1 2 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 3 4 Eric Kohli, Case No. 2:20-cv-00538-CDS-NJK

5 Plaintiff Order Granting in Part Plaintiff’s Motion for Default Judgment and Directing Clerk 6 v. to Enter Judgment

7 Ajay G. Dayal, et al., [ECF No. 245] 8 Defendants

9 10 This action was brought by plaintiff Eric Kohli, a lawyer who represented himself pro se, 11 for the payment of money owed under an oral employment contract. Kohli sued defendants Ajay 12 G. Dayal, Quantified Investment Group LLC, Quantified Capital Group, Pacific Bay Lending 13 Group, and Miss Elegant Expo for defendants’ refusal to pay Kohli for work he performed for a 14 two-month period in 2019. See generally First am. compl. (FAC), ECF No. 17. The case proceeded 15 to a jury trial against defendant Dayal only in November of 2024, which resulted in a verdict in 16 favor of plaintiff Kohli. Jury verdict, ECF No. 233. 17 Following the verdict, on January 27, 2025, the court issued an order, stating that if Kohli 18 was still seeking default judgment against the remaining defendants, he was required to file a 19 renewed motion for default judgment1 or, alternatively, to a notice advising the court he was no 20 longer seeking default judgment, no later than February 10, 2025. Order, ECF No. 242. Kohli 21 filed the renewed motion for default judgment on February 10, 2025. Renewed default j. mot., 22 ECF No. 245. For the reasons set forth herein, I grant in part Kohli’s motion for default 23 judgment. 24 25 26 1 I previously denied Kohli’s motion for default judgment against all defendants (ECF No. 189). See Order denying without prejudice mot. for default j., ECF No. 203. 1 I. Discussion 2 As set forth in my prior order, obtaining a default judgment under Federal Rule of Civil 3 Procedure 55 is a two-step process. See Eitel v. McCool,

(9th Cir. 1986) 4 (explaining the process). First, “[w]hen a party against whom a judgment for affirmative relief is 5 sought has failed to plead or otherwise defend, and that failure is shown by affidavit or 6 otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). After default is entered, 7 a party may seek entry of default judgment under Rule 55(b). “Entry of default does not entitle 8 the non-defaulting party to a default judgment as a matter of right.” Warner Bros Ent. Inc. v. Caridi, 9

(C.D. Cal. 2004) (citation omitted). The “general rule [is] that default 10 judgments are ordinarily disfavored. Cases should be decided upon their merits whenever 11 reasonably possible.” Eitel,

(citing Pena v. Seguros La Comercial, S.A.,

, 12 814 (9th Cir. 1985)). Whether to grant a default judgment lies within the district court’s 13 discretion.

14 The Clerk of Court entered default against defendants Pacific Bay and Miss Elegant Expo 15 on August 21, 2023. Entry of default 1, ECF No. 139. Just shy of a year later, the Clerk of Court 16 entered default against defendants Quantified Capital Group, LLC and Quantified Investment 17 Group, LLC (hereinafter, collectively the Quantified Defendants).2 Entry of default 2 (July 18 2024), ECF No. 181. Upon entry of default, I take as true the factual allegations in the non- 19 defaulting party’s complaint, except those related to the amount of alleged damages. Fed. R. Civ.

(b)(6); TeleVideo Sys., Inc. v. Heidenthal,

, 917–18 (9th Cir. 1987). In accordance with 21 the court’s order and Rule 55, Kohli filed a renewed motion for default judgment against all 22 defendants. Default mot., ECF No. 203. As the procedural requirements for default judgment 23 have been satisfied, I evaluate the Eitel factors. 24 The first Eitel factor requires the court to “consider[ ] whether and to what extent [the 25 plaintiff] will suffer prejudice . . . if the Court declines to grant default judgment.” Blackhawk 26 2 The Clerk of Court also entered default against Ajay Dayal. ECF No. 181. 1 Network, Inc., v. Comput. Servs., Inc.,

at *6 (N.D. Cal. Oct. 11, 2024). 2 Although at the beginning of this litigation, all defendants were represented by counsel and 3 were actively engaged in defending themselves, that representation terminated in January 2023. 4 See Mins. of proc., ECF No. 107 (granting motion to withdraw (ECF No. 96)). Thereafter, 5 defendants Dayal, Quantified Investment Group, LLC, and Quantified Capital Group, LLC 6 retained another attorney,3 who filed a motion to dismiss on behalf of those defendants, but then 7 moved to withdraw from the case after those defendants failed to pay for services rendered, 8 causing a breakdown of the attorney-client relationship. See Mot. to withdraw, ECF No. 160. 9 The motion to withdraw was granted. Order, ECF No. 168. Since that time, no defendant 10 (corporate or individual) has obtained new counsel. 11 Magistrate Judge Nancy J. Koppe issued a report and recommendation (R&R) that I 12 enter default4 against the Quantified Defendants for their repeat failures to comply with court 13 orders, namely, to obtain counsel to represent them as is required by the federal rules. Second 14 R&R, ECF No. 176. This was issued after the Quantified Defendants failed to respond to a court 15 order to update their address, ECF No. 170, and a show cause order demanding they explain why 16 sanctions should not be issued for failing to update their address, ECF No. 172. It was not the 17 first time Judge Koppe issued a show cause order against the Quantified Defendants. In May of 18 last year, she issued a show cause order for failing to meet the deadline for obtaining counsel, 19 which is required for corporate defendants. See OTSC, ECF No. 118. 20

21 3 Defendants Pacific Bay Lending and Miss Elegant Expo never retained new counsel. Judge Koppe issued a report and recommendation (R&R) that default be entered against both on July 28, 2023. First R&R, 22 ECF No. 134. The R&R was issued after both defendants failed to respond to a show cause order (ECF No. 118) for failing to obtain counsel as required for corporate defendants.

Those two defendants were 23 given multiple extensions to comply and failed to do so. Id. at 1. They also failed to respond to the show cause order and did not file any objections to the R&R. Consequently, I adopted the R&R in full and 24 ordered the Clerk of Court to enter default against Bay Lending Group and Miss Elegant Expo. See ECF No. 138. The Clerk of Court entered default against Pacific Bay and Miss Elegant Expo on August 21, 25 2023. ECF No. 139. On October 15, 2023, Kohli filed the motion for default judgment. ECF No. 153. No opposition was filed, so default judgment was entered on November 15, 2023. Default J., ECF No. 157. 26 4 Although the R&R states that “default judgment” is warranted, I ultimately found that only entry of default was appropriate at the time. Order, ECF No. 179 at 2. 1 Given the Quantified Defendants’ repeat failures to comply with court orders, the court 2 finds that Kohli will suffer prejudice if default judgment is not entered against them as he will 3 have no other means for recovery against them. See M&E Staffing, LLC v. Remarkable Staffing, LLC, 4

, at *5 (E.D. Wash. Sept. 27, 2024) (finding plaintiff had no other 5 recourse than default judgment to recover damages because defendant failed to execute a 6 settlement agreement and failed to otherwise defend itself); PepsiCo, Inc. v. Cal. Sec. Cans,

Supp. 2d 1172, 1177 (C.D. Cal. 2002) (holding that potential prejudice to plaintiff weighs in favor 8 of default judgment because plaintiff would have no recourse); Elektra Ent. Grp., Inc. v. Crawford, 9

(C.D. Cal. 2005) (“Plaintiffs would suffer prejudice if the default judgment is 10 not entered because Plaintiffs would be denied the right to judicial resolution of the claims 11 presented, and would be without other recourse for recovery.”). Thus, this factor weighs in favor 12 of default judgment against the Quantified Defendants. 13 The second and third Eitel factors—the merits of the claim and the sufficiency of the 14 complaint—are “often analyzed together and require courts to consider whether a plaintiff has 15 state[d] a claim on which [he] may recover.” Viet. Reform Party v. Viet Tan - Viet. Reform Party,

Supp. 3d 948, 962 (N.D. Cal. 2019) (quotations omitted). In his amended complaint, Kohli 17 brought the following claims against all defendants: violations of the Fair Labor Standards Act 18 (FLSA) and Nevada’s Wage and Hours Laws (NWL), unjust enrichment, breach of contract, 19 retaliation and wrongful termination, bad faith, fraud, extortion and involuntary servitude, and 20 intentional infliction of emotional distress. See FAC, ECF No. 17. By the time the case proceeded 21 to trial against defendant Ajay Dayal, the remaining claims were breach of contract, unjust 22 enrichment, fraud, and the FLSA and NWL violations. At trial, evidence showed that Dayal 23 never paid Kohli for work he performed for Dayal and his companies after he was hired by Dayal 24 by way of an oral contract. At some point, the terms of the oral employment agreement changed, 25 but Dayal still failed to meet his end of that agreement. The evidence at trial also showed that 26 Dayal owned and operated Quantified Capital Group, LLC and Quantified Investment Group, 1 LLC. Ultimately, the jury returned a verdict in favor of Kohli on his breach of contract, fraud, 2 FLSA, and NWL claims. Verdict, ECF No. 223. Given that the jury found Dayal liable for all but 3 the unjust enrichment claims, and the complaint brought the same claims against the Quantified 4 Defendants, the second and third factors weigh in favor of entering default against the 5 Quantified Defendants as it relates to the breach of contract, fraud, FLSA, and NWL claims. 6 The fourth Eitel factor also weighs in favor of entering default against the Quantified 7 Defendants. This factor requires the court to consider “the amount of money at stake in relation 8 to the seriousness of Defendant’s conduct.” PepsiCo, Inc., 238 F. Supp. 2d at 1176. “If the sum of 9 money at stake is completely disproportionate or inappropriate, default judgment is disfavored.” 10 Twentieth Century Fox Film Corp. v. Streeter,

(D. Ariz. 2006). The jury 11 returned a verdict in the amount of $60,000 for the breach of contract claim, $30,000 for 12 compensatory damages, and $90,000 in punitive damages.5 ECF No. 233. These amounts were 13 not disproportionate or inappropriate to the claims brought by Kohli, nor the evidence 14 introduced at trial, so this weighs in favor of entering default against the Quantified Defendants. 15 The fifth Eitel factor—the possibility of a dispute over material factors—also weighs in 16 favor of entering default judgment. That is because once the court clerk enters a default, the 17 well-pleaded factual allegations of the complaint are taken as true, except for those allegations 18 relating to damages. See Geddes v. United Fin. Grp.,

, 560 (9th Cir. 1997). Moreover, 19 here, the court was able to hear the evidence against the Quantified Defendants that was 20 introduced during the trial against Dayal. The Quantified Defendants’ failure to defend against 21 this action, together with the clerk’s entry of default, and evidence introduced at trial, the court 22 could find there is “no genuine dispute of material facts [that] would preclude granting 23 plaintiff’s motion.” PepsiCo, Inc., 238 F. Supp. 2d at 1177. Although the evidence at trial was more 24 directed at Dayal, he was the owner and operator of the Quantified Defendant businesses, and 25 5 The jury also awarded wages under the FLSA and NWL claims but for the reasons I stated on the 26 record, including but not limited to preventing double recovery, during the December 18, 2024 hearing, I set that award aside. See Mins. of proc., ECF No. 232. 1 the complaint alleges joint and several liability. See FAC, ECF No. 17. Because the evidence 2 introduced at trial against Dayal is the same evidence against the Quantified Defendants, and the 3 jury returned a verdict in favor of Kohli, there is little dispute over material factors. Accordingly, 4 the fifth Eitel factor weighs in favor of entering default judgment against the Quantified 5 Defendants. 6 The sixth factor requires that the court consider whether the default was due to 7 excusable neglect. There is no evidence of any excusable delay on the record. Indeed, Judge 8 Koppe repeatedly advised and cautioned the Quantified Defendants that they must be 9 represented by counsel in federal court and gave them multiple opportunities to obtain counsel 10 and engage in this action. See ECF Nos. 118, 168, 172, 176. They failed to heed the warnings. The 11 sixth Eitel factor favors the entry of a default judgment when the defendant has been properly 12 served or when the plaintiff demonstrates that the defendant is aware of the action. See Wecosign, 13 Inc. v. IFG Holdings, Inc.,

(C.D. Cal. 2012). The record is clear: Quantified 14 Defendants knew about this action and knew they were required to have counsel or could face 15 sanctions. 16 The seventh Eitel factor “takes into account the strong public policy in favor of deciding 17 cases on the merits.” Langer v. Peykar,

, at *3 (C.D. Cal. Aug. 22, 2018); see also 18 Eitel,

(“Cases should be decided upon their merits whenever reasonably 19 possible.”); In Re Roxford Foods, Inc.,

, 879 (9th Cir. 1993) (holding that default 20 judgments are disfavored and cases should be decided on the merits if possible). This factor 21 almost always weighs against default judgment. This situation is no different, but the court 22 notes that the Quantified Defendants’ refusal to obtain counsel makes it impossible to resolve 23 the claims against them on the merits. The Ninth Circuit has “recognized that this factor ‘lends 24 little support’ to a party whose responsibility it is to move a case toward disposition on the 25 merits but whose conduct impedes progress in that direction.” In re Phenylpropanolamine (PPA) 26 Prods. Liab. Litig.,

(9th Cir. 2006) (quoting In re Exxon Valdez,

, 433 1 (9th Cir. 1996)). Thus, although “[a] decision on the merits is desirable, but under these 2 circumstances, default judgment is warranted.” Nevada Prop. 1, LLC v. Kiwibank Ltd.,

5633048, at *2 (D. Nev. Sept. 21, 2020). 4 Accordingly, having considered the Eitel factors, I find that default judgment against the 5 Quantified Defendants, with an award of damages, is warranted, so Kohli’s renewed motion for 6 default judgment is granted in part. The court enters default judgment against the Quantified 7 Defendants in the amount of $60,000 for the breach of contract claim, $30,000 for compensatory 8 damages, and $90,000 in punitive damages6 to be paid joint and severally with co-defendant 9 Ajay Dayal. 10 The court declines, however, to enter a damages award against defendants Pacific Bay 11 Lending Group and Miss Elegant Expo because the court questions the evidence against these 12 defendants. When it comes to joint and several liability, “the presumptive rule is joint and 13 several liability unless it is clear that one or more of the losing parties is responsible for a 14 disproportionate share of the costs.” Andresen v. Int’l Paper Co.,

, at *6 (C.D. Cal. 15 June 10, 2015) (quoting Anderson v. Griffin,

, 522–23 (7th Cir. 2005)). Although the 16 allegations in the FAC were pleaded the same as to each defendant, the evidence adduced at trial 17 did not reveal that Kohli did any work for either of these companies. Other than confirming that 18 Dayal was the owner/operator of those companies, there was no evidence introduced regarding 19 what, if any, work Kohli ever did for or on behalf of these companies. Indeed, the sum and 20 substance of evidence introduced at trial about these companies addressed: (1) whether Miss 21 Elegant Expo was a beauty pageant and if Dayal had a business license for it, and (2) whether 22 Pacific Bay was a mortgage company. There was no evidence, direct or circumstantial, 23 suggesting Kohli performed any work on behalf of those companies. On the other hand, the 24 testimony and the evidence supported that Kohli did do work at Dayal’s behest on behalf of the 25 6 Kohli asks that I impose the wage damages awarded by the jury against the Quantified Defendants 26 because they “failed to wage any defense.” ECF No. 245. I deny this request for the same reason the court declined to award those damages with respect to Dayal. 1] Quantified Defendants. As an example, the email address Kohli utilized when working for Dayal ended with @thequantifiedgroup.com. 3 The trial evidence showed that Kohli contracted with Dayal for a job, and then Dayal failed to perform under that contact. This makes Dayal largely responsible for the damages. Although the court recognizes the trial was against Dayal, it is still Kohli’s burden to 6|| demonstrate default judgment is warranted. Assaf v. Carp,

, *1 (C.D. Cal. June 5, 2018) (“On a motion for default judgment, Plaintiffs the burden of proving up their damages” by providing “detailed affidavits and supporting exhibits.”). Having been presented no evidence that Kohli performed work for Miss Elegant Expo or Pacific Bay, I exercise my discretion and 10]| decline to enter a damages award against these two companies. 11) IL. Conclusion 12 IT IS HEREBY ORDERED THAT Kohli’s motion for default judgment [ECF No. 245] 13||is GRANTED in part, as set forth in this order. 14 The Clerk of Court is kindly directed to enter judgment in favor of Eric Kohli against 15|| Ajay Dayal. The judgment shall reflect damages in the amount of $60,000 for the breach of 16]| contract claim, $30,000 for compensatory damages, and $90,000 in punitive damages, to paid 17|| jointly and severally with Quantified Capital Group, LLC and Quantified Investment Group, 18]| LLC. 19 The Clerk of Court is also directed to enter default judgment against Quantified Capital Group, LLC and Quantified Investment Group, LLC. The default judgment shall reflect damages the amount of $60,000 for the breach of contract claim, $30,000 for compensatory damages, 22]| and $90,000 in punitive damages, to paid jointly and severally with Ajay Dayal, and to close this 23]| case. / ) 24 Dated: May 19, 2025 LZ (

25 ZL LA Cristina 12 Silva 26 ates District Judge