United States District Court, D. New Jersey
December 22, 2004.
JOSEPH O'DONNELL, Individually and t/a TOP GLOVE PROMOTIONS Plaintiff,
OLEG SHALAYEV, Individually and t/a OLEG SHALAYEV PROMOTIONS, and NICOLAI VALUEV Defendants.
The opinion of the court was delivered by: JEROME SIMANDLE, District Judge
This is Defendant Nicolai Valuev's motion to vacate default
judgment, entered by the Court on March 28, 2002 for failure to
respond to the Court's orders requiring Defendants to provide
full and complete accountings to Plaintiff. The principal issue
is whether a mailing of the Complaint by Plaintiff's counsel to
Defendant Valuev's address in the Russian Federation was
sufficient to accomplish service of process under any method
permitted for foreign service in Rule 4 of the Federal Rules of
Civil Procedure. If it is not, default judgment must be vacated.
For the reasons set forth herein, the motion is granted and
Defendant Valuev is required to serve an answer within 20 days of
entry of the accompanying Order.*fn1
A. Underlying Facts
On October 10, 2001, Plaintiff, Joseph O'Donnell, individually
and t/a Top Glove Promotions, filed a complaint for damages and
injunctive relief against Defendants Oleg Shalayev, individually
and t/a Oleg Shalayev Promotions,*fn2 and Nicolai
Valuev,*fn3 grounded in several contract-based
claims*fn4 relating to an "Exclusive Representation
Agreement" ("Agreement") with Defendants and Arseny
Pursuant to the Agreement, the U.S. Parties were given the
"exclusive right" to "represent" Valuev in the United States and
around the world, except Russia, and to "promote and manage
fights" on Valuev's behalf in all countries worldwide, except
Russia, "providing [Valuev] with financial, management, training
and legal support as necessary." (Agreement at ¶ 3.)
B. Facts Relating to Service of Process
In the section of the Agreement entitled "addresses for legal
notices," the U.S. and Russian Parties agreed to use the
following address for legal notices to the Russian Parties: "Oleg
Shalayev, Koroleva str. 9, apt. 28, St. Petersburg, 197431
Russia." (Agreement at ¶ 13.) Additionally, on March 12, 2001,
Berezin sent an e-mail to Synkov including the following address:
"Valuev Nikolay Sergeevich St. Petersburg, Krasnoloselsky Rayon,
Krasnoye Selo, Ul. Gvardeyskaya 8/2 apt 39."*fn6 (7/20/04
O'Donnell Cert. at ¶ 5.)
In August 2001, Plaintiff sent, via fax, copies of the proposed
summons and complaint, translated in Russian, to Shalayev and
Valuev. In response, Shalayev faxed to Plaintiff a letter written
in Russian. (7/20/04 O'Donnell Cert. at ¶ 12, Ex. G.) The letter
is dated "08.23.001" and Plaintiff alleges that it bears the
signatures of Shalayev and Valuev. (Id.) Valuev denies having
signed that letter, accusing Shalayev of forging his signature.
(9/04 Valuev Decl. at ¶ 3.) The English translation of the letter
reads, in pertinent part: "We have received from you the papers
concerning your complaint against me and Nicolay. Since this is a
serious matter and requires a competent translation and
consultation with experts, we are unable to give you an immediate
answer, but we will respond [sic] you within a week."*fn7
(7/20/04 O'Donnell Cert. at ¶ 12, Ex. G.)
Moreover, on or about August 23, 2001, (which was about seven
weeks before the Complaint was filed on October 10, 2001)
Shalayev and Valuev allegedly telephoned O'Donnell to discuss the
proposed complaint. (Id. at ¶ 13.) Synkov also participated in
the discussion and served as a translator. (Id.) Defendant
Valuev admits participating in that telephone discussion (Valuev
Decl. at ¶ 5), but asserts that he has "no recollection of
speaking with Mr. O'Donnell or with Mr. Synkov after August of
2001, and certainly did not discuss any final judgment with
either." (Id. at ¶ 7.) According to Defendant, he has "been
contacted by many individuals regarding fighting in the United
States and it is possible such a conversation occurred though I
have no recollection of one with plaintiff in 2002." (Id.)
On September 11, 2001, Plaintiff received a letter from Evgeny
Vasilievich Popov, an attorney from St. Petersburg, Russia. Mr.
Popov was not at that time a member of the New Jersey Bar.
(7/20/04 O'Donnell Cert. at Ex. I.) The letter stated that "I
have been retained by Oleg Shalayev and Nikolay Valuev to
represent and protect the interests of The Russian Parties in Top
Glove Promotions." (Id.) Defendant Valuev, however, maintains
that "I never retained anyone, including Evgeny Vasilievich Popov
to represent me in this matter. My sole retention has been the
recent retention of the firm of Dines and English, L.L.C. to
represent me." (4/17/04 Valuev Cert. at ¶ 5.)
On October 10, 2001, the day the complaint was filed, Plaintiff
mailed copies of the summons and complaint to Defendant Valuev at
"Sergeevich St. Petersburg, Krasnoloselsky Rayon, Krasnoye Selo,
Ul. Gvardeyskaya 8/2 apt 39," via DHL Worldwide Express. (7/21/04
Saputelli Cert. at ¶ 3, Ex. B.) The delivery confirmation receipt
is dated October 10, 2001, and the accompanying "tracking" report
indicates that the delivery was signed for by "OSIPOVA" on
October 16, 2001. (Id.)
Additionally, on October 10, 2001, Plaintiff sent, via DHL
Worldwide Express, copies of the summons and complaint to
Shalayev at "Koroleva St. 9, Apt. 28, St. Petersburg, Russia,"
the address designated by the Agreement for legal notices to the
Russian Parties. (7/21/04 Saputelli Cert. at ¶ 3, Ex. A; see
Agreement at ¶ 13.) According to the DHL tracking report,
Shalayev signed for the delivery on October 17, 2001. (7/21/04
Saputelli Cert. at ¶ 3, Ex. A.) Finally, Plaintiff mailed copies
of the summons and complaint to Mr. Popov, in Russia, via DHL
Worldwide Express. (Id. at ¶ 5, Ex. C.). That delivery was
signed for on October 12, 2001, by "KUZNETSOVA," Mr. Popov's
By handwritten letter, allegedly bearing the signatures of both
Shalayev and Valuev, dated "26.10.001," the two defendants
acknowledged receipt of the "Complaint." (7/20/04 O'Donnell Cert.
at ¶ 18, Ex. L.) On November 8, 2001, the Clerk of the Court
received a document written in Russian from Mr. Popov. The Office
of the Court Clerk promptly contacted Mr. Popov via e-mail,
requesting that he clarify the significance of the submission.
Mr. Popov replied that he was the "attorney for defendants" and
that the document was the Defendants' "answer." (7/21/04
Saputelli Cert. at ¶¶ 6-8, Ex. D.) The Court Clerk granted the
Defendants an additional 30 days in which to translate the answer
into English, but Defendants failed to comply within that 30 day
On February 13, 2002, after oral argument by Plaintiff's
counsel, the Court granted Plaintiff's motion to strike
Defendants' November 8, 2001 submission, pursuant to Fed.R. Civ.
P. 12(f), and to enter default judgment against Defendants under
Fed.R.Civ.P. 55(a) and 55(b). In so ordering, the Court held
that "personal jurisdiction over these defendants exists because
they were duly served with process, they attempted to respond to
these allegations, they've had substantial contacts with the
forum state, New Jersey, sufficing for both general jurisdiction
and transactional jurisdiction." (2/14/2002 Tr. at 15; 7-11.)
On February 14, 2002, the Court entered an Order granting
preliminary injunctive relief in favor of Plaintiff and ordering
that Defendants provide an accounting to Plaintiff. On March 26,
2002, a final hearing was held on the default judgment damages.
Final judgment was entered on March 28, 2002, in favor of
Plaintiff, in the amount of $176,783.04.*fn8 Plaintiff
served copies of the Orders of February 13 and 14, 2002, along
with certified translations thereof, upon Defendants Valuev and
Shalayev and Mr. Popov, via Courier Express Services, Ltd., as
per the Court's Order. (7/21/04 Saputelli Cert. at ¶ 12, Ex. J.;
2/14/2002 Order at 4.) On March 30, 2002, a copy of the Final
Judgment, as well as a certified Russian translation, was
delivered to "St. Petersburg, Krasnoloselsky Rayon, Krasnoye
Selo, Ul. Gvardeyskaya 8/2 apt 39." (8/3/04 Saputelli Cert. at ¶
6, Ex. C.)
Before the Court is Defendant Valuev's Motion To Vacate Default
Judgment and Set Aside Orders, filed July 9, 2004.*fn9
A. Standard of Review
Rule 55(c) of the Federal Rules of Civil Procedure provides
that "[f]or good cause shown the court may set aside an entry of
default and, if a judgment by default has been entered, may
likewise set it aside in accordance with Rule 60(b)." Pursuant to
Fed.R.Civ.P. 60(b)(4), "[o]n motion and upon such terms as are
just, the court may relieve a party . . . from a final judgment"
if "the judgment is void." A default judgment rendered by a court
which lacked personal jurisdiction over the defendant is void.
Pennoyer v. Neff, 95 U.S. 714, 725-727 (1877). A defendant may
challenge the personal jurisdiction of the rendering court by
attacking the validity of the service of process. Stranahan Gear
Co. v. NL Indus. Inc., 800 F.2d 53, 56-57 (3d Cir. 1986).
"Service of process refers to a formal delivery of documents that
is legally sufficient to charge the defendants with notice of a
pending action." Volkswagenwerk Aktiengesellschaft v. Schlunk,
486 U.S. 699, 701 (1988).
Though the decision to set aside a default judgment is left
"primarily to the discretion of the district court," United
States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194 (3d
Cir. 1984), the Third Circuit mandates that a district court
generally must weigh three factors in ruling on a motion to
vacate default judgment under Rule 60(b):
(1) whether the plaintiff will be prejudiced if the
default is lifted;
(2) whether the defendant has a meritorious defense;
(3) whether the default was the result of the
defendant's culpable conduct.
Emcasco Insurance Co. v. Sambrick, 834 F.2d 71
, 73 (3d Cir.
1987); Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d 14
(3d Cir. 1985); Mettle v. First Union Nat'l Bank,
279 F. Supp. 2d 598, 601 (D.N.J. 2003).
However, since "[a] default judgment entered when there has
been no proper service of the complaint is, a fortiori, void,
and should be set aside," Gold Kist, 756 F.2d at 19 (citing
Fed.R.Civ.P. 60(b)(4)), in such instances, the district court
need not resort to an analysis of the three factors listed above.
Gold Kist, 756 F.2d at 19; Mettle, 279 F. Supp. 2d at 603 n.
3 ("As this Court finds that entry of default against [defendant]
is void based on the improper service of the summons and
complaint, the Court need not consider the factors set forth in
Gold Kist." (citing Gold Kist, 756 F.2d at 19)).
B. Defendant's Motion to Vacate
Defendant Valuev seeks to have the Court set aside default
judgment pursuant to Fed.R.Civ.P. 60(b)(4).*fn10 (Def.'s
Br. at 3.) Valuev contends that service of process was never
properly effectuated pursuant to Fed.R.Civ.P. 4(f), thereby
preventing the Court from obtaining personal jurisdiction over
Defendant. (Id. at 3-6.) Defendant is correct. Default judgment
must be vacated.
(i) Timeliness of Defendant's Motion
Rule 60(b) provides that a motion to vacate default judgment
"shall be made within a reasonable time." Fed.R.Civ.P. 60(b).
Despite this mandate, however, the Third Circuit has joined the
"nearly overwhelming authority" supporting the proposition that
"laches is not available to preclude a claimant from attacking a
void judgment" under Rule 60(b)(4). One Toshiba Color
Television, 213 F.3d at 158 (collecting cases). Indeed, "no
passage of time can transmute a nullity into a binding judgment,
and hence there is no time limit for such a motion." United
States v. One Toshiba Color Television, 213 F.3d 147, 157 (3d
Cir. 2000) (en banc).
"It is in the pursuit of his remedies that [the moving party's]
delay, if any, will become an issue." Id. Thus, for example,
where default judgment has been entered in a civil forfeiture
proceeding and judgment has been satisfied, petitioner's delay in
bringing a motion to vacate for defective service of process may
not preclude the court from setting aside judgment, though it may
be grounds for denying petitioner actual return of property.
Id.; United States v. $119,980.00, 680 F.2d 106, 107-08 (11th
Cir. 1982) (holding Rule 60(b) may not be used to impose
affirmative relief beyond vacating prior judgment).
Where, though, the relief sought is limited to the motion to
vacate, as it is here, the inquiry necessarily ends where it
begins. Accordingly, Defendant Valuev was not bound by any time
constraints in challenging the Court's default judgment as void.
Id.; Shenouda v. Menhanna, 203 F.R.D. 166, 169 (D.N.J. 2001)
(holding motion to vacate under Fed.R.Civ.P. 60(b)(4) timely
despite being made almost five years after the court's entry of
default judgment). Thus, the instant motion is timely.
(ii) Personal Jurisdiction and Service of Process
As the discussion below details, the Court has personal
jurisdiction over Defendant Valuev.
[T]o exercise personal jurisdiction over a defendant,
a federal court sitting in diversity must undertake a
two-step inquiry. First, the court must apply the
relevant state long-arm statute to see if it permits
the exercise of personal jurisdiction; then, the
court must apply the precepts of the Due Process
Clause of the Constitution. In New Jersey, this
inquiry is collapsed into a single step because the
New Jersey long-arm statute permits the exercise of
personal jurisdiction to the fullest limits of due
process. . . .
Personal jurisdiction under the Due Process Clause depends upon
the relationship among the defendant, the forum, and the
ligation. Physical presence within the forum is not required to
establish personal jurisdiction over a nonresident defendant.
Instead, the plaintiff must show that the defendant has
purposefully directed its activities toward the residents of the
forum state, or otherwise purposefully availed itself of the
privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws.
IMO Industries, Inc. v. Kiekert AG, 155 F.3d 254, 258-59 (3d
Cir. 1998) (internal citations omitted).
As explained in the Court's Oral Opinion of February 13, 2002,
there is both general and specific jurisdiction over Defendant
Valuev in this case. First, general jurisdiction was satisfied
because at the time default judgment was entered there were
continuous ongoing contacts for at least one year by Mr. Valuev
with New Jersey. At the very least, there was a training camp in
Vineland and a prize fight in Atlantic City, both located within
the District of New Jersey.
Even if there were not general jurisdiction over Mr. Valuev,
the Court finds that there was specific jurisdiction.
In order for specific jurisdiction to be properly exercised
under the Due Process Clause, the plaintiff must satisfy a
two-part test. First, the plaintiff must show that the defendant
has constitutionally sufficient "minimum contacts" with the
forum. Second, for jurisdiction to be exercised the court must
determine, in its discretion, that to do so would comport with
"traditional notions of fair play and substantial justice."
IMO Industries, 155 F.3d at 259 (internal citations omitted).
Both prongs are satisfied here. Specifically, the subject matter
of Plaintiff's complaint was the Exclusive Representation
Agreement to which Defendant Valuev was a party. The Agreement
pertains to services that have been rendered by Mr. Valuev as a
boxer in the District of New Jersey. As such, it does not offend
"traditional notions of fair play and substantial justice" that
Mr. Valuev would be hailed into a New Jersey court to address the
charges against him.
(iii) Means of Service of Process
"[N]otice, though necessary, is not sufficient to effect
service. . . . Although notice underpins Federal Rule of Civil
Procedure 4 concerning service, notice cannot by itself validate
an otherwise defective service. Proper service is still a
prerequisite to personal jurisdiction. Inquiry into the propriety
of service is separate from, and in addition to, the due process
concerns present in an inquiry into the notice itself." Grand
Entertainment Group, Ltd. v. Star Media Sales, Inc.,
988 F.2d 476, 492 (3d Cir. 1993).
(a) Service on Foreign Defendant and the Hague Service
Under Rule 4(f)(1) of the Federal Rules of Civil Procedure,
service upon an individual in a foreign country may be
effectuated "by any internationally agreed means reasonably
calculated to give notice, such as the Hague Convention on the
Service of Judicial and Extrajudicial Documents."
The Hague Service Convention is a multilateral treaty that was
formulated in 1964 by the Tenth Session of the Hague Conference
of Private International Law. The Convention revised partsof the
Hague Conventions of 1905 and 1954. The revision was intended to
provide a simpler way to serve process abroad, to assure that
defendants sued in foreign jurisdictions would receive actual and
timely notice of suit, and to facilitate proof of service abroad.
Schlunk, 486 U.S. at 698 (1988). The Convention, as a
ratified treaty, is the supreme law of the land and maintains
controlling effect. See U.S. Const. Art. VI, cl. 2; Jennings
v. Boenning & Co., 482 F.2d 1128, 1132 n. 1 (3d Cir. 1973); EOI
Corp. v. Medical Marketing Ltd., 172 F.R.D. 133, 135 (D.N.J.
The Hague Service Convention was entered into force for the
United States on February 10, 1969 and for the Russian Federation
on December 1, 2001. Plaintiff's Complaint was filed on October
10, 2001 and, thus, the terms of the Convention would not have
governed service of original process attempted on that date.
(b) Service Under the Federal Rules
In the absence of an internationally agreed means of service,
service may be effectuated "by delivery to the individual
personally of a copy of the summons and the complaint," so long
as service is "reasonably calculated to give notice" and is not
prohibited by the law of the foreign country. Fed.R.Civ.P.
4(f)(2)(C)(i). Plaintiff here does not allege to have attempted
service under this provision.
In the alternative, service under Rule 4(f)(2)(C)(ii) may be
made by "any form of mail requiring a signed receipt, to be
addressed and dispatched by the clerk of the court to the party
to be served. . . ." Fed.R.Civ.P. 4(f)(2)(C)(ii). As the
discussion below explains, service in this manner was likewise
(1) Service on Valuev Individually
Plaintiff here argues that service on Defendant Valuev by
ordinary mail to Valuev's place of residence in Russia was
sufficient to satisfy the requirements of Rule 4. This contention
is erroneous.*fn11 Under Rule 4(f)(2)(C)(ii), service by
mail to a foreign defendant is improper if addressed and
dispatched by the plaintiff rather than by the clerk of the
court. Additionally, the Rule requires a signed receipt. The
Advisory Committee Note to former Rule 4(i)(D)(1), now Rule
4(f)(2)(C)(ii), indicates that these "additional safeguards" a
signed receipt and the processing of papers by the court clerk
are intended to insure delivery, especially "since the
reliability of postal service may vary from country to
country. . . ." Advisory Committee Note to former Fed.R.Civ.P.
4(i)(D)(1). By failing to satisfy the technical requirements of
the Rule, Plaintiff was unsuccessful in his attempt to properly
serve Defendant by mail.
(2) Service on Valuev's Agent
Plaintiff also attempted to serve Mr. Shalayev in Russia by
ordinary mail to the agreed upon address. At that time, Shalayev
arguably was acting as Valuev's agent. (See 9/30/04 Valuev
Cert. ¶¶ 3,4 and 7.) Indeed, the Agreement explicitly identified
Shalayev's address as that to which "legal notices" would be
served on the Russian Parties. Whether Shalayev was indeed
Valuev's agent for purposes of service of process, though, is of
no import here; even if Shalayev were authorized to receive
service of process on Valuev's behalf, any attempt by Plaintiff
to do so was insufficient under the Federal Rules.
Service by delivery to a "individual personally" does not
include service upon that individual's agent. See Fed.R. Civ.
P. 4(e)(2) (distinguishing between service "to the individual
personally" and service "to an agent authorized by appointment or
by law to receive service of process"). To be sure, the Federal
Rules of Civil Procedure do authorize, in other instances,
service upon agents. See Fed.R.Civ.P. 4(e)(2) (authorizing
service upon individuals within a judicial district of the United
States "by delivering a copy of the summons and complaint to an
agent authorized by appointment or by law to receive service of
process"); Fed.R.Civ.P. 4(h)(1) (permitting service upon
corporations and associations by delivering a copy of the summons
or complaint to a "general agent" or "to any other agent
authorized by appointment or by law to receive service of
process"). Rule 4(f), however, governing service upon individuals
in a foreign country, does not authorize service by such means,
perhaps recognizing the difficulty inherent in determining
whether a foreign entity was in fact a duly appointed agent for
accepting service of process in the foreign country. In any
event, even if service on an agent were permissible under
Fed.R.Civ.P. 4(f), it would have to be effectuated through the agent
in the same manner as on the party himself either personally
under Rule 4(f)(2)(C)(i), or by "any form of mail requiring a
signed receipt, to be addressed and dispatched by the clerk of
the court to the party to be served," Fed.R.Civ.P.
(4)(f)(2)(C)(ii). Once again, neither requirement was satisfied
here. As such, service on Shalayev, as Defendant Valuev's agent,
was likewise insufficient to constitute service on Valuev.
By failing to comply with the requirements of the Federal Rules
of Civil Procedure, Plaintiff failed to properly serve Defendant
with notice of the proceedings against him.*fn12 Because
service was improper, the Court lacked personal jurisdiction over
Mr. Valuev. And, as noted above, a default judgment rendered by a
court which lacked personal jurisdiction over the defendant is
void. Pennoyer v. Neff, 95 U.S. at 725-727.*fn13
C. Additional Factors to Be Considered by the Court
Having determined that default judgment entered against
Defendant Valuev is void, the Court is not required to
additionally consider the three factors enumerated in
Emcasco.*fn14 Gold Kist, 756 F.2d at 19 (citing
Fed.R.Civ.P. 60(b)(4)); Mettle, 279 F. Supp. 2d at 603 n. 3;
Shenouda, 203 F.R.D. at 171 (concluding a 60(b)(4) analysis
upon a determination that default judgment was void because
service of process was defective). In any event, as the following
discussion illustrates, those factors also militate in favor of
setting aside default judgment. Contra Hoxworth v. Blinder,
Robinson & Co., Inc., 980 F.2d 912, 920 (3d Cir. 1992) ("It is
not necessary that all the factors point toward a default before
the sanction will be upheld.")
(i) Prejudice to Plaintiff
Plaintiff here has failed to identify, both in its numerous
written submissions and before the Court at oral argument on
September 20, 2004, any prejudice that may befall Mr. O'Donnell
if the Court were to vacate default judgment under Rule 60(b).
The only potential prejudice that the Court can identify is the
waste of time and money that Plaintiff will incur in awaiting
Defendant's response and in addressing Defendant's default. These
expenses, however, are curable by requiring Defendant to
reimburse Plaintiff for reasonable costs and fees.
(ii) Existence of A Meritorious Defense
Defendant alleges that the Agreement violates the Professional
Boxing Safety Act ("Muhammad Ali Boxing Reform Act" or "Act"),
15 U.S.C. § 6301 et seq., and, thus, is void. Additionally,
Defendant claims the Agreement is invalid under Nevada law. The
Court is inclined to agree with these conclusions.
(a) Muhammad Ali Boxing Reform Act
Pursuant to 15 U.S.C. § 6308(b)(1), entitled "firewall between
promoters and managers," "it is unlawful for a promoter to have a
direct or indirect financial interest in the management of a
boxer" or for "a manager to have a direct or indirect financial
interest in the promotion of a boxer."*fn15 For reasons now
explained, as to boxing matches conducted in the United States,
the Agreement violates that provision.*fn16
The explicit purpose of the Exclusive Representation Agreement
at issue here was for the U.S. Parties and the Russian Parties
"to act . . . as a single management and promotional unit to"
inter alia, "promote [Valuev's] fights in the U.S.A. and
worldwide." (Agreement at ¶ 1.) Moreover, the Agreement purports
to "grant to the U.S. Parties an exclusive right to represent
[Valuev] in the United States and worldwide, except Russia, to
promote and manage fights in the United States and worldwide,
except Russia on behalf of [Valuev], providing him with
financial, management, training and legal support as necessary."
(Id. at ¶ 3 (emphasis added).); see 15 U.S.C. § 6301(5)
(defining "manager" as "a person who receives compensation for
service as an agent or representative of a boxer") (emphasis
Furthermore, the Agreement states that "[t]he U.S. Parties will
designate its representatives to act as co-managers" so long as
Shalayev gives his consent on decisions relating to choice of
opponents and venues, training schedules and routines, and
financial arrangement of fights. (Agreement at ¶ 4.2 (emphasis
Despite the paucity of case law throughout the nation
interpreting the Muhammad Ali Boxing Reform Act, the language and
stated purpose of the statute seem to contemplate (and prohibit)
agreements such as the one here.
(b) Nevada Law*fn17
Defendant additionally argues that the Agreement violates Nev.
Admin. Code 41 § 467.104 which provides that "an unarmed
combatant*fn18 may not have a promoter or any of its
members, stockholders, officials, matchmakers or assistant
matchmakers act directly or indirectly as his manager."*fn19
For the reasons expressed infra, the express terms of the
Agreement contravene this prohibition. See Section II.C.ii.a.
Additionally, section 467.104 states that "[a]n unarmed combatant
may not have a promoter or any of its members, stockholders,
officials, matchmakers or assistant matchmakers . . . hold any
financial interest in his management or his earnings from
contests or exhibitions." Nev. Admin. Code 41 § 467.104. This
language directly implicates paragraph 7.1 of the Agreement,
stating that "The Russian Parties and the U.S. Parties agree that
they shall share all net proceeds of any fight revenues,
including the purse. . . ."
For these reasons, the Court holds that the Agreement likely
violates Nev. Admin. Code 41 § 467.104.*fn20
(iii) Defendant's Culpable Conduct
It is well settled that "the party in default must show that
the default was not caused by his own culpable conduct in order
to have it set aside." Emcasco Insurance Co., 834 F.2d at 73;
Admiral Home Aplliances v. Tenavision, Inc., 735 F.2d 1347
(D.N.J. 1982). Plaintiff argues that "Valuev's utter disregard of
the lawsuit and the mandates of the Final Judgment for well over
two years, constitutes arrogance and complete disregard of the
consequences of such conduct. Valuev is obviously moving to
vacate the Judgment at this late date simply because the Judgment
interferes in his new plans." (Pl.'s Br. at 32.) Specifically,
Plaintiff alleges that Defendant Valuev has recently signed a
promotional agreement with a German promoter, Wilfried Sauerland,
and has fought (and will continue to fight) under Sauerland's
promotion. (Pl.'s Br. at 17 ¶¶ 34-38, Ex. R.) The Court
determines that these reasons for denying Defendant's motion are
insufficient in light of the particulars of this case.
To begin with, Defendant Valuev does not speak, read nor write
English. (9/30/04 Valuev Cert. at ¶ 14; 4/17/04 Valuev Cert.) All
knowledge that Mr. Valuev had regarding the specifics of the
proceedings against him were communicated to him by Mr.
Shalayev.*fn21 Indeed, it was Mr. Shalayev who first
informed Mr. Valuev, sometime in the second half of 2002, of the
judgment entered against him by this Court on March 28, 2002.
(Id. at ¶ 4.) Based on Mr. Shalayev's communications with
Defendant, Mr. Valuev was either unaware of, or unable to
comprehend, the terms of the judgment. (Id. at ¶¶ 4-8.) In
fact, Mr. Valuev maintains that he only learned the full terms of
the final judgment after he severed ties with Shalayev sometime
Plaintiff, though, alleges that copies of the summons and
complaint were sent to Defendant Valuev at his permanent address
in Russia the same address that Defendant listed as his
permanent residence on his Russian Passport application, and the
same address provided by Berezin in an e-mail to Synkov (7/20/04
O'Donnell Cert. at ¶ 5; 9/13/04 Supplemental O'Donnell Cert. at
1-2, Exs. A and B.) Defendant maintains that he has not lived at
that address for at least several years. (4/17/04 Valuev Cert. at
¶ 4; 9/04 Valuev Decl. at ¶ 2.) In support of that contention,
Defendant has explained to the Court that
in Russia the address at which one is registered is
not necessarily the address at which one lives. The
Guardeyska address was the address of my father and
mother where I was brought up. When my surviving
parent dies, the registration means that I will have
a right to claim ownership rights to the apartment. I
do not, however, live there.
(9/30/04 Valuev Cert. at ¶ 11.) Plaintiff does not dispute this
characterization of Russian property law. As courts are entitled
to consider such evidence in determining foreign law,
Fed.R.Civ.P. 44.1, the Court accepts Mr. Valuev's representations, at
least for purposes of the instant motion.
Having not received notice of the pendency of the proceedings
against him, Mr. Valuev relied on the accuracy of Mr. Shalayev's
representations regarding the terms of the Court's final judgment
and order. That Mr. Shalayev's interests may not have been
aligned with Mr. Valuev's only bolsters the veracity of the
contention that Defendant did not learn the full terms of default
judgment from Mr. Shalayev. Thus, just as Defendant suggested to
this Court at oral argument, even if Shalayev did receive copies
of the summons and complaint in this action, he in all likelihood
never forwarded it along to Defendant Valuev.*fn23
For the reasons just explained, the Court is uncomfortable
attributing the delay in filing this motion to Mr. Valuev.
Indeed, once Valuev learned of the specifics of the judgment
against him, he retained counsel within a relatively short period
of time.*fn24 In sum, the default was not caused by
Defendant's culpable conduct.*fn25
For the foregoing reasons, Defendant Valuev's motion to vacate
default judgment pursuant to Fed.R.Civ.P. 60(b)(4) is granted
and Defendant will be directed to answer Plaintiff's complaint
within 20 days. The accompanying Order is entered.
ORDER TO VACATE DEFAULT JUDGMENT AND TO ANSWER
This matter came before the Court upon motion by Defendant
Valuev to vacate default judgment entered by the Court on March
28, 2002 for failure to respond to the Court's orders requiring
Defendants to provide full and complete accountings to Plaintiff;
The Court having considered the written submissions and having
heard oral argument on September 20, 2004; and
For the reasons expressed in the Opinion of today's date;
IT IS this 22nd day of December 2004 hereby
ORDERED that the motion to vacate default judgment under
Fed.R.Civ.P. 60(b)(4) by Defendant Valuev is GRANTED; and
IT IS FURTHER ORDERED that Defendant Valuev shall answer
Plaintiff's complaint within 20 days from today; and
IT IS FURTHER ORDERED that Plaintiff's motion to amend and/or
clarify the default judgment [Docket Item 49] is dismissed as