Solar Liberty Energy Systems, Inc. v. Suacci et al, No. 3:2011cv00884 - Document 21 (S.D. Cal. 2011)

Court Description: ORDER granting Defendant's 15 Motion to Set Aside Default and denying 8 Motion for Default Judgment - Clerk. Court grants Plaintiff's Request for Fees and Costs, Plaintiff's declaration due 11/23/11. Response to declaration due 1 2/07/11. Miscellaneous Hearing regarding fees and costs set for 12/21/2011 01:30 PM in Courtroom 12 before Judge Anthony J. Battaglia. Defendant Suacci's responsive pleading to complaint due 12/02/11. Signed by Judge Anthony J. Battaglia on 11/09/11. (cge)

Download PDF

Solar Liberty Energy Systems, Inc. v. Suacci et al Doc. 21 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 Solar Liberty Energy Systems, Inc., 13 Plaintiff, v. 14 15 16 17 MARK SUACCI, an individual; SHANE SHAW, an individual; E-VILLAGE, INC. dba E-VILLAGE SOLAR, Defendants. ) ) ) ) ) ) ) ) ) ) ) Civil No. 11cv884 AJB (RBB) ORDER GRANTING DEFENDANT’S MOTION TO SET ASIDE DEFAULT AND DENYING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT [Doc. Nos. 8 and 15] 18 Plaintiff, Solar Liberty Energy Systems, Inc., filed a Motion for Default Judgment (Doc. No. 8) 19 on August 2, 2011. Defendant Marc Suacci (Suacci) filed a Motion to Set Aside Default (Doc. No. 15) 20 on October 12, 2011. Plaintiff filed an opposition (Doc. No. 18), Defendant Suacci filed a reply (Doc. 21 No. 19), and Plaintiff filed a sur-reply (Doc. No. 20). The Court finds these motion appropriate for 22 submission on the papers without oral argument pursuant to Local Civil Rule 7.1.d.1. Based upon the 23 parties’ moving papers and for the reasons set forth herein, Defendant’s motion to set aside default is 24 hereby GRANTED, and Plaintiff’s motion for default judgment is DENIED. 25 Background 26 Plaintiff Solar Liberty Energy Systems, Inc. engages in the business of selling and installing 27 solar modules. (Doc. No. 18 at 1.) Plaintiff agreed to purchase solar modules from Captain Voltage and 28 E-Village LLC for the total amount of $971,349.00 in early 2006. (Doc. No. 18 at 2.) Plaintiff claims 1 11cv884 Dockets.Justia.com 1 that merchandise totaling $823,696.00 was delivered, with $147,653.00 in merchandise undelivered. Id. 2 Plaintiff also claims to have incurred $2,950.00 for freight charges that Captain Voltage and E-Village 3 LLC agreed to pay but failed to do so. Id. 4 On January 12, 2010, Plaintiff obtained a default judgment in the United States District Court in 5 the Western District of New York in the amount of $201,103.96 against Captain Voltage and E-Village, 6 LLC. Id. The judgment was entered against Captain Voltage and E-Village, LLC on February 24, 7 2010. Id. On March 14, 2011, Plaintiff received an “Exemplification Certificate” from the United 8 States District Court for the Western District of New York for the February 24, 2010 judgment. (Decl. 9 Simenton, ¶ 2; Exhibit 2.) On March 18, 2011, Plaintiff obtained a Clerk’s Certification of Judgment, 10 which was registered in California. Id. On March 24, 2011, Plaintiff obtained a Writ of Execution for 11 $220,631.83, plus daily interest at the rate of $49.59. (Decl. Simenton, ¶ 2; Exhibit 3.) 12 Following entry of judgment, Plaintiff alleges that Captain Voltage became a suspended 13 corporation and that Suacci and Defendant Shane Shaw (Shaw) transferred the assets of Captain Voltage 14 and/or E-Village, LLC to themselves and/or E-Village, Inc. in order to avoid paying the judgment 15 amount. (Compl. ¶ 30.) Plaintiff claims that Suacci and Shaw are or were the owners of Captain 16 Voltage and E-Village, LLC. (Compl. ¶ 31.) Plaintiff also contends that E-Village, Inc. agreed to be 17 liable for the amount due under agreement by Captain Voltage and E-Village LLC, through its owners, 18 Suacci and Shaw. (Compl. ¶ 32.) Plaintiff alleges Suacci and Shaw have acknowledged and agreed in 19 writing that Plaintiff is owed the judgment amount of $201,103.96. Id. Plaintiff claims that Captain 20 Voltage and E-Village Solar LLC are the Defendants’ agent and alter ego, yet Suacci and Shaw have 21 held themselves personally liable for the debt. Id. 22 Plaintiff alleges that Shaw, E-Village Inc., and Suacci could not be added to the 2010 New York 23 judgment in California, because it was obtained by default. (Doc. No. 18 at 2.) Plaintiff thus retained 24 local counsel and filed the instant Complaint against Shaw, E-Village Inc., and Suacci on April 26, 25 2011. (Doc. No. 18 at 3.) 26 Procedural History 27 On April 26, 2011, the Complaint was filed and a Summons and Complaint issued. (Decl. 28 Simenton, ¶ 9; Doc. No. 1, 2.) On June 14, 2011, Plaintiff alleges that the Summons and a copy of the 2 11cv884 1 Complaint were properly and timely served upon Suacci. (Decl. Simenton, ¶ 9; Doc. 3, 14.) Accord- 2 ingly, Suacci would have been required to file a responsive pleading on or before July 5, 2011, which 3 was twenty-one (21) days after service of the Summons and Complaint, pursuant to FRCP 12(a)(1)(A). 4 (Decl. Simenton, ¶ 9.) 5 Suacci did not file a responsive pleading, appear, or defend the suit in any way. (Decl. 6 Simenton, ¶ 9.) As a result, on July 18, 2011, the Clerk entered default against Suacci for failing to 7 answer the Complaint. (Decl. Simenton, ¶ 9; Doc. No. 7.) On August 2, 2011, Plaintiff filed a Motion 8 for Default Judgment against Suacci in the amount of $201,103.96, plus interest accruing at $49.59 per 9 day from February 24, 2010. Id. On October 12, 2011, Suacci filed a Motion to Set Aside Default. 10 (Doc. 15-1.) This Court had initially set the hearing on the motion for entry of default for October 14, 11 2011, but continued it to November 10, 2011. Legal Standard 12 13 14 A. Motion to Set Aside Default Federal Rule of Civil Procedure 55(c) provides that a court may set aside the entry of default 15 “for good cause shown.” Factors to be considered when deciding whether to set aside an entry of default 16 judgment include: (1) whether the plaintiff would be prejudiced by a set-aside; (2) whether the 17 defendant can present a meritorious defense to the claim; and (3) whether the defendant’s “culpable 18 conduct” led to the default. Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984); American Ass’n of 19 Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1108 (9th Cir. 2000). 20 B. Motion for Entry of Default Judgment 21 Rule 55(a) of the Federal Rules of Civil Procedure requires the Clerk of the Court to enter 22 default “when a party against whom a judgment for affirmative relief is sought has failed to plead or 23 otherwise defend, and that failure is shown by affidavit or otherwise.” Fed. R. Civ. P. 55(a). Rule 24 55(b)(2) provides that the Court may grant a default judgment after default has been entered by the 25 Clerk. Fed. R. Civ. P. 55(b)(2). The Ninth Circuit has articulated the following factors for courts to 26 consider in determining whether default judgment should be granted: (1) the substantive merit of the 27 plaintiff's claims; (2) the sufficiency of the complaint; (3) the amount of money at stake; (4) the 28 possibility of prejudice to the plaintiff if relief is denied; (5) the possibility of disputes to any material 3 11cv884 1 facts in the case; (6) whether default resulted from excusable neglect; and (7) the public policy favoring 2 resolutions of cases on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 3 “The general rule of law is that upon default the factual allegations of the complaint, except 4 those relating to the amount of damages, will be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 5 F.2d 915, 917-18 (9th Cir. 1987) (quotation omitted). “Plaintiff is required to prove all damages sought 6 in the complaint. In addition, [a] judgment by default shall not be different in kind [or] exceed in amount 7 that prayed for in the [complaint]. In determining damages, a court can rely on the declarations 8 submitted by the plaintiff or order a full evidentiary hearing . . . . If proximate cause is properly alleged 9 in the complaint, it is admitted upon default. Injury is established and plaintiff need prove only that the 10 compensation sought relates to the damages that naturally flow from the injuries pled.” Phillip Morris 11 USA, Inc. v. Castworld Prods., 219 F.R.D. 494, 498 (C.D. Cal. 2003) (citations omitted). 12 A default judgment on fewer than all defendants must comply with Federal Rule of Civil 13 Procedure 54(b), which provides: “[T]he court may direct entry of a final judgment as to one or more, 14 but fewer than all, claims or parties only if the court expressly determines that there is no just reason for 15 delay. Otherwise, any order . . . that adjudicates fewer than . . . all the parties does not end the action as 16 to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicat- 17 ing all the claims and all the parties’ rights and liabilities.” Fed. R. Civ. P. 54(b) (emphasis added). 18 19 Discussion A. Motion to Set Aside Default 20 1. Whether the Plaintiff Would Be Prejudiced by a Set-aside. 21 To be prejudicial, “the standard is whether [plaintiff’s] ability to pursue his claim will be 22 hindered.” Falk, 739 F.2d at 463; TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 701 (9th Cir. 23 2001); see also Thompson v. American Home Assur. Co., 95 F.3d 429, 433-34 (6th Cir. 1996) (stating 24 that “the delay must result in tangible harm such as loss of evidence, increased difficulties of discovery, 25 or greater opportunity for fraud or collusion”). 26 Here, the Court finds that setting aside the default will not be prejudicial to the Plaintiff. 27 Although Plaintiff has spent a significant amount of time and resources since filing the Complaint, no 28 tangible harm arises by a set-aside. The delay will not result in the loss of evidence or increased 4 11cv884 1 difficulties of discovery. Furthermore, Plaintiff’s ability to obtain relief still exists through litigation. 2 Thus, the Court finds that Plaintiff would not be prejudiced by a set aside. 3 2. Whether the Defendant Can Present a Meritorious Defense to the Claim. 4 “Where timely relief is sought from a default and the movant has a meritorious defense, doubt, if 5 any, should be resolved in favor of the motion to set aside the default so that cases may be decided on 6 their merits.” O’Connor v. State of Nev., 27 F.3d 357, 364 (9th Cir. 1994) (citation omitted). To justify 7 vacating the default judgment, a plaintiff must present specific facts that would constitute a defense. 8 Franchise Holding II, LLC. v. Huntington Restaurants Group, Inc., 375 F.3d 922, 926 (9th Cir. 2004). 9 The question whether the factual allegation is true is subject to later litigation and not to be determined 10 by the court when it decides the motion to set aside the default. United States v. Signed Personal Check 11 No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1094 (9th Cir. 2010). 12 Here, Suacci alleges that he did not own or control Captain Voltage at the time of the alleged 13 wrongdoing. (Doc. No. 15-1 at 3; Doc. No. 19 at 2.) Specifically, Suacci alleges that control of the 14 company and bank accounts was transferred to Defendant Shaw in March 2006. (Suacci Decl., ¶¶ 13, 15 17.) Plaintiff provides evidence refuting the transfer by showing invoices and emails between Plaintiff 16 and Captain Voltage that pre-date the alleged sale of the company. (Doc. No. 18 at 12; Ex. 4.) The 17 evidence that Plaintiff provides, despite Suacci using the title “C.O.O.” in an email signature, does not 18 prove whether Suacci in fact still obtained ownership of Captain Voltage at the time of the alleged 19 wrongdoing. Suacci declares that although officially transferring his shares in Captain Voltage to 20 E-Village, LLC in February 2007, he had foregone control in March 2006. (Doc. No. 19 at 2; Suacci 21 Decl., ¶¶ 13, 17.) Furthermore, Plaintiff provides evidence that Suacci was listed as an owner of 22 “E-Village Solar” on an online networking website. (Doc. 18-5 at 24.) Suacci, however, claims that he 23 “never had an ownership interest” in E-Village, LLC, a co-judgment debtor, to which shares of Captain 24 Voltage were allegedly transferred. (Doc. No. 19 at 3; Suacci Decl., ¶¶ 18.) Suacci’s factual statements 25 that he had forgone ownership of Captain Voltage before the alleged wrongdoing and that he did not 26 have ownership interest in E-Village, LLC, if true, constitute a meritorious defense to Plaintiff’s claims. 27 3. Whether the Defendant’s “Culpable Conduct” Led to the Default. 28 5 11cv884 1 A party’s conduct is culpable if he has received actual or constructive notice of the filing of the 2 action and failed to answer the complaint. In re Hammer, 940 F.2d 524, 526 (9th Cir. 1991); Gregorian 3 v. Izvestia, 871 F.2d 1515, 1523 (9th Cir. 1989); Pena v. Seguros La Comercial, S.A., 770 F.2d 81, 815 4 (9th Cir.1985). On a motion to set aside a default judgment, the movant’s factual statement supporting 5 his defense will be deemed to be true. Falk, 739 F.2d at 463; In re Stone, 588 F.2d 1316, 1319 (10th Cir. 6 1978). 7 Here, Suacci alleges that he did not receive actual or constructive notice of the filing of the 8 action. (Doc. No. 15-1 at 6; Doc. No. 19 at 3-4.) On May 6, 2011, Plaintiff attempted to serve Suacci 9 through its retained process server, E.S.Q. Services, Inc. (“ESQ”) at what was believed to be his 10 residential address of 3051 Avenida De Lamar, Spring Valley, CA 91977. (Decl. Simenton, Suacci, ¶ 5; 11 Ex. 5.) Suacci, however, alleges that he moved from 3051 Avenida De Lamar to his current residence, 12 3043 Avenida De Lamar, Spring Valley, CA 91978, in 2006. (Doc. No. 15-1 at 2; Suacci Decl. ¶ 1.) 13 On May 12, 2011, Plaintiff also attempted service at the 3043 Avenida De Lamar address but ESQ noted 14 that the “address [was] being remodeled, nobody living there for the time being.” (Doc. No. 20-2; Ex. 15 8.) Plaintiff then attempted and failed to provide personal service at an address believed to be Suacci’s 16 usual place of business at 7980 Ronson Road, San Diego, CA 92111 on June 10, 2011. (Doc. 18 at 3.) 17 Finally, service was properly completed at Suacci’s self-admitted usual place of business, 5457 Ruffin 18 Road, San Diego, CA 92123, by substituted service upon the person apparently in charge, “Nicole S.” 19 (Doc. No. 14; Doc. No. 18 at 7.) Plaintiff thereafter mailed a copy of the Summons and Complaint to 20 the same address. (Doc. No. 14; Doc. No. 18 at 7.) 21 Suacci claims that he never received the Summons and Complaint said to have been served at 22 5457 Ruffin Road. (Doc. No. 19 at 3; Suacci Decl. ¶ 4.) Moreover, he also alleges that he first learned 23 of the lawsuit in late August 2011 through his aunt “who happened to come across the lawsuit while 24 perusing the internet” (Doc. No. 19 at 3; Suacci Decl. ¶ 6.); he did not evade service (Doc. No. 19 at 4; 25 Suacci Decl. ¶ 8.); and he did not receive the Summons and Complaint via delivery at his office, home, 26 or otherwise, and he first saw the Complaint after he retained counsel and counsel retrieved a copy from 27 the Court’s website. (Doc. No. 19 at 3; Suacci Decl. ¶ 9.) 28 6 11cv884 1 Taking Suacci’s factual statements as true on its face, the Court finds that Suacci did not engage 2 in “culpable conduct” leading to the default. Suacci alleges that he did not receive actual notice of the 3 lawsuit. (Suacci Decl., ¶¶ 4, 5, 7, and 9.) Furthermore, Plaintiff provides no evidence showing that 4 Suacci attempted to evade service or acted in bad faith. Plaintiff’s accusations that Suacci knew of the 5 Summons and Complaint and chose to ignore it are devoid of factual support. Thus, no culpable 6 conduct is found. 7 4. Whether Service upon Suacci of the Summons and Complaint Were Proper. 8 Rule 4(m) of the Federal Rules of Civil Procedure requires service of process of the summons 9 and complaint on the Defendants within 120 days of filing the complaint. Fed. R. Civ. P. 4(m). If a 10 plaintiff fails to serve the summons and complaint within 120 days, the court may dismiss the action 11 without prejudice after giving notice to the plaintiff. Id. 12 Here, Plaintiff provided sufficient evidence to show proper service of the Summons and 13 Complaint. Plaintiff attempted to personally serve Suacci at three different locations. (Doc. No. 18 at 14 3-5.) One such location, 3043 Avenida De Lamar, was correctly identified as Suacci’s home but vacant 15 at the time of attempted service. (Doc. No. 20-2; Ex. 8.) On June 14, 2011, Plaintiff successfully 16 completed substituted service upon “Nicole S.,” the person apparently in charge at Suacci’s self- 17 admitted usual place of business located at 5457 Ruffin Road, San Diego, CA 92111. (Doc. No. 14; 18 Doc. No. 18 at 7.) On October 6, 2011, an Amended Proof of Service was filed with the Court because 19 ESQ had inadvertently listed the service address as 7980 Ronson Road instead of the 5457 Ruffin Road 20 address where it had actually completed substituted service (and where it had mail-served the Summons 21 and Complaint.) (Doc. No. 14; Doc. No. 20.) Thus, service upon Suacci was proper. 22 5. Conditions for the Relief Requested. 23 Reasonable conditions may be imposed in granting a motion to vacate a default judgment. 24 Nilsson, Robbins,et al. v. Louisiana Hydrolec, 854 F.2d 1538, 1546 (9th Cir. 1988). The condition most 25 commonly imposed is that the defendant reimburse the plaintiff for costs incurred because of the default. 26 Id. In some cases, it may also be appropriate for the defendant to be required to post bond to secure the 27 amount of the default judgment pending a trial on the merits. Id. 28 7 11cv884 1 Here, Plaintiff seeks attorney’s fees and costs relating to the costs to locate, to serve, and to 2 obtain the default against Suacci. Plaintiff also seeks a bond in the amount of $20,000.00 as a condition 3 to set aside the default. The Court finds that only attorney’s fees and costs associated with obtaining the 4 default are appropriate. Thus, Plaintiff must file a declaration of fees and costs for the Court to review 5 showing the billing, dates, amounts of time and services, as well as the hourly rates and the basis for 6 such rates and costs. 7 Conclusion 8 For the reasons set forth above, the Court finds Suacci has demonstrated good cause to set aside 9 the default because Plaintiff will not be prejudiced, Suacci presented a meritorious defense to the claim, 10 and no culpable conduct was found. Suacci’s Motion to Set Aside Default (Doc. No. 15) is hereby 11 GRANTED, and Plaintiff’s Motion for Default Judgment (Doc. No. 8) is hereby DENIED. It is 12 therefore ORDERED that the default entered against Suacci on July 18, 2011 be set aside. 13 The Court finds that service of Suacci was proper and completed upon Suacci on June 14, 2011. 14 As a condition for the relief requested, the Court hereby GRANTS Plaintiff’s request for fees and costs 15 incurred obtaining the default and ORDERS Plaintiff to file a declaration in support thereof on or before 16 November 23, 2011. Defendant Suacci’s response to Plaintiff’s declaration of fees and costs is due on 17 or before December 7, 2011. A hearing on the amount of fees and costs is set for December 21, 2011 at 18 1:30 p.m. in Courtroom 12 before Judge Battaglia. 19 20 21 Since Defendant Suacci has not yet filed a responsive pleading to the Plaintiff’s Complaint, he must do so on or before December 2, 2011. IT IS SO ORDERED. 22 23 DATED: November 9, 2011 24 Hon. Anthony J. Battaglia U.S. District Judge 25 26 27 28 S:\Battaglia\orders\11cv884.Solar Order.wpd 8 11cv884

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.