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J & J Sports Production Inc. v. M&I Hospitality of Delaware Inc.

United States District Court, D. Delaware

November 19, 2018

J & J SPORTS PRODUCTION, INC., Plaintiff,
v.
M&I HOSPITALITY OF DELAWARE INC., IGOR RAMOS, MARTHA RIVERA d/b/a MORELIA MEXICAN RESTAURANT, Defendants.

          Charles J. Brown, III, Gellert Scali Busenkell & Brown, LLC, Wilmington, DE - attorneys for Plaintiff

          MEMORANDUM OPINION

          NOREIKA, U.S. DISTRICT JUDGE.

         Before the Court is a Motion for Default Judgment (the "Motion") (D.I. 11) submitted by Plaintiff J & J Sports Production, Inc. (hereinafter "J&J" or "Plaintiff) against M&I Hospitality of Delaware ("M&I"), Igor Ramos ("Ramos"), and Martha Rivera ("Rivera") d/b/a Morelia Mexican Restaurant (collectively "Defendants") for the unlawful interception and exhibition of Plaintiffs program without a proper commercial license pursuant to claims of 47 USC § 605, 47 USC § 553, and for common law conversion. For the reasons below, the Court grants the Motion as to M&I, denies the Motion as to the individual Defendants Igor Ramos and Martha Rivera, and awards damages to Plaintiff in the amount of $2, 752.

         I. BACKGROUND

         Plaintiff is an international sports and entertainment distributor. (D.I. 12 at 1). In the Spring of 2013, Plaintiff contracted for the "exclusive nationwide television distribution rights to the Floyd Mayweather, Jr. v. Robert Guerrero, WBS Welterweight Championship Fight Program and its undercard bouts (the "Fight") taking place on May 4, 2013. (D.I. 1 at 2). Leading up to the Fight, J&J entered sublicensing agreements with commercial entities across North America, granting those entities limited commercial rights to show the Fight. (Id. at 3).

         Almost two years after the Fight, on May 1, 2015, Plaintiff filed a Complaint for Damages (the "Complaint") against Defendants alleging that:

[w]ith full knowledge that the [Fight] was not to be intercepted, received and exhibited by entities unauthorized to do so, defendants and/or their agents, servants, workmen or employees so did unlawfully publish, divulge and exhibit the Program at the time of its transmission at their addresses of their respective establishments, as indicated above. Said unauthorized interception, publication, exhibition and divulgence by defendants was done willfully and for purposes of direct or indirect commercial advantage or private financial gain.

(Id.). Plaintiff asserted three claims against the Defendants: violation of 47 U.S.C. § 605; violation of 47 U.S.C. § 553; and common law conversion. (Id. at 2-5). Following inaction from all parties, the Honorable Gregory M. Sleet issued a Status Report Order on February 3, 2016, directing Plaintiff to "submit a status letter ... no later than February 23, 2016." (D.I. 3). Plaintiff failed to comply. Thereafter, on March 14, 2016, Plaintiff submitted requests for default as to each of the Defendants. (D.I. 4, 5, 6). The Clerk entered default as to each of the Defendants the same day. (D.I. 7, 8, 9). More than two years later, on September 20, 2018, the case was reassigned to the undersigned. On October 2, 2018, the Court entered an Order to Show Cause for failure to prosecute. (D.I. 10). On October 10, 2018, nearly thirty-one (31) months after the entry of default, Plaintiff filed its Motion. (D.I. 11).

         With its Motion, Plaintiff submitted an affidavit from its President[1], (id., Exhibit A) (the "Gagliardi Affidavit"); its contract for the exclusive license to exhibit a live telecast of the Fight (Id., Exhibit A-1); a "rate-card" for commercial sub-licenses (Id., Exhibit A-2); and an affidavit from an investigator named Daniel Szlezak (Id., Exhibit B) (the "Szlezak Affidavit"). The Szlezak Affidavit outlines the investigator's presence at Morelia Mexican Restaurant on the night of the Fight and indicates that he (1) paid a $6 cover charge to enter the establishment, (2) observed five televisions of various size placed around the room, and (3) watched a portion of an undercard fight playing on a television. (Id., Exhibit B at 1). Szlezak states "I counted the number of patrons two (sic) separate times. The head counts were 85, 88, 92." (Id.).

         On November 1, 2018, Plaintiff filed a response to the Order to Show Cause explaining its delay was because it "believed that a default judgment had been obtained once the default was entered." (D.I. 13 at 1).

         II. LEGAL STANDARDS

         Defaults and default judgments are governed by Rule 55 of the Federal Rules of Civil Procedure. Under Rule 55(a), where defendant is properly served and has subsequently "failed to plead or otherwise defend, ... the clerk must enter the party's default." Fed.R.Civ.P. 55(a). Following the clerk's entry of default, where a claim is not for a sum certain[2], a plaintiff must "apply to the court for a default judgment." Fed.R.Civ.P. 55(b)(2). In the Third Circuit, there is a preference that, where possible, a case should be decided on its merits and not by default judgment. Cananzaro v. Fischer, 570 Fed.Appx. 162, 165 (3d Cir. 2014). When determining whether to grant a default judgment, the Court uses the three-part test set out by the Third Circuit in Chamberlain v. Giampapa, which requires a consideration of "(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to culpable conduct." 210 F.3d 154, 164 (3d Cir. 2000) (citing United States v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984)). The Court takes the Complaint's well-plead facts as true, but damages must be proven by the Plaintiff. See Comdyne I Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir.1990).

         III. DISCUSSION

         A. Plaintiff is Entitled to Default Judgment Against M&I ...


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