ¶ 11. Under the FSA, Plaintiff agreed to purchase certain Accounts 18 (“Purchased Accounts”) from Innova and Vivos and to provide Innova and Vivos with loans for 19 running their businesses. Id. ¶ 12. To secure the loans, Plaintiff acquired an interest in all of 20 Innova’s and Vivos’s assets, including all Accounts not included in the Purchased Accounts 21 (“Remaining Accounts”). Id. ¶ 13. 22 Additionally, Innova and Vivos appointed Plaintiff as their “attorney-in-fact.” Id. ¶ 14. 23 This appointment gave Plaintiff several powers with respect to the Purchased Accounts and the 24 Remaining Accounts. Id. For example, Plaintiff obtained the power to receive and to distribute 25 payments owed to Innova and Vivos on all Accounts; the power to notify Account Debtors for all 26 Accounts that payments should be made directly to Plaintiff; the power to file suit to collect 27 1 payments owed on Purchased Accounts; and the power to contact Account Debtors for any 2 purpose. Id.; see also id., Exhibit A at 6. 3 Finally, the FSA defined several “Events of Default” and provided Plaintiff with additional 4 powers “[u]pon the occurrence of any Event of Default.” See id. ¶ 14; id., Exhibit A at 10. Most 5 importantly, the FSA provided that any Event of Default would allow Plaintiff to “collect all 6 Accounts, regardless of whether such Accounts are Purchased Accounts.” See id. ¶ 14; id., 7 Exhibit A at 10. 8 D. The Parties’ Disputes Over Payments Owed to Innova Under the Professional Services Agreement 9 Because certain payments owed by IDC to Innova for work performed under the PSA were 10 included in the Purchased Accounts, the FSA gave Plaintiff the right to collect those payments 11 from IDC. Compl. ¶ 24. Additionally, because the remaining payments owed by IDC to Innova 12 for work performed under the PSA were included in the Remaining Accounts, the FSA gave 13 Plaintiff a security interest in those remaining payments. Id. ¶ 31. 14 On August 17, 2018, Plaintiff sent IDC a notice stating that Plaintiff had acquired an 15 interest in all payments owed by IDC to Innova for work performed under the PSA. Id. ¶ 20. The 16 notice requested that IDC make those payments directly to Plaintiff. Id. On August 28, 2018, 17 IDC acknowledged receipt of Plaintiff’s notice. See id. ¶ 21; id., Exhibit D. 18 Plaintiff alleges that in August 2019, Innova and Vivos defaulted on their obligations 19 under the FSA. See id. ¶ 40. According to Plaintiff, this default entitled Plaintiff to “collect on all 20 Accounts,” including the payments owed by IDC to Innova for work performed under the PSA. 21 Id. ¶ 41. 22 Plaintiff further alleges that, although IDC initially paid Plaintiff the amounts owed to 23 Innova under the PSA, IDC stopped making payments without any explanation. Id. ¶ 24. 24 Specifically, Plaintiff alleges that IDC has failed to pay $1,315,123.83 owed to Innova for work 25 performed under the PSA between August 2018 and September 2019. Id. ¶ 31. 26 E. Procedural History 27 1 On June 3, 2020, Plaintiff filed a complaint asserting six claims against Innova, Vivos, and 2 IDC. See Compl. ¶¶ 43–101. Specifically, Plaintiff asserted: (1) a breach of contract claim 3 against IDC, id. ¶¶ 43–58; (2) a services rendered claim against IDC, id. ¶¶ 59–66; (3) an account 4 stated claim against IDC, id. ¶¶ 67–76; (4) a declaratory judgment claim against Innova, Vivo, and 5 IDC, id. ¶¶ 77–81; (5) a promissory estoppel claim against IDC, id. ¶¶ 82–92; and (6) a breach of 6 contract claim against Innova and Vivos, id. ¶¶ 93–101. 7 On June 8, 2020, Plaintiff served each defendant with the complaint. ECF Nos. 8–10. 8 Accordingly, the deadline for each defendant to respond was June 29, 2020. See Federal Rule of 9 Civil Procedure 12(a)(1)(A)(i). On June 17, 2020, Plaintiff and IDC filed a joint stipulation 10 extending IDC’s deadline to respond to the complaint to July 14, 2020. ECF No. 12. On July 14, 11 2020, IDC filed an answer to Plaintiff’s complaint. ECF No. 20. 12 On July 17, 2020, Plaintiff filed a motion for entry of default as to Innova and Vivos. ECF 13 Nos. 23, 24. On July 20, 2020, the Clerk entered defaults as to Innova and Vivos. ECF Nos. 25, 14 26. 15 On March 25, 2021, Plaintiff filed a motion for default judgment as to Innova and Vivos 16 with respect to Plaintiff’s declaratory judgment claim and with respect to Plaintiff’s breach of 17 contract claim against Innova and Vivos. ECF No. 54. 18 On June 17, 2021, the Court denied Plaintiff’s motion for default judgment because 19 Plaintiff had failed to address subject matter jurisdiction and personal jurisdiction. ECF No. 59 at 20 1–2. Although the Court granted Plaintiff leave to file a renewed motion for default judgment, the 21 Court warned that Plaintiff’s failure to cure the jurisdictional deficiencies would result in denial of 22 a subsequent motion for default judgment with prejudice. Id. at 2. 23 On June 29, 2021, Plaintiff filed a renewed motion for default judgment as to Innova and 24 Vivos. ECF No. 62. 25 II. REQUESTS FOR JUDICIAL NOTICE 26 The Court may take judicial notice of matters that are either “generally known within the 27 trial court’s territorial jurisdiction” or “can be accurately and readily determined from sources 1 whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). Moreover, courts may 2 consider materials referenced in the complaint under the incorporation by reference doctrine, even 3 if a plaintiff failed to attach those materials to the complaint. Knievel v. ESPN,

, 4 1076 (9th Cir. 2005). Public records, including judgments and other publicly filed documents, are 5 proper subjects of judicial notice. See, e.g., United States v. Black,

(9th Cir. 6 2007). However, to the extent any facts in documents subject to judicial notice are subject to 7 reasonable dispute, the Court will not take judicial notice of those facts. See Lee v. City of Los 8 Angeles,

(9th Cir. 2001), overruled on other grounds by Galbraith v. County of 9 Santa Clara,

(9th Cir. 2002). 10 In connection with Plaintiff’s renewed motion for default judgment, Plaintiff requests 11 judicial notice of a state court complaint filed by Innova against IDC (Ex. 7); Innova’s application 12 to the California Secretary of State to do business in California (Ex. 13); Innova’s March 22, 2019 13 Statement of Information filed with the California Secretary of State (Ex. 14); and Innova’s 14 December 13, 2019 Statement of Information filed with the California Secretary of State (Ex. 15). 15 See ECF No. 62-3. 16 Each of these exhibits is a matter of public record and is therefore the proper subject of 17 judicial notice. See Black,

. Thus, the Court GRANTS Plaintiff’s request for 18 judicial notice. 19 III. LEGAL STANDARD 20 Pursuant to Federal Rule of Civil Procedure 55(b)(2), the Court may enter a default 21 judgment when the Clerk, under Rule 55(a), has previously entered a party’s default. Fed. R. Civ.

(b). “The district court’s decision whether to enter a default judgment is a discretionary one.” 23 Aldabe v. Aldabe,

(9th Cir. 1980). Once the Clerk enters default, all well- 24 pleaded allegations regarding liability are taken as true, except with respect to damages. See Fair 25 Hous. of Marin v. Combs,

(9th Cir. 2002) (“With respect to the determination 26 of liability and the default judgment itself, the general rule is that well-pled allegations in the 27 complaint regarding liability are deemed true.”); TeleVideo Sys. v. Heidenthal,

, 917– 1 18 (9th Cir. 1987) (“[U]pon default the factual allegations of the complaint, except those relating 2 to the amount of damages, will be taken as true.”). However, the “defendant is not held to admit 3 facts that are not well-pleaded or to admit conclusions of law.” See DIRECTV, Inc. v. Hoa Huynh, 4

(9th Cir. 2007). 5 As a threshold step, “when entry of judgment is sought against a party who has failed to 6 plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over 7 both the subject matter and the parties.” In re Tuli,

(9th Cir. 1999) (citations 8 omitted). Indeed, a “judgment entered without personal jurisdiction over the parties is void.”

9 Additionally, “the party seeking to invoke the court’s jurisdiction bears the burden of establishing 10 that jurisdiction exists.” Scott v. Breeland,

(9th Cir. 1986) (citing Data Disc, 11 Inc. v. Sys. Tech. Assocs.,

(9th Cir. 1977)). 12 “Factors which may be considered by courts in exercising discretion as to the entry of a 13 default judgment include: (1) the possibility of prejudice to the plaintiff, (2) the merits of 14 plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in 15 the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was 16 due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil 17 Procedure favoring decisions on the merits.” Eitel v. McCool,

, 1471–72 (9th Cir. 18 1986). 19 IV. DISCUSSION 20 Plaintiff seeks default judgment as to Innova and Vivos with respect to two claims: (1) the 21 declaratory judgment claim against Innova, Vivos, and IDC; and (2) the breach of contract claim 22 against Innova and Vivos. Mot. at 2. Specifically, with respect to the declaratory judgment claim, 23 Plaintiff seeks a judgment declaring that Plaintiff “holds the sole right to payment” on all 24 monetary obligations owed by IDC to Innova for work performed under the Professional Services 25 Agreement (“PSA”).

In turn, with respect to the breach of contract claim, Plaintiff seeks a 26 judgment that Innova and Vivos defaulted on their obligations under the Factoring and Security 27 Agreement (“FSA”) and thereby caused Plaintiff damages “in the total amount of $1,284,427.37, 1 inclusive of prejudgment interest.”

2 For the reasons below, the Court finds that Plaintiff has not established personal 3 jurisdiction over Innova and Vivos. Accordingly, the Court need not address whether Plaintiff has 4 satisfied the other requirements necessary for an entry of default judgment. 5 “[A] judgment entered without personal jurisdiction over the parties is void.” In re Tuli, 6

. Moreover, “[t]he party seeking to invoke the court’s jurisdiction bears the burden 7 of establishing that jurisdiction exists.” Breeland,

(citation omitted); In re Boon 8 Glob. Ltd.,

(9th Cir. 2019) (explaining that it is the “party asserting jurisdiction 9 [that] bears the burden to establish jurisdictional facts.”). The Court previously denied Plaintiff’s 10 motion for default judgment without prejudice because Plaintiff failed to establish the Court’s 11 subject matter jurisdiction and the Court’s personal jurisdiction over Innova and Vivos. ECF No. 12 59 at 1–2. The Court warned Plaintiff that if it failed to cure these jurisdictional deficiencies, the 13 Court would deny a subsequent motion for default judgment with prejudice. Id. at 2. 14 Personal jurisdiction over an out-of-state defendant is appropriate if the relevant state’s 15 long-arm statute permits the assertion of jurisdiction without violating federal due process. 16 Schwarzenegger v. Fred Martin Motor Co.,

, 800–01 (9th Cir. 2004). California’s 17 long-arm statute,

, is co-extensive with federal due process 18 requirements, and therefore the jurisdictional analyses under California law and federal due 19 process merge into one. See

(“[A] court of this state may exercise 20 jurisdiction on any basis not inconsistent with the Constitution of this state or of the United 21 States.”); Mavrix Photo, Inc. v. Brand Techs., Inc.,

(9th Cir. 2011) 22 (“California’s long-arm statute . . . is coextensive with federal due process requirements, so the 23 jurisdictional analyses under state law and federal due process are the same.”). 24 For a court to exercise personal jurisdiction over a defendant consistent with due process, 25 that defendant must have “certain minimum contacts” with the relevant forum state “such that the 26 maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” 27 Int’l Shoe Co. v. Washington,

(1945) (quoting Milliken v. Meyer,

, 1 463 (1940)). In addition, “the defendant’s ‘conduct and connection with the forum State’ must be 2 such that the defendant ‘should reasonably anticipate being haled into court there.’” Sher v.

F.2d 1357, 1361 (9th Cir. 1990) (quoting World-Wide Volkswagen Corp. v. 4 Woodson,

(1980)). 5 A court may exercise either general or specific personal jurisdiction over a defendant. See 6 Ziegler v. Indian River Cty.,

, 473 (9th Cir. 1995). Plaintiff contends that Innova and 7 Vivos are subject both to general and specific personal jurisdiction in California. Mot. 62 at 17– 8 21. The Court addresses each argument in turn. 9 A. Plaintiff Has Failed to Show that Innova and Vivos Are Subject to General Jurisdiction in California 10 Plaintiff argues that Innova and Vivos are subject to general jurisdiction in California 11 because they have “substantial, continuous, and systematic” contacts with California. Mot. at 18. 12 For the reasons below, the Court rejects this argument. 13 “A court may assert general jurisdiction over foreign (sister-state or foreign-country) 14 corporations to hear any and all claims against them when their affiliations with the State are so 15 ‘continuous and systematic’ as to render them essentially at home in the forum State.” Goodyear 16 Dunlop Tires Operations, S.A. v. Brown,

(2011). “The paradigmatic locations 17 where general jurisdiction is appropriate over a corporation are its place of incorporation and its 18 principal place of business.” Ranza v. Nike, Inc.,

(9th Cir. 2015) (citing 19 Daimler AG v. Bauman,

, 137–38 (2014)). Indeed, “[o]nly in an ‘exceptional case’ 20 will general jurisdiction be available anywhere else.” Martinez v. Aero Caribbean,

, 21 1070 (9th Cir. 2014) (citing Daimler,

n.19). 22 Because Vivos is a Delaware corporation with its corporate headquarters in Delaware, 23 Compl. ¶ 3, and because Innova is a Delaware limited liability company that resides in Virginia, 24 id. ¶ 4, California is not a “paradigmatic location[] where general jurisdiction is appropriate over” 25 Vivos and Innova. See Ranza,

. Accordingly, Plaintiff bears the burden of 26 showing that this is an “exceptional case” where general jurisdiction is nevertheless appropriate. 27 1 See Martinez,

. 2 Plaintiff’s renewed motion for default judgment provides three reasons that Innova and 3 Vivos are subject to general jurisdiction in California. See Mot. at 18–20. First, Plaintiff asserts 4 that “Innova has been registered to do business in California since at least December 5, 2016, it 5 has a California agent for service of process, and has maintained an office [in California] since 6 registration in 2016.” Mot. at 18. Second, Plaintiff asserts that Innova has “entered into service 7 contracts with California technology companies, such as IDC,” and that Innova “maintained a 8 bank account in California where it received funding advances from [Plaintiff] to conduct its 9 business in California.” Mot. at 18–19. Third, Plaintiff contends that Innova’s contacts with 10 California subject Vivos to general jurisdiction because “Vivos is a holding company which 11 owned Innova’s membership interests.” Id. at 20. 12 As an initial matter, the Court notes that Plaintiff relies almost entirely on documents 13 submitted with the instant motion, not on allegations in the complaint. See Mot. at 17–21. Indeed, 14 the only relevant fact alleged in the complaint is that Innova has “entered into service contracts 15 with California technology companies, such as IDC.” Id. at 18 (citing Compl. ¶ 16). Accordingly, 16 because one of the factors the Court must consider is “the sufficiency of the complaint,” the Court 17 finds that Plaintiff’s reliance on facts not alleged in the complaint weighs against a finding of 18 general jurisdiction at this stage. See Eitel, 782 F.2d at 1471–72. 19 Regardless, even taking all of Plaintiff’s assertions regarding personal jurisdiction into 20 account, Plaintiff has failed to show that this is an “exceptional case” where general jurisdiction 21 over a nonresident is appropriate. As the United States Supreme Court has explained, the fact that 22 a “corporation ‘engages in a substantial, continuous, and systematic course of business’” in a state 23 does not by itself subject a corporation to general jurisdiction in the state. See Daimler,

. In Daimler, the United States Supreme Court held that a global manufacturer of luxury 25 vehicles was not subject to general jurisdiction in California even though the manufacturer made 26 $4 billion of sales in California annually and had an agent with “multiple California-based 27 facilities.”

In the instant case, Plaintiff has not attempted to explain why Innova and Vivos are 1 different from any other nonresident corporation that does business in California, let alone why 2 Innova and Vivos’s contacts with California are more substantial than those considered and 3 rejected in Daimler. Thus, although the facts described by Plaintiff tend to establish that Innova 4 and Vivos do business in California, they do not show that Innova and Vivos are “essentially at 5 home” in California such that general jurisdiction is appropriate. See Goodyear,

. 6 Thus, the Court concludes that Plaintiff has not established general jurisdiction over 7 Innova and Vivos. 8 B. Plaintiff Has Failed to Show that Innova and Vivos Are Subject to Specific Personal Jurisdiction in California 9 Plaintiff argues that the Court has specific jurisdiction over Innova and Vivos with respect 10 to Plaintiff’s declaratory judgment and breach of contract claims because those claims arise from 11 the Professional Services Agreement (“PSA”) between Innova and IDC. ECF No. 62 at 19–21. 12 For the reasons below, the Court rejects Plaintiff’s argument. 13 Under Ninth Circuit law, specific personal jurisdiction over a nonresident defendant is 14 appropriate when (1) the nonresident defendant “purposefully direct[s] his activities or 15 consummate[s] some transaction with the forum or resident thereof; or perform[s] some act by 16 which he purposefully avails himself of the privilege of conducting activities in the forum”; (2) the 17 claim “arises out of or relates to the defendant’s forum-related activities”; and (3) the exercise of 18 jurisdiction is reasonable. Schwarzenegger v. Fred Martin Motor Co.,

(9th Cir. 19 2004). If the plaintiff succeeds in satisfying the first two prongs, the burden shifts to the 20 nonresident defendant to “present a compelling case” that the exercise of jurisdiction would not be 21 reasonable.

22 Plaintiff’s arguments regarding specific jurisdiction rely on the same facts as Plaintiff’s 23 arguments regarding general jurisdiction. See Mot. at 19–20. As discussed, the only relevant fact 24 alleged in the complaint is that Innova has “entered into service contracts with California 25 technology companies, such as IDC.”

at 18 (citing Compl. ¶ 16). Because one of the factors 26 the Court must consider is “the sufficiency of the complaint,” the Court finds that Plaintiff’s 27 1 reliance on facts not alleged in the complaint weighs against a finding of specific jurisdiction at 2 this stage. See Eitel, 782 F.2d at 1471–72. 3 Regardless, the Court considers all of Plaintiff’s arguments in support of specific 4 jurisdiction. Plaintiff’s strongest argument is that the Professional Services Agreement (“PSA”) 5 with IDC, who is a California resident, subjects Innova and Vivos to jurisdiction in California. 6 See Mot. at 18–19. According to Plaintiff, its claims against Innova and Vivos arise from the PSA 7 because Plaintiff “seeks relief determining Plaintiff’s rights to the accounts owed by IDC to 8 Innova.” Id. at 20. 9 However, the United States Supreme Court has held that, under the due process clause, a 10 nonresident defendant is not subject to jurisdiction in a forum simply because the defendant has 11 made a contract with a resident of the forum. See Burger King Corp. v. Rudzewicz,

, 12 478 (1985) (“If the question is whether an individual’s contract with an out-of-state party alone 13 can automatically establish sufficient minimum contacts in the other party’s home forum, we 14 believe the answer clearly is that it cannot.”). Instead, to determine whether a contract with a 15 resident of a forum subjects a nonresident to personal jurisdiction in the forum, courts must 16 evaluate “prior negotiations and contemplated future consequences, along with the terms of the 17 contract and the parties’ actual course of dealing.”

. California state courts have 18 interpreted these principles to mean that “‘the breach of a contract made and to be performed in 19 the state’ may be sufficient to support the exercise of personal jurisdiction” over a nonresident. 20 See Roman v. Liberty University, Inc.,

, 679 n.1 (2008) (quoting Martin v. 21 Detroit Lions, Inc.,

(1973)). 22 Applying this standard to the instant case, Plaintiff has failed to show that the PSA subjects 23 Innova and Vivos to personal jurisdiction in California. Apart from the fact that IDC is a 24 California resident, Plaintiff provides no details connecting the PSA to California. Plaintiff does 25 not, for example, contend that Innova’s officers entered California to negotiate the PSA or that 26 Innova’s consultants came to California to fulfill their duties under the PSA. Indeed, Plaintiff’s 27 complaint contains just a single allegation regarding the performance of the PSA: Plaintiff is informed and believes, and based thereon alleges, that on or about July 1 5, 2018, Innova and IDC entered into a Professional Service Agreement (“PSA”) pursuant to which Innova located and supplied personnel (“Contractors”) to IDC or 2 IDC’s End Customers per IDC’s specifications. 3 Compl. ¶ 16. The full PSA, which Plaintiff incorporates by reference, see

does not provide 4 additional support. The PSA makes clear that Innova’s consultants worked with IDC’s clients, not 5 with IDC itself, and states only that IDC’s clients were “located in USA and Canada.” Compl., 6 Exhibit C § 1. Accordingly, the PSA provides no information about whether Innova’s consultants 7 performed any work in California. Id. Without such information, the Court cannot conclude that 8 the PSA was a “contract made and to be performed in the state,” let alone that the PSA subjects 9 Innova and Vivos to personal jurisdiction in the state. See Roman,

n.1. 10 Moreover, although Plaintiff’s declaratory judgment claim may arise from the PSA, 11 Plaintiff fails to explain why the breach of contract claim against Innova and Vivos, which alleges 12 that Innova and Vivos defaulted on the Factoring and Security Agreement (“FSA”), arises from 13 Innova and Vivos’s California business activities. Specifically, Plaintiff’s breach of contract claim 14 alleges that Innova and Vivos “breached their obligations under the [FSA] by, among other things, 15 failing to repay amounts owed under the [FSA], breaching [their] warranties not to assign/transfer 16 [their] security and not providing Plaintiff prior notice in writing of [their] change of address.” 17 Compl. ¶ 96. In the instant motion, Plaintiff contends that Innova and Vivos’s failure to repay 18 loans from Plaintiff under the FSA is related to Innova and Vivo’s California business activities 19 because Innova and Vivos used these loans “to provide services to other California companies.” 20 Mot. at 20. However, Plaintiff provides no citations to support this contention, either in the form 21 of allegations from the complaint or in the form of documents subject to judicial notice. See

22 Accordingly, even if Innova’s California business activities are substantial, Plaintiff has failed to 23 show that the breach of contract claim “arises out of or relates to” those activities. 24 Schwarzenegger,

. 25 Thus, the Court finds that Plaintiff has not established personal jurisdiction over Innova 26 and Vivos. 27 V. LEAVE TO AMEND

5 The Court finds that allowing Plaintiff to amend its claims against Innova and Vivos or to

3 file a third motion for default judgment would be futile and cause undue delay. See Leadsinger, 4 Inc. v. BMG Music Publ’g,

(9th Cir. 2008). Plaintiffs first motion for default

5 judgment failed to address subject matter jurisdiction and personal jurisdiction at all. See ECF No.

6 59 at 1-2. The Court warned Plaintiff that failing to cure these jurisdictional deficiencies would

5 result in the dismissal of a subsequent motion for default judgment with prejudice. Jd. at 2.

Plaintiff's renewed motion for default judgment fails to establish personal jurisdiction. 9 Indeed, the only relevant fact alleged in the complaint is that Innova has “entered into service

10 contracts with California technology companies, such as IDC.” Mot. at 18 (citing Compl. □ 16).

This generic allegation provides no details connecting Innova and Vivos to California. Although

2 Plaintiff cites other facts not alleged in the complaint, these facts also do not establish personal jurisdiction.

S 4 Plaintiffs failure to provide evidence establishing personal jurisdiction over a year after 3 5 filing the complaint shows that leave to amend would be futile and cause undue delay. Thus, the 6 Court dismisses Plaintiff's claims against Innova and Vivos with prejudice. See Facebook, Inc. v. 5 Pedersen,

(N.D. Cal. 2012) (explaining that when a plaintiff fails to 8 establish personal jurisdiction in the context of a motion for default judgment, dismissal is

19 appropriate). VI. CONCLUSION

For the foregoing reasons, the Court DENIES Plaintiff's motion for default judgment and

DISMISSES Plaintiff's claims against Innova and Vivos with prejudice. 33 IT IS SO ORDERED.

54 Dated: December 21, 2021

29 LUCY ¢ KOH 26 United States Circuit Judge

Sitting by designation on the United States District Court for the Northern District of California. 28 Case No. 20-CV-03679-LHK “