Thayer v. Sawyer

Background

Matthew Thayer brought one breach-of-contract claim against Mark Sawyer. Thayer alleged that the parties entered a settlement agreement on February 9, 2024, under which Sawyer was to pay a total of $603,000 in installments. Thayer alleged that Sawyer paid $50,000 on February 12, 2024, but made no further payments and communicated through counsel that he would not make the remaining payments.

The Clerk entered default against Sawyer on July 11, 2024, after Sawyer failed to appear or respond. Thayer previously sought default judgment, but the court denied that motion without prejudice after finding that Thayer had not established personal jurisdiction over Sawyer. Thayer then filed the renewed motion addressed in this order.

Jurisdiction and Service

Before entering default judgment, the court examined service of process, subject-matter jurisdiction, and personal jurisdiction. The court found that Thayer showed specific personal jurisdiction, meaning that Sawyer had sufficient connections with California related to the dispute. The court relied on evidence that Sawyer held a California financing-law license, maintained a financial-services website listing a San Jose business address, and had related California connections to the underlying transaction and settlement negotiations.

The court also found subject-matter jurisdiction based on diversity of citizenship. Thayer alleged that he was a Minnesota citizen and initially alleged that Sawyer was a California citizen; although the renewed motion stated that Sawyer was a Nevada citizen, the court treated the complaint’s allegation as true for purposes of the motion. The amount sought exceeded $75,000, and the court found complete diversity between the two parties.

The court found that Sawyer was timely and properly served through substituted service at his home in Nevada. The person who served the documents had attempted personal service four times before serving Jennifer Sawyer, an adult co-resident.

Default-Judgment Analysis

The court applied the factors used by the United States Court of Appeals for the Ninth Circuit to decide whether default judgment was appropriate. The court found that Thayer would be prejudiced without a judgment because he would have no other means to recover the alleged unpaid funds. It also found that Thayer’s allegations were sufficient to state a viable breach-of-contract claim under California law and that the claim had merit for purposes of default judgment.

The court found that the requested $553,000 was not unreasonable or excessive in light of the alleged breach and was consistent with the settlement agreement. The possibility of a dispute about material facts was a neutral factor because Sawyer had not appeared, but Thayer had not submitted evidence conclusively proving the breach. The court found no indication that Sawyer’s default resulted from excusable neglect. Although federal procedure generally favors decisions on the merits, the court concluded that this factor did not prevent default judgment because Sawyer had refused to appear or defend the case.

Relief and Order

The court found that Thayer had provided enough proof to establish damages of $553,000, the amount he claimed remained due under the settlement agreement. Thayer did not provide evidence supporting interest, attorney’s fees, or costs.

The court granted Thayer’s renewed motion for default judgment. It ordered that judgment be entered in Thayer’s favor for $553,000.