Magic Carpet Ski Lifts, Inc. v. S&a Co.
| Decision Date | 08 June 2015 |
| Docket Number | Civil Action No. 14-cv-02133-REB-KLM |
| Parties | MAGIC CARPET SKI LIFTS, INC., a Colorado corporation, Plaintiff, v. S&A CO., LTD, a Korean corporation, Defendant. |
| Court | U.S. District Court — District of Colorado |
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Plaintiff's Motion for Entry of Default Judgment [#12]1 (the "Motion"). Pursuant to 28 U.S.C. § 636(b)(1)(A) and D.C.Colo.LCivR 72.1(c), the Motion has been referred to the undersigned for a recommendation regarding disposition [#6]. In the Motion, Plaintiff asks the Court to enter default judgment against Defendant pursuant to Fed. R. Civ. P. 55(b)(2). Motion [#12] at 2. Defendant has not responded to the Motion. The Court has reviewed the pleadings, the entire case file, and the applicable law, and is sufficiently advised in the premises.2 For the reasons set forth below, the Court respectfully RECOMMENDS that the Motion [#12] be GRANTED in partand DENIED in part.
Plaintiff is a Colorado corporation with its principal place of business in Colorado.3 Compl. [#1] ¶ 1. Defendant is a Korean corporation, organized and existing under the laws of South Korea, with its principal place of business in Ansan City, South Korea. Id. at ¶ 2.
Plaintiff alleges that on May 15, 2013, Defendant entered into a Purchase Agreement with Plaintiff. Id. at ¶ 7. Plaintiff attached the Purchase Agreement to the Complaint. Compl., Ex. 1 [#1-1] (the "Agreement"). Pursuant to the terms of the Agreement, Defendant agreed to purchase two ski lift conveyor systems for a purchase price of $112,640.00. Compl. [#1] ¶ 7; see also Agreement [#1-1] at 2. Plaintiff alleges that it delivered both ski lift conveyor systems to Defendant. Id. at ¶ 8.
The Agreement required Defendant to pay the $112,640.00 in two installments of $56,320.00, with the last payment to be made no later than September 15, 2013. Agreement [#1-1] at 2. It contains a provision requiring interest on past due sums in the amount of 18% annually, and also grants the prevailing party attorneys' fees and court costs in the event that litigation arises from collection of payment. Id.
Plaintiff alleges that despite demands for payment, Defendant has not paid Plaintiff $112,640.00 as required by the Agreement. Compl. [#1] ¶ 9. As a result, Plaintiffcommenced this action on July 31, 2014. See Id. at 3. Defendant was served on October 1, 2014 in Ansan City, South Korea via the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters ("Hague Convention"). Motion [#12] at 1. Plaintiff has submitted a Certificate of Service from the South Korean Central Authority to the Court. Id.; see generally Notice of Service, Ex. 1 [#11-1]. Defendant has not filed a response or otherwise appeared.
On November 25, 2014, Plaintiff filed a Motion for Entry of Default Judgment. See id. The Clerk of Court entered default on November 26, 2014. See generally Entry of Default [#13].
Pursuant to Fed. R. Civ. P. 55, default may enter against parties who fail to appear or otherwise defend a lawsuit. Here, entry of default was proper because Defendant failed to respond to Plaintiff's Complaint [#1]. Before proceeding with a default judgment, however, the Court must consider whether it has jurisdiction, whether the facts establish a legitimate basis for the entry of judgment, and whether the amount of damages can be ascertained. See Grady v. Swisher, No. 11-cv-02880-WYD-KLM, 2014 WL 3562794, at *5 (D. Colo. July 18, 2014). Accordingly, the Court's analysis addresses jurisdiction and whether there is a basis for entry of judgment.
In determining whether a default judgment is warranted, the Court must first consider whether it has jurisdiction over the subject matter and the parties against whom default judgment is sought. Dennis Garberg & Assocs., Inc., v. Pack-Tech Int'l Corp., 115 F.3d 767, 772 (10th Cir. 1997); Williams v. Life Sav. & Loan, 802 F.2d 1200, 1202-03 (10th Cir.1986). The Court must do so in consideration of the well-established rule that "a judgment is void if the court that enters it lacks jurisdiction over either the subject matter of the action or the parties to the action." United States v. 51 Pieces of Real Prop., 17 F.3d 1306, 1309 (10th Cir. 1994).
As noted above, undisputed facts from the Complaint and supporting affidavits are taken as true for purposes of analyzing this motion.
Diversity jurisdiction is governed by 28 U.S.C. § 1332(a), which provides in pertinent part that "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between- (1) citizens of different states; [or] (2) citizens of a State and citizens of a foreign state." The Complaint alleges that Plaintiff is a Colorado corporation with its principal place of business in Colorado and that Defendant is a South Korean corporation, organized under South Korean law, with its principal place of business in South Korea. Compl. [#1] ¶¶ 1-2. The damages sought by Plaintiff for Defendant's alleged breach of the Agreement total $112,640 in value. Id. ¶ 7. Plaintiff also seeks interest, attorneys' fees, and costs. Id. ¶ 13. Thus, the parties are diverse and the amount in controversy exceeds the statutory minimum. Therefore, the Court may exercise subject matter jurisdiction over this dispute pursuant to 28 U.S.C. § 1332(a).
In addition to subject matter jurisdiction, entry of a default judgment in a civil case requires personal jurisdiction over the parties against whom judgment is sought. Bixler v. Foster, 596 F.3d 751, 761 (10th Cir. 2010). The Court must first address the adequacy ofservice in deciding whether it has personal jurisdiction over Defendant. See United States v. Elsberg, No. 08-cv-00522-MSK-KLM, 2010 WL 5177439, at *2 (D. Colo. Aug. 17, 2010). Rule 4(f) of the Federal Rules of Civil Procedure governs service on individuals in a foreign country. Fed. R. Civ. P. 4(f); see Burda Media, Inc. v. Viertel, 417 F.3d 292, 299 (2d Cir. 2005); Marks v. Alfa Group, 615 F.Supp.2d 375, 377 (E.D. Pa. 2009). The rule also applies to foreign corporations not within any judicial district of the United States. Fed. R. Civ. P. 4(h)(2). The rule allows for service of process "by any internationally agreed means that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents." Fed. R. Civ. P. 4(f)(1). The Hague Convention is "intended to provide a simpler way to serve process abroad, to assure that defendants sued in foreign jurisdictions [ ] receive actual and timely notice of suit, and to facilitate proof of service abroad." Volkswagenwerk Aktiengesellschaft v. Schlunk, 466 U.S. 694, 698 (1988). The Convention applies "where there is occasion" to transmit a judicial document for service abroad. Id. at 702 (quoting Article 1 of the Hague Convention). Compliance with the Hague Convention is mandatory in all cases to which it applies. Id. at 705.
Plaintiff alleges that service was properly effected in compliance with the Hague Convention. Motion [#12] at 1. Both the United States and South Korea are signatories to the Hague Convention. Am. River Transp. Co. v. M/V BOW LION, No. Civ.A. 03-1306, Civ.A. 03-1594, Civ.A. 03-1797, Civ.A. 03-1864, Civ.A. 03-2003, 2004 WL 764181, at *2 (E.D. La. Apr. 7, 2004). On November 11, Plaintiff filed a Notice of Service with an attached Certificate of Service issued by the National Court Administration of the Republic of Korea, South Korea's Central Authority. See generally Notice of Service, Ex. 1 [#11-1].The Certificate of Service states that service was effected at a street address of "100-2 Tubingplace" on October 1, 2014. Id. The Central Authority's return of a completed Certificate of Service is "prima facie evidence that the Authority's service . . . was made in compliance with the Convention." Res. Trade Fin., Inc. V. PMI Alloys, LLC, No. 99 Civ. 5156(DAB), 2002 WL 1836818, at *4 (S.D.N.Y. Aug. 12, 2002) (quoting Northrup King Co. v. Compania Productora Semillas Algodoneras Selectas, S.A., 51 F.3d 1383, 1389 (8th Cir. 1995)). Accordingly, the Court is satisfied that Plaintiff has properly served Defendant.
In continuing the analysis regarding personal jurisdiction, "[P]laintiff need only make a prima facie showing [of personal jurisdiction] if the motion [for default judgment] is decided only on the basis of the parties' affidavits and other written materials." Dennis Garberg & Assocs., Inc., 115 F.3d at 773. The Court may only exercise personal jurisdiction over a non-resident defendant if: (1) the long-arm statute of Colorado permits personal jurisdiction in this case; and (2) the exercise of personal jurisdiction in Colorado comports with the Due Process Clause of the United States Constitution. Pro Axess, Inc. v. Orlux Distrib., Inc., 428 F.3d 1270, 1276 (10th Cir. 2005); see also Dudnikov v. Chalk & Vermillion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008). The Supreme Court of Colorado interprets Colorado's long-arm statute "to confer the maximum jurisdiction permitted by the due process clauses of the United States and Colorado constitutions." Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1193 (Colo. 2005). Because a due process analysis of jurisdiction in this case will also satisfy Colorado's long-arm statute, the Court need only consider whether the exercise of personal jurisdiction over Defendant is permitted by the Due Process Clause. SCC Commc'ns v. Anderson, 195 F. Supp. 2d 1257, 1260 (D. Colo. 2002) (); Dudnikov, 514 F.3d at 1070 (...
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