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JBR, Inc. v. Cafe Don Paco, Inc.

United States District Court, Ninth Circuit

May 6, 2013

JBR, INC., Plaintiff,


NATHANAEL M. COUSINS, Magistrate Judge.

Plaintiff JBR, Inc. alleges that defendants Cafe Don Paco, Inc., Roberto Benda§a, and Alvaro Montealgre failed to perform in accordance with contracts for the sale of coffee. The clerk has twice denied JBR's request for entry of default for failure to serve defendants. JBR seeks a court order authorizing service by email, as Benda§a and Montealgre now live in Nicaragua. The issues are (1) whether Cafe Don Paco has been served, (2) whether email service on Benda§a and Montealgre is appropriate, and (3) whether defective service is permissible. JBR also moves for an extension of time to serve defendants. The Court considers these issues suitable for determination on the papers and VACATES the hearing set for May 8, 2013. Because the Court finds that international agreement does not prohibit service by email in Nicaragua and email is reasonably calculated to provide defendants with actual notice, the Court GRANTS JBR's motion for alternative service. Because JBR has shown good cause for the delay in serving defendants, the Court GRANTS JBR's motion for an extension of the time to complete service.


A. The Parties

Plaintiff JBR, Inc. is a California corporation, doing business as Rogers Family Company ("JBR"), which provides community aid for sustainable coffee farming to its coffee suppliers. Compl., Dkt. No. 1 § 1, 9. Defendant Cafe Don Paco, Inc. is a Texas corporation operating in San Antonio, Texas, that imports and distributes coffee from a sister company in Nicaragua, Cafe Don Paco, S.A. Id. § 3. Defendant Roberto Benda§a is the son of Cafe Don Paco's founder, Francis Ernest Benda§a Radzevich, and a shareholder of the company. Id. § 3, 10. Benda§a is a resident of Texas. Id. § 3. Defendant Alvaro Montealgre is the brother-in-law of Benda§a and believed to be the President of Cafe Don Paco and its Agent for Service of Process in San Antonio. Motion for Alternate Service, Dkt. No. 24 at 3; Smoot Decl., Dkt. No. 24-1 § 2. Montealgre was born in Nicaragua but resides in Texas. Dkt. No. 1 § 4.

B. Facts Alleged in the Complaint

JBR formed a relationship with the owners of Cafe Don Paco in 1997, and JBR's president, Jon Rogers, maintained a close relationship with Cafe Don Paco's founder and namesake, Francis Benda§a. Id. § 9-11. JBR and Cafe Don Paco had an ongoing arrangement under which JBR buys "green coffee" from coffee farmers in Nicaragua with whom Cafe Don Paco has a relationship. Id. § 20. In addition, since 1997, JBR has given over $500, 000 in aid to Cafe Don Paco's community for children's nutrition programs, building health clinics, housing, and schools, and hiring teachers. Id. § 9, 11.

On October 14, 2008, JBR entered into a written agreement with Cafe Don Paco, now owned and operated by Roberto Benda§a and Montealgre, to lend Cafe Don Paco $350, 000, which would be repaid in green coffee after March 1, 2009. Id. § 13. In December 2010 and January 2011, Benda§a requested two loans of $200, 000 related to the 2010-11 growing season. Id. § 14-18. A promissory note secured the first $200, 000 and set the terms for repayment, and JBR wired $200, 000 to Cafe Don Paco's account at Sterling Bank in San Antonio, Texas, on December 13, 2010. Id. § 16. In January 2011, JBR loaned Cafe Don Paco another $200, 000 at Benda§a's request, which was also memorialized with a promissory note and wired to Cafe Don Paco's account at Sterling Bank in San Antonio, Texas, on January 5, 2011. Id. § 16-18. As of January, 2012, Cafe Don Paco had not repaid JBR in green coffee or cash. Id. § 27.

C. Procedural History

To enforce the contracts and recover past losses, JBR brings claims of breach of contract, fraud, and intentional interference with economic relationships. See generally Dkt. No. 1. JBR filed its complaint on May 10, 2012 against Cafe Don Paco, Benda§a, and Montealgre. Dkt. No. 1.

On October 2, 2012, JBR attempted to serve the summons and complaint on Cafe Don Paco, Benda§a, and Montealgre. See Dkt. Nos. 11-14. A process server mailed copies addressed to the company, Benda§a, and Montealgre at the company's registered address, 415 Embassy Oaks Drive, Suite 100, San Antonio, Texas. Id. The process server also served a copy of the complaint and summons on the manager of Q Pharmacies, which operates at 415 Embassy Oaks Drive. Dkt. No. 14. In addition, he delivered a copy to the Texas Secretary of State. Dkt. No. 14. On October 9, 2012, the Texas Secretary of State mailed a copy of the summons and complaint to Cafe Don Paco by certified mail. Dkt. No 15. As of March 11, 2013, Cafe Don Paco does not have a physical office in San Antonio, Texas. Dkt. No. 24-1 § 10, Ex. F.

Benda§a does not have an identifiable address in Texas. Dkt. No. 6. On June 9, 2012, JBR emailed Benda§a the summons, complaint, and initial case management schedule at the email address Benda§a used to communicate with JBR. Dkt. No. 24-1 § 5.

JBR served a copy of the summons and complaint at a Texas residence owned by Montealgre and his wife, but the home had been sold. Dkt. No. 6. On June 12, 2012, JBR contacted the Almori Foundation, one of Montealgre's publicly listed organizations, and spoke with Maria Barrantes. Dkt. No. 24-1 §§ 2, 5, 6. Barrantes confirmed that Montealgre was on site and that she would personally deliver the complaint and summons to him. Id. § 5. JBR emailed Barrantes the complaint and summons. Id. § 5, Ex. D.

Benda§a responded to the June 9 email on October 23, 2012 and stated that he had "never been an employee nor partner of Cafe Don Paco Inc., " but is a partner in the Nicaraguan company, and that Montealgre is the owner of Cafe Don Paco, Inc. Id., Ex. B. Benda§a provided JBR with the email addresses of Montealgre and his legal adviser, Mauricio Gomez, and copied them on his response. Id. On October 24, 2012, JBR again emailed the summons and complaint to the email addresses that Benda§a had responded from. Id., Ex. C. JBR also emailed the complaint and summons to Montealgre and his legal ...

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