MONTECH STUDIOS, INC. v. CHANG et al

Filing 16

MEMORANDUM OPINION AND ORDER: For the reasons stated in the attached opinion and order, Plaintiff's Motion for Default Judgment 14 is DENIED without prejudice. See opinion and order for details. Signed by Judge Loren L. AliKhan on 3/7/2025. (lclla3)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

MONTECH STUDIOS, INC.,
Plaintiff,
Civil Action No. 23 - 1757 (LLA)

v.
CHIH-CHENG CHANG, et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
Plaintiff Montech Studios, Inc. sued Defendants Chih-Cheng Chang, Jason C. Chang,
Zhengjing Co., Ltd., and Autumn Gold, Inc. for breach of contract and $541,000 in damages. After
several attempts at service of process, Montech Studios now moves for default judgment. For the
reasons explained below, the court denies the motion without prejudice.
I.

FACTUAL BACKGROUND

For the purposes of a default judgment motion, the court accepts the plaintiff’s wellpleaded allegations as true. Kwok Sze v. Johnson, 172 F. Supp. 3d 112, 115 (D.D.C. 2016). Montech
Studios is a software development company that is incorporated in Wyoming but maintains an
office in the District of Columbia. ECF No. 1 ¶¶ 1, 6. Defendant Chih-Cheng Chang (also known
as Jason C. Chang) resides in Sacramento, California. Id. ¶ 2. Mr. Chang owns Zhengjing Co.,
Ltd. and is the “authorized representative” for Autumn Gold, Inc. Id. ¶¶ 3-4.
In February 2022, Montech entered a consulting contract with Zhengjing Co. and
Mr. Chang to advise them “on how best to implement and grow both current and future projects.”
Id. ¶ 6. Zhengjing paid Montech a $10,000 retainer and agreed to pay all future work “within 30

days” of any issued invoice. Id. Approximately a week later, Montech invoiced Zhengjing for
$82,000, which Mr. Chang promptly paid. Id. ¶ 7.
Also in February 2022, Montech signed an agreement with Zhengjing and Mr. Chang to
develop and deploy a cryptocurrency called “$Space Project Coin” on the Ethereum blockchain.
Id. ¶ 10. After completing work on the contract, Montech invoiced Mr. Chang for $225,500, which
he failed to pay. Id. ¶ 11.
In March 2022, Montech signed an agreement with Autumn Gold, Inc., through Mr. Chang,
to develop an online dating website for Asian men and women. Id. ¶ 8. Pursuant to that agreement,
Montech sent Mr. Chang an invoice for $88,500. Id. Mr. Chang then sent two payments of $40,000
each, leaving a remainder of $8,500 unpaid. Id. In April 2022, Montech charged Mr. Chang an
additional $25,000 for updates to the website, but he again failed to pay. Id. ¶ 9.
In June 2022, Montech signed a fourth agreement with Mr. Chang, this time “to develop a
Fantasy website and coin to be launched on the Avalanche blockchain.” Id. ¶ 12. Following the
project’s completion, Montech invoiced Mr. Chang for $200,000, which also remains unpaid. Id.
In addition to these charges, Montech also sent Defendants invoices for the following
miscellaneous charges:
?

TLC Asian

$42,000

?

Space Coin project maintenance

$17,500

?

TLC Asian maintenance

$17,500

?

Superiormex & TLC website

$11,000

?

Influencer search and onboarding

$ 5,000

?

Social media managers

$14,500

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Id. ¶ 13. While these figures add up to $566,500, Montech claims that Defendants instead owe an
“undisputed and outstanding total . . . of $541,000.” Id.1
II.

PROCEDURAL HISTORY

In June 2023, Montech sued all four Defendants seeking compensatory damages and
attorney’s fees. ECF No. 1, at 4-5. The Clerk of the Court issued summonses for each Defendant
shortly thereafter. ECF No. 3. Montech, however, failed to serve Defendants for six months. See
Docket, No. 23-CV-1757 (D.D.C.). In December 2023, the case was reassigned to the undersigned.
Id. The court then issued an order requiring Montech to “show either proof of service or establish
good cause for the failure to do so” by February 1, 2024. ECF No. 4.
On January 31, 2024, Montech filed return-of-service affidavits for all four Defendants.
ECF Nos. 5, 6, 8, 9. The affidavits stated:
Service of the Complaint and Summons was made on Chih-Cheng
Chang, Jason C[.] Chang, Jason Chang, all names of one person,
Zhengling [sic], Co. Ltd., & Autumn Gold, Inc. by placing individual
copies of the complaint for each defendant at 111 Vista Creek
Circle, Sacramento, CA, which also serves as the personal residence
of defendant Jason Chang.
ECF No. 5, at 1-2.2 Montech also provided the court with a link to a video purporting to depict
said service. Id. at 2. Montech justified this manner of service on the grounds that Mr. Chang had
“refus[ed] to accept certified mail and [three] other attempts at service.” Id.

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The court is unable to determine the source of the $25,500 shortfall based on the complaint.

Montech spelled the first corporate Defendant’s name as “Zhengjing” in the complaint but
changed it to “Zhengling” in the return-of-service affidavits. Compare ECF No. 1, with ECF
Nos. 5, 6, 8, 9. In keeping with the official captioning of the case, the court will use “Zhengjing.”
2

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In March 2024, Montech moved for an entry of default, ECF No. 11, and the Clerk of the
Court entered default against all Defendants shortly thereafter, ECF No. 12. In May 2024,
Montech moved for default judgment. ECF No. 15.
III.

LEGAL STANDARDS

“[T]he Federal Rules of Civil Procedure provide for default judgments . . . [to] safeguard
plaintiffs ‘when the adversary process has been halted because of an essentially unresponsive
party,’” and to protect the “the diligent party . . . lest he be faced with interminable delay and
continued uncertainty as to his rights.” Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005) (quoting
Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)). While such judgments are designed to
protect plaintiffs, courts generally disfavor them because of the judiciary’s “preference for
resolving disputes on their merits.” Darby v. McDonald, 307 F.R.D. 254, 257 (D.D.C. 2014)
(quoting Bennett v. United States, 462 F. Supp. 2d 35, 38 (D.D.C. 2006)).
Federal Rule of Civil Procedure 55 requires a plaintiff to complete two steps to obtain a
default judgment. See Fed. R. Civ. P. 55. First, the plaintiff must ask the Clerk of the Court to
enter default based on a defendant’s failure “to plead or otherwise defend” in response to the
complaint. Fed. R. Civ. P. 55(a). Upon entry of default, the “defaulting defendant is deemed to
admit every well-pleaded allegation in the complaint.” Robinson v. Ergo Sols., LLC, 4 F. Supp.
3d 171, 178 (D.D.C. 2014) (quoting Int’l Painters & Allied Trades Indus. Pension Fund v. R.W.
Amrine Drywall Co., 239 F. Supp. 2d 26, 30 (D.D.C. 2002)). Second, after the Clerk of the Court
has entered default, the plaintiff must file a motion for default judgment and provide notice of the
same to the defaulting party. Fed. R. Civ. P. 55(b)(2).
A default judgment, however, can only be entered against a defendant who has been
properly served. See, e.g., Scott v. District of Columbia, 598 F. Supp. 2d 30, 36 (D.D.C. 2009).

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This is because “a defendant’s obligation to respond to a complaint arises only upon service of the
summons and complaint.” Id. (citing Fed. R. Civ. P. 12(a)). Without proper service, the court
“lack[s] the power to assert personal jurisdiction over a defendant” and any resulting judgments
are void. Mann v. Castiel, 681 F.3d 368, 372 (D.C. Cir. 2012). The plaintiff bears the burden of
proving that service was proper under Rule 4. Fed. R. Civ. P. 4(c)(1); see Mann, 681 F.3d at 372.
IV.

DISCUSSION

Here, the court must deny Montech’s motion for default because Montech has failed to
properly serve Defendants. Start with Mr. Chang. Under Rule 4(e), a plaintiff may serve an
individual by:
(1) 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; or
(2) doing any of the following:
(A) delivering a copy of the summons and of the complaint to
the individual personally;
(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
(C) delivering a copy of each to an agent authorized by
appointment or by law to receive service of process.
Fed. R. Civ. P. 4(e).
Montech represents that it “plac[ed] individual copies of the complaint for each defendant
at 111 Vista Creek Circle, Sacramento, CA, which also serves as the personal residence of
[Mr.] Chang.” ECF No. 5, at 2. Montech does not state that it personally served Mr. Chang, so it
has not fulfilled the requirements of Rule 4(e)(2)(A). It also does not say that it left copies of the
summonses and complaint at Mr. Chang’s dwelling “with someone of suitable age and discretion

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who resides there,” so it has not satisfied Rule 4(e)(2)(B), either. Nor does Montech contend that
it delivered the copies to “an agent authorized by appointment or by law to receive service of
process” on behalf of Mr. Chang, so it also has not satisfied Rule 4(e)(2)(C).
Montech’s final resort is through Rule 4(e)(1), which permits service in accordance with
the state law of “where service is made”—here, California. California’s service rules largely mirror
those of the Federal Rules of Civil Procedure. Under California law, for example, a “summons
may be served by personal delivery of a copy of the summons and of the complaint to the person
to be served.” Cal. Civ. Proc. Code § 415.10. If personal service is not possible,
a summons may be served by leaving a copy of the summons and
complaint at the person’s dwelling house, usual place of abode,
usual place of business, or usual mailing address other than a United
States Postal Service post office box, in the presence of a competent
member of the household or a person apparently in charge of his or
her office, place of business, or usual mailing address other than a
United States Postal Service post office box, at least 18 years of age,
who shall be informed of the contents thereof, and by thereafter
mailing a copy of the summons and of the complaint by first-class
mail, postage prepaid to the person to be served at the place where
a copy of the summons and complaint were left.
Cal. Civ. Proc. Code § 415.20(b). Montech’s attempted service on Mr. Chang fails to conform to
this provision in at least two respects. First, Montech does not state that the summons and complaint
were left “in the presence of a competent member of the household or a person apparently in charge
of . . . [the] usual mailing address” who was “at least 18 years of age.” Id. Second, Montech does
not represent that it “thereafter mail[ed] a copy of the summons and of the complaint by first-class
mail” to Mr. Chang at that address. Id.
Montech’s attempt at service fares no better with respect to the corporate Defendants.
Under Rule 4(h)(1), a plaintiff may serve a corporation in a United States federal judicial district:
(A) in the manner prescribed by Rule 4(e)(1) for serving an
individual; or

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(B) by delivering a copy of the summons and of the complaint to an
officer, a managing or general agent, or any other agent authorized
by appointment or by law to receive service of process and—if the
agent is one authorized by statute and the statute so requires—by
also mailing a copy of each to the defendant.
Fed. R. Civ. P. 4(h). As already explained, Montech’s attempted service failed to comply with
Rule 4(e)(1), so it was deficient under Rule 4(h)(1)(A). Additionally, Montech does not represent
that it gave the summonses for the corporate Defendants and a copy of the complaint “to an officer,
a managing or general agent, or any other agent authorized . . . to receive service of process” for the
corporate Defendants, so it did not comply with Rule 4(h)(1)(B). Montech also cannot demonstrate
compliance under California law (by way of Federal Rule of Civil Procedure 4(h)(1)(A)), which
prescribes a virtually identical method for serving corporate entities as it does for individuals. See
Cal. Civ. Proc. Code § 415.20(a) (requiring that the summons and complaint “be left with a person
at least 18 years of age” and be “thereafter mail[ed]” to the same address).
In short, Montech has not shown that it properly served Defendants. And because default
“cannot be entered where there was insufficient service of process,” Scott, 598 F. Supp. 2d at 36, the
court must vacate the Clerk of the Court’s entry of default and deny Montech’s motion for default
judgment, see Liebman v. Deutsche Bank Nat’l Tr. Co., 15 F. Supp. 3d 49, 60 n.8 (D.D.C. 2014)
(holding that where a defendant “was improperly served, an entry of default against [the defendant]
would be inappropriate”).
At the same time, the court is sympathetic to Montech’s repeated efforts to serve an
apparently unresponsive group of Defendants. Thus, while the court will vacate the Clerk of the
Court’s entry of default and deny the motion for default judgment, Montech is free to propose
alternative methods of serving Defendants. Because Rule 4(e)(1) allows service pursuant to state
law, a plaintiff may request alternative service on domestic individuals and entities if the relevant
state permits it. See Sanchez v. Yu Lin Corp., 2022 WL 4598653, at *4 (D.D.C. Sept. 30, 2022)
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(permitting an alternative method of service against domestic defendants); Birmingham v. Doe,
593 F. Supp. 3d 1151, 1157-58 (S.D. Fla. 2022) (explaining that a plaintiff may request alternative
methods of service pursuant to state law by way of Federal Rule of Civil Procedure 4(e)(1)). Under
California law, when a plaintiff has exhausted the usual methods of service, “the court in which
the action is pending may direct that summons be served in a manner which is reasonably
calculated to give actual notice to the party to be served and that proof of such service be made as
prescribed by the court.” Cal. Civ. Proc. Code § 413.30. Accordingly, Montech may propose such
methods and include them in a motion for alternative service. The court reminds Montech that its
proposals must be “reasonably calculated to give actual notice” to Defendants and otherwise
comply with federal and California law. A repeat of its prior attempts, which have been unsuccessful
to date, will be insufficient.
V.

CONCLUSION

For the foregoing reasons, it is hereby ORDERED that Plaintiff’s Motion for Default
Judgment, ECF No. 14, is DENIED without prejudice. It is further ORDERED that the Clerk of
the Court’s entry of default, ECF No. 13, is VACATED.
SO ORDERED.

LOREN L. ALIKHAN
United States District Judge
Date: March 7, 2025

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