Reddy v. Nuance Communications, Inc. et al

Filing 85

ORDER GRANTING DEFENDANTS' MOTION TO SET ASIDE DEFAULT AND DENYING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT by Judge Paul S. Grewal denying 45 Motion Default Judgment; granting 65 Motion to Set Aside Default (psglc1, COURT STAFF) (Filed on 4/25/2012)

1
2
3
4
5
6
7
UNITED STATES DISTRICT COURT

9
United States District Court
For the Northern District of California

8

NORTHERN DISTRICT OF CALIFORNIA

10

SAN JOSE DIVISION

11

KRISHNA REDDY,

12

Plaintiff,
v.

13
14

NUANCE COMMUNICATIONS, INC, et al.,
Defendants.

15
16

I.

17

)
)
)
)
)
)
)
)
)

Case No.: 5:11-CV-05632 PSG
ORDER GRANTING DEFENDANTS’
MOTION TO SET ASIDE DEFAULT
AND DENYING PLAINTIFF’S
MOTION FOR DEFAULT
JUDGMENT
(Re: Docket Nos. 45, 65)

INTRODUCTION

In this discriminatory employment practice and wrongful termination suit, Defendants Paul

18
Ricci (“Ricci”), Jeanne Nauman (“Nauman”), Catherine Dorchuck (“Dorchuck”), Diane Coffey
19
20

(“Coffey”), Metthew Liptak, John Hagen and Richard Nardone (collectively “Individual

21

Defendants”) move to set aside the clerk’s entry of default filed on February 9, 2012. 1 The

22

Individual Defendants contend that Plaintiff Krishna Reddy (“Reddy”) did not effectuate sufficient

23

service to establish personal jurisdiction over them, and thus the court did not have jurisdiction to

24

enter default. Reddy opposes. 2 On April 24, 2012, the parties appeared for hearing. Having

25
26

1

27

2

28

See Docket No. 37.

Additionally, Reddy moves for default judgment against the Individual Defendants. See Docket
No. 45.
1
Case No.: 11-05632 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO SET ASIDE DEFAULT AND DENYING
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

1

reviewed the papers and considered the arguments of counsel, the court GRANTS the Individual

2

Defendants’ motion to set aside the entry of default, and DENIES Reddy’s motion for entry of

3

default judgment.

4

II.

BACKGROUND

5

On November 21, 2011, Reddy filed this suit against her former employer, Nuance

6

Communications, Inc. (“Nuance”) and the Individual Defendants. 3 Shortly thereafter, counsel for

7
8

United States District Court
For the Northern District of California

9

Nuance contacted Reddy to waive service pursuant to Fed. R. Civ. P 4(d). 4 Nuance, however, did
not agree to accept service on behalf of the Individual Defendants. 5 On December 30, 2011, Reddy

10

used a process server to serve the Individual Defendants by leaving one copy of the summons and

11

complaint with Nancy Newark (“Newark”), Legal Counsel – Employment, Nuance

12

Communications, Inc., 1 Wayside Road, Burlington, Massachusetts 01803, and by sending a

13

duplicate copy by certified mail. 6

14
On February 3, 2012, Reddy filed with the clerk a Request for Entry of Default of the
15
16

Individual Defendants. 7 Reddy also filed proofs of service with respect to the Individual

17

Defendants. 8 On February 9, 2012, the Court Clerk entered default as to all the Individual

18

Defendants except Coffey. 9 On February 14, 2012, Ricci, Nauman, Dorchuck, and Coffey filed an

19
20
21

3

See Docket No. 1.

22

4

See Docket No. 71, at ¶ 1, Ex. 1.

23

5

See id.

24

6

See Docket No. 25 at ¶ 5; see also Docket Nos. 26-34.

25

7

See Docket No. 25.

26

8

See Docket Nos. 26-34.

27

9

See Docket No. 37.

28

2
Case No.: 11-05632 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO SET ASIDE DEFAULT AND DENYING
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

1

objection to the service of process. 10 In response, on February 22, 2012, Reddy filed her motion for

2

default judgment with respect to the Individual Defendants. 11 Approximately two weeks later, the

3

Individual Defendants filed the present motion to set aside the clerk’s entry of default. 12

4

III.

LEGAL STANDARDS

5

A. Standard for Setting Aside an Entry of Default

6

A “court may set aside an entry of default for good cause.” 13 When setting aside an entry of

7
8

United States District Court
For the Northern District of California

9

default, the “district court's discretion is especially broad.” 14 “The parallels between granting relief
from a default entry and a default judgment encourage [courts to utilize] the list of grounds for

10

relief provided for in Rule 60(b).” 15 Fed. P. Civ. P. 60(b)(4) specifically allows a court to set aside

11

“any final judgment, order or proceeding” where “the judgment is void.” 16 If the “court lacked

12

personal jurisdiction over the defendant or the requirements for effective services were not

13

satisfied, the default judgment is void and must be vacated.” 17 Courts have found that three factors

14
are relevant when considering the grounds for relief from default judgment: “(1) whether the
15
16

plaintiff will be prejudiced; (2) whether the defendant has a meritorious defense; and (3) whether

17
10

See Docket No. 39.

11

See Docket No. 45.

12

See Docket No. 65.

13

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

18
19
20
21
14

23

Brady v. United States, 211 F.3d 499, 504 (9th Cir. 2000) (internal citations omitted); see also
Hawaii Carpenters’ Trust Funds v. Stone, 794 F.2d 508, 513 (9th Cir. 1986) (“Rule 55(c) frees a
court considering a motion to set aside a default entry from the restraint of Rule 60(b) and entrusts
determination to the discretion of the court”).

24

15

Hawaii Carpenters’ Trust Funds, 794 F.2d at 513.

25

16

Fed. R. Civ. P. 60(b)(4).

26

17

22

27
28

Walker & Zanger (W. Coast) Ltd. v. Stone Design S.A., 4 F. Supp. 2d 931, 934 (C.D. Cal. 1997);
see also Mason v. Genisco Tech. Corp., 960 F.2d 849, 851 (9th Cir. 1992) (finding that an earlier
judgment was void because the plaintiff did not properly serve the complaint).
3
Case No.: 11-05632 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO SET ASIDE DEFAULT AND DENYING
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

1

culpable conduct of the defendant led to the default.” 18 However, this is a disjunctive list and

2

“[w]here timely relief is sought from a default . . . and the movant has a meritorious defense, doubt,

3

if any, should be resolved in favor of the motion to set aside the default so that cases may be

4

decided on their merits.” 19

5

B. The Standard for Sufficient Service of Process

6

Under Fed. R. Civ. P. 4(e), service of process may be effected under either federal or state

7
8

rules. The federal rules allow a plaintiff to serve process on an individual by:
(A) delivering a copy of the summons and the complaint to the individual personally;

United States District Court
For the Northern District of California

9

(B) leaving a copy of each at the individual’s dwelling or usual place of abode with
someone of suitable age and discretion who resides there; or

10
11

(C) delivering a copy of each to an agent authorized by appointment or by law to receive
service of process. 20

12
13
14

The State of California provides its own set of rules for effectuating service of process upon
individuals. First, “a summons may be served by personal delivery of a copy of the summons and

15
16

of the complaint to the person to be served.” 21 For persons to be served as specified in §§ 416.10 –

17

416.50, 22 “summons may be served by leaving a copy of the summons and complaint during usual

18

office hours in his or her office or, if no physical address is known, at his or her usual mailing

19

address . . . with the person who is apparently in charge thereof, and by thereafter mailing a copy of

20
21
22
23

18

Falk v. Allen, 737 F.2d 461, 463 (9th Cir. 1984); see also Franchise Holding II, LLC v.
Huntington Rests. Grp., Inc., 975 F.3d 922, 925 (9th Cir. 2004).
19

Mendoza v. Wright Vineyard Mgmt., 784 F.2d 941, 945-46 (9th Cir. 1986).

20

Fed. R. Civ. P. 4(e)(2).

21

Cal. Civ. Proc. Code § 415.10.

24
25
26
22

27
28

These specific sections refer to serving summons on a corporation, a dissolved corporation, a
joint stock company or association, an unincorporated association, and a public entity, respectively.
4
Case No.: 11-05632 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO SET ASIDE DEFAULT AND DENYING
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

1

the summons and complaint by first-class mail.” 23 For individual defendants, if the person is

2

outside California, a summons may be served “by sending a copy of the summons and of the

3

complaint to the person to be served by first-class mail.” 24 In order to obtain personal jurisdiction

4

over a nonresident by service outside California, however, it is necessary that the trial court have

5

power to exercise such jurisdiction. 25 “For a court to exercise personal jurisdiction over a

6

nonresident defendant, that defendant must have at least minimum contacts with the relevant forum

7
8

United States District Court
For the Northern District of California

9

such that the exercise of jurisdiction does not offend traditional notions of fair play and substantial
justice.” 26
IV.

10

DISCUSSION

11

As a preliminary matter, Reddy argues that the Individual Defendants waived any defense

12

of lack of personal jurisdiction or insufficient service of process because the motion was not filed

13

within twenty-one days after being served with the summons and the complaint. Reddy relies on an

14
Eighth Circuit decision holding that objections to insufficiency of service or process are waived
15
16

unless the objections are raised in the answer or other responsive pleading. 27 But the Individual

17

Defendants have yet to file a responsive pleading. Indeed, the entire point of their request to set

18

aside is that they claim that they have yet even to be served, and they seek relief that would allow

19

them to do so. Under these circumstances, there is no waiver.

20
21

Turning to the issue of whether Reddy complied with the provisions for federal service
under Fed. R. Civ. P. 4 in effectuating service of the Individual Defendants, Reddy does not argue

22
23

Cal. Civ. Proc. Code § 415.20(a).

24

Cal. Civ. Proc. Code § 415.40.

23
24
25

25

Judd v. Superior Court, 60 Cal. App. 3d 38, 43 (Cal. Ct. App. 1976); see also Cal. Civ. Proc.
Code § 410.10.

26

26

Boschetto v. Hansing, 539 F.3d 1011, 1015-16 (9th Cir. 2008) (internal citations omitted).

27

27

See Photolab Corp. v. Simplex Specialty Co., 806 F.2d 807, 810-11 (8th Cir. 1986).

28

5
Case No.: 11-05632 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO SET ASIDE DEFAULT AND DENYING
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

1

that she properly served the Individual Defendants under either Fed. R. Civ. P. 4(e)(2)(A) or

2

4(e)(2)(B). Instead, she relies on Fed. R. Civ. P. 4(e)(2)(C) and cites her service on Newark.

3

Newark, however, is not the personal attorney for the Individual Defendants. 28 Because Reddy did

4

not introduce any evidence to suggest that Newark is in fact an authorized agent of the Individual

5

Defendants, service according to Rule 4(e)(2)(C) was improper.

6

While California Code of Civil Procedure Section 415.40 authorizes Reddy to serve

7
8

United States District Court
For the Northern District of California

9

nonresident individual defendants by certified mail, it does not by itself establish jurisdiction over
the nonresident defendants. Each Individual Defendant’s contacts with California must be

10

established independently. 29 Reddy does not sufficiently allege the contacts each Individual

11

Defendant has with California. Instead, she simply contends that she worked from her home in

12

California and that Nuance’s and the Individual Defendants’ actions were aimed at injuring her in

13
14

California. To be sure, “an individual’s status as an employee acting on behalf of his or her
employer does not insulate the individual from personal jurisdiction based on his or her forum

15
16

contacts.” 30 But it is equally the case that an individual’s “contacts with California should not be

17

judged according to [her] employer’s activities there.” 31 From the papers and pleadings, however,

18

there is no evidence that the Individual Defendants deliberately engaged in significant activities

19

within California, purposely availing themselves of this forum’s benefits, and therefore are subject

20

to this court’s jurisdiction. 32

21
22
23

28

Cf. Ellard v. Conway, 94 Cal. App. 4th 540, 546 (2001) (“plaintiffs could have served
defendant’s attorney pursuant to federal law”).
29

See Calder v. Jones, 465 U.S. 783, 790 (1906).

30

Anglo Irish Bank Corp., PLC v. Superior Court, 165 Cal. App. 4th 969, 981 (2008).

31

Calder, 465 U.S. at 790.

32

Cf. Anglo Irish Bank Corp., 165 Cal. App. 4th at 984.

24
25
26
27
28

6
Case No.: 11-05632 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO SET ASIDE DEFAULT AND DENYING
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

In sum, the court is persuaded that Reddy did not serve the Individual Defendants in

1
2

accordance with either the federal or state provisions for services recognized by Fed. R. Civ. P. 4.

3

Under such circumstances, allowing the claims against the Individual Defendants to be decided on

4

the merits is the appropriate course.

5

V.

6

CONCLUSION

The Individual Defendants’ motion to set aside the clerk’s entry of default is GRANTED.

7
8

United States District Court
For the Northern District of California

9

The court further DENIES Reddy’s motion for entry of default judgment.
IT IS SO ORDERED.

10
11
12

Dated:

4/25/2012

_________________________________
PAUL S. GREWAL
United States Magistrate Judge

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

7
Case No.: 11-05632 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO SET ASIDE DEFAULT AND DENYING
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT