The opinion of the court was delivered by: Hayes, Judge
The matters before the Court are the Motion for Default Judgment (Doc. # 10) filed by Plaintiff J & J Sports Productions Inc. ("J & J Sports") and the Amended Motion to Set Aside Default (Doc. # 21) filed by Defendants Emilia Carvajal Perez and Jose Alfredo Perez.
On June 25, 2009, J& J Sports initiated this action by filing a complaint. (Doc. # 1).
The complaint alleges Defendants own a restaurant called Mariscos Ensenada located in Oceanside, California. Id. at 3. The complaint alleges J & J Sports held exclusive nationwide commercial distribution rights to "Lethal Combination: Manny Pacquiao v. David Diaz WBC Lightweight Championship Fight Program" ("the Program") broadcast on June 28, 2008. Id. The complaint alleges that Defendants' restaurant unlawfully intercepted the broadcast and showed the Program to customers. Id. at 4. The complaint alleges the unauthorized screening of the Program was intentional and done for commercial advantage and financial gain. Id. The complaint alleges claims for: (1) violation of 47 U.S.C. § 605; (2) violation of 47 U.S.C. § 553; (3) conversion; and (4) violation of California Business & Professions Code § 17200, et seq. Id. at 4-8. The complaint seeks injunctive relief, $170,000 in statutory damages, exemplatory damages, punitive damages, restitution, compensatory damages, attorneys' fees, and costs. Id. at 9-10.
On June 25, 2009, the Clerk of the Court issued a summons to Defendants. (Doc. # 2). On July 21, 2009, the summons was returned executed. (Docs. # 4, 5). An answer was due by August 3, 2009. Id. No answer was filed. On August 4, 2009, J & J Sports requested entry of Clerk Default against Jose Perez. (Doc. # 6). On August 5, 2009, the Clerk of the Court entered default against Jose Perez. (Doc. # 7). On August 18, 2009, J & J Sports requested entry of Clerk Default against Emilia Perez. (Doc. # 8). On August 19, 2009, the Clerk of the Court entered Default against Emilia Perez. (Doc. # 9). On October 8, 2009, J & J Sports moved for default judgment. (Doc. # 10).
On November 6, 2009, Defendants filed a Motion to Set Aside Clerk's Default. (Doc. # 20). On November 16, 2009, Defendants filed their Amended Motion to Set Aside Clerk's Default. (Doc. # 21). On December 4, 2009, J & J Sports filed an amended proof of service and a second amended proof of service. (Docs. 22, 23).
I. Amended Motion to Set Aside Clerk's Default
A. Contentions of the Parties
Defendants contend that they were not aware of the pending lawsuit until mid-October of 2009, when they immediately sought legal counsel. (Doc. # 21-1 at 2). Defendants contend that the service of process was defective and that they were not actually served. Id. Defendants contend that the proof of service as to Jose Perez states he was served at the restaurant on Monday July 13, 2009, at 10:35 AM, but he only works from about 7 AM to 8 AM on Mondays because Defendants are semi-retired. Id. Defendants contend the proof of service as to Emilia Perez is internally inconsistent as to where and how she was served, casting doubt on its validity. Id. Defendants contend that they also failed to receive a mailed copy of the lawsuit due to negligent mail handling at the restaurant. Id.
Defendants contend that they have a meritorious defense to the allegations of the complaint. Id. at 8. Defendants contend that they subscribe to a Mexican satellite television network called "Sky TV Mexico," which broadcasts Mexican television programs in the United States. Id. Defendants contend that the Program was broadcast on Sky TV Mexico and shown in their restaurant by simply turning on the television and selecting that channel. Id. Defendants contend that there will be no prejudice to J & J Sports if the default is set aside. Id. at 9. Defendants attached the sworn declarations of Emilia Perez, Jose Perez, and their attorney, Sergio Feria, in support of their motion as well as their proposed answer to the complaint. (Docs. # 21-2, 21-3, 21-4, and 21-5).
J & J Sports contends that Defendants have failed to show good cause for setting aside the Clerk's Default. (Doc. # 24 at 3-4). J & J Sports contends Defendants' statements do not show that they were not properly served and that at most, they are able to show "technical discrepancies" in the proof of service as to Emilia Perez. Id. at 5. J & J Sports contends that Defendants defense to the allegations in the complaint is not meritorious because even if Defendants did receive the broadcast from Sky TV Mexico, showing it in the restaurant would violate J &J Sports's licensing rights. Id. at 7. J &J Sports further contends that it would be prejudiced if the default were set aside because "Defendants are intimately intertwined" resulting in "a possibility of fraud or collusion" and because "Defendants admittedly to having [sic] little to do with the day to day operations of the business there is a likelihood of loss of evidence." Id. at 9. ...