Tuckerbrook Alternative Investments v. Banerjee

• Decision Date: 30 November 2010
• Docket Number: Civil Action No. 09–11672–WGY.
• Citation: 754 F.Supp.2d 177
• Parties: TUCKERBROOK ALTERNATIVE INVESTMENTS, LP, Plaintiff,v.Sumanta BANERJEE, Defendant.
• Court: U.S. District Court — District of Massachusetts

754 F.Supp.2d 177

TUCKERBROOK ALTERNATIVE INVESTMENTS, LP, Plaintiff,

v.Sumanta BANERJEE, Defendant.

Civil Action No. 09–11672–WGY.

United States District Court, D. Massachusetts.

Nov. 30, 2010.

Sean T. Carnathan, O'Connor, Carnathan and Mack LLC, Burlington, MA, for Plaintiff.Mitchell J. Matorin, Matorin Law Office LLC, Needham, MA, for Defendant.

MEMORANDUM AND ORDER

YOUNG, District Judge.I. INTRODUCTION

Tuckerbrook Alternative Investments (“Tuckerbrook”) filed a lawsuit against Sumanta Banerjee (“Banerjee”) alleging claims for breach of a settlement agreement previously entered into in a 2008 lawsuit between the two parties. The complicated and laborious procedural posture of this case, explored below, places this Court in the unique position of determining whether to vacate the second default judgment entered against Banerjee for failing to respond to the complaint.

II. BACKGROUND

Tuckerbrook is a registered investment advisor regulated by the Securities and Exchange Commission. Compl. ¶ 6, ECF No. 1. In May 2006, Tuckerbrook hired Banerjee to be a portfolio manager for certain funds. Id. ¶ 11. Further factual background is unnecessary, as this case hinges on issues of procedure.

Tuckerbrook filed a verified complaint on October 6, 2009, in the United States District Court for the District of Massachusetts, asserting claims against Banerjee for breach of a settlement agreement reached as a resolution of a prior action in this Court, Docket No. 08–10636–PBS (“ Tuckerbrook v. Banerjee I ”). On February 23, 2010, the Court entered a default, ECF No. 8, against Banerjee for failing to respond to the complaint. The next day Tuckerbrook filed a motion for default judgment for sum certain, ECF No. 10. On March 9, 2010, this Court found moot Tuckerbrook's motion for default judgment for sum certain, as Banerjee had finally surfaced. On March 5, 2010, Banerjee, by way of an email to the Court, requested the default be set aside. In his affidavit, Banerjee claims that he had no knowledge of the pending suit because the complaint and summons had never been served upon him. Banerjee Aff. Opp. Default ¶ 3, ECF No. 12. The Court granted the motion to set aside the default because Tuckerbrook's affidavit of service revealed that it was Banerjee's father, the late Mr. S.K. Banerjee, who had inadvertently been served. Id. at 8. On December 1, upon realizing the error, Banerjee's father had returned the unopened complaint and summons to the service processor, Brutalia Associates. Id. Thus, service was not proper.

After Tuckerbrook's motion for default judgment for sum certain was declared moot, it filed a motion to deem service of process effectuated, ECF No. 13, based on the prior (improper) service as well as emailed copies of the summons and complaint sent to the email address Banerjee had used to communicate with the Court. See Carnathan Aff., Ex. A, ECF No. 14–1. Based on these representations, this Court allowed Tuckerbrook's motion and required that Banerjee reply within 45 days. Banerjee responded by again emailing the Court to explain that he had not yet received the complaint. See Banerjee Letter, ECF No. 15. On April 23, 2010, an order was entered directing Tuckerbrook to mail yet another copy of the complaint either by certified mail or another equally verifiable delivery service. This order also stated that the Court had acquired personal jurisdiction over Banerjee on account of his repeated email correspondence with the Court.

On April 30, 2010, Tuckerbrook filed an affidavit of service, ECF No. 16, which consisted of a letter from the customer service department of Mercury Business Services (“Mercury”). The letter explained that service was attempted through the company DHL, but was refused by Banerjee on April 29. Carnathan Aff., ECF No. 16. The letter also mentions a further attempt to proffer service—a phone call on April 30 to Banerjee urging him to accept the shipment as it contained court-ordered documents—that was also refused. Id. Banerjee responded with another letter to the Court inquiring as to what personal jurisdiction entailed. See Banerjee Letter, ECF No. 17. This letter also explained that the attempted delivery was not refused by Banerjee himself, but rather by his illiterate house servants. Id.

On June 1, 2010, the Court made the second entry of default against Banerjee, ECF No. 20. On June 3, Tuckerbrook filed a motion for default judgment for sum certain, ECF No. 22. Another email, ECF No. 24, was received from Banerjee on June 8, which was treated as a motion in opposition to the default and a motion to extend time, both of which were promptly denied. The Court allowed Tuckerbrook's motion for default judgment for sum certain on June 30.

Over a month later, on August 12, Banerjee filed several motions including a motion to dismiss and a motion to vacate the default judgment, ECF Nos. 27 and 29, respectively. The motion to vacate asserted several grounds whereby the default judgment must be vacated under Rule 60(b) of the Federal Rules of Civil Procedure. Tuckerbrook responded with a motion in opposition six days later, ECF No. 31. At that point, Banerjee, previously representing himself pro se, obtained counsel who filed memoranda in support of his motion to vacate the default judgment, ECF No. 34. Tuckerbrook filed a reply to the supplemental memoranda on October 21. The Court must now decide whether once again to allow Banerjee's motion to vacate the default judgment.

III. ANALYSISA. Legal Standard

Once a default judgment has been entered, relief must be sought under Federal Rule of Civil Procedure 60(b). See Fed.R.Civ.P. 55(c). The district court has sound discretion to allow or deny a motion to set aside a default judgment. United States v. One Urban Lot, Etc., 865 F.2d 427, 429 (1st Cir.1989). Generally, legal policy prefers case resolution on the merits. Am. Metals Serv. Exp. Co. v. Ahrens Aircraft, Inc., 666 F.2d 718, 720 (1st Cir.1989); see also 11 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2857 (2d ed. 2010) (hereinafter “Wright & Miller”). Moreover, there is greater cause for liberality in reopening a case that has never been considered on the merits. Id.

While a Rule 60(b) motion ultimately is at the discretion of the court, the remedial nature of the rule tends toward the exercise of such discretion. Id. If the movant can demonstrate that he is seeking timely relief and can assert a meritorious defense, judgment should be set aside. Id.; see Schwab v. Bullock's, Inc., 508 F.2d 353, 355 (9th Cir.1974) (noting that discretion is limited by the remedial nature of the governing rule, the general disfavor of default judgments, and the preference that doubt be resolved in favor of setting aside judgment, so that cases may be resolved on the merits). Additionally, the First Circuit has identified three factors to consider in determining whether to set aside a default judgment: (1) whether the default was willful; (2) whether the defendant has a meritorious defense; and (3) whether the opposing party would be prejudiced. Coon v. Grenier, 867 F.2d 73, 76 (1st Cir.1989). The Coon court cautioned that these need not be the only considerations, but rather that they serve as general guidelines. Id.

B. Setting Aside the Default Judgment

Banerjee, both in his pro se motion to vacate and his counsel's supporting memoranda, asserts a variety of legal theories as to why this default judgment must be vacated. The Court need not entertain each theory, for one alone leads to the conclusion that the judgment should be vacated. Banerjee contends the Court erred as matter of law in ruling that it had acquired personal jurisdiction over the defendant, thus rendering void the default judgment. Mem. Supp. Mot. Vacate 6–9, ECF No. 34. The lack of personal jurisdiction, according to Banerjee, arises from Tuckerbrook's failure properly to serve him under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361 [hereinafter “Hague Service Convention”]. Because proper service is a prerequisite to the exercise of personal jurisdiction, lack thereof will render any subsequent ruling void.

Proper service under Rule 4 of the Federal Rules of Civil Procedure is required for a court to obtain personal jurisdiction over a defendant. Echevarria–Gonzalez v. Gonzalez–Chapel, 849 F.2d 24, 28 (1st Cir.1988). When effectuating service on a foreign defendant, service consistent with any internationally agreed means reasonably calculated to give notice is acceptable, including service authorized by the Hague Service Convention. Fed.R.Civ.P. 4(f)(1). When a foreign defendant resides in a signatory country, service upon that defendant must be made in accordance with the treaty. See Tabb v. Journey Freight Internations, 584 F.Supp.2d 334, 340 (D.Mass.2008) (Ponsor, J.) (holding that to make effective service in a country that has joined the Hague [Service] Convention, a plaintiff must follow the provisions of the treaty) (citations omitted); see also Marcantonio v. Primorsk Shipping Corp., 206 F.Supp.2d 54, 57 (D.Mass.2002) (Lasker, J.) (“Rule 4(f)(1) requires the use of the provisions outlined by the Hague [Service] Convention when it is in effect.”).

The defendant, Banerjee, is a resident of India. India has been a signatory to the Hague Service Convention since November 23, 2006. See The World Org. for Cross–Border Co-operation in Civil and Commercial Matters, Hague Conference Status Table, http:// hcch. e- vision. nl/ index_ en. php? act= conventions. status& cid= 17 (last updated Oct. 18, 2010). Article 10 of the Hague Service Convention provides that, notwithstanding any reservations, the Convention will not interfere with the freedom to send judicial documents directly to persons abroad through postal channels. Hague Service Convention, art. 10. Pursuant to Article 21...