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Shive v. Amazon.Com, Inc.

United States District Court, D. New Mexico

October 12, 2017

JAMES SHIVE, Plaintiff,
v.
AMAZON.COM, INC.; EBAY, INC.; JOHN LAVECCHIA; J&C BASEBALL CLUBHOUSE, INC.; SEARS HOLDING CORPORATION; UNBEATABLE SALE.COM, INC.; and WAL-MART STORES, INC., Defendants.

          James Shive Rio Rancho, New Mexico Plaintiff Pro Se.

          MEMORANDUM OPINION AND ORDER ADOPTING THE MAGISTRATE JUDGE'S PROPOSED FINDINGS AND RECOMMENDED DISPOSITION, AND SETTING THIS MATTER FOR A DAMAGES HEARING

         THIS MATTER comes before the Court on: (i) the Magistrate Judge's Second Proposed Findings and Recommended Disposition, filed August 25, 2017 (Doc. 79)(“PFRD”); and (ii) the Plaintiff's Third Motion for Default Judgment Against Defendant J&C Baseball Clubhouse, Inc., (“J&C Baseball”) filed July 20, 2017 (Doc. 77)(“Motion”). No party objected to the Honorable William P. Lynch's PFRD, which recommended that the Court grant the Motion. Because the Court concludes that Magistrate Judge Lynch's conclusions and recommended disposition in the PFRD are not clearly erroneous, arbitrary, obviously contrary to law, or an abuse of discretion, the Court will adopt the PFRD. Accordingly, having entered default judgment against J&C Baseball, the Court will refer this case to the Honorable Jerry Ritter, United States Magistrate Judge, to conduct a jury trial on the question of damages.

         PROCEDURAL BACKGROUND

         Plaintiff James Shive filed a Complaint for Copyright Infringement, filed May 12, 2015 (Doc. 1)(“Complaint”), against J&C Baseball and others. Shive alleges that J&C Baseball reproduced and sold online copies of a photograph of Clarence Clemons, for which Shive maintains a copyright, without Shive's permission. See Complaint ¶¶ 14, 16, at 6. Pertinent here, Shive filed a Proof of Service as to J&C Baseball, filed February 16, 2017 (Doc. 70). Shive then moved for entry of default under rule 55(a) of the Federal Rules of Civil Procedure. See Request for Entry of Default, filed June 6, 2017 (Doc. 75). The Clerk of this Court entered default as to J&C Baseball. See Clerk's Entry of Default, filed June 28, 2017 (Doc. 76). Subsequently, Shive filed his Motion for Default Judgment Against Defendant J&C Baseball Clubhouse, Inc., filed July 20, 2017 (Doc. 77). Shive included an Affidavit In Support of Motion for Default Judgment, filed July 20, 2017 (Doc. 78). Judge Lynch entered his PFRD on August 25, 2017, recommending that the Court grant Shive's Motion. See PFRD at 8.

         LAW REGARDING DEFAULT JUDGMENT

         Rule 55 mandates a two-step process for a default judgment. First, a party must obtain a Clerk's entry of default. See Fed.R.Civ.P. 55(a) (“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.”); Watkins v. Donnelly, 551 Fed.Appx. 953, 958 (10th Cir. 2014)(unpublished)[1](“Entry of default by the clerk is a necessary prerequisite that must be performed before a district court is permitted to issue a default judgment.”). Second, the party must either request the Clerk to enter default judgment when the claim is for “a sum certain or a sum that can be made certain by computation, ” Fed.R.Civ.P. 55(b)(1), or, “[i]n all other cases, the party must apply to the court for a default judgment, ” Fed.R.Civ.P. 55(b)(2).

         After entering default judgment, a district court takes all of the well-pleaded facts in a complaint as true. See United States v. Craighead, 176 Fed.Appx. 922');">176 Fed.Appx. 922, 925 (10th Cir. 2006) (unpublished); Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974)(“While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation.” (citations omitted)). “‘If defendant does not contest the amount prayed for in the complaint [by failing to answer] and the claim is for a sum certain or a sum that can be made certain by computation, the judgment generally will be entered for that amount without any further hearing.'” United States v. Craighead, 176 Fed.Appx. at 925 (alteration in original)(quoting 10A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam N. Steinman, Federal Practice & Procedure § 2688, at 70-71 (4th ed. 2016)). See Fed.R.Civ.P. 8(d) (“Averments in a pleading to which a responsive pleading is required, other than those as to the amount of damage, are admitted when not denied in the responsive pleading.”). “‘A court may enter a default judgment without a hearing only if the amount claimed is . . . one capable of mathematical calculation.'” Applied Capital, Inc. v. Gibson, 558 F.Supp.2d 1189, 1202 (D.N.M. 2007)(Browning, J.) (quoting H.B. Hunt v. Inter-Globe Energy, Inc., 770 F.2d 145, 148 (10th Cir. 1985) and citing Venable v. Haislip, 721 F.2d 297, 300 (10th Cir. 1983)). “It is a familiar practice and an exercise of judicial power for a court upon default, by taking evidence when necessary or by computation from facts of record, to fix the amount which the plaintiff is lawfully entitled to recover and to give judgment accordingly.” 10A Wright & Miller, supra, § 2688, at 80 (quoting Pope v. United States, 323 U.S. 1, 12 (1944)). “If the damages sum is not certain or capable of easy computation, the court may” conduct such hearings or order such references as it deems necessary. Applied Capital, Inc. v. Gibson, 558 F.Supp.2d at 1202 (citing Beck v. Atl. Contracting Co., 157 F.R.D. 61, 64 (D.Kan. 1994)(Lungstrum, J.)). See Fed.R.Civ.P. 55(b)(2)(B) (“The court may conduct hearings or make referrals . . . when, to enter or effectuate judgment, it needs to . . . determine the amount of damages.”).

         “Default judgments are a harsh sanction.” In re Rains, 946 F.2d 731, 732 (10th Cir. 1991). The Court has noted that, “[b]ecause default judgment is a harsh sanction involving a court's power to enter and enforce judgments regardless of the merits of a case, courts do not favor such a sanction ‘purely as a penalty for delays in filing or other procedural error.'” Noland v. City of Albuquerque, No. CIV 08-0056, 2009 WL 2424591, at *1 (D.N.M. June 18, 2009)(Browning, J.)(quoting In re Rains, 946 F.2d at 733).

[S]trong policies favor resolution of disputes on their merits: [T]he default judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party. In that instance, the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights. The default judgment remedy serves as such a protection.

In re Rains, 946 F.2d at 732-33 (citations omitted)(internal quotation marks omitted). See Noland v. City of Albuquerque, 2009 WL 2424591, at *1 (denying motion for default judgment, because the counsel for the defendant City of Albuquerque “entered an appearance three days after Noland filed his motion for default judgment, ” and, thus, the Court could not “reasonably say that the City of Albuquerque is an essentially unresponsive party, that the adversary process has been halted, or that Noland faces interminable delay because of the City of Albuquerque's actions”).

         “The court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b).” Fed.R.Civ.P. 55(c). “[T]he good cause required by Fed.R.Civ.P. 55(c) for setting aside entry of default poses a lesser standard for the defaulting party than the excusable neglect which must be shown for relief from judgment under Fed.R.Civ.P. 60(b).” Pinson v. Equifax Credit Info. Servs., Inc., 316 Fed.Appx. 744');">316 Fed.Appx. 744, 750 (10th Cir. 2009)(unpublished) (quoting Dennis Garberg & Assocs., Inc. v. Pack-Tech Int'l Corp., 115 F.3d 767, 775 n. 6 (10th Cir. 1997)). The distinction between setting aside an entry of default and setting aside a default judgment “reflects the different consequences of the two events and the different procedures that bring them about.” 10A Wright & Miller, supra, § 2692 at 104-05.

[T]he clerk or the court may enter a default upon the application of the nondefaulting party. The entry simply is an official recognition of the fact that one party is in default, as, for example, for failure to comply with the rules, to appear as scheduled, or to prosecute the case with due diligence. The entry is an interlocutory step that is taken under Rule 55(a) in anticipation of a final judgment by default under Rule 55(b).
In sharp contrast, a final default judgment is not possible against a party in default until the measure of recovery has been ascertained. This typically requires a hearing, in which the defaulting party may participate; in some situations, a jury trial may be made available to determine an issue of damages. Moreover, the entry of a default judgment is a final disposition of the case and an appealable order.
Additional differences between relief from the entry of a default and from a default judgment appear in the grounds that will support the grant of each motion. Stated generally, the defaulting party is not entitled to relief from a judgment as a matter of right under Rule 60(b). The movant must present a justification supporting the relief motion and must establish his contentions if challenged. Although whether relief will be granted is a matter within the sound discretion of the trial court, the vacation of a default judgment is subject to the explicit provisions of Rule 60(b), which places additional restraints upon the court's discretion. In contrast, the motion to set aside ...

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