Shellmound-Christie Corp. v. CA/SCC 5850 LS JV
Shellmound-Christie Corp., a corporation v. CA/SCC 5850 LS JV, LLC, a limited liability company
- Kandis Westmore
- 4:23-cv-05192
- U.S. District Court · Northern District of California
- 10
Shellmound-Christie v. CA/SCC 5850, Judge Westmore, granted in part and denied in part default judgment, awarding damages, interest, attorney’s fees, and costs.
Shellmound-Christie Corp. received a default judgment against CA/SCC 5850 LS JV, LLC and CA-Ventures Holdings, LLC, which were held jointly and severally liable for the damages, interest, attorney’s fees, and costs awarded.
What happened
Shellmound-Christie Corp. sued CA/SCC 5850 and CA-Ventures Holdings, LLC for breach of contract after the defendants did not pay amounts acknowledged under agreements concerning a commercial property transaction. The defendants initially answered through counsel, but their answers were later stricken and default was entered after counsel withdrew and they failed to obtain new counsel.
The court found that it had jurisdiction, that the defendants were properly served, and that the complaint adequately stated a breach-of-contract claim. It determined that default judgment was appropriate because the defendants had notice of the case, did not oppose the motion, and otherwise left the plaintiff without a way to recover the unpaid amounts.
Judge Westmore granted in part and denied in part the motion for default judgment. The court entered judgment against the defendants jointly and severally for $362,715.86, 9% annual interest on that amount from July 15, 2023 until payment, $29,935.00 in attorney’s fees, and $1,238.11 in costs; it did not award the requested post-judgment interest on litigation-related attorney’s fees and costs.
The detailed version
- Shellmound-Christie Corp. v. CA/SCC 5850 LS JV · No. 4:23-cv-05192
- Kandis Westmore
- Aug. 27, 2025
Background
Shellmound-Christie Corp. asserted one breach-of-contract claim against CA/SCC 5850 and CA-Ventures Holdings, LLC. Shellmound-Christie and CA/SCC 5850 entered into a purchase-sale agreement for commercial property. After CA/SCC 5850 elected to terminate that agreement, the parties entered into a January 13, 2023 standstill agreement. Under that agreement, CA/SCC 5850 agreed to pay outstanding amounts and a $250,000 break-up fee, and acknowledged owing $649,999.97. CA-Ventures signed the agreement and guaranteed CA/SCC 5850’s payment obligations.
The escrowed $400,000, plus interest, was released to Shellmound-Christie, but the remaining amount was not paid by February 28,
- In a later agreement, Shellmound-Christie agreed not to immediately sue in exchange for payment by July 15,
- The defendants acknowledged that the amount outstanding as of June 19, 2023 was $303,259.32, plus $7,464.50 in attorney’s fees, and agreed that the balance would accrue 9% annual interest and an additional $50,000 late-payment fee if not paid by July
- The defendants did not pay.
The defendants initially filed answers while represented by Attorney Andrew C. Harris. After the court allowed Harris to withdraw, it warned that the defendant LLCs could not appear in federal court without counsel. The defendants did not obtain counsel. The court struck their answers and directed the Clerk to enter default; default was entered against both defendants on April 18, 2025. The defendants did not oppose Shellmound-Christie’s motion for default judgment or appear at the August 7, 2025 hearing.
Jurisdiction, Service, and Default Judgment Standard
The court found subject-matter jurisdiction under 28 U.S.C. § 1332 because the plaintiff was a California corporation, CA/SCC 5850 was organized in and had its principal place of business in Delaware, CA-Ventures was organized in and had its principal place of business in Illinois, and the amount in controversy exceeded $75,000. It also found personal jurisdiction and proper venue based on a forum-selection provision in the later agreement, which the defendants signed. The defendants had been served with the complaint and had filed answers before their answers were stricken.
Under Federal Rule of Civil Procedure 55(b)(2), a court may enter judgment after a defendant’s default. The court applied the seven factors commonly used to decide whether default judgment is appropriate: prejudice to the plaintiff; the merits of the claim; the sufficiency of the complaint; the amount at stake; the possibility of a factual dispute; whether the default resulted from excusable neglect; and the preference for decisions on the merits.
The court concluded that the first six factors favored default judgment. Without judgment, Shellmound-Christie would have no recourse to obtain the unpaid balances. The signed agreements supported the claim, the defendants were unlikely to dispute liability after failing to participate, and their default was not excusable neglect because they had been served, had obtained counsel, and knew about the litigation. These factors outweighed the Federal Rules’ preference for resolving cases on the merits.
Breach-of-Contract Claim
The court explained that a breach-of-contract claim requires proof of a contract, the plaintiff’s performance or excuse for nonperformance, the defendant’s breach, and resulting damages. Based on the complaint, Shellmound-Christie performed by refraining from filing suit as agreed, while the defendants failed to pay the acknowledged balance by July 15, 2023. The court found that the complaint sufficiently stated the claim.
Damages, Fees, and Costs
The court did not simply accept the amount of damages requested. It found that the complaint contained an arithmetic error concerning the amount due as of June 19, 2023 and calculated that the amount allegedly owed as of July 15, 2023 was $362,715.86. That figure included the outstanding balance, interest through July 15, and the $50,000 late-payment fee. The court awarded $362,715.86 and 9% annual interest on that amount from July 15, 2023 until payment.
The court also found reasonable the requested $29,935.00 in attorney’s fees after reviewing the billing rates and billing records. It awarded $1,238.11 in costs for filing, service, copying, and online research. Shellmound-Christie also requested 9% post-judgment interest on attorney’s fees and costs. The court stated that the agreement did not provide a basis for interest on attorney’s fees and costs incurred in the litigation, and the judgment did not include that requested interest.
Disposition
Judge Westmore granted in part and denied in part Shellmound-Christie’s motion for default judgment. The court entered judgment against CA/SCC 5850 and CA-Ventures jointly and severally for $362,715.86, interest on that amount at 9% per year from July 15, 2023 until payment, $29,935.00 in attorney’s fees, and $1,238.11 in costs.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.