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Bon-Aire Industries, Inc v. Mitchell Products

December 16, 2010


The opinion of the court was delivered by: Mary L. Cooper United States District Judge



The plaintiff, Bon-Aire Industries, Inc. ("plaintiff" or "Bon-Aire") brings this action for patent infringement, trademark counterfeiting and willful infringement and dilution, trade dress infringement and dilution, copyright infringement, and unfair competition. (Dkt. entry no. 1, Compl. at ¶ 9.) The plaintiff alleges that the defendants, Ken's General Merchandise, Kenny McBrearty ("McBrearty"), Dale Shellenberger ("Shellenberger"), and Larry Scheidt ("Scheidt") (collectively, the "defendants"), are selling or have offered for sale counterfeit versions of its "ULTIMATE® Hose Nozzle." (Dkt. entry no. 26, Pl. Br. at 1.)*fn1

The Court entered an order on April 13, 2010, preliminarily enjoining the defendants from, inter alia, "manufacturing, using, selling or attempting to sell, purchasing, importing, distributing, brokering, promoting, marketing, advertising, storing, shipping, receiving or maintaining in its possession any hose nozzle having a trade dress that is identical to, substantially similar to, or a colorable imitation of the ULTIMATE® hose nozzle." (Dkt. entry no. 17, 4-13-10 Prelim. Inj. Order.) The Magistrate Judge directed the Clerk of Court to enter default on May 12, 2010, pursuant to Federal Rule of Civil Procedure ("Rule") 55(a), against each of the defendants. (See dkt. entry no. 22, 5-12-10 Letter Order.) The Clerk of Court complied with this directive. (Unnumbered dkt. entry after dkt. entry no. 22.)

The plaintiff now moves for entry of judgment by default against Ken's General Merchandise, McBrearty, Shellenberger, and Scheidt, pursuant to Rule 55(b)(2). (Dkt. entry no. 26, Notice of Mot.)*fn2 The plaintiff seeks: (1) conversion of the 4-13-10 Preliminary Injunction Order to a permanent injunction; (2) entry of judgment in its favor and against Ken's General Merchandise as to a monetary award in the amount of $14,670; (3) entry of judgment in its favor and against Shellenberger as to a monetary award in the amount of $21,502; (4) entry of judgment in its favor and against Scheidt as to a monetary award in the amount of $21,502; and (5) an award of attorney's fees and costs. (Dkt. entry no. 26, Proposed Order & J. of Default at 2.)

Shellenberger filed an Answer on July 1, 2010, approximately one month after the plaintiff filed its motion for entry of judgment by default. (Dkt. entry no. 27, Answer.) The plaintiff has not filed any supplemental briefing or notice to the Court with respect to the motion for judgment by entry of default since Shellenberger filed his Answer.

I. Standard of Review

A. Entry of Judgment by Default

Rule 55(b)(2) authorizes a court to enter judgment by default against "a properly served defendant who fails to plead or otherwise defend an action." La. Counseling & Family Servs. v. Makrygialos, LLC, 543 F.Supp.2d 359, 364 (D.N.J. 2008). A court uses its discretion to decide whether to enter judgment by default, considering (1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a meritorious defense, and (3) whether the defendant's delay is due to culpable conduct. Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). A court must accept as true the well-pleaded factual allegations of the complaint, but need not accept the moving party's legal conclusions or factual allegations relating to the amount of damages. Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).

Rule 55(c) states that "[t]he court may set aside an entry of default for good cause." The decision to set aside the entry of default pursuant to Rule 55(c) is left primarily to the discretion of the Court. United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984). In deciding whether good cause exists to set aside an entry of default, a court considers the same factors used in determining whether to enter judgment by default, except that the standard is "less stringent." See Hill v. Williamsport Police Dep't, 69 Fed.Appx. 49, 51 (3d Cir. 2003) (noting that Chamberlain's three-part test for granting default judgment was transposed from $55,518.05 in U.S. Currency, which concerned a motion to overturn a default judgment); see also Feliciano v. Reliant Tooling Co., Ltd., 691 F.2d 653, 656 (3d Cir. 1982) (indicating that the standard for setting aside a default is less stringent than for setting aside a default judgment). Default judgments are disfavored, and any doubts concerning whether a default should be vacated "should be resolved in favor of setting aside the default and reaching a decision on the merits." Gross v. Stereo Component Sys., Inc., 700 F.2d 120, 122 (3d Cir. 1983).

B. Personal Jurisdiction

The Court "has an affirmative duty to look into its jurisdiction over both the subject matter and the parties." Blythe v. Marauder Corp., No. 09-5695, 2010 WL 3609789, at *1 (D.N.J. Sept. 16, 2010) (citation and quotation omitted). In the absence of personal jurisdiction, an entry of judgment by default is void. Id.; see also Budget Blinds, Inc. v. White, 536 F.3d 244, 258 (3d Cir. 2008) (noting that a judgment is void, such that a party may seek relief from such judgment under Rule 60(b)(4), if the rendering court lacked personal jurisdiction over the party). Once challenged, the plaintiff bears the burden of proving by a preponderance of the evidence facts sufficient to establish personal jurisdiction. Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992).

The Court is satisfied that it has subject matter jurisdiction pursuant to 28 U.S.C. § 1331, based on the plaintiff's assertion of multiple causes of action arising under federal law. However, the Court is concerned as to whether personal jurisdiction over Shellenberger exists, as well as McBrearty and Ken's General Merchandise, who have not appeared in this action but were served in Montezuma, Georgia.

The Court may exercise personal jurisdiction to the extent permitted by the Due Process Clause of the Fourteenth Amendment. Fed.R.Civ.P. 4(e); N.J.Ct.R. 4:4-4. The Due Process Clause requires that a defendant have "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Provident Nat'l Bank v. Cal. Fed. Sav. & Loan ...

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