Bonner v. Arastehjoo et al

Filing 47

ORDER by Judge Claudia Wilken GRANTING DEFENDANTS' 14 MOTION TO SET ASIDE ENTRY OF DEFAULT, AND 30 MOTION TO SUBMIT FURTHER EVIDENCE, AND DENYING AS MOOT PLAINTIFF'S 16 MOTION FOR DEFAULT JUDGMENT, AND 35 ADMINISTRATIVE MOTION TO ADMIT ADDITIONAL DOCUMENTS. (ndr, COURT STAFF) (Filed on 10/31/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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CHARLES A. BONNER,

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United States District Court
For the Northern District of California

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No. C 11-1350 CW

Plaintiff,
v.
AKRAM ARASTEHJOO; NEDA VOJDANI;
and DOES 1-100,
Defendants.
________________________________/

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ORDER GRANTING
DEFENDANTS' MOTION
TO SET ASIDE ENTRY
OF DEFAULT, Docket
No. 14, AND MOTION
TO SUBMIT FURTHER
EVIDENCE, Docket
No. 30, AND
DENYING AS MOOT
PLAINTIFF'S MOTION
FOR DEFAULT
JUDGMENT, Docket
No. 16, AND
ADMINISTRATIVE
MOTION TO ADMIT
ADDITIONAL
DOCUMENTS, Docket
No. 35

Plaintiff Charles A. Bonner filed the present action against
Defendants Akram Arastehjoo and her daughter Neda Vojdani,

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alleging sixteen causes of action under federal and state law.
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After Defendants failed to answer the complaint or otherwise

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respond, the Clerk entered default as to both Defendants.

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Defendants have appeared specially to move the Court to set aside

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the entry of default.

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the parties' submissions, the Court GRANTS the motion.

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Docket No. 14.

Having considered all of

BACKGROUND
According to the allegations in the Complaint and other

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submissions filed with the Court, Plaintiff Bonner and Defendant
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Arastehjoo had a personal relationship for several years.

During

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that time Bonner and Arastehjoo allegedly engaged in real estate

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transactions together and Bonner provided legal services to

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Arastehjoo, Vojdani and other family members.

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Arastehjoo loaned Bonner sums of money, and Bonner provided

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certain real property as security.

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In addition,

On November 23, 2010,

Arastehjoo filed suit against Bonner in Marin County Superior

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Court, alleging fraud and other violations of law related to the
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loans, and legal malpractice, and sought judicial foreclosure.

United States District Court
For the Northern District of California

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Arastehjoo has also instituted a non-judicial foreclosure of

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Bonner's real property located at 105 Buchanan Drive, Sausalito,

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California.

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in the state action against Arastehjoo and Doe defendants.

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Arastehjoo demuured to the cross-complaint.

On December 27, 2011, Bonner served a cross-complaint

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On March 21, 2011, Bonner filed the above-entitled federal
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action against Arastehjoo and Vojdani.

The complaint arises from

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the loans that are also at issue in the state action and seeks

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payment for legal services Bonner allegedly provided.

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attempted to serve Defendants on the same day by sending his

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assistant Ilse Wolff to the law office of Robert Diskint, counsel

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for Arastehjoo in the state action.

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Bonner

The day after Bonner filed the federal action, he moved for a

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temporary restraining order to stop the foreclosure sale of his
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Buchanan Drive property.

Again, Wolff went to Diskint's law

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office.

She personally gave Diskint the motion and other related

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papers, including a copy of the complaint.
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The parties dispute

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whether a copy of summons was included with the copy of complaint

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that was enclosed with the motion for a temporary restraining

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order.

The motion was denied.

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DISCUSSION
Federal Rule of Civil Procedure 55(a) provides, “When a party
against whom a judgment for affirmative relief is sought has

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failed to plead or otherwise defend as provided by these rules and
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that fact is made to appear by affidavit or otherwise, the clerk

United States District Court
For the Northern District of California

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shall enter the party’s default.”

However, a “person is not bound

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by a judgment in litigation to which he or she has not been made a

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party by service of process.”

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F.2d 849, 851 (9th Cir. 1992).

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served, the entry of default against it must be set aside.

Mason v. Genisco Tech. Corp., 960
If a party was not properly
See

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id. (stating that the default judgment is void if plaintiff failed
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to serve defendant properly).

Furthermore, a court may set aside

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entry of default for good cause.

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is disfavored.

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1991).

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doubts as to the propriety of the default are resolved against the

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party seeking the default.

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Fed. R. Civ. P. 55(c).

Default

See In re Hammer, 940 F.2d 524, 525 (9th Cir.

Public policy supports deciding cases on the merits; any

See id.

In the present case, the parties dispute whether the summons

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and complaint were properly served.

Federal Rule of Civil

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Procedure 4 establishes the required form and method of service.

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Among other methods, Rule 4 provides that service may be

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accomplished by following state law for serving a summons or
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delivering a copy of the summons and complaint to an agent

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authorized by appointment or law to receive service of process.

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Fed. R. Civ. P. 4(e)(1), (2)(C).

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agent's authority to accept service may be implied.

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v. Ziegler Bolt and Parts Co., 111 F.3d 878, 881 (Fed. Cir. 1997).

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Defendants concede that an
United States

Bonner argues that he properly served Defendants because

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(1) Diskint accepted service of his cross-complaint in the state
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action, (2) Diskint instructed Bonner to direct all communications

United States District Court
For the Northern District of California

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intended for Arastehjoo to him, (3) Diskint's assistant told

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Plaintiff's process server that she would accept service and

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(4) Diskint failed to inform the process server that he was not

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authorized to accept service on behalf of Defendants.

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The first argument fails because Bonner does not dispute case

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law indicating that the "mere relationship between a defendant and
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his attorney does not, in itself, convey authority to accept
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Ziegler, 111 F.3d at 881.

Furthermore, California Code

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service."

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of Civil Procedure section 428.60(2) states that if a party has

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appeared in the action, the cross-complaint shall be served upon

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the party's attorney, or upon the party if the appearance has been

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made without an attorney.

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Accordingly, the fact that Diskint

accepted service of the cross-complaint in the state action does

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not establish that Arastehjoo authorized him to receive service of
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the complaint and summons in this action.

Furthermore, this

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argument does not apply to service on Vojdani who was not a party

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to the state action.
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Bonner's second argument is unpersuasive because Diskint's

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instructions to Bonner that Bonner communicate with him regarding

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the dispute does not amount to evidence that Defendants authorized

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Diskint to accept service of the federal complaint.

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Code § 2322(b) ("An authority expressed in general terms, however

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Cal. Civil

broad, does not authorize an agent to . . . [d]efine the scope of

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the agency); Imperial-Yuma Prod. Credit Ass'n v. Shields, 99 Cal.
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App. 546, 551 (1950) (a declaration by a purported agent that he

United States District Court
For the Northern District of California

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was the agent, "made out of the presence and without the knowledge

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of the principal, was incompetent to establish either the fact of

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agency or the extent of the agent's authority").

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March 11, 2011 email from Diskint to Bonner, in which he stated,

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"akram sent me your email to her.

Morover, the

please deal with me regarding

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negotiations.

as we discussed please try to come up with a

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serious proposal," does not even expressly refer to the federal
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action or service of process.1
Bonner's third argument is defeated for the same reasons that

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his second argument fails.

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told Wolff or otherwise agreed with Wolff that she would accept

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service on behalf of Defendants, such facts do not demonstrate

Even if Diskint's secretary, Cornell,

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that Defendants authorized Cornell or Diskint to accept service of
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the summons and complaint in the federal action.

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Defendants' unopposed request to file additional evidence
is GRANTED. See Docket Nos. 30, 32 and 34.
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Finally, Bonner points to no authority for the proposition

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that Diskint's failure to inform Wolff that he was not authorized

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to accept service on behalf of Defendants renders Bonner's manner

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of service proper under Rule 4.

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Even if Bonner's service of the federal complaint were
effective, there is good cause under Rule 55(c) to set aside the

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entry of default.

Benton v. Kearney, 2009 WL 2711943, at *2 (C.D.

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Cal.).

There is no evidence that culpable conduct by Defendants

United States District Court
For the Northern District of California

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led to the entry of default.

Defendants indicate that they intend

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to litigate the case.

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complaint in the state action.

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the requirement that he litigate the case would prejudice him.

Indeed, Arastehjoo demurred to the cross-

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Bonner has not demonstrated that

CONCLUSION

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Because Bonner failed to serve the complaint and summons on
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Defendants properly, and other factors, demonstrate good cause to
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set aside the entry of default, Defendants' motion is GRANTED.

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Docket No. 14.

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moot.

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documents in support of his motion for default judgment is DENIED

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as moot.

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Bonner's motion for default judgment is DENIED as

Docket No. 16.

Bonner's motion for admission of filed

Docket No. 35.

Plaintiff shall serve Arastehjoo within

thirty days and Vojdani within 120 days.

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IT IS SO ORDERED.

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Dated: 10/31/2011

CLAUDIA WILKEN
United States District Judge

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