Pasha Hawaii Holdings LLC v. Neptune Construction Group Inc.

Background

Pasha Hawaii Holdings, LLC alleged that Neptune Construction Group Inc. repeatedly used Pasha’s ocean freight services to transport containers between California and Hawaii. The parties’ arrangements involved booking confirmations, Pasha’s Sea Freight Tariff, and invoices. Pasha alleged that it transported 14 shipments booked between July 15, 2023, and December 10, 2023, but Neptune did not pay the 14 invoices.

Pasha filed claims for breach of contract and common counts on October 24, 2024. Pasha served Neptune through its registered agent by substituted service. After Neptune failed to respond, the Clerk entered default on December 13, 2024. Pasha then moved for default judgment. Neptune did not appear at the hearing and did not oppose the motion.

Jurisdiction, Service, and Default Judgment Standard

The court determined that it had subject-matter jurisdiction because the claims involved admiralty or maritime jurisdiction under 28 U.S.C. § 1333. It also found personal jurisdiction and proper venue based on the Tariff’s provision agreeing to jurisdiction in the Northern District of California. The court found service proper because Pasha served Neptune’s registered agent.

The court applied the seven factors used to decide whether to enter a default judgment, including prejudice to the plaintiff, the merits and sufficiency of the claims, the amount at stake, the possibility of factual disputes, whether the default resulted from excusable neglect, and the preference for decisions on the merits. Because Neptune did not participate after being served, the court found that the factors favored default judgment. The court concluded that Pasha had sufficiently stated a breach-of-contract claim based on its performance of the freight services and Neptune’s failure to pay the 14 invoices.

Damages and Costs

Pasha sought $120,506.94 for the unpaid invoices. The court found that amount supported by the invoices and reasonably tied to the freight services. Pasha also sought prejudgment interest, but the court found that Pasha had not provided a sufficient legal basis for that request. Pasha withdrew the request at the hearing, and the court recommended denying prejudgment interest.

Pasha requested $477.61 in litigation costs, consisting of a $405 filing fee and $72.61 for service of process. The court found those costs reasonable and recommended awarding them. The conclusion states that the recommended total award is $120,984.55, consisting of $120,506.94 in unpaid invoices and $477.61 in costs. However, one line in the conclusion refers to the costs as $477.81, which conflicts with the itemized costs and the stated total.

Recommendation and Next Steps

The magistrate judge recommended that Pasha’s motion for default judgment be granted in part and denied in part: granted in part as to $120,506.94 in unpaid invoices and $477.61 in costs, and denied as to prejudgment interest. The case was reassigned to a district judge because Neptune, being in default, had not consented to magistrate-judge jurisdiction. The recommendation instructed Pasha to serve Neptune with the report and recommendation and proof of service. Either party may file objections within 14 days after being served, and the report states that failing to object within that period may waive the right to appeal the district court’s order.