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

Filing 29


Download PDF
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

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?