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Sharma v. Big Limos MFG, LLC

United States District Court, N.D. Illinois, Eastern Division

June 27, 2017

RAJAN SHARMA, Plaintiff,
v.
BIG LIMOS MFG, LLC and MICHAEL WALSTROM, Defendants.

          MEMORANDUM OPINION AND ORDER

          John Z. Lee, Judge

         Plaintiff Rajan Sharma (“Plaintiff”) has sued Defendants Big Limos MFG, LLC (“Big Limos”) and Michael Walstrom (“Walstrom”), alleging breach of contract. On March 29, 2017, the Court entered an order of default as to Big Limos. Since that time, Plaintiff has moved for entry of default as to Walstrom. In addition, Defendants have now appeared and filed a motion asking the Court to vacate the entry of default as to Big Limos, deny Plaintiff's motion for entry of default as to Walstrom, and grant Defendants leave to file an answer or responsive pleading. For the reasons stated herein, Defendants' motion [18] is denied. Plaintiff's motion for entry of default as to Walstrom [15] is granted.

         Background

         On January 3, 2017, Plaintiff filed suit against Big Limos and Walstrom, alleging that they breached an agreement to sell Plaintiff a customized limousine for $125, 000. Compl. ¶¶ 14, 22-26, ECF No. 1. Big Limos is a limited liability company with its principal place of business in Lake Havasu City, Arizona. Id. ¶ 2. Walstrom-who is Big Limos's founder, CEO, and registered agent-resides in Huntington Beach, California. See Id. ¶ 3.

         On January 6, 2017, Plaintiff, through a process server, attempted to serve Defendants at Big Limos's registered address in Lake Havasu City. Pl.'s 1st Mot. Default ¶ 2, ECF No. 10. When the process server arrived at the address, however, he learned that it belonged to a grocery store. Id. The grocery store's staff members were unable to give any information as to whether Big Limos or Walstrom could be found at the address. Id.

         On January 11, 2017, Plaintiff attempted to serve Walstrom at his residential address in Huntington Beach. Pl.'s Mot. Alt. Serv. ¶ 5, ECF No. 6. When Plaintiff's process server arrived at the address, however, there were no vehicles parked in the driveway, and no one answered the door. Id. The process server reattempted service on January 16, 2017. Id. ¶ 6. That day, there were two cars parked in the driveway, but a locked gate made the front door inaccessible. Id. Plaintiff attempted service at the Huntington Beach address several more times from January 19 to January 22, 2017, making six attempts in total that month. Id. ¶¶ 7-10. No individuals could be found at the address during any of these attempts. Id. ¶ 11.[1]

         Unable to serve Big Limos through Walstrom at the Huntington Beach address, Plaintiff next attempted to serve Big Limos through the Arizona Corporation Commission. See Pl.'s 1st Mot. Default ¶ 4. The Arizona Corporation Commission successfully completed service on Big Limos on February 9, 2017. Id. In the meantime, at the Court's direction, Plaintiff continued his efforts to serve Walstrom. See Pl.'s 2d Mot. Default ¶¶ 6-7, ECF No. 15. Plaintiff hired a private investigator named Peter Dotson[2] (“Investigator Dotson”) to assist with these efforts. See id. ¶ 7. Investigator Dotson confirmed that the Huntington Beach address was Walstrom's most current home address. Id. ¶ 8. Investigator Dotson also contacted Rich McAndrews (“Investigator McAndrews”), a local investigator in California. Id. ¶ 10. Investigator McAndrews, too, confirmed that Walstrom was the current owner of the property at the Huntington Beach address. Id. ¶ 11.

         On February 24, 2017, Investigator Dotson spoke with Walstrom over the telephone. Id. ¶ 9. In a signed affidavit, Investigator Dotson described his conversation with Walstrom as follows:

I called Walstrom [ ] and spoke in detail regarding his knowledge of this case and his desire to make proceeding as difficult as possible for [Plaintiff's counsel]. Walstrom claimed to be an ex-attorney who knows the law. Walstrom stated he would honor the original contract to produce a custom Limo for [Plaintiff], provided [Plaintiff] drops the lawsuit. Walstrom said if [Plaintiff] did not cease efforts in this lawsuit, Walstrom would incur as much cost for service as possible . . . . Walstrom stated he is well aware of this lawsuit.

Id., Ex. D (“Dotson Aff.”), at 1. Walstrom acknowledges that he spoke with Investigator Dotson on February 24, 2017, and he does not dispute the above description of their conversation. See Walstrom Aff. ¶¶ 41-46.

         From March 14 to March 22, 2017, Investigator McAndrews made at least three more unsuccessful attempts to serve Walstrom at the Huntington Beach address. Pl.'s 2d Mot. Default ¶¶ 13, 19-20, 22. According to Investigator McAndrews, no individuals were at the address during this period, id., although a black Mercedes was parked in the driveway each time he visited, id. ¶ 29. Walstrom disputes this assertion, maintaining that he and his family members regularly entered and exited the property at the Huntington Beach address around this time. Walstrom Aff. ¶ 47.

         On March 23, 2017, Investigator McAndrews again went to the Huntington Beach address to attempt service. Pl.'s 2d Mot. Default ¶ 24. That day, he saw a black Mercedes slowly pass the residence before making a U-turn at the end of the block. Id. ¶ 25. The Mercedes then returned and parked in front of Walstrom's residence. Id. A woman who matched descriptions of Walstrom's wife exited the driver's side of the Mercedes. Id. ¶ 26. Investigator McAndrews approached the woman and called her name, but she immediately ran into the residence and shut the patio door behind her. Id. ¶ 27. Investigator McAndrews dropped the summons and the complaint over the patio door and advised the woman that she was being served on behalf of Walstrom. Id. ¶ 28. He also left copies of the service documents on the patio and under the windshield wipers of the Mercedes, and he mailed another copy to Walstrom at the Huntington Beach address. Id. ¶¶ 29-30. Plaintiff asserts (and Defendants do not dispute) that these efforts were sufficient to serve process on Walstrom. See Id. ¶ 31.

         Meanwhile, on March 22, 2017, Plaintiff filed a motion for entry of default as to Big Limos and mailed copies of the motion to Big Limos's registered address and Walstrom's Huntington Beach address. Pl.'s 1st Mot. Default at 6. The Court held a hearing on the motion on March 29, 2017. Defendants did not appear at the hearing, and Big Limos had neither filed an appearance nor responded to Plaintiff's complaint by that time.[3] Accordingly, the Court granted Plaintiff's motion and entered an order of default as to Big Limos. Order of 3/29/17, ECF No. 12.

         On April 19, 2017, Plaintiff filed a motion for entry of default as to Walstrom. See Pl.'s 2d Mot. Default. Again, Plaintiff mailed copies of the motion to Big Limos's registered address and Walstrom's Huntington Beach address. Id. at 11. By that date, Defendants still had not appeared or responded to the complaint.[4]

         On April 24, 2017, attorney Dennis Esford (“Esford”) filed an appearance on behalf of both Defendants. Defendants claim that they initially contacted Esford regarding this litigation on February 16, 2017. Defs.' Mot. Vacate ¶ 1, ECF No. 18. At that time, Esford told Defendants that he could not represent them until he first reviewed the substance of Plaintiff's claims and determined whether he had time to take the case. Id. ¶ 2. Nevertheless, Defendants claim that they believed Esford had agreed to represent them. Id. ¶ 3. It was not until April 24, 2017, that Esford learned of Defendants' mistaken belief. Id.[5] Upon learning this information, Esford immediately filed an appearance on Defendants' behalf. Defs.' Mot. Vacate ¶ 4. That same day, Defendants, through Esford, also filed a motion asking the Court to vacate the entry of default as to Big Limos. Id. ¶ 12.

         On April 26, 2017, the Court held a hearing on Plaintiff's motion for entry of default as to Walstrom. Esford attended the hearing on Defendants' behalf. During the hearing, the parties discussed Plaintiff's pending motion for entry of default as to Walstrom, as well as Defendants' pending motion to vacate the entry of default as to Big Limos. At the conclusion of the hearing, ...


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