From Baja Developments LLC v. TSD Loreto Partners, S. en C., 2010 U.S. Dist. LEXIS 42551 (D. Ariz. April 30, 2010):

Following entry of default, Rule 55(b)(2), FED.R.CIV.P., permits a district court to enter final judgment in a case. Entry of default judgment, however, is not a matter of right. *** Entry of default judgment is entirely within a court's discretion and may be refused if the judge determines no justifiable claim has been alleged or that a default judgment is inappropriate for other reasons. *** Well-pled factual allegations of a complaint are taken as true, except for those allegations relating to damages. ***

In determining damages, a district court can rely on the declarations submitted by the plaintiff or conduct a full evidentiary hearing. Fed. R. Civ. P. 55(b)(2). "A plaintiff's burden in 'proving up' damages is relatively lenient." *** "[F]undamental fairness, required by the due process of law, limits the scope of relief[,]" ... which is, undoubtedly, why Rule 54(c), Fed.R.Civ.P., proscribes that a "default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings." Rule 54(c), Fed.R.Civ.P.

The Ninth Circuit has enumerated seven factors for a district court to consider in determining whether to grant a default judgment: (1) the merits of the plaintiff's substantive claim; (2) the sufficiency of the complaint; (3) the sum of money at stake in the action; (4) the possibility of prejudice to the plaintiff; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring a decision on the merits. ***

Because the Complaint seeks non-liquidated, compensatory damages "in excess of $7,000,000[]" which is not "a sum certain or a sum that [could] be made certain by computation" within the meaning of Rule 55(b), FED.R.CIV.P., the Court conducted an on-the-record Rule 55(b)(2) default damages hearing on April 21, 2010. ***

Baja New York has not provided, nor has this Court's independent research discovered, any authority addressing the issue of diversity jurisdiction of a sociedad en comandita organized under Mexican law.bbbbbb The Supreme Court has expressly held, how-ever, that a sociedad en comandita is a juridical person under the laws of Puerto Rico. Puerto Rico v. Russell & Co., 288 U.S. 476, 481 (1933) (holding a sociedad en comandita is a juridical person under Puerto Rican law and, therefore, the citizenship of the entity, and not its members, was determinative of jurisdiction). As the Supreme Court explained: "In the law of its creation the sociedad is consistently regarded as a juridical person. It may contract, own property and transact business, sue and be sued in its own name and right." ... "[Its] characteristics under the Codes of Puerto Rico give content to their declaration that the sociedad is a juridical person. That personality is so complete in contemplation of the law of Puerto Rico that we see no adequate reason for holding that the sociedad has a different status for purposes of federal jurisdiction than a corporation organized under that law."***

The Court finds that Plaintiff Baja New York has met its burden of demonstrating that grounds for diversity jurisdiction exist and its claim is supported with competent proof by a preponderance of the evidence, i.e., the declaration of Plaintiff's expert on Mexican law, Jose Antonio Diez de Bonilla-Martinez. ***

CONCLUSIONS OF LAW

8. At the conclusion of the April 21, 2010 default damages hearing, the Court instructed Baja New York's counsel to file a post-hearing memorandum on the legal issue whether Rule 54(c), Fed. R. Civ. P., and federal law allows a plaintiff, like Baja New York, to receive a greater sum of money at a default damages hearing, here approximately $ 1.5 million dollars more than the amount pled in the Complaint "estimated to exceed $ 7,000,000."***

[Footnote 9] Federal Rule 54(c) provides in relevant part:

(c) Demand for Judgment; Relief to Be Granted. A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings. . . .

Rule 54(c), FED.R.CIV.P.

The Complaint alleges that "[s]ince August 2007, Loreto Partners has controlled the accounting functions that tracked the sums expended on the provision of services to it under the ISA . . . [and] BAJA New York [did] not have access to information about the precise dollar amount of money it spent providing services to Loreto Partners[,]" until after the Complaint was filed. *** Baja New York requested an accounting of the amount of money Loreto Partners owes Baja New York. *** Additionally, the Complaint prayed for judgment against Loreto Partners "[f]or compensatory damages in an amount to be proven at trial[.]" ***

[T]his issue may "be one of first impression[]" in the Ninth Circuit. *** Nevertheless, courts in the Ninth Circuit have held that "doubts about the actual assessment of damages [awarded at a default hearing] will be resolved against the party who frustrates proof of such, and the factfinder may calculate damages at the highest reasonably ascertainable value." *** [D]istrict courts outside the Ninth Circuit have concluded that a complaint seeking compensatory damages "in excess of" the contract purchase price, provides a proper foundation for the amounts sought by plaintiff in default proceedings. ***

Because (1) the Complaint's prayer for judgment requested, not a specific amount, but rather "compensatory damages in an amount to be proven at trial[,]" ***; (2) Baja New York was forced to allege a minimum estimate of the amount of its damages that "exceeds $ 7,000,000" as a result of Loreto Partners' possessing all the accounting books and records when the Complaint was filed; and (3) the Complaint provided Loreto Partners fair notice that Baja New York was seeking a significant, multi-million dollar award and served as sufficient and proper foundation for the amount of money sought by Baja New York in the default hearing, the Court concludes that Baja New York should be awarded its total compensatory damages reasonably proven at the default damages hearing. Therefore, Baja New York is entitled to compensatory damages in the amount of $8,442,044.00 plus interest at the legal rate from the date the Judgment is entered to the date the Judgment is paid in full.