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Joe Hand Promotions, Inc v. Juan M. Ramirez Bernal

April 5, 2013


The opinion of the court was delivered by: Sandra M. Snyder United States Magistrate Judge


(Doc. 11)

Joe Hand Promotions, Inc. ("Plaintiff") moves for entry of default judgment against Juan M. Ramirez Bernal, individually and doing business as La Fiesta Bar, aka La Fiesta Dance ("Defendant"). Doc. 11. Defendant opposes this motion (Doc. 14) and seeks to have his entry of default set aside. Doc. 23. The Court reviewed the motions and supporting documents and has determined that these matters are suitable for decision without oral argument pursuant to Local Rule 78-230(h).

For the following reasons, Defendant's motion to set aside entry of default (Doc. 23) is GRANTED. As a result, Plaintiff's motion for entry of default judgment (Doc. 11) is DENIED AS MOOT. This order does not discuss Defendant's motion to dismiss the complaint (Doc. 18), which remains noticed for hearing on May 20, 2013 at 1:30pm before Judge Anthony W. Ishii.

I. Procedural History

On September 13, 2012, Plaintiff filed its complaint against Defendant, alleging violations of 2 47 U.S.C. § 605, et seq., and 47 U.S.C. § 553, et seq., as well as claims under California state law. 4 3 Plaintiff claims that it was the exclusive commercial distributor of the program "Star Power: Floyd 5 Mayweather, Jr. v. Victor Ortiz Championship Fight Program" (the "program"). Plaintiff claims that 6 Defendant unlawfully intercepted and broadcast the telecast of this program on September 17, 2011. 7 Defendant failed to respond to the complaint within the time prescribed by the Federal Rules 8 of Civil Procedure. Default was entered against Defendant on January 25, 2013. On January 30, 9 2013, Plaintiff moved for default judgment. Defendant made an appearance on March 19, 2013. He opposed the motion for default judgment, moved to dismiss the complaint, and moved to set aside his default. Plaintiff replied on March 27, 2013. Defended filed an opposition to Plaintiff's reply on April 1, 2013.

II. Motion to Set Aside Default

The Federal Rules of Civil Procedure govern the entry of default. Once default has been entered by the clerk, "[t]he court may set aside an entry of default for good cause." Fed. R. Civ. P. 55(c). In evaluating whether good cause exists, the court may consider "(1) whether the party seeking to set aside the default engaged in culpable conduct that led to the default; (2) whether it had no meritorious defense; or (3) whether reopening the default judgment would prejudice the other party." United States v. Mesle, 614 F.3d 1085, 1091 (9th Cir. 2010) (citing Franchise Holding II, LLC v. Huntington Restaurants Group, Inc., 375 F.3d 922, 925-26 (9th Cir. 2004)); see also TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001). A district court may refuse to set aside the default if any one of these factors is true. Id. However, "judgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits." Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). When a party seeking timely relief from default has a meritorious defense, "doubt, if any, should be resolved in favor of the motion to set aside the default so that cases may be decided on their merits." Mendoza v. Wight Vineyard Mgmt., 783 F.2d 941, 945-46 (9th Cir. 1986), quoting Schwab v. Bullocks Inc., 509 F.2d 353, 355 (9th Cir. 1974).

A. Culpable Conduct

In the Ninth Circuit, "a defendant's conduct is culpable if he has received actual or 3 constructive notice of the filing of the action and intentionally failed to answer." TCI Group, 244 4 F.3d at 697, quoting Alan Newman Prods. v. Albright, 862 F.3d 1388, 1392 (9th Cir. 1988). Further, 5 actions may be found culpable when "there is no explanation of the default inconsistent with a 6 devious, deliberate, willful, or bad faith failure to respond." Id. at 698.

1. Service Was Valid

Defendant argues that the summons was invalidity served under California law, which applies 9 here. See Fed. R. Civ. P. 4(e). First, Defendant contends that he must be served as both an individual and as an entity. This is not correct. Service on Defendant Bernal was properly effected via service upon his business, since the business was his dba and not a distinct entity. See Pinkerton's, Inc. v. Superior Court, 49 Cal. App. 4th 1342, 1349 (1996) (where a person or business deals under a fictitious name, "it has held itself out to those with whom it does business as having adopted that name for all business purposes. Notice to it under that name is all that the law requires.")

Defendant also asserts that service was made on an improper person. In California, service on a business of form unknown, like substitute service on a person at his business, may be made upon "a person apparently in charge" of that business. C.C.P. §§ 415.20(b), 415.95(a). Here, the proof of service indicates that after many unsuccessful attempts to effect service at Defendant's business address, the process server encountered a "Rene 'Doe' (Refused Last Name), Person in Charge." This person told the server that Defendant was not in. The server made substituted service on this person, giving instructions to deliver the documents to Defendant. He then mailed the documents to Defendant. Defendant argues that based on this information, "it is not possible to determine whether Rene was 'apparently in charge'." Defendant explains, "[H]is capacity at the established [sic] is not stated. He could be an employee, he could be the manager-he could simply be a customer at the bar. . We know literally nothing about Rene."

The facts show otherwise. Here, the process server identified Rene as the "person in charge." Rene also acted in charge by stating that Defendant was not present. This response would be atypical of "a customer at the bar." That was all that was needed. The statute does not require a recitation of the person's "capacity at the establishment," and California courts do not require the recitation of the 2 full name in circumstances such as these. See Trackman v. Kenney, 187 Cal. App. 4th 175, 183 3 (2010) ("Persons in apparent charge of businesses and residences often refuse to give their true legal 4 names. For this reason, it is an accepted practice to name such a ...

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