Tain v. Hennessey, et al

Filing 33

ORDER granting Defendant Edward Hennessey's Motion to Set Aside Judgment as Void Pursuant to FRCP 55(c) and Rule 60(b)(4). Signed by Judge Irma E. Gonzalez on 4/30/20009. (jah) (jrl).

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TRAYCE TAIN, trustee of the TAIN FAMILY TRUST, dated September 23, 1997, vs. Plaintiff, CASE NO. 03cv1481- IEG - NLS ORDER SETTING ASIDE DEFAULT JUDGMENT AS VOID [Doc. 26]

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

EDWARD P. HENNESSEY, JR.; and CHESTERFIELD CAPITAL GROUP, L.L.C., Defendants. On March 3, 2009, Defendant Edward Hennessey specially appeared and filed a motion to set aside default judgment as void pursuant to Federal Rule of Civil Procedure 55(c) and Rule 60(b)(4). (Doc. 26.) Defendant claims the Court lacks personal jurisdiction over him due to a defect in service of process. In response, Plaintiff filed a notice of non-opposition. (Doc. 31.) Having reviewed the parties' submissions, and for the reasons set forth below, the Court GRANTS Defendant's motion. BACKGROUND On July 24, 2003, Plaintiff filed the complaint alleging (1) fraud, (2) failure of consideration, (3) breach of contract, and (4) common count for money had and received. (Doc. No. 1.) On January 27, 2004, upon application by Plaintiff, the Court issued an Order for Service by Publication of Summons. (Doc. No. 7.) The Order required the summons be published in a newspaper of general circulation in St. Louis Missouri. Id. On October 18, 2004, Plaintiff filed her Proof of Service by Publication, which consisted of the Declaration of Monette L. Blue. Ms. Blue -103cv1481- IEG - NLS

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stated the summons had been published in the Riverfront Times "six times for six successive weeks in the month of July." The Riverfront Times is a free paper with no list of subscribers. The Clerk of Court entered default on October 22, 2004. Plaintiff then filed an Application for Default Judgment, which the Court Granted in Part and Denied in Part on May 6, 2005. Pursuant the Court's order, judgment was entered against Defendant in the total amount of $365,120.75. In late 2008, Plaintiff attempted to enforce the Judgment through the Circuit Court of St. Louis County, Missouri by way of a garnishment of the Defendant's wages. Until he received notice of the garnishment proceedings, Defendant asserts he had no notice of the action against him and had no opportunity to appear and respond to the complaint. LEGAL STANDARD "Motions to vacate a default judgment, like the one in this case, are cognizable under Fed. R. Civ. P. 60(b)." TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 695 (9th Cir. 2001). Rule 60(b)(4), the pertinent subsection, grants the Court discretion to relieve a party from a judgment if "the judgment is void." Fed. R. Civ. P. 60(b)(4). A judgment is void where plaintiff has not made effective service. See Mason v. Genisco Tech. Corp., 960 F.2d 849, 851 (9th Cir. 1992). Under Federal Rule of Civil Procedure 4(e)(1), a plaintiff may serve an individual by "following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made." In California, a summons may be served by publication if "upon affidavit it appears . . . that the party to be served cannot with reasonable diligence be served in another manner specified in this article . . . ." Cal. Code. Civ. P. § 415.50. California Government Code §6060 requires the notice be "published in a newspaper of general circulation for the period prescribed." A "newspaper of general circulation" is a "newspaper published for the dissemination of local or telegraphic news and intelligence of a general character, which has a bona fide subscription list of paying subscribers, and has been established . . . for at least one year preceding the date of the publication . . . ." Cal. Gov. Code §6000. DISCUSSION In Eureka Reporter v. Times-Standard, 165 Cal. App. 4th 891, 895 (2008), the California Court of Appeal found the Eureka Reporter was not a "newspaper of general circulation" because it was a -2-

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free newspaper that did not have a bona fide subscription list of paying customers. The Court found a list of recipients, who made donations to offset home delivery costs, did not qualify as a subscription list because, among other things, the amount donated did not correspond to the number of issues received. Id. In the instant case, the parties agree the Riverfront Times is not a "newspaper of general circulation" because it does not have a "bona fide subscription list of paying customers. The word "free" appears on the upper right hand corner of the front page. (Lodgement 1.) On page 5, the following statement appears: Riverfront Times is available free of charge, limited to one copy per reader. Additional copies of the current issue may be purchased for $1.00 plus postage, payable in advance at the Riverfront Times office. Riverfront Times may be distributed only by Riverfront Times authorized distributors. No person may, without prior written permission of Riverfront Times, take more than one copy of each Riverfront Times weekly issue. (Lodgement 1 at 5.) This statement indicates the Riverfront Times does not have a subscription list, but instead is distributed for free by local distributors. Therefore, publication in the Riverfront Times does not satisfy California's service by publication, rendering service defective. For this reason, the Court GRANTS Defendant's motion to set aside judgment because the judgment is void. IT IS SO ORDERED.

DATED: April 30, 2009 IRMA E. GONZALEZ, Chief Judge United States District Court

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