Jolie Design & Decor, Inc. et al v. CeCe Caldwell's Paints, LLC et al
Filing
47
ORDER AND REASONS granting 41 Motion to Vacate 15 Order on Motion for Entry of Default. Signed by Judge Helen G. Berrigan on 08/15/2013. (kac, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOLIE DESIGN & DECOR, INC. AND
ANNIE SLOAN INTERIORS, LTD.
CIVIL ACTION
VERSUS
NO. 12‐2387
CECE CALDWELLʹS PAINTS, LLC,
DALLAS FAUX FINISHING, LLC, AND
DONNA SCHULTZ
SECTION: “C” (3)
ORDER AND REASONS
Before the Court is a Motion by Dallas Faux Finishing, LLC to Vacate Clerkʹs
Entry of Default. Rec. Doc. 41. Plaintiffs Jolie Design & Decor, Inc. and Annie Sloan
Interiors, LTD. (ʺJolie Designʺ) have not filed an opposition to the motion. The motion
is before the Court on the briefs, without oral argument. Having considered the
memoranda of counsel, the record and the applicable law, the Court finds that vacating
the entry of default is appropriate.
I. BACKGROUND
Annie Sloan Interiors is owned in part by decorative artist Annie Sloan. Rec. Doc.
12 at 3. Sloan has trademarked her paint as ʺCHALK PAINT.ʺ Id. While there is
dispute as to the exclusivity of use, Annie Sloan Interiors has allegedly used the
CHALK PAINT trademark in interstate commerce since 2004. Id. at 5. Jolie Design is
the exclusive licensee of the CHALK PAINT trademark in the United States and the
exclusive distributor of CHALK PAINT decorative paint. Id. at 2.
Shultz was a retailer
of CHALK PAINT decorative paint up until September 2011. Rec. Doc. 20 at 3; Rec. Doc.
12 at 7. Sometime after the end of her retailer relationship with Jolie Designs, Shultz
became involved in CeCe Caldwell, which began to sell ʺChalk and Clay Paint.ʺ Rec.
Doc. 12 at 7.
Dallas Faux Finishing, LLC (ʺDallas Finishingʺ) is a Texas limited liability
company doing business as Maison Blanche Paints (ʺMaison Blancheʺ). Rec. Doc. 12 at
2. The company is owned by Annie Omar. Id. at 16. Maison Blanche sought to become
one of Jolie Designʹs retail distributors of CHALK PAINT in July of 2011, but was not
successful. Id. at 16‐17. Instead, Omar and Maison Blanche allegedly developed and
began to distribute ʺLa Craie Paint,ʺ which Jolie Design alleges is ʺsubstantially identical
and confusingly similarʺ to CHALK PAINT. Id. at 17.
Plaintiffs filed this suit seeking damages arising from the alleged violation of the
CHALK PAINT trademark under both the Lanham Act and various state laws. Rec.
Doc. 1; Rec. Doc. 12. Specifically, Jolie Design brings claims against Dallas Finishing for
Maison Blancheʹs alleged infringement, dilution, unfair competition, false advertising
and false designation of origin by its partners, agents and retailers. Rec. Doc. 12 at 18.
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On October 15, 2012, Jolie Design attempted to serve Dallas Finishing by serving
its registered agent, Annie Omar, when it delivered to the corporation a summons in a
civil action and a complaint for injunctive relief and damages. Rec. Doc. 5. However,
the process server gave these documents to Monica Doe as ʺauthorized to acceptʺ for
Dallas Finishing and Omar. Id. The address where ʺMonica Doeʺ was served was 513
Richmond Park Lane, Fort Worth, TX 76140‐6520. Id. After Dallas Finishing failed to
answer the complaint or otherwise appear, it appeared on the call docket on January 16,
2013. Rec. Doc. 13. Jolie Design moved for an entry of default against this defendant on
December 28, 2012. Rec. Doc. 14. The clerk entered a default judgment against Dallas
Finishing under Federal Rule of Civil Procedure 55(a) on January 2, 2013. Rec. Doc. 15.
Dallas Finishing now moves to set aside that entry of default alleging that service was
improper. Rec. Doc. 41.
II. LAW AND ANALYSIS
Federal Rule of Civil Procedure 55(c) provides that a district court may ʺset aside
an entry of default for good cause.ʺ FED. R. CIV. PRO. 55(c). The three factors courts
consider in determining whether good cause exists are (1) whether the default was
willful; (2) whether setting it aside would prejudice the adversary; and (3) whether a
meritorious defense is presented. Lacy v. Sitel Corp., 227 F.3d 290, 292 (5th Cir. 2000)
(citing Dierschke v. OʹCheskey, 975 F.2d 181, 183‐84 (5th Cir. 1992)). Additionally, a court
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may consider whether the defendant acted expeditiously to correct the default. Lacy, 227
F.3d at 292 (citing Dierschke, 975 F.2d at 184). The district court may also consider
whether the public interest is implicated by the default, and whether there was a
significant financial loss to the defendant. Dierschke, 975 F.2d at 184. Additionally, there
is a strong policy in favor of decisions on the merits, and default judgments are
disfavored. Lindsey v. Prive Corp., 161 F.3d 866, 893 (5th Cir. 1998); Harper Macleod, 260
260 F.3d 389, 393 (5th Cir. 2001) (citing Lindsey v. Prive Corp., 161 F.3d 886, 892 (5th Cir.
1998)).
A corporation may be served ʺby delivering a copy of the summons and
complaint to an officer . . . or any other agent authorized by appointment or by law to
receive service of process . . . .ʺ FED.R.CIV.P. 4(h)(1)(B). Alternatively, a corporation
may be served by ʺfollowing state law for serving a summons . . . .ʺ FED.R.CIV.P.
4(e)(1). Here, plaintiffs attempted to serve Dallas Finishing following Texas law. Rec.
Doc. 41‐1 at 8. A default judgment is supported against a jurisdictional challenge under
Texas law if plaintiffs can prove ʺthat (1) the pleadings established the Defendants were
amenable to service, and (2) evidence in the record demonstrates the Defendants were
in fact served in the manner required by the Texas long arm statute.ʺ Harper Macleod
Solicitors v. Keaty & Keaty, 260 F.3d 389, 398 (5th Cir. 2001) (citing Bludworth Bond
Shipyard, Inc. v. M/V Caribbean Wind, 841 F.2d 646, 649 (5th Cir. 1988)). Texas law
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requires a default judgment to be set aside for a defendant who complains that service
was not in strict compliance with the applicable requirements. Hubicki v. Festina, 226
S.W.3d 405, 408 (Tex. 2007) (citing Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990)).
Dallas Finishing argues that the default judgment should be vacated both
because (1) service was improper, which creates a mandatory ground for vacating the
default, and (2) it meets all three prongs of the test for good cause. Rec. Doc. 41‐1 at 8.
Monica Doe, Dallas Finishing claims, is really named Monica Rolling. Id. at 2.
Moreover, Rolling has sworn under oath that she is not an employee or agent of Dallas
Finishing. Rec. Doc. 41‐3 at 1. She babysits Omarʹs children and does personal chores
for Omar. Id. Defendant Dallas Finishing states that Rolling is not authorized to accept
service of process for Dallas Finishing. Rec. Doc. 41‐1 at 2.
Here, plaintiffs have not demonstrated that they served defendant Dallas
Finishing in the manner required by the Texas long arm statute. Plaintiffs served the
babysitter of the defendantʹs authorized agent. Rec. Doc. 41‐4 at 4. This did not effect
service. See, e.g., world Environmental, L.L.C. v. Wolfpack Environmental, L.L.C., No. 01‐08‐
00561‐CV, 2009 WL 618697, at *2 (Tex, Ct. App. Mar. 12, 2009) (finding there was no
effective service of a limited liability company when a manager or registered agentʹs
personal assistant was served). Thus, service of process to Dallas Finishing was
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insufficient, and the entry of default against it must be set aside.1 It is of no matter
whether Omar had actual notice of service because the Texas Supreme Court has
expressly ruled that an actual notice exception does not overcome strict compliance to
the long arm statute. Harper Macleod, 260 F.3d at 399 (citing Wilson, 800 S.W.2d 833, 836
(Tex. 1990)).
III. CONCLUSION
For the reasons stated above,
IT IS ORDERED that Dallas Faux Finishing, LLCʹs Motion to Vacate Clerkʹs Entry
of Default is hereby GRANTED. Rec. Doc. 41.
New Orleans, Louisiana this 15th day of August, 2013.
____________________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT JUDGE
1
The Court finds no need to analyze the specific Lacy/Dierschke factors for good cause.
Defendant has demonstrated that her failure to answer was not willful and she was making good
faith efforts to work with an attorney. Rec. Doc. 41-1 at 11. Furthermore, plaintiffs shall not be
prejudiced by the vacatur of default at this time.
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