United States District Court, N.D. California, San Jose Division
ORDER ADOPTING MAGISTRATE JUDGE'S REPORT AND
RECOMMENDATION TO GRANT MOTION FOR DEFAULT JUDGMENT AGAINST
DEFENDANT OAKTOWN VENTURES, LLC ONLY, AND TO DENY DEFAULT
JUDGMENT AGAINST DEFENDANT HACKETT [RE: ECF 14, 22]
LABSON FREEMAN, UNITED STATES DISTRICT JUDGE
the Court is Magistrate Judge Nathanael M. Cousins'
Report and Recommendation (“R&R”), which
addresses Plaintiff Fresh & Best Produce, Inc.'s
motion for default judgment against Defendants Oaktown
Ventures, LLC (“Oaktown”) and Richard Hackett
(“Hackett”). See R&R, ECF 22; Motion
for Default Judgment, ECF 14. Plaintiff claims that Oaktown,
which was doing business as Jack's Oyster Bar and Fish
House, ordered and accepted produce from Plaintiff but failed
to pay invoices due and owning in excess of $27, 000. Compl.
¶¶ 2, 7-10, ECF 1. Plaintiff moves for default
judgment against Oaktown and its managing member, Hackett, on
its claims that Oaktown is liable for breach of contract and
violations of the Perishable Agricultural Commodities Act
(“PACA”), 7 U.S.C. §§ 499a-499t, and
that Hackett is liable under PACA for breach of fiduciary
duties to trust beneficiaries. Compl., ECF 1; Motion for
Default Judgment, ECF 14. The R&R recommends that the
motion be granted as to Oaktown but denied as to Hackett on
the basis that Plaintiff has not established this Court's
personal jurisdiction over Hackett.
which was served with the R&R on May 19, 2017 via the
Court's Electronic Case Filing System, was required to
file any objection to the R&R by June 2, 2017.
See Fed. R. Civ. P. 72(b)(2) (deadline for objection
is fourteen days after being served with report and
recommendation). Plaintiff filed an untimely objection on
June 5, 2017, asserting two errors in the R&R. Pl.'s
Obj., ECF 25. First, Plaintiff points out an apparent
clerical error in a portion of the R&R concluding that
“Oaktown” - rather than Plaintiff - is entitled
to default judgment in the amount of $31, 172.46. Plaintiff
requests that this Court rule that Plaintiff is
entitled to default judgment in the amount of $31, 172.46.
Second, Plaintiff disputes the R&R's conclusion that
Plaintiff has failed to establish personal jurisdiction over
Hackett. Because it perceives no prejudice to any party in
doing so, the Court exercises its discretion to consider
Plaintiff's untimely objection on the merits. The Court
therefore reviews de novo both arguments raised by
Plaintiff. See Fed. R. Civ. P. 72(b)(3) (“The
district judge must determine de novo any part of the
magistrate judge's disposition that has been properly
served Defendants Oaktown and Hackett with copies of the
R&R by mail on June 7, 2017. However, the Court need not
wait for expiration of the fourteen-day period for objection
following service on Defendants, because Defendants are not
entitled to present argument unless and until they obtain
relief from the Clerk's entry of default. See
Schwarzer, Tashima & Wagstaffe, Federal Civil
Procedure Before Trial ¶ 6:6 (2017 ed.)
(“Entry of default cuts off the defendant's right
to appear in the action. The court clerk cannot accept any
papers from the defendant other than a motion for relief from
the default.”); ¶ 6:42 (“Entry of a
defendant's default cuts off his or her right to appear
in the action or to present evidence.”).
Court concludes that the R&R is well-founded in fact and
law with the exception of the clerical error noted by
Plaintiff. With respect to Oaktown, the Court agrees with
Judge Cousins' determinations regarding the existence of
subject matter jurisdiction and personal jurisdiction;
analysis of the factors governing default judgment set forth
in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986);
and finding that Plaintiff is entitled to default judgment in
the total amount of $31, 172.46.
respect to Hackett, the Court agrees with Judge Cousins'
determination that Plaintiff has not established the
existence of personal jurisdiction. Plaintiff challenges that
determination, arguing that “[d]omicile has been
established.” Pl.'s Obj. at 1, ECF 25. The Court
has reviewed Plaintiff's evidence of domicile de
novo as required by Federal Rule of Civil Procedure
72(b)(3). Plaintiff relies on the declarations of one of its
owners, Chong Suk Cho, and its attorney, Susan Bishop.
Cho's declaration contains no information relevant to
Hackett's domicile: Cho refers generally to prior
conversations with Hackett, states that Hackett has avoided
Cho's telephone calls for several months, and asserts
that Hackett signed a check on an Oaktown account which was
returned for insufficient funds. Second Decl. of Chong Suk
Cho, ECF 18. Counsel's declaration does contain
statements relevant to Hackett's domicile, for example,
that Hackett “lives and works in or around Oakland,
California.” Bishop Decl. ¶ 11. Evidence that
Hackett lives in or around Oakland would be evidence of
domicile. However, counsel's declaration does not contain
facts establishing her personal knowledge regarding
Hackett's residence. Counsel bases her statements on
public filings which she asserts provide Oakland addresses
for Hackett. Id. ¶¶ 14-16 and Exhs. D-E.
While the filings in question do list two different Oakland
addresses for Hackett, those addresses are the addresses of
two companies for which Hackett is listed as the Chief
Executive Officer, Oaktown and Bocanova, LLC. Id.
The filings do not suggest that either of the two Oakland
addresses is Hackett's residence, nor do they provide any
other information regarding Hackett's domicile.
Counsel's statement that a website listed Hackett as the
“Chef Owner” of Jack's Oyster Bar in Oakland,
California likewise does not establish that Hackett is
domiciled in California.
requests that in the event the Court concludes that
Hackett's domicile has not been established, the Court
grant Plaintiff additional time to effect service of process
on Hackett personally while he is in California as a means of
establishing this Court's personal jurisdiction over him.
See Burnham v. Superior Court, 495 U.S. 604, 628
(1990) (California courts may exercise personal jurisdiction
over a defendant based service of process on the defendant
while the defendant is present in the state). That request is
the Court ADOPTS the R&R, with the exception of the
clerical error discussed above, and ORDERS as follows:
(1) Plaintiff s motion for default judgment is GRANTED as to
(2) Plaintiff is entitled to default judgment against
Defendant Oaktown in the total amount of $31, 172.46,
comprising $27, 055.06 in unpaid principal balance, $2,
298.40 in prejudgment interest, $1, 199.00 in attorneys'
fees, and $620.00 in costs.
(3) Plaintiff s motion for default judgment is DENIED WITHOUT
PREJUDICE as to Defendant Hackett.
(4) Plaintiff s request for an extension of time to effect
service of process on Defendant Hackett personally while he
is present in the state of California is granted. Plaintiff
shall file a certificate of service or a status ...