United States District Court, E.D. Virginia, Alexandria Division
REPORT AND RECOMMENDATION
D. Davis United States Magistrate Judge
matter is before the Court on Plaintiffs Motion for Default
Judgment against Defendant Celestine Obi
("Defendant") pursuant to Federal Rule of Civil
Procedure 55(b)(2). (Dkt. No. 12.) After neither Defendant
nor a licensed attorney for Defendant appeared at the hearing
on August 26, 2016, the undersigned Magistrate Judge took
this matter under advisement to issue this Report and
Recommendation. Upon consideration of the Complaint, the
Motion for Entry of Default Judgment, and the supporting
documents, the undersigned Magistrate Judge makes the
following findings and recommends that Plaintiffs Motion be
360 Painting, LLC ("Plaintiff) filed the Complaint on
August 20, 2015, for breach of contract seeking damages and
injunctive relief. Plaintiff has moved for default judgment
against Defendant and seeks damages in the amount of $265,
000; an injunction permanently enjoining Defendant from
utilizing Plaintiffs trade secrets or holding itself out to
the public as a franchise of Plaintiff 360 Painting; and an
Order requiring Defendant to file with the Court a report
under oath setting forth in detail the manner in which
Defendant has complied with the injunction, including
returning Plaintiffs trade secrets. (Dkt. No. 12 at 3.)
Jurisdiction and Venue
of the Federal Rules of Civil Procedure provides for the
entry of default judgment when "a party against whom a
judgment for affirmative relief is sought has failed to plead
or otherwise defend." Fed.R.Civ.P. 55(a). The court must
have both subject matter and personal jurisdiction over a
defaulting party before it can render a default judgment.
Court has subject matter jurisdiction over the claims
pursuant to 28 U.S.C. § 1332(a)(1) because diversity of
citizenship exists between Plaintiff and Defendant and the
amount in controversy exceeds $75, 000. The Complaint alleges
damages in the amount of $265, 000 exclusive of interest and
fees, thus meeting the amount in controversy requirement.
(Compl. ¶ 3.) As to citizenship, Plaintiff is a Virginia
corporation, wholly owned and Operated by Paul E. Flick,
whose principal residence is in Virginia; additionally, 360
Painting, LLC's principal place of business is also in
Virginia. (Compl. ¶ 1.) Defendant Celestine Obi is an
individual whose principal residence is in Florida. (Compl.
¶ 1.) Because Plaintiff and Defendant have complete
diversity of citizenship and the amount in controversy
exceeds $75, 000 (Compl. ¶ 3), this Court has subject
matter jurisdiction over this case.
Court has personal jurisdiction over Defendant pursuant to
the forum selection clause in the contract. (Compl.
¶¶ 3, 29.) Forum selection clauses are prima
facie valid. Insight Holding Grp., LLC v. Sitnasuak
Native Corp., 685 F.Supp.2d 582, 587 (E.D. Va. 2010)
(citing Paul Bus. Sys., Inc. v. Canon U.S.A., Inc.,
397 S.E.2d 804, 807 (Va. 1990) (holding that a forum
selection clause should be enforced unless the objecting
party establishes otherwise)). A valid forum selection clause
"may act as a waiver to objections to personal
jurisdiction." Consulting Eng'rs Corp. v.
Geometric Ltd., 561 F.3d 273, 281 n.ll (4th Cir. 2009)
(citing Nat'l Equip. Rental, Ltd. v. Szukhent,
375 U.S. 311, 315-16 (1964)). Defendant has not contested the
validity of the forum selection clause. Therefore, the forum
selection clause is valid, and this Court has personal
jurisdiction over Defendant.
is proper in this District pursuant to 28 U.S.C. §
1391(b)(2) because a substantial part of the omissions giving
rise to the claims occurred in this judicial district.
(Compl. ¶ 3.) Furthermore, forum selection clauses are
generally enforced as to selection of venue. Albemarle
Corp. v. AstraZeneca UK Ltd., 628 F.3d 643, 649 (4th
Cir. 2010). Defendant has consented to this venue by prior
agreement and has agreed to be subject to the jurisdiction of
this Court. (Compl. ¶¶ 3, 29.) Venue and
jurisdiction are therefore proper in this Court.
Service of Process
court to have personal jurisdiction over a defendant for the
purpose of entering default judgment, the plaintiff must
properly serve the defendant under federal or state law.
Miss. Publ'g Corp. v. Murphree, 326 U.S. 438,
444-45 (1946) (stating that "service of summons is the
procedure by which a court having venue and jurisdiction of
the subject matter of the suit asserts jurisdiction over the
person of the party served"); Cent. Operating Co. v.
Util. Workers of Am., 491 F.2d 245, 249-51 (4th Cir.
1974) (reversing the district court's entry of default
judgment because the court lacked personal jurisdiction where
the plaintiff failed to effectively serve the defendant with
summons and complaint). The Federal Rules of Civil Procedure
provide the manner in which service must occur.
Rule of Civil Procedure 4(e) governs service upon an
individual and allows service by "delivering a copy of
the summons and of the complaint to the individual personally
[or] leaving a copy of each at the individual's dwelling
or usual place of abode with someone of suitable age and
discretion who resides there." Fed.R.Civ.P.
4(e)(2)(A)-(B). On September 24, 2015, a certified process
server served the Defendant with the Summons and Complaint at
his dwelling. (Dkt. No. 4.) Therefore, Plaintiff properly
served Defendant pursuant to Rule 4(e).
Grounds for Default
August 20, 2015, Plaintiff filed its Complaint against
Defendant seeking damages and injunctive relief. (Dkt. No.
1.) A certified process server served Defendant on September
24, 2015. (Dkt. No. 4.) On April 20, 2016, after Defendant
failed to respond, the Clerk of Court entered default against
Defendant. (Dkt. No. 8.) On August 11, 2016, Plaintiff filed
the pending Motion for Default Judgment. (Dkt. No. 12.) This
Court held a hearing on the Motion on August 26, 2016. (Dkt.
No. 18.) After Defendant failed to appear at the August 26,
2016 hearing, the undersigned Magistrate Judge took this
matter under advisement to issue this Report and
FINDINGS OF FACT
full review of the pleadings, the undersigned Magistrate
Judge finds that Plaintiff has established the following
facts. Plaintiff 360 Painting is the licensor of the 360°
Painting System service. (Compl. ¶ 4.) Plaintiff has
licensed others to operate painting system services
businesses identified with the 360° Painting service mark
designated by 360 Painting as part of the 360° Painting
system (the "Proprietary Mark"), and to utilize
confidential methods and procedures developed by 360 Painting
for the operation of 360° Painting franchises.
(Id.) The Proprietary Mark is registered with the
United States Patent and Trademark Office and the
registration is in full force and effect. (Compl. ¶ 5.)
Plaintiff has given public notice of the registration and
Proprietary Mark as provided in 15 ...