Super Micro Computer, Inc. v. R Associates, Inc.

Background

Super Micro Computer, Inc. alleged that R Associates, Inc. ordered equipment beginning in 2018. Super Micro Computer shipped the equipment, but R Associates allegedly did not pay the full amount. The complaint asserted breach of contract, account stated, open book account, and quantum valebant claims, and alleged that R Associates owed $215,655.85.

According to a declaration submitted by Super Micro Computer’s Vice President of Finance and Controller, R Associates issued four purchase orders between September 14 and October 12, 2018. Super Micro Computer sent invoices totaling $229,794.60. R Associates returned some products, receiving a $1,547.75 credit, and paid $12,591. The remaining balance was $215,655.85.

Jurisdiction and Service

The court found diversity jurisdiction because the opinion states that Super Micro Computer is a Delaware corporation with its principal place of business in San Jose, California, and R Associates is a Texas corporation with its principal place of business in Houston, Texas. The amount in controversy exceeded $75,000.

The court also found personal jurisdiction over R Associates. It reasoned that R Associates purposefully did business with a California corporation, that the claims arose from the alleged contract and breach, and that the parties’ terms and conditions included consent to the exclusive jurisdiction of state and federal courts in Santa Clara County, California. The court found service adequate because R Associates’ agent for service of process was served on November 20, 2020.

Default Judgment Analysis

A default judgment is a judgment entered when a defendant fails to defend the case. Applying the factors used by federal courts in the Ninth Circuit, the court found that Super Micro Computer would likely be left without a remedy if default judgment were denied. It also found that the complaint’s allegations and supporting evidence sufficiently established the breach-of-contract claim.

The court explained that, after default, well-pleaded allegations are treated as true except for the amount of damages. For breach of contract, Super Micro Computer had to show a contract, its own performance or an excuse for nonperformance, R Associates’ breach, and damages. The court found that Super Micro Computer sufficiently alleged and demonstrated that R Associates breached the agreement by failing to pay for equipment it ordered and received.

The court found that the requested $215,655.85 was tailored to the alleged misconduct. Although the policy favoring decisions on the merits weighed against default judgment, the court found that the other factors favored it and that R Associates had failed to litigate the case.

Recommended Disposition

The report and recommendation states that the court recommends granting Super Micro Computer’s motion for default judgment and awarding $215,655.85 in damages. It also directs Super Micro Computer to serve R Associates with the report and file proof of service. The report states that any party could object within fourteen days after being served.

The opinion is signed by Allie Kim, United States Magistrate Judge, and is a recommendation rather than a statement that the final district-court judgment had already been entered.