Fresh & Best Produce, Inc. v. Oaktown Ventures, LLC et al

Filing 29

ORDER ADOPTING 22 MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION TO GRANT 14 MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT OAKTOWN VENTURES, LLC ONLY, AND TO DENY DEFAULT JUDGMENT AGAINST DEFENDANT HACKETT. Signed by Judge Beth Labson Freeman on 6/12/2017. (blflc1S, COURT STAFF) (Filed on 6/12/2017)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6

SAN JOSE DIVISION

7
8

FRESH & BEST PRODUCE, INC.,
Plaintiff,

9
v.

10

United States District Court
Northern District of California

11
12
13

OAKTOWN VENTURES, LLC dba
JACK’S OYSTER BAR AND FISH
HOUSE, and RICHARD HACKETT aka
RICK HACKETT,
Defendants.

Case No. 16-cv-06991-BLF
ORDER ADOPTING MAGISTRATE
JUDGE’S REPORT AND
RECOMMENDATION TO GRANT
MOTION FOR DEFAULT JUDGMENT
AGAINST DEFENDANT OAKTOWN
VENTURES, LLC ONLY, AND TO
DENY DEFAULT JUDGMENT
AGAINST DEFENDANT HACKETT
[Re: ECF 14, 22]

14
15
16

Before the Court is Magistrate Judge Nathanael M. Cousins’ Report and Recommendation

17

(“R&R”), which addresses Plaintiff Fresh & Best Produce, Inc.’s motion for default judgment

18

against Defendants Oaktown Ventures, LLC (“Oaktown”) and Richard Hackett (“Hackett”). See

19

R&R, ECF 22; Motion for Default Judgment, ECF 14. Plaintiff claims that Oaktown, which was

20

doing business as Jack’s Oyster Bar and Fish House, ordered and accepted produce from Plaintiff

21

but failed to pay invoices due and owning in excess of $27,000. Compl. ¶¶ 2, 7-10, ECF 1.

22

Plaintiff moves for default judgment against Oaktown and its managing member, Hackett, on its

23

claims that Oaktown is liable for breach of contract and violations of the Perishable Agricultural

24

Commodities Act (“PACA”), 7 U.S.C. §§ 499a-499t, and that Hackett is liable under PACA for

25

breach of fiduciary duties to trust beneficiaries. Compl., ECF 1; Motion for Default Judgment,

26

ECF 14. The R&R recommends that the motion be granted as to Oaktown but denied as to

27

Hackett on the basis that Plaintiff has not established this Court’s personal jurisdiction over

28

Hackett.

1

Plaintiff , which was served with the R&R on May 19, 2017 via the Court’s Electronic
Case Filing System, was required to file any objection to the R&R by June 2, 2017. See Fed. R.

3

Civ. P. 72(b)(2) (deadline for objection is fourteen days after being served with report and

4

recommendation). Plaintiff filed an untimely objection on June 5, 2017, asserting two errors in

5

the R&R. Pl.’s Obj., ECF 25. First, Plaintiff points out an apparent clerical error in a portion of

6

the R&R concluding that “Oaktown” – rather than Plaintiff – is entitled to default judgment in the

7

amount of $31,172.46. Plaintiff requests that this Court rule that Plaintiff is entitled to default

8

judgment in the amount of $31,172.46. Second, Plaintiff disputes the R&R’s conclusion that

9

Plaintiff has failed to establish personal jurisdiction over Hackett. Because it perceives no

10

prejudice to any party in doing so, the Court exercises its discretion to consider Plaintiff’s

11
United States District Court
Northern District of California

2

untimely objection on the merits. The Court therefore reviews de novo both arguments raised by

12

Plaintiff. See Fed. R. Civ. P. 72(b)(3) (“The district judge must determine de novo any part of the

13

magistrate judge’s disposition that has been properly objected to.”).

14

Plaintiff served Defendants Oaktown and Hackett with copies of the R&R by mail on June

15

7, 2017. However, the Court need not wait for expiration of the fourteen-day period for objection

16

following service on Defendants, because Defendants are not entitled to present argument unless

17

and until they obtain relief from the Clerk’s entry of default. See Schwarzer, Tashima &

18

Wagstaffe, Federal Civil Procedure Before Trial ¶ 6:6 (2017 ed.) (“Entry of default cuts off the

19

defendant’s right to appear in the action. The court clerk cannot accept any papers from the

20

defendant other than a motion for relief from the default.”); ¶ 6:42 (“Entry of a defendant’s default

21

cuts off his or her right to appear in the action or to present evidence.”).

22

The Court concludes that the R&R is well-founded in fact and law with the exception of

23

the clerical error noted by Plaintiff. With respect to Oaktown, the Court agrees with Judge

24

Cousins’ determinations regarding the existence of subject matter jurisdiction and personal

25

jurisdiction; analysis of the factors governing default judgment set forth in Eitel v. McCool, 782

26

F.2d 1470 (9th Cir. 1986); and finding that Plaintiff is entitled to default judgment in the total

27

amount of $31,172.46.

28

With respect to Hackett, the Court agrees with Judge Cousins’ determination that Plaintiff
2

1

has not established the existence of personal jurisdiction. Plaintiff challenges that determination,

2

arguing that “[d]omicile has been established.” Pl.’s Obj. at 1, ECF 25. The Court has reviewed

3

Plaintiff’s evidence of domicile de novo as required by Federal Rule of Civil Procedure 72(b)(3).

4

Plaintiff relies on the declarations of one of its owners, Chong Suk Cho, and its attorney, Susan

5

Bishop. Cho’s declaration contains no information relevant to Hackett’s domicile: Cho refers

6

generally to prior conversations with Hackett, states that Hackett has avoided Cho’s telephone

7

calls for several months, and asserts that Hackett signed a check on an Oaktown account which

8

was returned for insufficient funds. Second Decl. of Chong Suk Cho, ECF 18. Counsel’s

9

declaration does contain statements relevant to Hackett’s domicile, for example, that Hackett
“lives and works in or around Oakland, California.” Bishop Decl. ¶ 11. Evidence that Hackett

11
United States District Court
Northern District of California

10

lives in or around Oakland would be evidence of domicile. However, counsel’s declaration does

12

not contain facts establishing her personal knowledge regarding Hackett’s residence. Counsel

13

bases her statements on public filings which she asserts provide Oakland addresses for Hackett.

14

Id. ¶¶ 14-16 and Exhs. D-E. While the filings in question do list two different Oakland addresses

15

for Hackett, those addresses are the addresses of two companies for which Hackett is listed as the

16

Chief Executive Officer, Oaktown and Bocanova, LLC. Id. The filings do not suggest that either

17

of the two Oakland addresses is Hackett’s residence, nor do they provide any other information

18

regarding Hackett’s domicile. Counsel’s statement that a website listed Hackett as the “Chef

19

Owner” of Jack’s Oyster Bar in Oakland, California likewise does not establish that Hackett is

20

domiciled in California.

21

Plaintiff requests that in the event the Court concludes that Hackett’s domicile has not been

22

established, the Court grant Plaintiff additional time to effect service of process on Hackett

23

personally while he is in California as a means of establishing this Court’s personal jurisdiction

24

over him. See Burnham v. Superior Court, 495 U.S. 604, 628 (1990) (California courts may

25

exercise personal jurisdiction over a defendant based service of process on the defendant while the

26

defendant is present in the state). That request is granted.

27
28

Accordingly, the Court ADOPTS the R&R, with the exception of the clerical error
discussed above, and ORDERS as follows:
3

1

(1)

Plaintiff’s motion for default judgment is GRANTED as to Defendant Oaktown.

2

(2)

Plaintiff is entitled to default judgment against Defendant Oaktown in the total

3

amount of $31,172.46, comprising $27,055.06 in unpaid principal balance,

4

$2,298.40 in prejudgment interest, $1,199.00 in attorneys’ fees, and $620.00 in

5

costs.

6

(3)

Defendant Hackett.

7
8
9

Plaintiff’s motion for default judgment is DENIED WITHOUT PREJUDICE as to

(4)

Plaintiff’s request for an extension of time to effect service of process on Defendant
Hackett personally while he is present in the state of California is granted. Plaintiff
shall file a certificate of service or a status update regarding service on or before

11
United States District Court
Northern District of California

10

September 15, 2017.

12
13

IT IS SO ORDERED.

14
15
16
17

Dated: June 12, 2017
______________________________________
BETH LABSON FREEMAN
United States District Judge

18
19
20
21
22
23
24
25
26
27
28
4