Rci TM Corp. v. R&R Venture Grp., LLC, Case No. 6:13-cv-945-Orl-22DAB
| Decision Date | 27 January 2015 |
| Docket Number | Case No. 6:13-cv-945-Orl-22DAB |
| Parties | RCI TM CORP. and RCI, LLC, Plaintiff, v. R&R VENTURE GROUP, LLC, POINT RENTAL LIQUIDATORS, LLC, BRANDON J. COOKE and EXCESS PROPERTY SOLUTIONS, LLC, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This cause came on for consideration without oral argument on the following motion filed herein:
Plaintiffs, RCI TM Corp. and RCI, LLC, (collectively "RCI") filed a Complaint against several Defendants for improper use of RCI's trademarks. Doc. 1. RCI now moves for a final default judgment pursuant to Federal Rule of Civil Procedure 55(a) against four of the Defendants: R&R Venture Group, LLC ("R&R"), Point Rental Liquidators, LLC (PRL), Excess Property Solutions,LLC ("EPS"), Brandon J. Cooke ("Cooke"), (collectively the "Defendants")1. RCI previously obtained entries of default against Defendants, when they failed to respond to the Complaint and withdrew an answer. RCI now moves for final default judgment against the Defendants seeking a permanent injunction and an award of attorney's fees. Because the Court finds final default judgment to be proper, it is respectfully RECOMMENDED that the Motion for Final Default Judgment be GRANTED in part and DENIED as to attorney's fees.
On June 18, 2013, RCI filed a Complaint against Defendants for trademark infringement, unfair competition, and deceptive and unfair trade practices in using RCI's trademarks in selling Defendants' timeshare products. Doc. 1. Defendants Brandon Cooke and EPS were served with the Complaint on July 24, 2013; Defendant PRL was served on September 3, 2013. Docs. 29, 30, 45. All three of these Defendants failed to respond to the Complaint. RCI moved for entry of defaults against EPS, Cooke, and PRL, which the Clerk entered against EPS and Cooke on September 23, 2013 and against PRL on October 1, 2013. Docs. 44, 51.
The fourth Defendant, R&R, was served with the Complaint on June 24, 2013, and filed its Answer and Affirmative Defenses on August 14, 2013. Doc. 8, 33. On September 4, 2014, the Court struck the pleadings of Defendant, R&R, and entered a default as a sanction pursuant to Federal Rule of Civil Procedure 37 for R&R's violation of the Court's July 29, 2014 Order compelling the appearance of R&R's Rule 30(b)(6) Corporate Representative at deposition. The Court had ordered R&R to designate a Rule 30(b)(6) corporate representative by August 6, 2014 and to make the representative available to be deposed by August 20, 2014, cautioning R&R that it would "be subjectto sanctions, including the possibility of entry of default if the corporate representative fails to appear." Doc. 64. Although R&R's counsel timely notified RCI's counsel by email of the corporate representative's designation and availability to appear for the deposition, the representative failed to appear for the deposition. Doc. 70.
When R&R's counsel subsequently moved to withdraw, the Court entered an Order denying the motion, but advising R&R that "the continued failure to cooperate with counsel may cause the company to suffer the consequences of compromised legal representation, and may result in a having a default judgment entered against the company." Doc. 69. RCI moved for sanctions on August 20, 2014 (Doc. 70); R&R conceded in its response that it had ceased operating as a business as of August 2014 and it was "unable, due to lack of funds, to cause its corporate representative to appear for a deposition on August 19, 2014, and will not be able to afford to attend mediation of this matter, or to continue to pay counsel to defend it in this matter." Doc. 74 ¶ 5. "For that reason, and in consideration of the fact that R&R Venture Group is no longer operating, and has no appreciable assets, Defendant hereby agrees to a withdrawal of its answer in this matter and that the Clerk of the Court may enter a default against R&R Venture Group, LLC" Doc. 74 ¶ 6. On September 4, 2014 the Court granted Plaintiff's Motion for Sanctions, striking R&R's pleadings and directing the Clerk to enter default against R&R. Doc. 75.
On October 3, 2014, RCI filed its Motion for Default Judgment against the remaining four Defendants2. Doc. 79. On October 6, 2014, Chief Judge Conway ordered RCI to mail copies of the Motion and the supporting documentation to the defaulted Defendants at the address where process was served and then file a certificate with the Court; RCI complied on October 7, 2014. Doc. 80, 81.
RCI seeks a final default judgment on Counts I to IV of the Complaint - federal trademark infringement (Count I), federal unfair competition (Count II), common law unfair competition (Count III), and Florida Deceptive and Unfair Trade Practices (Count IV) - and abandoning its claim for relief for Count V, tortious interference. Before the court may enter a final default judgment, the clerk must enter a default when the "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." Fed. R. Civ. P. 55(a); see also Solaroll Shade & Shutter Corp. v. Bio-Energy Sys., 803 F.2d 1130, 1134 (11th Cir. 1986) (). Notwithstanding the entry of default by the clerk, "a defendant's default does not in itself warrant the court in entering a default judgment." Nishimatsu Constr. Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). Therefore, the court must evaluate whether it is proper to enter a default judgment. "A 'defendant, by his default, admits the plaintiff's well-pleaded allegations of fact, and is barred from contesting on appeal the facts thus established.'" Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir. 2009) (citations omitted). RCI obtained defaults against three of the four Defendants when they failed to respond to the Complaint, and against the fourth when it withdrew its answer.
The Court must confirm that the defaulting Defendants were properly served under the Federal Rules of Civil Procedure. Federal Rule of Civil Procedure 4(e)(2)(B) allows service on an individual by leaving a copy of the summons and complaint at the defendant's dwelling or usual place of abode with someone of suitable age and discretion who resides there. Fed. R. Civ. P. 4(e)(2)(B). Alternatively, under Rule 4(e), service is accomplished by following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made or by delivering a copy to an agent authorized by appointment or by law toreceive service of process. Fed. R. Civ. Pro. 4 (e). Defendant Brandon Cooke, residing in Morris, Illinois, was personally served with the Complaint, on July 24, 2013. Doc. 29.
Under Federal Rule of Civil Procedure 4(h)(1), service on an unincorporated association such as an LLC may be effected pursuant to the law of the state in which the organization is located or by delivering summons to an officer, managing or general agent or one authorized by statute to receive service. RCI served both Excess Property Solutions, LLC, an Illinois limited liability company3, and Point Rental Liquidators, LLC, a dissolved Nevada limited liability company, in Illinois4. The Illinois Limited Liability Company Act ("ILLCA") sets forth the requirements for service on a limited liability company. 805 Ill. Comp. Stat. Ann. 180/1-50 (requirements for service). For a foreign limited liability company, such as PRL, organized in a state other than Illinois - i.e., Nevada - assuming it was doing business in Illinois, process as to the company "shall be served either upon the registered agent appointed by the limited liability company or upon the Secretary of State as provided in this Section." Id. 180/1-50(a); see also id. 180/45-55 (providing that rules for service apply to foreign limited liability companies). See Chicago Reg'l Council of Carpenters v. Joseph J. Sciamanna, Inc., No. 08 C 4636, slip op. at 11, 2009 WL 1543892, at *5 (N.D.Ill. June 3, 2009). ("Under Illinois law, process on a limited liability company must be served upon the company's registered agent or upon the Illinois Secretary of State if the company does not have a registered agent in the State."); cf. Arbitron, Inc. v. Marathon Media, LLC, No. 07 Civ.2099(DC), 2008 WL 892366, at *4 (S.D.N.Y. Apr.1, 2008) ().
Defendant Excess Property Solutions, an Illinois limited liability company, was served with the Complaint on July 24, 2013 via service on the registered agent, Shayne Lowe. Doc. 30. Brandon Cooke is the managing member of PRL, which is a dissolved Nevada limited liability company (see Doc. 1 ¶ 6); on September 3, 2013, service on Defendant PRL, was made on a putative "authorized employee," Courtney Menal, at 1841 Anne Drive, Apt. D, Morris, Illinois. Doc. 45. All three of these Defendants failed to respond to the Complaint. RCI moved for entry of defaults against EPS and Cooke on September 23, 2013 and against PRL on October 1, 2013, and the Clerk entered defaults against them immediately. Docs. 44, 51.
Service on Defendant Excess Property Solutions, was done via service on the registered agent, Shayne Lowe, and complies with the Illinois statute. Doc. 30; Doc. 78-8 at 65. However, at first...
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