Opinion
6:23-CV-00154-ADA-JCM
04-24-2024
BOBBY KEMP, Plaintiff, v. HONEYVILLE GRAIN INC., et al, Defendants.
TO: THE HONORABLE ALAN D ALBRIGHT, UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
JEFFREY C. MANSKE, UNITED STATES MAGISTRATE JUDGE
This Report and Recommendation is submitted to the Court pursuant to 28 U.S.C. § 636(b)(1)(C), FED. R. CIV. P. 72(b), and Rules 1(f) and 4(b) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas, Local Rules for the Assignment of Duties to United States Magistrate Judges. Before the Court are Defendant Honeyville Grain Inc.'s Motion to Set Aside the Clerk's Entry of Default (ECF No. 23), Plaintiff's Response (ECF No. 25), and Defendant Honeyville Grain Inc.'s Reply (ECF No. 30). For the following reasons, the Court recommends Defendant's Motion be GRANTED.
I. BACKGROUND
Defendant Honeyville Grain Inc. files this Motion to Set Aside the Clerk's Entry of Default. Plaintiff sued Defendants on February 21, 2023, for breach of contract and theft of trade secrets under the Racketeer Influenced and Corrupt Organization Act (“RICO”). Pl.'s Compl. at (ECF No. 1) at 8-9. Plaintiff filed a Motion to Proceed in forma pauperis, which the Court granted. ECF No. 2; ECF No. 5. Plaintiff then filed an amended complaint on April 4, 2023. ECF No. 6. Pursuant to the Court's Order granting Plaintiff permission to proceed in forma pauperis, the Court ordered the United States Marshal to serve a copy of the amended complaint, summons, and the Court's Order granting Plaintiff in forma pauperis status on Defendants. ECF No. 8.
The Clerk of the Court issued a summons for Honeyville Grain Inc. on April 6, 2023, as requested by Plaintiff. ECF No. 9. That summons lists Honeyville's address as “116 Dayton Drive, Rancho Cocamonga (sic), CA 91730.” Id. at 3. The United States Marshall sent the summons to the address listed by Plaintiff by certified mail, return receipt requested. ECF No. 11. After Honeyville did not respond to the lawsuit, Plaintiff filed a Motion for Default Judgment against it. ECF No. 13. The undersigned recommended denying Plaintiff's Motion for Default Judgment as the Clerk of the Court had not entered default. ECF No. 15. That Report and Recommendation was adopted on October 16, 2023. ECF No. 16. Plaintiff then filed a Motion for Clerk's Entry of Default on October 16, 2023. ECF No. 18. The Clerk entered default against Honeyville on October 17, 2023. Honeyville then filed this Motion to Set Aside the Clerk's Entry of Default.
II. RELEVANT LAW
Default may be entered against a party when it fails to answer or otherwise defend a suit. FED. R. CIV. P. 55. The following three steps must be followed to obtain a default judgment: (1) default by the defendant; (2) entry of default by the Clerk; and (3) entry of default judgment by the court. N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). The court may set aside an entry of default for good cause. Fed.R.Civ.P. 55(c). Courts are required to set aside an entry of default if service was defective. Espinoza v. Humphries, 44 F.4th 275, 276 (5th Cir. 2022) (citations omitted).
III. ANALYSIS
Honeyville argues that the Court must set aside the Clerk's Entry of Default because service was improper. To properly effect service on a corporation, plaintiffs may follow state law for serving summons in an action in the state where service is made. Fed.R.Civ.P. 4(e)(1), (h)(1)(A). Here, service was to be accomplished in California. In California, a summons may be served on a corporation by delivering a copy of the summons and the complaint to the person designated as agent for service of process as provided in the California Corporations Code, to the president, chief executive officer, other head of the corporation, a vice president, a secretary or assistant secretary, treasurer or assistant treasurer, controller or chief financial officer, a general manager, or a person authorized by the corporation to receive service of process. Cal Civ. P. Code § 416.10 (a), (b).
Here, there is no evidence that Honeyville was properly served. According to Honeyville's chief executive officer, the proper service address for Honeyville is 11600 Dayton Drive, not 116 Dayton Drive. Def.'s Mot., Ex. A at ¶ 6, 7. Plaintiff acknowledges that the address he wrote on the summons form is not an address associated with Honeyville. Pl.'s Resp. (ECF No. 25) at 4. Plaintiff argues, however, that Honeyville was properly served because “the U.S.P.S. driver delivered the certified mail addressed to Honeyville to the secretary who signed for the package.” Id. at 5. Honeyville correctly points out that the U.S.P.S. tracking history does not provide any information as to who received the summons and complaint or at what address. Def.'s Mot., Ex. B. The Court cannot hold that Honeyville was properly served and was required to respond to the instant lawsuit. Accordingly, Honeyville's Motion should be GRANTED and the Clerk's entry of default should be set aside.
IV. CONCLUSION
It is therefore RECOMMENDED Defendant Honeyville's Motion to Set Aside the Clerk's Entry of Default (ECF No. 23) be GRANTED.
V. OBJECTIONS
The parties may wish to file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are made. The District Court need not consider frivolous, conclusive, or general objections. Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc).