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DCH Auto Group, Inc. v. Fit You Best Automobile

September 11, 2007

DCH AUTO GROUP (USA), INC., PLAINTIFF,
v.
FIT YOU BEST AUTOMOBILE, INC., DEFENDANT.



The opinion of the court was delivered by: Gershon, United States District Judge

OPINION AND ORDER

Defendant Fit You Best Automobile, Inc. ("FYB") moves this court to vacate the default judgment it awarded plaintiff DCH Auto Group (USA), Inc. ("DCH") and to re-open this case pursuant to Federal Rules of Civil Procedure 60(b)(4) and 60(b)(1). For the reasons set forth below, FYB's motion is denied.

FACTS

Procedural History

On June 21, 2005, DCH initiated this action by filing a complaint with the court and thereafter served a copy of the summons and complaint on FYB on June 22, 2005.*fn1 In sum and substance, DCH sought monetary and injunctive relief arising from FYB's alleged violations of its trademark, the Dah Chong mark. After FYB failed to answer or otherwise respond to the complaint, on August 10, 2005, DCH filed a motion for default judgment. Pursuant to Fed. R. of Civ. P. 55(a), the Clerk of Court entered a notation of defendant's default on October 7, 2005. By order dated October 17, 2005, the court granted default judgment in favor of plaintiff and referred the matter to the Honorable Joan M. Azrack, United States Magistrate Judge, for a report and recommendation ("R&R") concerning the relief that should be granted to plaintiff. On February 3, 2006, the court adopted Judge Azrack's R&R in full, granting plaintiff's application for a permanent injunction and awarding plaintiff costs in the amount of $668.77 and attorney's fees in the amount of $36,388.46. The injunction permanently enjoins FYB from, inter alia, using the Dah Chong mark to identify itself or any goods or services it offers. FYB had not filed any objections to Judge Azrack's R&R.

On February 15, 2006, the Clerk of Court entered judgment against defendant in accordance with the court's February 3, 2006 order. In response to DCH's request, on February 23, 2006, the court amended its February 3, 2006 order to include express reference to DCH's trademark, the Dah Chong mark, in Chinese characters for purposes of identification. Afterwards, on March 9, 2006, the Clerk of Court entered an amended judgment to reflect the change.

FYB's Failure to Respond

More than two months prior to filing the complaint, DCH began attempting to contact FYB. On April 20, 2005, Maria Lin, a partner of Morgan & Finnegan, LLP, DCH's counsel, wrote a letter to Mr. Y. Kong of FYB regarding FYB's infringing use of DCH's trademark (the Dah Chong mark). Thereafter, on June 10, 2005, George Liang, Senior Vice President and Regional Manager of DCH, wrote letters in both English and Chinese to FYB regarding FYB's infringing use of DCH's trademark. FYB failed to respond to either letter.

After the complaint was filed and served, on June 21 and 22, respectively, DCH continued to attempt to contact FYB. On July 14, 2005, two days after FYB's time to answer the complaint had expired, Maria Lin and Jeffrey Liao, an associate at Morgan & Finnegan, LLP, participated in a series of phone calls with FYB. During each phone call, Ms. Lin communicated with the individual who answered the phone in both English and Mandarin Chinese, attempting to discuss the case. Each time, however, the individual who answered the phone refused to participate in the telephone conversation.

Four days later, on July 18, 2005, Janet Dore, a partner of Morgan & Finnegan, LLP, sent a letter to FYB via Federal Express explaining that the time to file an answer had elapsed, and inquiring as to whether FYB intended to file an answer and whether FYB was represented by an attorney. Ms. Dore also informed FYB that DCH would move for default judgment should FYB fail to answer or otherwise respond to the complaint. This letter was delivered to FYB's address on July 19, 2005 and signed for by an M. Sher. No response was received from FYB, and on August 10, 2006, DCH served by hand copies of its notice of motion for default judgment, a proposed entry of default judgment, a proposed default judgment and permanent injunction, a memorandum of law in support of DCH's motion, and the declarations of Janet Dore and Jeffrey Liao in support of the motion.

As indicated above, the court entered an order, dated October 17, 2005, for judgment by default to DCH and referred the matter to Magistrate Judge Joan M. Azrack for R&R. On January 10, 2006, Judge Azrack issued her R&R, a copy of which was mailed to FYB. FYB filed no objections. Ultimately, as described above, the court adopted the R&R, and judgment was entered against FYB.

DCH continued to contact FYB after the judgment for relief was entered. Specifically, on February 7, 2006, Gerard Haddad, a partner of Morgan & Finnegan, LLP, served via a process server on FYB a letter alerting it of the court's entry of default judgment, enclosing the R&R as well as the order adopting the R&R, and requesting that FYB pay the judgment of attorney's fees and costs. Thereafter, on March 13, 2006, Danielle Tully, an associate of Morgan & Finnegan, LLP, served via a process server on FYB a letter alerting it to the court's entry of default judgment, enclosing the R&R as well as the amended order adopting the R&R and the amended judgment, and requesting that FYB pay the judgment of attorney's fees and costs. As with DCH's previous attempts to contact FYB, these communications were ignored.

On May 10, 2006, Gerard Haddad again contacted FYB via Certified Mail, again informing FYB of the judgment against it and requesting that FYB pay the judgment of attorney's fees and costs. Finally, on June 21, 2006, a year after the case had been initiated, Danielle Tully again contacted FYB via First Class Mail, again informing FYB of the judgment against it and requesting that FYB pay the judgment of attorney's fees and costs. Once again, FYB did not respond.

More than five months later, on November 22, 2006, FYB wrote to the court asking permission to file its motion to vacate the default judgment. On January 16, 2007, the court held a pre-motion conference, during which the parties were instructed to attempt to settle this issue prior to filing any motion to re-open this case. Because the parties were not able ...


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