G & G Closed Circuit Events, LLC v. Miranda

Background

G & G Closed Circuit Events, LLC sued Ismael M. Miranda individually, Miranda doing business as El Agave Restaurant, and El Agave Restaurant, Inc., described as an unknown business entity doing business as El Agave Restaurant. The complaint alleged violations of federal communications laws, conversion, and California’s unfair-competition statute based on the alleged unauthorized interception and exhibition of a sports and entertainment program at El Agave Restaurant.

The Clerk entered default after the defendants did not appear or respond to the summons and complaint. G & G then moved for default judgment, seeking remedies under 47 U.S.C. § 605 and for conversion. The defendants had not appeared or opposed the motion.

Legal standard

Before entering default judgment, the court must determine whether the defendant was properly served and whether the court has subject-matter and personal jurisdiction. If those requirements are met, the court considers several factors, including the possible prejudice to the plaintiff, the merits and sufficiency of the claims, the amount at stake, the possibility of factual disputes, whether the default resulted from excusable neglect, and the preference for decisions on the merits.

Service on Miranda

The proof of service stated that the summons and complaint were left with “Rose Miranda, Aunt.” G & G argued in its motion that Miranda had been personally served, but the court found that the record did not support that assertion.

Under California law, substitute service generally requires leaving the papers at the defendant’s usual residence, place of business, or usual mailing address with an appropriate person, mailing copies to that same address, and showing reasonable diligence in trying to make personal service first. The court found that G & G had not shown the required diligence because the proof of service contained no information about attempts to serve Miranda personally.

Federal Rule of Civil Procedure 4(e)(2)(B) provides another method: leaving the papers at the individual’s dwelling or usual place of abode with someone of suitable age or discretion who resides there. That method does not require a showing of reasonable diligence. But the court still found the proof of service inadequate because it did not identify the address where the papers were left or establish that the address was Miranda’s usual place of abode.

Disposition

The court concluded that G & G had failed to show proper service on Miranda. It also concluded that, because the complaint appeared to allege that the defendants were jointly liable or similarly situated, the court should not enter default judgment against El Agave Restaurant before the matter could be adjudicated as to all defendants.

The court denied G & G’s motion for default judgment without prejudice. It ordered G & G to serve Miranda again and file a new proof of service within 30 days of the order. After the time for Miranda to respond to the complaint expires, G & G may file a renewed motion for default judgment, which must address whether the new service was adequate.