Vaile v. National Credit Works Incorporated

Filing 14

ORDER that the entry of default against Defendant 12 is hereby VACATED and set aside; Plaintiff's Request to Enter Default 11 , is DENIED without prejudice; and Plaintiff has until 12/19/11 in which to either properly serve Defendant or file a waiver of service, or this case will be dismissed. Signed by Magistrate Judge Lawrence O Anderson on 10/17/11. (TLJ)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Jessica Vaile,
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Plaintiff,
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vs.
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National Credit Works, Inc.,

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Defendant.

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No. CV-11-674-PHX-LOA
ORDER

This action arises on the Court’s review of the file. On September 26, 2011, and

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upon Plaintiff’s Request to Enter Default, doc. 11, the Clerk of Court entered default

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against Defendant National Credit Works, Inc. because Defendant failed to answer or

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otherwise respond to the complaint. (Doc. 12) Plaintiff voluntarily consented to

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magistrate-judge jurisdiction on April 18, 2011, pursuant to 28 U.S.C. § 636(c). (Doc. 6)

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I. Background

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Plaintiff Jessica Vaile (“Plaintiff”) commenced this action on April 6, 2011,

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alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.

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(Doc. 1) On August 8, 2011, Plaintiff filed a Proof of Service prepared by Rob Metzler

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of New York, stating that Defendant was served with the summons and complaint on

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August 17, 2011 at 3:40 p.m. at 3719 Union Road, Cheektowaga, New York 14225 by

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service upon John Licata. (Doc. 8) Federal Rule of Civil Procedure 12(a)(1), provides in

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relevant part, that a defendant must serve an answer “within 21 days after being served

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with the summons and complaint.” Rule 12(a)(1), Fed.R.Civ.P. Defendant has not filed

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an answer or otherwise responded to the complaint within the time allotted by Rule

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12(a)(1). Because of Plaintiff’s inaction in this case, on September 19, 2011, the Court

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entered an Order to Show Cause for Plaintiff to show cause why this lawsuit should not

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be dismissed due to Plaintiff’s failure to prosecute her lawsuit. (Doc. 10) On September

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23, 2011, Plaintiff filed a Request to Enter Default. (Doc. 11) Purportedly in accordance

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with Rule 55(a), Fed.R. Civ.P., on September 26, 2011, the Clerk entered Defendant’s

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default. (Doc. 12)

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Upon review of the docket, the Court notes that neither the Proof of Service, doc.

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8, nor Plaintiff’s Request to Enter Default, doc. 11, reflect by affidavit or otherwise what

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John Licata’s relationship is, if any, to the corporate Defendant, National Credit Works,

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Inc. The Court must speculate whether John Licata is Defendant’s statutory agent, officer,

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or director and, if he is, whether the service of process on John Licata constitutes valid

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service under federal or state law.

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II. Service of Process

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A federal court does not have personal jurisdiction over a defendant unless the

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defendant has been served properly under Federal Rule of Civil Procedure 4. Direct Mail

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Spec. v. Eclat Computerized Tech., 840 F.2d 685, 688 (9th Cir. 1988) (citing Jackson v.

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Hayakawa, 682 F.2d 1344, 1347 (9th Cir. 1982)). “Without a proper basis for juris-

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diction, or in the absence of proper service of process, the district court has no power to

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render any judgment against the defendant’s person or property unless the defendant has

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consented to jurisdiction or waived the lack of process.” S.E.C. v. Ross, 504 F.3d 1130,

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1138-39 (9th Cir. 2007) (“‘[S]ervice of process is the mechanism by which the court

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[actually] acquires’ the power to enforce a judgment against the defendant’s person or

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property.”) (emphasis in original; citation omitted). “Serving a summons or filing a

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waiver of service establishes personal jurisdiction over a defendant[.]” Rule 4(k), Fed.R.

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Civ.P. See, Fishman v. AIG Ins. Co., 2007 WL 4248867 (D.Ariz. November 30, 2007).

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Federal Rule of Civil Procedure 4 contains detailed provisions on the manner in

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which service should occur. Rule 4(h)(1)(A)-(B) provide that service of process may be
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made on a corporation “in the manner prescribed by Rule 4(e)(1) for serving an indivi-

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dual” or “by delivering a copy of the summons and of the complaint to an officer, a

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managing or general agent, or any other agent authorized by appointment or by law to

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receive service of process . . . .” Rule 4(h)(1)(A)-(B), Fed.R. Civ.P. Thus, a plaintiff

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may utilize the federal rules regarding service of process, the state’s service rules in the

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state in which the federal district court is located, or, if service is effected in another state,

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the service rules of that state.1 Rule 4(e)(1), (h)(1)(A)-(B), Fed.R.Civ.P. Service of

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process will be upheld if it conforms to either the federal or a state’s service of process

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rules. However, “[s]ervice of process has its own due process component, and must be

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‘notice reasonably calculated . . . to apprise interested parties of the pendency of the

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action and afford them an opportunity to present their objections.’” Ross, 504 F.3d at

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1138 (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)).

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“In the Ninth Circuit, the requirements of Rule 4(h) are liberally construed to

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achieve its underlying purpose of giving a party notice of a claim against it.” Grand

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Canyon Resort Corp. v. Drive-Yourself Tours, Inc., 2006 WL 1722314, * 3 (D.Ariz. June

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22, 2006) (citing, among others, Direct Mail, 840 F.2d at 688-89; Chan v. Soc’y

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Expeditions, Inc., 39 F.3d 1398, 1404 (9th Cir. 1994)). An appointed agent’s authority

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need not be express; it can also be implied. Grand Canyon Resort Corp., 2006 WL

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1722314 at 3 (citing Direct Mail, 840 F.2d at 685). “Implied authority may be sufficient

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where an individual is not an employee but is ‘so integrated with the organization that he

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will know what to do with the papers . . . so as to render it fair, reasonable and just to

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imply authority on his part to receive service,’ and as long as the party receives sufficient

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notice of the complaint.” Id. (quoting Direct Mail, 840 F.2d at 866) (holding that

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receptionist employed by another corporation was an agent despite denial of authority

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when defendant corporation shared office space with her employer and she was only

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The Court notes that because there is no general federal long-arm statute, federal
courts must look either to the long-arm statutes of the state in which the court sits or to
specific federal statutes to authorize the exercise of jurisdiction. See, Ross, 504 F.3d at 1138.
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person in the office), and citing Chan, 39 F.3d at 1404 (holding that service on president

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of a company in his individual, but not his official, capacity was effective to render

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service on the corporation)).

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“When service of process is challenged, a plaintiff bears the burden of showing

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that the court’s personal jurisdiction is properly exercised.” Id., 2006 WL 1722314 at 2

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(citing Hirsh v. Blue Cross Blue Shield, 800 F.2d 1474, 1477 (9th Cir. 1986); 4A Charles

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Alan Wright and Arthur R. Miller, Federal Practice and Procedure § 1083 (2006); and

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Grand Entm’t Group, Ltd. v. Star Media Sales, 988 F.2d 476, 488 (3d Cir. 1993)). More-

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over, a plaintiff is required to serve all defendants with a copy of the summons and

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complaint within 120 days of filing a complaint or the complaint may be dismissed.

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Robinson v. Heritage Elementary School, 2009 WL 1578313, * 2 (D.Ariz. June 3, 2009)

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(citing Rule 4(m), Fed.R.Civ.P.). Although district courts have broad discretion to extend

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the time for service under Rule 4(m), “no court has ruled that the discretion is limitless.”

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Efaw v. Williams, 473 F.3d 1038, 1041 (9th Cir. 2007).

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III. Default

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Federal Rule of Civil Procedure 55 governs the entry of default and default

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judgment. Specifically, Rule 55(a) instructs that a clerk must enter default against a party

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who has “failed to plead or otherwise defend” in the action. Rule 55(a), Fed.R.Civ.P.

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The entry of default by the clerk is a necessary “prerequisite to an entry of default

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judgment.” Vongrabe v. Spint PCS, 312 F.Supp.2d 1313, 1318 (S.D.Cal. 2004). The

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clerk may enter a default judgment “[if] the plaintiff’s claim is for a sum certain or a sum

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that can be made certain by computation . . . .” Rule 55(b)(1), Fed.R.Civ.P. In all other

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cases, the party must apply to the court for a default judgment. Rule 55(b)(2), Fed.R.

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Civ.P. A default, however, does not automatically entitle a plaintiff to a default judgment.

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See, Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (enumerating seven factors for a

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district court to consider in determining whether to grant a default judgment). “In

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deciding whether to grant default judgment, a court must first assess the adequacy of the

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service of process on the party against whom default is requested.” Golden Scorpio Corp.
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v. Steel Horse Saloon I, 2009 WL 976598, * 1 (D.Ariz. April 9, 2009) (citation and

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quotation omitted).

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IV. Discussion

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When the fact of default is established by “affidavit or otherwise,” a clerk is

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required to enter the defendant’s default. Rule 55(a), Fed.R.Civ.P. When requesting

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entry of default under Rule 55(a), however, a plaintiff must provide the clerk with the

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required proof of default. Id.; Tiesing v. 357 Customs Inc., 2008 WL 1970226 (E.D.Cal.

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May 5, 2008). Because Plaintiff’s Request to Enter Default, doc. 11, contained no

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affidavit explaining John Licata’s relationship to Defendant, and there is no evidence in

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the record that service on Defendant through John Licata was otherwise properly effectu-

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ated under Rules 4(e)(1) and 4(h)(2), the entry of default against Defendant, doc. 12, was

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inappropriately entered and will be vacated. See, Mason v. Genisco Technology Corp.,

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960 F.2d 849, 851 (9th Cir. 1992) (“A person is not bound by a judgment in a litigation

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to which he or she has not been made a party by service of process.”); Combs v. Nick

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Garin Trucking, 825 F .2d 437, 442 (D.C.Cir. 1987) (“[I]t is uniformly held that a judg-

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ment is void where the requirements for effective service have not been met.”).

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For the reasons set forth above and on the Court’s own motion,

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IT IS ORDERED that:

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1. the entry of default against Defendant, doc. 12, is hereby VACATED and set

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aside;

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2. Plaintiff’s Request to Enter Default, doc. 11, is DENIED without prejudice; and

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3. Plaintiff has until Monday, December 19, 2011 in which to either (a) properly

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serve Defendant in accordance with the applicable law, or (b) file a waiver of service

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under Fed.R.Civ.P. 4(d), or this case will be dismissed pursuant to Rule 4(m), Fed.R.

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Civ.P. Absent a showing of good cause and due diligence, no additional extensions to

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serve process will be granted.

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Dated this 17th day of October, 2011.

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