Brosnan v. National Loan Center et al

Filing 87

ORDER by Judge Joseph C. Spero denying 76 Motion for Default Judgment; granting 80 Motion to Set Aside Default. The Motion hearing set for May 26, 2017 at 2:00 p.m. is vacated. Instead, the Court will conduct a Case Management Conference a t the same date and time. Plaintiff's request to appear by telephone is GRANTED. Defendant Jason Katz should contact the Court no later than May 23, 2017 if he wishes to appear by telephone at the Case Management Conference (jcslc1S, COURT STAFF) (Filed on 5/18/2017) (Additional attachment(s) added on 5/18/2017: # 1 Certificate/Proof of Service) (klhS, COURT STAFF).

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JOHN BROSNAN, Case No. 15-cv-03487-JCS Plaintiff, 8 v. 11 ORDER GRANTING MOTION TO SET ASIDE ENTRY OF DEFAULT, DENYING MOTION FOR DEFAULT JUDGMENT AND SETTING CASE MANAGEMENT CONFERNCE FOR MAY 26, 2017 AT 2:00 P.M. 12 Re: Dkt. Nos. 76, 80 9 10 JASON KATZ, United States District Court Northern District of California Defendant. 13 14 15 I. INTRODUCTION Presently before the Court are: 1) Plaintiff‟s Motion for Default Judgment (“Default 16 Judgment Motion”); and 2) a Motion to Set Aside Entry of Default (FRCP 55(c)) by Defendant 17 Jason Katz (“Motion to Set Aside Default”). Both Plaintiff John Brosnan and the single remaining 18 defendant, Jason Katz, have consented to the jurisdiction of the undersigned magistrate judge 19 pursuant to 28 U.S.C. § 636(c). The Court held a hearing on the Default Judgment Motion on 20 February 24, 2017 at 9:30 a.m. A hearing on the Motion to Set Aside Default was noticed for 21 May 26, 2017 at 2:00 p.m. The Court finds that the Motion to Set Aside Default can be decided 22 without a hearing and therefore vacates the motion hearing set for May 26, 2017 at 2:00 p.m. 23 pursuant to Civil Local Rule 7-1(b). Instead, the Court will conduct a Case Management 24 Conference at the same date and time, that is, on May 26, 2017 at 2:00 p.m. Parties may 25 appear by telephone or in person at the Case Management Conference. Any party who wishes to 26 appear by telephone should notify Karen Hom, Courtroom Deputy, at (415) 522-2035 by May 23, 27 2017 informing her of his intent to appear by telephone and providing a land line telephone 28 1 number where he can be reached at the time of the hearing.1 For the reasons stated below, the 2 Default Judgment Motion is DENIED. The Motion to Set Aside Default is GRANTED. 3 II. BACKGROUND 4 Plaintiff filed his initial complaint in this action on June 25, 2015. In accordance with the 5 terms of his supervised release in Case No. CR 10-00068 WHA, Plaintiff was required to submit 6 his complaint for pre-filing screening to determine whether his complaint was frivolous. Judge 7 Alsup reviewed the complaint and found that it did not appear to be frivolous on its face and 8 therefore permitted Plaintiff to file the complaint. See Case No. MC 15-80182 WHA, Docket No. 9 2. Plaintiff named as defendants National Loan Center,, Lendio Inc., 10 United States District Court Northern District of California 11 and Jason Katz, alleging that they used an automatic dialing system to make 12 robocalls to his telephone number for the purposes of solicitation without his prior express 13 consent. In his original complaint, he asserted claims under the Telephone Consumer Protection 14 Act (“TCPA”) and the Truth in Caller ID Act (“TCIA”), 47 U.S.C. § 227(b) & (e). Because 15 Plaintiff is proceeding in forma pauperis, the undersigned conducted an initial review of his 16 complaint under 28 U.S.C. § 1915(e)(2)(B) and dismissed Plaintiff‟s claims under the TCIA on 17 the basis that there is no private right of action under that statute. Docket No. 12. The Court also 18 found that Plaintiff had failed to allege sufficient facts to raise a plausible inference that any of the 19 named defendants except the National Loan Center had violated the TCPA and on that basis 20 dismissed the remaining claims with leave to amend. Subsequently, Plaintiff filed an amended complaint dropping the TCIA claims and alleging 21 22 additional facts about Lendio Inc.,2 and Jason Katz in support of his TCPA 23 claim to show that these defendants were responsible for the robocalls he received. Docket No. 24 25 26 27 28 1 Plaintiff has already filed a request to appear by telephone at the May 26, 2017 hearing. See Dkt. No. 86. The Court GRANTS Plaintiff‟s request and will contact Plaintiff at the number listed in his request for the May 26, 2017 Case Management Conference. Plaintiff need not contact the Court unless he wishes to appear in person at the Case Management Conference. 2 In the original complaint, Plaintiff alleged that was a website operated by Lendio, Inc. See Complaint ¶ 12. In his amended complaint, Plaintiff did not assert any claims against, naming only Lendio, Inc. as a defendant. See FAC ¶ 10. 2 1 18. The Court found that the allegations in Plaintiff‟s amended complaint were sufficient survive 2 the Court‟s initial review and ordered the U.S. Marshal to serve the amended complaint on all of 3 the defendants named in the amended complaint. 4 The U.S. Marshal served Lendio, Inc. on April 22, 2016. Docket No. 48. Lendio, Inc. 5 was subsequently dismissed from the action without prejudice. Docket No. 59 (May 27, 2016 6 CMC Minutes). After the Marshal was unable to serve Katz at the Utah address alleged in the 7 original complaint, Brosnan provided what appears to be a business address for “Broadview 8 Networks” in Melville New York for Jason Katz. Docket Nos. 46, 53. The U.S. Marshal served 9 the complaint at that address on July 15, 2016, leaving it with someone named “John Giovanni.” Docket No. 63. The Marshal was unable to serve National Loan Center and Businessbounce at the 11 United States District Court Northern District of California 10 addresses Plaintiff provided and the Court dismissed those defendants for failure to serve on 12 August 16, 2016. Docket No. 68. Defendant Katz failed to answer or appear in this action and on 13 September 6, 2016 the Clerk entered his default. Docket No. 69. Plaintiff filed his Default 14 Judgment Motion on November 9, 2017. 15 At the February 24, 2017 hearing on Plaintiff‟s Default Judgment Motion, the Court 16 expressed concern that service on Katz at the Broadview Networks address may not have been 17 proper. Rule 4(a)(e) allows an individual to be served by delivering it personally to the individual, 18 leaving “at the individual‟s dwelling or usual place of abode with someone of suitable age and 19 discretion who resides there” or by delivering a copy of the complaint to an authorized agent. Fed. 20 R. Civ. P. 4(e)(2). Alternatively, service may be made pursuant to “state law for serving a 21 summons in an action brought in courts of general jurisdiction in the state where the district court 22 is located or where service is made.” Fed. R. C. P. 4(e)(1). Thus, service on Katz could be made 23 under New York or California law. 24 New York law allows for service on an individual at that individual‟s “actual place of 25 business” but such service is only valid if the summons is delivered to the individual‟s business 26 address and thereafter sent by First Class mail to that same address. See N.Y. C.P.L.R. 308. 27 Similarly, California law permits an individual to be served at his or her “usual place of business,” 28 but also requires that a copy of the summons and complaint must be sent by First Class mail after 3 1 the summons and complaint have been delivered to that address. See Cal. Civ. Proc. Code § 2 415.20. Here, there was no evidence in the record establishing that the Broadview Network 3 address was Katz‟s “actual” or “usual” place of business. Nor was there any evidence in the 4 record that after leaving a copy of the complaint and summon at that address the U.S. Marshal 5 mailed a copy of the complaint and summons to that address by First Class mail. In order to determine whether service on Katz had been proper, the Court requested further 6 7 information from the United States Marshal. Subsequently, the Court was informed that the 8 Marshal had re-served Defendant Katz – this time by personally delivering a copy to Katz, as is 9 permitted under Rule 4(e)(2)(A) of the Federal Rules of Civil Procedure (“an individual . . may be served in a judicial district of the United States by . . . delivering a copy of the summons and of 11 United States District Court Northern District of California 10 the complaint to the individual personally”). See Docket No. 83 (Process Receipt and Return 12 reflecting that Katz was personally served on April 10, 2017). On April 24, 2017, Katz appeared in this action for the first time, filing an opposition brief 13 14 on the Default Judgment Motion and asking the Court to vacate the default in his Motion to Set 15 Aside Default. Katz represents that he was not aware of this lawsuit until early April 2017, when 16 he was personally served with the complaint and summons. Motion to Set Aside Default at 2. He 17 also denies responsibility for placing the calls that are the subject of Brosnan‟s complaint. Id. 18 According to Katz, these calls were “marketing leads” provided by other entities (including former 19 defendants Lendio and Business Bounce) that were simply routed to Katz‟s desk. Id. 20 III. 21 ANALYSIS Rule 55(c) allows the Court to “set aside an entry of default for good cause.” “„Failure to 22 properly serve a defendant with process pursuant to Fed. R. Civ. P. 4 constitutes good cause to set 23 aside an entry of default.‟” McKinney v. Apollo Grp. Inc., No. 07CV2373 WQH (CAB), 2008 WL 24 11318288, at *4 (S.D. Cal. July 23, 2008) (quoting Koninklijke Philips Elecs. N. V. v. KXD Tech., 25 Inc., 245 F.R.D. 470, 472 (C.D. Cal. 1992)). While the court has broad discretion in deciding 26 whether to set aside the entry of default pursuant to Rule 55(c), there is a strong preference for 27 trial on the merits, and any doubts should be resolved in favor of setting aside the default. Id. 28 Here, there is insufficient evidence in the record to determine whether the original attempt 4 1 to serve Katz at the Broadview Networks address was proper; the only evidence in the record (the 2 process receipt and return filed on July 26, 2016) suggests that it was not. See Dkt. No. 63. In 3 addition, Katz states that until the Marshal re-served the Complaint and summons in April 2017 he 4 was unaware of the action. The Court therefore finds good cause to vacate the default and deny 5 the Default Judgment Motion. 6 IV. 7 8 9 10 CONCLUSION The Motion to Set Aside Default is GRANTED. The Default Judgment Motion is DENIED. A Case Management Conference shall be held on May 26, 2017 at 2:00 p.m. IT IS SO ORDERED. Dated: May 18, 2017 United States District Court Northern District of California 11 12 13 ______________________________________ JOSEPH C. SPERO Chief Magistrate Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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