Board of Trustees of the Sign v. PS Trade Show Services

Background

The plaintiffs moved for default judgment, which is a request for judgment against parties who did not defend the case. The district court referred the motion to Magistrate Judge Tse, who issued a report and recommendation. The plaintiffs objected to that recommendation.

Plaiffs’ Objections

The plaintiffs first argued that default judgment should also be entered against Nicole Steele because the complaint allegedly showed that she had an operating role in PS Tradeshow NV. The court agreed with Judge Tse that the complaint did not clearly identify Nicole Steele as an owner or allege facts supporting that conclusion for purposes of treating her as responsible for the company’s obligations.

The plaintiffs also argued that default judgment should be entered against Switch On Solutions, Inc. because it had been served but had not appeared through counsel. The court rejected that argument. It noted that the plaintiffs had not made the argument before Judge Tse and that the cases they cited involved corporations that initially appeared through counsel and later failed to keep counsel. Switch On never appeared. The court agreed with Judge Tse that the plaintiffs had not shown Switch On was an alter ego of PS Tradeshow NV, which was the theory presented in the complaint and motion.

The plaintiffs also asked the court to clarify that the judgment required the three defendants against whom judgment was entered to submit to a payroll audit. The court stated that the motion and proposed judgment had requested that relief and concluded that defendants against whom default judgment had been entered must submit to the audit.

Ruling

Judge Haywood S. Gilliam, Jr. overruled the plaintiffs’ objections and adopted Magistrate Judge Tse’s report and recommendation in full. The court denied the plaintiffs’ motion for renewed review, granted the motion for default judgment in part and denied it in part, and entered the proposed judgment as to PS Tradeshow NV, Pete Steele, and PS Tradeshow CA. The court denied the motion and did not enter judgment as to Switch On Solutions, Inc. and Nicole Steele. It also set a telephonic case-management conference for February 20, 2024, at 2:00 p.m., requiring the plaintiffs and the remaining defendants against whom default judgment had not been entered to appear.