Johnson v. Oakwood Center LLC

          ORDER FOR REASSIGNMENT TO A DISTRICT JUDGE REPORT AND RECOMMENDATION RE AMENDED MOTION FOR DEFAULT JUDGMENT RE: DKT. NO. 20

          VIRGINIA K. DEMARCHI UNITED STATES MAGISTRATE JUDGE

         In this disability rights action, plaintiff Scott Johnson sues for alleged accessibility violations he says he encountered at Ceci's Liquor Store (“Store”) in San Jose, California. He asserts claims under Title III of the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. § 12181, et seq. and the California Unruh Civil Rights Act (“Unruh Act”), Cal. Civ. Code §§ 51-53. Mr. Johnson seeks injunctive relief, as well as statutory damages, attorneys' fees and costs.

         Defendants Oakwood Center, LLC (“Oakwood Center”) and Long Thanh Do failed to answer the complaint or to otherwise appear in this matter. At Mr. Johnson's request, the Clerk of the Court entered Long Thanh Do's default on May 15, 2019 and Oakwood Center's default on May 30, 2019. Dkt. Nos. 11, 13.

         Now before the Court is Mr. Johnson's amended motion for default judgment. In his original motion, Mr. Johnson sought $8, 000 in statutory damages, $670 in litigation costs, and $5, 919 in attorneys' fees. Dkt. No. 17. However, his original moving papers sought fees at lower rates^[1] than those that are now being requested in the pending amended motion. Dkt. No. 17-4. Additionally, the original motion sought fees for attorneys Phyl Grace and Christina Carson, who do not appear on the submitted billing statement, ^[2] and failed to mention attorney Amanda Seabock, who does appear on the billing statement. Id.

         Mr. Johnson subsequently withdrew his original motion (Dkt. No. 18) and filed the present amended motion for default judgment, which now seeks fees for work performed by Ms. Seabock, but no longer requests fees for work performed by Ms. Grace or for Ms. Carson. Dkt. No. 20-4. As noted above, the amended motion also seeks fees at a higher rate than originally requested, ^[3]resulting in requested fees of $6, 135, in addition to the $8, 000 in statutory damages and $670 in costs. Additionally, as discussed below, the amended motion includes a civil minute order apparently issued by the Central District of California in No. CV 18-5136 MRW Lindsay v. Grupo Glemka. Dkt. No. 20-9.

         The docket indicates that Mr. Johnson served his original motion papers by mailing them to defendants (Dkt. No. 17-9), but no certificate of service was included with the amended motion for default judgment. Although it is unclear whether Mr. Johnson provided defendants with written notice of the present amended motion, ^[4] a party in default is not entitled to notice under Fed.R.Civ.P. 55 unless he has appeared, formally or informally, and demonstrated a clear intent to defend the suit. Fed.R.Civ.P. 55(b)(2) (“If the party against whom a default judgment is sought has appeared personally or by a representative, that party or its representative must be served with written notice of the application at least 7 days before the hearing.”); In re Roxford Foods, Inc., 12 F.3d 875, 879 (9th Cir.1993) (“While it is true that the failure to provide 55(b)(2) notice, if the notice is required, is a serious procedural irregularity that usually justifies setting aside a default judgment or reversing for the failure to do so, notice is only required where the party has made an appearance.”) (quotations and citations omitted); Wilson v. Moore & Assocs., Inc., 564 F.2d 366, 368 (9th Cir.1977) (“No party in default is entitled to 55(b)(2) notice unless he has ‘appeared' in the action.”). As discussed above, the record reflects that neither Oakwood Center nor Long Thanh Do have appeared, formally or otherwise, in this matter.

         Defendants have not opposed or otherwise responded to the motion, and briefing is closed. Civ. L.R. 7-3(a). The Court held a hearing on the matter on August 20, 2019. Mr. Johnson appeared; defendants did not. Mr. Johnson was directed to file, by September 13, 2019, supplemental briefing regarding service of the complaint and summons on Oakwood Center. No. such supplemental filing was made.^[5]

         Mr. Johnson has consented to proceed before a magistrate judge. 28 U.S.C. § 636(c); Fed.R.Civ.P. 73. However, as defendants have not appeared and are in default, the magistrate judge does not have the consent of all parties. Accordingly, this Court directs the Clerk of the Court to reassign this action to a district judge, with the following report and recommendation that Mr. Johnson's motion for default judgment be granted in part and denied in part.

         REPORT AND RECOMMENDATION

         I. BACKGROUND

         According to his complaint, Mr. Johnson is a level C-5 quadriplegic who cannot walk and has significant manual dexterity impairments. He says he uses a wheelchair for mobility and has a specially equipped van with a ramp that enables him to move in and out of his vehicle. Dkt. No. 1 ¶ 1; Dkt. No. 20-5 ¶¶ 2-3. Long Thanh Do is the alleged owner of the Store, and Oakwood Center reportedly owns the real property where the Store is located. Dkt. No. 1 ¶¶ 2-7; Dkt. No. 20-4 ¶¶ 3-5; Dkt. No. 20-8.

         Mr. Johnson claims that during several visits between December 2018 and January 2019, he encountered barriers with the parking space, paths of travel, and transaction counter that prevented him from enjoying full and equal access to the Store's facilities. Dkt. No. 1 ¶¶ 14-24; Dkt. No. 20-5; Dkt. No. 20-7. When Mr. Johnson visited the Store on December 18, 2018, he says he followed a sign directing him to the “van accessible” space, but found that the space had mounding slopes and was poorly maintained, with cracking and broken asphalt. Dkt. No. 20-5 ¶¶ 5-6. Mr. Johnson parked in that space, but says he struggled with the slopes and cracked asphalt. Id. ¶ 6. Once inside the Store, Mr. Johnson alleges that he could not navigate through approximately half the Store because display racks and merchandise were stacked in a way that made paths too narrow to accommodate a wheelchair. Id. ¶ 7. He further states that he went to the sales counter to purchase cigarettes, but the transaction counter was too high, with no lowered portion for use by persons with disabilities. Id. ¶ 8. Mr. Johnson says he returned to the Store twice in January 2019 because it carried his preferred brand of cigarettes. Id. ¶ 10. Nevertheless, he claims that the alleged access barriers “created difficulty and discomfort for [him].” Dkt. No. 1 ¶ 25. While he says he would like to return to the Store, both as a customer and to assess compliance with accessibility laws, Mr. Johnson says he has decided not to do so “due to the frustrating barriers” at the premises. Dkt. No. 20-5 ¶ 11; see also Dkt. No. 1 ¶ 28.

         II. LEGAL STANDARD

         Default may be entered against a party who fails to plead or otherwise defend an action. Fed.R.Civ.P. 55(a). After entry of default, a court may, in its discretion, enter default judgment. Fed.R.Civ.P. 55(b)(2);^[6] Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In deciding whether to enter default judgment, a court may consider the following factors: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In considering these factors, all factual allegations in the plaintiff's complaint are taken as true, except those relating to damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). The court may hold a hearing to conduct an accounting, determine the amount of damages, establish the truth of any allegation by evidence, or investigate any other matter. Fed.R.Civ.P. 55(b)(2).

         III. DISCUSSION

         A. Jurisdiction

         “When entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).

         Federal question jurisdiction is based on Mr. Johnson's ADA claim for relief. 28 U.S.C. § 1331. The Court has supplemental jurisdiction over his Unruh Act claim pursuant to 28 U.S.C. § 1367. This Court is also satisfied that personal jurisdiction exists over both defendants. Mr. Johnson's complaint and public records submitted with the present motion indicate that Long Thanh Do owns the Store and is domiciled in California and that Oakwood Center is a California limited liability company that owns the real property in San Jose, California on which the Store is located. Dkt. No. 1 ¶¶ 2-7; Dkt. No. 20-4 ¶¶ 3-5; Dkt. 20-8. See Daimler AG v. Bauman, 571 U.S. 117, 137 (2014) (“For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile . . .. With respect to a corporation, the place of incorporation and principal place of business are paradig[m] . . . bases for general jurisdiction.”) (internal quotations and citation omitted) (alteration in original); Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (“Specific jurisdiction . . . depends on an affiliation between the forum and the underlying controversy, principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation.”).

         B. Service of Process

         1. Defendant Long Thanh Do

         Pursuant to Rule 4(e) of the Federal Rules of Civil Procedure, an individual defendant may be served by: (1) delivering a copy of the summons and complaint to the individual personally; (2) leaving a copy of the summons and complaint at the individual's dwelling or usual place of abode with someone of suitable age and discretion who resides there; or (3) delivering a copy of the summons and complaint to an agent authorized by appointment or law to receive service of process. Fed.R.Civ.P. 4(e)(2). Alternatively, an individual defendant may be served with process pursuant to the law of the state where the district court is located. Fed.R.Civ.P. 4(e)(1). Under California law, individual defendants may be served by several means, including personal delivery of the summons and complaint to the individual or the individual's authorized agent. Cal. C.C.P. §§ 415.10, 416.90.

         The record indicates that service properly was effected as to Long Thanh Do, who was personally served with process at the Store. Dkt. No. 8.

         2. Defendant Oakwood Center

         Pursuant to Rule 4(h)(1)(B) of the Federal Rules of Civil Procedure, a domestic corporation may be served:

by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and-if the agent is one authorized by statute and the statute so requires-by also mailing a copy of each to the defendant.

Fed. R. Civ. P. 4(h)(1)(B). Alternatively, Rule 4 provides that service on a corporation may be made by “following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made.” Fed.R.Civ.P. 4(e)(1), (h)(1)(A).

         California Code of Civil Procedure section 416.10 provides that a corporation may be served by “delivering a copy of the summons and the complaint . . . [t]o the person designated as agent for service of process” or “[t]o the president, chief executive officer, or other head of a corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a controller or chief financial officer, a general manager or person authorized by the corporation to receive service of process.” Cal. Code Civ. Proc. § 416.10(a), (b). In lieu of personal delivery, California law permits substituted service on a person to be served under section 416.10 by (1) “leaving a copy of the summons and the complaint during usual office hours in his or her office . . . with the person who is apparently in charge thereof” and (2) “thereafter mailing a copy of the summons and complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left.” Cal. Code Civ. Proc. § 415.20(a). However, before resorting to substituted service, “a plaintiff must first make reasonably diligent (i.e., two or three) attempts at personal service.” Shaw v. Five M, LLC, No. 16-cv-03955-BLF, 2017 WL 747465, at *2 (N.D. Cal., Feb. 27, 2017) (citing Bein v. Brechtel-Jochim Group, Inc., 6 Cal.App.4th 1387, 1390 (1992)).

         Mr. Johnson filed a proof of service suggesting that on April 13, 2019, the process server attempted to personally serve Sin Yee Wong, Oakwood Center's registered agent for service of process. Dkt. No. 9. The proof of service indicates that the process server instead resorted to substituted service, under California Code of Civil Procedure section 416.10, by leaving documents with an Eva Wong (identified as a “Co-occupant” at the service address) and then mailing them to Sin Yee Wong at that same address. Id. The proof of service, however, does not include any declaration of diligence regarding prior attempts at personal service. Indeed, a box on the proof of service form for the process server to note diligence in any such prior personal service attempts is unchecked, suggesting that no attempts were made to personally serve Oakwood Center's agent. Id. at 1. Because the sole proof of service indicates that the complaint and summons were left with Eva Wong, and not Oakwood Center's agent for service of process, Sin Yee Wong, Mr. Johnson has not shown that the requirements of Rule 4(h)(1)(B) have been met. See Heifetz v. Breed Properties, No. 16-1490 CRB, 2017 WL 713303, at *3 (N.D. Cal., Feb. 23, 2017). Moreover, “[o]ne attempt at personal service does not constitute a reasonably diligent attempt at personal service sufficient to allow substituted service on a defendant.” Id. (citing Bein, 6 Cal.App.4th at 1390). Accordingly, this Court concludes that service was not properly effected as to Oakwood Center and that Mr. Johnson's motion for default judgment should be denied as to that defendant. Id.

         Because the Court is satisfied that Long Thanh Do properly was served, it will consider the merits of the present motion as to that defendant.

         C. Eitel Factors

         For the reasons to be discussed, the Eitel factors weigh in favor of entering default judgment.

         1. The possibility of prejudice to Mr. Johnson

         The first Eitel factor requires the Court to consider whether Mr. Johnson would be prejudiced if default judgment is not entered. Unless default judgment is entered, Mr. Johnson will have no other means of recourse. That is sufficient to satisfy this factor. See, e.g., Ridola v. Chao, No. 16-cv-02246-BLF, 2018 WL 2287668, at *5 (N.D. Cal., May 18, 2018) (finding that the plaintiff would be prejudiced if default judgment were not entered because she “would have no other means of recourse against Defendants for the damages caused by their conduct.”).

         2. The merits of Mr. Johnson's claims and the sufficiency of the complaint

         Pursuant to the second and third Eitel factors, this Court concludes that the complaint alleges meritorious substantive claims for relief.

         a. ADA Title III, 42 U.S.C. § 12181, et seq.

         Title III of the ADA prohibits discrimination by places of public accommodation: “No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.” 42 U.S.C. § 12182(a). For purposes of Title III, discrimination includes “a failure to remove architectural barriers . . . in existing facilities . . . where such removal is readily achievable.” Id. § ...