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Joe Hand Promotions, Inc. v. Contreras

February 13, 2006

JOE HAND PROMOTIONS, INC., AS BROADCAST LICENSEE OF THE NOVEMBER 11, 2000, LEWIS/TUA PROGRAM, PLAINTIFF,
v.
ALEX CONTRERAS, INDIVIDUALLY AND AS AN OFFICER, DIRECTOR, SHAREHOLDER, AND/OR PRINCIPAL OF MOMENTS TAVERNA, INC. D/B/A MOMENTS TAVERNA A/K/A MOMENTS LAVERNA, AND MOMENTS TAVERNA, INC. D/B/A MOMENTS TAVERNA A/K/A MOMENTS LAVERNA; DEFENDANTS.



The opinion of the court was delivered by: Sifton, Senior Judge

MEMORANDUM OPINION AND ORDER

By Order dated July 20, 2005, this Court entered default judgment against Defendants Alex Contreras, individually and as an officer, director, shareholder, and/or principal of Moments Taverna, Inc. d/b/a Moments Taverna a/k/a Moments Laverna, and Moments Taverna, Inc. d/b/a Moments Taverna a/k/a Moments Laverna (hereinafter "Moments Taverna") (collectively "Defendants"). Defendant Contreras, acting pro se, subsequently submitted a letter stating that he had not received notice of the action, and that the plaintiff had fabricated the events on which the complaint is based. This Court issued an order to show cause why the default judgment should not be vacated. Plaintiff Joe Hand Promotions has filed a response in opposition. For the following reasons, the default judgment is vacated.

BACKGROUND

Plaintiff Joe Hand Promotions commenced this action against the Defendants on January 9, 2003.*fn1 In the complaint, plaintiff alleged that it was granted the right, by contract, to distribute the November 11, 2000 Lewis/Tua boxing match via closed circuit television and encrypted satellite signal. Plaintiff subsequently entered into agreements with various establishments in New York state, allowing them to exhibit the program to their patrons. Plaintiff alleges that the Defendants and/or their agents intercepted the satellite signal and unlawfully exhibited the closed circuit program at Moments Taverna for the purposes of commercial gain, in violation of 47 U.S.C. § 605(a) and 47 U.S.C. § 553.*fn2 Plaintiff also alleges that the Defendants or their agents modified a device or utilized equipment unlawfully knowing or having reason to know that the device was primarily of assistance in the unauthorized decryption of satellite cable programming, in violation of 47 U.S.C. § 605(e)(4).*fn3

Plaintiff initially filed its complaint against Maria Fernanda Mendez and Moments Taverna. Service was made on the corporate defendant Moments Taverna on January 24, 2003, by service upon the Secretary of State of New York authorized to accept service on its behalf. Personal service was made upon Defendant Maria Mendez on March 24, 2003. No answer or appearance was made by the defendants, and on August 12, 2004, Plaintiff moved for default judgment. By Order dated September 3, 2004, I entered judgment, by reason of default, against defendants Maria Mendez, individually and as an officer, director, shareholder and principal of Moments Taverna, and against Moments Taverna. Subsequently, Maria Mendez moved to vacate the default judgment, and, by order dated March 23, 2005, I granted her motion.

On May 12, 2005, Plaintiff moved for an order dismissing Maria Mendez from the case, a motion which I granted on May 23, 2005. Also on May 12, 2005, Plaintiff filed an Amended Complaint naming Alex Contreras, individually and as an officer, director, shareholder, and/or principal of Moments Taverna, Inc. d/b/a Moments Taverna a/k/a Moments Laverna, and Moments Taverna, Inc. d/b/a Moments Taverna a/k/a Moments Laverna as Defendants. The Clerk's notation of default indicates that Defendant Contreras "was served with a copy of the Amended Summons and First Amended Complaint on June 2, 2005, by affixing a copy of the Amended Summons and First Amended Complaint to the door of the defendant's residence..., that the Process Server attempted to serve the defendant on May 26, 2005 at 8:16p.m., May 28, 2005 at 7:10a.m., May 31, 2005 at 4:42p.m., June 2, 2005 at 3:52p.m., and that on June 3, 2005, the Process Server mailed a copy of the summons and complaint to the defendant...." No answer or appearance was made by Contreras or Moments Taverna, and on July 12, 2005, Plaintiff again moved for default judgment. By Order dated July 20, 2005, I again entered a default judgment against Defendants Alex Contreras, individually and as an officer, director, shareholder, and principal of Moments Taverna, Inc. d/b/a Moments Taverna a/k/a Moments Laverna, and against Moments Taverna, Inc. d/b/a Moments Taverna a/k/a Moments Laverna (the "Default Judgment").

On August 1, 2005, Defendant Contreras, acting pro se, sent the undersigned a letter stating that he had not received notice of Plaintiff's action, and that Plaintiff had fabricated the events set forth in the complaint.

DISCUSSION

Rule 55(c) of the Federal Rules of Civil Procedure provides that "[f]or good cause shown the court may set aside an entry of default judgment, and if judgment by default has been entered, may likewise set it aside in accordance with 60(b)." Fed.R.Civ.P. 55(c). Rule 60(b) authorizes the court to relieve a party from final judgment based on grounds including "mistake, inadvertence, surprise, or excusable neglect" or for "any other reason justifying relief from the operation of the judgment." Fed. R. Civ. P. 60(b).

The Second Circuit has set forth three criteria in determining whether to vacate a default judgment: "(1) whether the default was willful; (2) whether defendant has a meritorious defense; and (3) the level of prejudice that may occur to the non-defaulting party if relief is granted." American Alliance Ins. Co., Ltd. V. Eagle Ins. Co., 92 F.3d 57, 59 (2d Cir. 1996)(quoting Davis v. Musler, 713 F.2d 907, 915 (2d Cir.1982). Given this Circuit's strong preference "for resolving disputes on the merits," Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir.1993), all doubts must be resolved in the defendant's favor.

See David v. Musler, 713 F.2d 907, 915 (2d Cir.1983)(stating that all doubts should be resolved in favor of those seeking relief from default). Moreover, "concerns regarding the protection of a litigant's rights are heightened when the party held in default appears pro se," as Defendant appears here. Enron Oil Corp., 10 F.3d at 96. The Second Circuit has held that "as a general rule, a district court should grant a default judgment sparingly and grant leave to set aside a default judgment freely when the defaulting party is appearing pro se." Id. After weighing the three factors with respect to this action, I conclude that the default judgment should be vacated.

Willfulness

The Second Circuit has interpreted willfulness in the default judgment context "to refer to conduct that is more than merely negligent or careless." SEC v. McNulty, 137 F.3d 732, 738 (2d Cir.1998). A default may also be found willful where the conduct of the litigant or counsel "was egregious and was not satisfactorily explained." Id. at 739-39; Gonzalez v. City of New York, 104 F.Supp.2d 193, 196 (S.D.N.Y. 2000).

Defendant Contreras has never appeared before the Court on this matter. The first submission received from Defendant Contreras is his letter to the Court after default judgment had been granted. In this letter, Defendant Contreras contends that his inaction was due to the fact that he never received notice of the action. The Defendant also claims that his brother told him that Joe ...


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