Wells Fargo Bank NA v. Prime1 Construction LLC et al

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Wells Fargo Bank NA,
Plaintiff,
v.
Prime1 Construction LLC, et al.,
Defendants.
No. CV-24-02337-PHX-DJH
ORDER
On November 24, 2025, Cross-Claimants Ankur R. Shah (“Shah”) and Ruchi Jain
(“Jain”) (collectively, “Cross-Claimants”), in their capacities as trustees of the Ankur &
Ruchi Shah Family Trust (the “Trust”), filed a Motion for Default Judgment against
Defendants Prime1 Construction LLC (“Prime1”) and Phillip Aguilar1 (“Aguilar”)
(collectively, “Defendants”). (Doc. 92). Defendants have not appeared or otherwise
defended against this action. Consequently, the Motion is unopposed, and the time to file
a response has passed. See LRCiv 7.2(c).
I. Background
This case presents a rather convoluted set of circumstances. It was initially
instigated by Plaintiff Wells Fargo (“Wells Fargo”), on September 5, 2024, over a dispute
with a $125,000.00 check that resulted in an overdrawn account. (See generally Doc. 1).
As relevant here, both the Trust and Prime1 had accounts with Wells Fargo that were
involved with the disputed check and overdraw. (Doc. 1 at ¶¶ 11–12). Wells Fargo filed
1 Cross-Claimants state that Aguilar also went by the name “Jordan Rodriguez.” (Doc. 46
at ¶ 4). Any mention of the name “Rodriguez” refers to the same person as “Aguilar.”
Case 2:24-cv-02337-DJH Document 104 Filed 07/30/26 Page 1 of 8

- 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud
claims against the Trust. (Id. at ¶¶ 47–70). And, in the alternative, Wells Fargo brought
breach of contract and breach of the implied covenant of good faith and fair dealing claims
against Prime1 as well as an unjust enrichment claim against both Defendants. (Id. at ¶¶
71–95). Both Aguilar and Prime1 failed to answer or defend against Wells Fargo’s
Complaint, and the Clerk consequently entered default against each. (See Docs. 18, 36).
Following the receipt of Wells Fargo’s Complaint, Cross-Claimants filed a Second
Amended Answer and Cross Claim/Third Party Complaint (the “Cross Complaint”). (Doc.
46). In the Cross Complaint, Cross-Claimants allege claims against Defendants due to a
construction contract (the “Contract”) between the parties. They additionally brought suit
against Masizo Development, LLC (“Masizo”), another party identified in the Contract.
(See id. at ¶¶ 5, 22).2
Cross-Claimants allege that, in February of 2024, they were seeking a licensed
contractor to complete a home improvement project on their house. (Id. at ¶ 9). At the
urging of their designer, Cross-Claimants selected Aguilar, who is the owner of Prime1, to
complete the project. (See id. at ¶¶ 4, 9–15). Aguilar and the designer agreed to complete
the project for $250,000.00, and sent Cross-Claimants the Contract, which they signed on
or around February 8, 2024. (Id. at ¶¶ 15–16).
To commence construction work, Cross-Claimants paid Aguilar $125,000.00. (Id.
at ¶ 17). However, “[s]ubsequent to signing the Contract, and prior to the commencement
of work, Shah and Jain quickly uncovered significant red flags indicative of deliberate
fraud, including Aguilar’s use of false names (such as Jordan Rodriguez), erratic and
evasive communication, and alarming online reviews directly accusing Aguilar and Prime1
of prior fraudulent activities.” (Id. at ¶ 18). It further came to light that Prime1 was not a
licensed contractor with the Arizona Registrar of Contractors at any relevant time.
(Id. at ¶ 20). Cross-Claimants allege that “Aguilar deliberately induced Shah and Jain to
2 Throughout this Order, cited paragraph numbers from docket entry 46 refer to the
paragraph number in the Cross Complaint, not the Second Amended Answer, unless
otherwise stated.
Case 2:24-cv-02337-DJH Document 104 Filed 07/30/26 Page 2 of 8

- 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
sign a fraudulent and misleading contract for labor and materials purportedly estimated at
$250,000, knowing that Prime1 was unlicensed and incapable of lawfully fulfilling the
Contract[.]” (Id. at ¶ 21).
“On February 10, 2024, [Wells Fargo] contacted Jain about the $125,000 check.”
(Id. at ¶ 24). Jain directed Wells Fargo to dishonor the check, and Wells Fargo initially
complied with this directive. (Id. at ¶¶ 25, 28). The parties then agreed to terminate the
Contract on February 13, 2024. (Id. at ¶ 32). Meanwhile, “Wells Fargo subsequently,
inexplicably, without authority, and without further communicating with Shah or Jain,
reversed its dishonor of the check and credited Prime1’s account.” (Id. at ¶ 34). And
“Aguilar surreptitiously withdrew the majority of the funds from Prime1’s Wells Fargo
account and absconded with the stolen money.” (Id. at ¶ 35).
As a result, Cross-Claimants brought the following claims: breach of contract
against Prime1 and Masizo; unjust enrichment against Prime1, Aguilar, and Masizo; and
fraud against Aguilar and Masizo. (Id. at ¶¶ 44–52). Masizo appeared and participated in
this matter. (See, e.g., Doc. 55). Cross-Claimants served Prime1 (Doc. 31), and after
unsuccessful attempts to serve Aguilar, they were permitted to execute service on Aguilar
by alternative means. (See Doc. 54). Alternative service was completed on February 27,
2025. (See Doc. 58). Nonetheless, Aguilar and Prime1 both failed to appear in this matter,
and default was again entered for each party. (Docs. 41, 62).
On August 14, 2025, Wells Fargo, the Trust, and Masizo participated in a settlement
conference with Magistrate Judge Lynette C. Kimmins, and a subsequent conference was
held on September 18, 2025. (See Docs. 78, 85). The second conference proved successful
as the parties were able to reach a settlement. (See Doc. 85). “Pursuant to the agreement
reached among the parties in the settlement conference, the Trust agreed to pay $65,000.00
to Wells Fargo to settle Wells Fargo’s claims against the Trust.” (Doc. 92 at 12).
Cross-Claimants now seek default judgment against Defendants for their claims
raised in the Cross Complaint. (See generally id.).
/ / /
Case 2:24-cv-02337-DJH Document 104 Filed 07/30/26 Page 3 of 8

- 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
II. Legal Standard
Federal Rule of Civil Procedure 55(b)(2) governs applications for default judgment.
The Court possesses discretion whether to enter a default judgment. Aldabe v. Aldabe, 616
F.2d 1089, 1092 (9th Cir. 1980). Before analyzing the merits of a motion for default
judgment, the Court “has an affirmative duty to look into its jurisdiction over both the
subject matter and the parties.” In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (citing
Williams v. Life Sav. and Loan, 802 F.2d 1200, 1203 (10th Cir. 1986)).
If jurisdiction is established, the Court then considers:
(1) the possibility of prejudice to the plaintiff, (2) the merits of the plaintiff’s
substantive claim, (3) the sufficiency of the complaint, (4) the sum of money
at stake in the action, (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 decisions on
the merits.
Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). “The general rule of law is that
upon default the factual allegations of the complaint, except those relating to the amount
of damages, will be taken as true.” Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th
Cir. 1977) (citing Pope v. United States, 323 U.S. 1, 12 (1944)).
III. Discussion
Cross-Claimants are seeking default judgment on their unjust enrichment claim
brought against Defendants as well as their fraud claim brought against Aguilar.3 They are
seeking to recover $65,000.00 from Defendants, “the exact amount that the Trust paid to
settle Wells Fargo’s claims.” (Doc. 92 at 6). In other words, Cross-Claimants seek to have
Defendants indemnify them for the damages—i.e., the $65,000.00 paid to settle Wells
Fargo’s claims against them—they say they incurred as a result of Defendants’ conduct.
3 Cross-Claimants also brought a breach of contract claim against Prime1 in their
Complaint. However, this claim is not addressed in their Motion for Default Judgment.
(See Doc. 92 at 5–6). As Cross-Claimants do not request default judgment on this claim
or otherwise seek damages regarding this claim, the Court considers it abandoned. See,
e.g., J & J Sports Productions, Inc. v. Banuelos, 2013 WL 1283344, at *3 n.3 (N.D. Cal.
2013) (treating a claim not addressed in the plaintiff’s motion for default was abandoned);
Kaloustian v. FarMar Law Group, PC, 2022 WL 18397630, at *6 n.2 (C.D. Cal. 2022)
(same).
Case 2:24-cv-02337-DJH Document 104 Filed 07/30/26 Page 4 of 8

- 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
This is problematic in the context of default judgment because neither of Cross-Claimants’
causes of action establish that Defendants are liable to indemnify Cross-Claimants for said
settlement. See Great Bowery, Inc. v. FouFou LLC, 2026 WL 1730861, at *2 (C.D. Cal.
2026) (“Because Plaintiff has not shown that it is entitled to the relief it seeks, its motion
for default judgment is denied.”).
“Arizona’s equitable indemnity law seeks to avoid unjust enrichment by allowing
recovery only when an indemnity plaintiff subject to derivative or imputed liability
discharges an actual obligation that a culpable indemnity defendant owed to a third party.”
KnightBrook Ins. Co. v. Payless Car Rental Sys. Inc., 409 P.3d 293, 295 (Ariz. 2018).
Under Arizona law, “the plaintiff in a common law indemnity action generally must show:
(1) it discharged a legal obligation owed to a third party; (2) for which the indemnity
defendant was also liable; and (3) as between the two, the obligation should have been
discharged by the [indemnity] defendant.” Id. (internal quotation mark and citations
omitted). Cross-Claimants brought no such claim here.
Instead, Cross-Claimants’ fraud claim is premised upon Aguilar’s representations
and omissions about Defendants’ legal ability to perform the contract and status as a
licensed contractor. (See Doc. 46 at 14). Not only is Cross-Claimants’ settlement unrelated
to their fraud claim, but also the above elements are not present. So, this claim provides
no basis for the Court to hold Defendants liable for Cross-Claimants’ settlement with Wells
Fargo.
Similarly, as to Cross-Claimants’ unjust enrichment claim, while the elements of
such a claim maybe ascertainable from the Cross Complaint in its entirety, the claim merely
asserts: “[b]y and through the acts and omissions of Prime1, Aguilar, and Masizo as alleged
in this Complaint, Prime1, Aguilar, and Masizo have been unjustly enriched and the Shahs
have been unjustly impoverished; and as such, the Shahs are entitled to equitable damages
in an amount to be proven at trial.” (Id. at 13). Consequently, the exact enrichment and
impoverishment that Cross-Claimants are referencing is not abundantly clear. To be sure,
Cross-Claimants allege that “[i]n Wells Fargo’s Complaint, it asserts certain civil claims
Case 2:24-cv-02337-DJH Document 104 Filed 07/30/26 Page 5 of 8

- 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
against the Trust, Prime1, and Aguilar.” (Id. at 12). And “[w]hile the Trust denies liability
to Wells Fargo, if the Trust is found to be liable to Wells Fargo, then Prime1, Aguilar, and
Masizo must be found liable to the Shahs.” (Id.) Moreover, the Motion now states that
“[t]he Trust has been impoverished in the amount of which Wells Fargo held the Trust
liable for the missing funds.” (Doc. 92 at 5). Nevertheless, these allegations and assertions
are insufficient to hold Defendants liable for Cross-Claimants’ settlement.
First, Cross-Claimants fail to allege the elements of an equitable indemnity claim
described above. Second, to establish unjust enrichment, “a plaintiff must demonstrate that
the defendant received a benefit, that by receipt of that benefit the defendant was unjustly
enriched at the plaintiff’s expense, and that the circumstances were such that in good
conscience the defendant should provide compensation.” Freeman v. Sorchych, 245 P.3d
927, 936 (Ariz. Ct. App. 2011). Cross-Claimants have not established in their Complaint
how their settlement with Wells Fargo conferred a benefit on Defendants, especially where,
as here, Wells Fargo’s claims against Defendants were plead as alternative claims to its
claims brought against Cross-Claimants. (See Doc. 1 at ¶¶ 72, 80, 88). By Cross-
Claimants’ own assessment, “the Trust agreed to pay $65,000.00 to Wells Fargo to settle
Wells Fargo’s claims against the Trust.” (Doc. 92 at 12 (emphasis added)). No benefit to
Defendants can be reasonably construed from Cross-Claimants’ settlement. Therefore,
Cross-Claimants’ unjust enrichment claim is legally insufficient to obtain their settlement
payment from Defendants.
In actuality, the damages ascertainable from the Cross Complaint stem from the
$125,000.00 check that Aguilar is alleged to have absconded with. (See Doc. 46 at 12).
Nonetheless, no damages regarding this check have been established with any amount of
certainty that would warrant the entry of default judgment. The Court is in receipt of two
conflicting recounts of the underlying events that transpired. See Escalante v. Lidge, 34
F.4th 486, 494–95 (5th Cir. 2022) (rejecting the argument that factual allegations in
competing default judgment motions should be viewed in isolation because the court was
“aware of no authority requiring courts adjudicating default judgments willfully to blind
Case 2:24-cv-02337-DJH Document 104 Filed 07/30/26 Page 6 of 8

- 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
themselves to pleadings of other parties in the same action”). In particular, Wells Fargo
claims that “Shah filed a fraud claim with Wells Fargo, claiming that the Check was
fraudulently altered and that he had not authorized Prime1 to deposit the Check,” and “[a]s
a result of Mr. Shah’s fraudulently filed fraud claim, Wells Fargo has lost the $125,000
amount that was returned to the Trust Account.” (Id.) At the same time, Cross-Claimants
allege that initially “Wells Fargo had dishonored their $125,000 check,” but “Wells Fargo
subsequently, inexplicably, without authority, and without further communicating with
Shah or Jain, reversed its dishonor of the check and credited Prime1’s account,” which
Aguilar then illicitly took. (Doc. 46 at ¶¶ 32, 34–35). Additionally, Shah’s declaration
attached to the Motion only establishes that Shah instructed Wells Fargo to dishonor the
check and that “Wells Fargo informed me that the funds would not be released to Prime1.”
(Doc. 92 at 11). Given the lack of clarity about the ultimate whereabouts of the check’s
funds, Cross-Claimants have, likewise, not established any damages relating to the
$125,000.00 check.
While the Court is sympathetic to Cross-Claimants’ difficulties with a seemingly
duplicitous and absent contractor, this does not negate the showing that must be made to
warrant default judgment. Entry of such a judgment is not a matter of right. Doe v. Qi,
349 F. Supp. 2d 1258, 1271 (N.D. Cal. 2004). “Its entry is entirely within the court’s
discretion and may be refused where the court determines no justifiable claim has been
alleged or that a default judgment is inappropriate for other reasons.” Eason v. Indymac
Bank, FSB, 2010 WL 1962309, at *1 (D. Ariz. 2010). Because the allegations in the Cross
Complaint are legally insufficient to establish entitlement to their claimed damages, the
Court finds that entry of default judgment is inappropriate. One World Apparel, LLC v.
Unity Wear, LLC, 2010 WL 11597809, at *3 (C.D. Cal. 2010) (“[T]he Court cannot grant
the default judgment requested by Plaintiff because the allegations of the Complaint, even
if accepted as true, do not establish a claim for the requested relief.”)
Accordingly,
IT IS ORDERED that Cross-Claimants’ Motion for Entry of Default Judgment
Case 2:24-cv-02337-DJH Document 104 Filed 07/30/26 Page 7 of 8

- 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
(Doc. 92) is DENIED.
IT IS FURTHER ORDERED that, unless the Court receives further filings from
any active party within fourteen (14) days of this Order, this matter will be considered
concluded, and the Clerk of Court will terminate this matter without further notice.
Dated this 30th day of July, 2026.
Honorable Diane J. Humetewa
United States District Judge
Case 2:24-cv-02337-DJH Document 104 Filed 07/30/26 Page 8 of 8