United States District Court, N.D. California
March 11, 2004.
GLADSTONE WOOD. Plaintiff
HAMPTON-PORTER INVESTMENT BANKERS, et al., Defendant
The opinion of the court was delivered by: MAXINE CHESNEY, District Judge
ORDER GRANTING DEFAULT
Before the Court is the petition to confirm arbitration award, filed
November 8, 2002, by plaintiff Gladstone Wood (`Wood"). Also before the
Court is a proposed default judgment which Wood submitted to the Court on
February 17, 2004, and which the Court construes as a request for entry
of default and motion for default judgment, The Court fines the matter
appropriate for decision without a hearing. See Civil L.R. 73
b). For the reasons set forth below, the Court GRANTS Wood's request for
entry of default and and motion for default judgment and GRANTS Wood's
petition to confirm the arbitration award against Hampton-Porter
On November 5, 2001, an arbitration award was entered in an arbitration
between Wood and respondents Hampton-Porter Investment Bankers
David C Adams ("Adams"), NASD case number 00-005373. (See
Exhibit to Petition to Confirm Arbitration Award ("Arbitration Award").
According to the Arbitration Award, Wood asserted claims against
Hampton-Porter and Adams for "breach of contract, breach of fiduciary
duty, fraud negligence and failure to supervise in regard to investments
made through respondent Hampton-Porter beginning around March 1999."
(See id. at 2.) Hampton-Porter moved to dismiss the
claims Wood asserted against it, but did not appear at the arbitration
hearing. (See id.)
After the arbitration hearing, the arbitrators issued the following
1. Claimant's claim against respondent David Adams
is dismissed with prejudice.
2. Claimant is awarded a default judgment against
respondent Hampton-Porter investment Bankers for
Hampton-Porter's failure to appear at the hearing.
Accordingly, respondent Hampton-Porter shall pay
$30,000, plus interest, to Claimant upon Claimant
tendering AMMI two-year 10% Convertible Debenture
to Hampton-Porter. Pre-Award interest is awarded
at a rate of 7% for the time from July 15, 1999
until October 22, 2001. Post-Award interest is
awarded at a rate of 10% per annum from October
22, 2001 until the Award is paid in full.
3. Sanction of $1000.00 is imposed against
respondent Hampton-Porter for failure to appear at
the arbitration hearing. The sanction shall be
paid by respondent Hampton-Porter to Claimant.
4. Each party shall bear its own costs, including
attorney's fees. Claimant shall also bear the cost
of respondent David Adams' airfare to and from the
5. All other relief not expressly granted is
(See id. at 3)
On November 8, 2002, Wood filed a petition with this Court to confirm
the Arbitration Award Wood's petition lists Hampton-Porter and Adams as
the only respondents.
On February 17, 2004, Wood submitted a proposed default judgment to the
Court. The proposed default judgment identifies Hampton-Porter, Gregory
D. Walker, James Green, and John Laurienti as respondents,
A. Service of Process
The Court granted Wood several extensions of time for effecting service
of process, and most recently ordered Wood to file proofs of service no
later than January 26, 2004. (See Order file January 20 2004.)
On January 25, 2004, Wood filed several proofs of
service. I See Submittal of Declarations of Service,
filed Jan. 26, 2004.)*fn1
The Federal Rules of Civil Procedure permit a business entity such as
Hampton-Porter to 36 served in the United States either pursuant to state
law "or by delivering a copy the summons and of the complaint to an
officer, a managing or general agent, or to an other agent authorized by
appointment or by law to receive service of process and, if the agent is
one authorized by statute to receive service and the statute so requires,
by as mailing a copy to the defendant[.]" See Fed.R.Civ.P.
4(h) Wood appears to have chosen the latter method as he has filed proofs
of service indicating attempts at service on certain of Hampton-Porters
officers. (See Submittal of Declarations of Service, filed Jan.
One of the proofs of service indicates that a registered process server
served Hampton Porter by serving Gregory D Walker ("Walker), as President
of Hampton-Porter, on January 23 2004. Specifically, the process server
states under oath that he delivered a copy of the summons and petition to
Walker's home and left the documents with `Charity Biddel-Walker
Spouse/Resident." (See id.) Such service on Walker
was effective, pursuant to Rule 4(e)(2) of the Federal Rules of Civil
Procedure, As noted above Ha Tip-ton Porter could be served by serving
one of its officers. See Fed. R Civ. P. 4(h). As Walker was
served, the Court finds that Hampton-Porter was also served, The Court
need not review the remaining proofs of service submitted by Wood.
As Hampton-Porter was served on January 23, 2004, it had twenty clays
to file an answer to Wood's petition. (See Fed. R Civ. P
12(a)(1)(A).) That twenty-day period elapsed on February 12, 2004. To
date, Hampton-Porter has not filed an answer
When a party against whom a judgment for affirmative relief is sought
has failed to plead or otherwise defend as provided by these rules and
that fact is made to appear by default or otherwise, the clerk shall
enter the party's default." As Hampton-Porter has been
properly served, and it has not filed an answer Hampton-Porter is
C. Default Judgment Against Hampton-Porter
On February 17, 2004, Wood submitted a proposed default judgment to the
Court There is no indication in the record that the proposed default
judgment has been served on Hampton-Porter, Rule 55(b)(2) only requires
the defaulting party to be given written notice of a motion for default
judgment when the defaulting party has appeared in the action, however
See Fed.R. Civ, P. 55(b)(2). As Hampton-Porter has never
appeared in the action there is no requirement that it must be given
notice of Wood's request for a default judgment.
When a party seeks an order confirming an arbitration award, "the court
must grant such an order unless the award is vacated, modified, or
corrected as prescribed in sections (and 1 r of the Federal Arbitration
Act. See 9 U.S.C. § 9. Section 10 provides that the Court
may vacate an arbitration award where the award "was procured by
corruption, fraud, or undue means", or where the arbitrators (1) acted
with "evident partiality or corruption." (2) were guilty of prejudicial
misconduct, or (3) "exceeded their powers or so imperfectly executed them
that a mutual, final, and definite award upon the subject matter
submitted was not made." See 9 U.S.C. § 10, Section 11
provides for modification or correction of the award where there "was an
evident material miscalculation of figures or an evident material mistake
in the description of any person, thing, or property referred to in he
award"; where the arbitrators made an award on "a matter not submitted to
them, unless it is a matter not affecting the merits of the decision upon
the matte" submitted"; or where the award "is imperfect in matter of form
not affecting the merits of the controversy " (See S. U.S.C.
§ 11) No basis for vacating the arbitration award appears on the face
of Wood's petition or in the terms of the award itself.
Accordingly, the Court will GRANT Wood's petition and CONFIRM the
Arbitration Award against Hampton-Porter.
C. Default Judgment Against Walker Green and Laurienti
Wood's proposed default judgment also seeks judgment against Walker,
and Launenti None of them is identified as a respondent in Wood's
petition, however, and Wood has never sought permission to amend his
petition. In addition, the Arbitration Award was issued against
Hampton-Porter, and not against any of its officers. Hampton-Porter is
alleged to be a limited liability company, As such, its officers
generally are not "personally liable under any judgment of a court, or in
any other manner, for any debt, obligation, or liability of the limited
liability company, whether that liability or obligation arises n
contract, tort, or otherwise, solely by reason of being a member of the
limited liability company." See Cal. Corp. Code § 17101,
Wood has demonstrated no ground upon which Walker, Green and/or Laurienti
can be held individually liable under the arbitration award issued
Accordingly, Wood's request for default judgment against Walker, Green,
and Lauriernti is DENIED.
D. Wood's Claim Against Adams
Although Wood's petition is asserted against Adams, the arbitrators did
not award any relief n Wood's favor against Adams. Moreover, there is no
indication in he record that Wood ever served Adams, As the deadline for
filing proofs of service has passed, the Court DISMISSES Wood's petition
against Adams, without prejudice, pursuant to Rule 4(m) of the Federal
Rules of Civil Procedure.
For the reasons set forth above,
1. Default is ENTERED against Hampton-Porter
2. Wood's motion for default judgment against Hampton-Porter, and
Wood's petit on for confirmation of the arbitration award against
Hampton-Porter, are GRANTED, and in accordance with the terms of the
a. Hampton-Porter shall pay $30,000, plus interest, to Wood upon Wood
tendering AMMl two-year 10% Convertible Debenture to Hampton-Porter.
Hampton-Porter shall pay to Wood pre-award interest at a rate of 7% for
the period between July 15, 1999 and October 22, 2001, for a total of
$4769.58, Hampton-Porter shall pay to Wood post-award
interest at a rate of 10% per annum from October 22, 2001 until the award
is paid in full
b. Hampton-Porter shall pay Wood a sanction of $1000 for failure to
appear at the arbitration hearing
c. Wood and Hampton-Porter shall bear their own costs, including
attorney's fees, incurred during the arbitration.
3. Wood's request for default judgment against Gregory D. Walker, James
Green, and John Laurienti is DENIED,
4. Wood's petition against David C. Adams is DISMISSED, without
prejudice, pursuant to Rule 4(m) of the Federal Rules of Civil Procedure.
5. The Clerk shall close the file
IT IS SO ORDERED.