United States District Court, W.D. Arkansas, Fayetteville Division
OPINION AND ORDER
HOLMES, III U.S. DISTRICT JUDGE
April 26, 2019, Denovo Brands, LLC initiated this action
against GCI Outdoor, Inc. seeking a declaratory judgment that
its ROK-IT chair does not infringe on GCFs registered U.S.
Patent No. 9,282,824 or, alternatively, that GCFs patent is
invalid. On June 16, 2019, after GCI failed to file a
responsive pleading, the Clerk entered the default of GCI.
(Doc. 11). After the Court denied Denovo's motion for
default judgment (Doc. 12), counsel for GCI entered a notice
of appearance and immediately filed a motion (Doc. 14) to set
aside the default on the basis that GCFs registered agent,
Daniel Grace, was never served. Denovo filed a response in
opposition (Doc. 23), a supplement to its response (Doc.
27-1), and GCI filed a reply (Doc. 26) with leave of Court.
For the reasons set forth below, the Court will GRANT the
motion to set aside the default of GCI.
is a strong preference for adjudication on the merits
stemming from an interest in preserving the "fundamental
fairness of the adjudicatory process." Oberstar v.
F.D.I.C., 987 F.2d 494, 504 (8th Cir. 1993). The entry
of default may be set aside for good cause. Fed.R.Civ.P.
55(c). "When examining whether good cause exists, the
district court should weigh whether the conduct of the
defaulting party was blameworthy or culpable, whether the
defaulting party has a meritorious defense, and whether the
other party would be prejudiced if the default were
excused." Stephenson v. El-Batrawi, 524 F.3d
907, 912 (8th Cir. 2008) (internal quotation omitted). GCI
argues here that it was neither blameworthy nor culpable
because its registered agent, Daniel Grace, was not served in
accordance with the Federal Rules of Civil Procedure.
plaintiff bears the burden of demonstrating that a defendant
was served. Fed.R.Civ.P. 4(1)(1). A return of service is
prima facie evidence that service was proper. See Hicklin
v. Edwards, 226 F.2d 410, 414 (8th Cir. 1955). Once a
plaintiff establishes a prima facie showing of service, the
burden shifts to the defendant to show that a complaint and
summons were not received. Id. Generally, a
defendant's sworn affidavit denying receipt of service
rebuts the presumption of service. See Ghounem v.
Ashcroft, 378 F.3d 740, 745 (8th Cir. 2004). In these
cases, a plaintiff cannot rely on the presumption but must
instead provide additional evidence to satisfy its Rule 4
burden. Cf Del Vecchio v. Bowers, 296 U.S. 280, 286
(1935) (holding a presumption does not have "the quality
of affirmative evidence" and will "control the
result [only] where there is an entire lack of competent
evidence"); see also St. Louis Shipbuilding Co. v.
Dir. of Office Workers' Comp. Programs, U.S. Dep't of
Labor, 551 F.2d 1119, 1124 (8th Cir. 1977) ("The
presumption serves only to control the result where there is
a total lack of competent evidence.").
case, Denovo filed as proof of service the affidavit of
Andrew Esposito. (Doc. 7). According to his affidavit, Mr.
Esposito alleges to have served GCFs registered agent, Daniel
Grace, on May 14, 2019. (Id.). However, Mr. Grace
filed his own affidavit denying that he received service.
(Doc. 14-1, pp. 2-3). The proof of service makes no mention
as to how Mr. Grace was served, nor does it indicate where he
was served. Rather, the only detail communicated by the proof
of service is an assertion that Mr. Esposito served Mr. Grace
on May 14. Because Mr. Grace's affidavit refutes the only
representation in the proof of service, his declaration under
oath rebuts any presumption of service that may apply. Denovo
must therefore provide additional evidence to demonstrate
that service was proper.
Court has considered holding an evidentiary hearing on this
matter, but it appears such a hearing would be futile. Mr.
Esposito filed a responsive affidavit to Mr. Grace's
allegation that he was never served. (Doc. 23-1). Though Mr.
Esposito claims to have personally served Mr. Grace on May
14, 2019, he is unable to locate any notes regarding the
location or time he served Mr. Grace. Rather, Mr. Esposito
all but indicated those notes do not exist. Id.
("This is not uncommon. Because the Proof of Service
form does not explicitly require these additional details, it
is our practice not to provide them."). Mr. Esposito had
an opportunity to offer additional evidence as to how he
served Mr. Grace-whether by his own testimony or
otherwise-but is unable to do so. Because Denovo appears
unable to offer any additional evidence as to how service was
perfected, any evidentiary hearing would be futile.
Accordingly, the Court finds that Denovo has failed to carry
its burden to demonstrate that service was proper.
Denovo fails to carry its burden to prove service, the Court
finds that GCI was not served in accordance with Rule 4. As a
result, GCI's failure to timely respond was not the
result of its own culpable or blameworthy conduct.
Additionally, Denovo will not be prejudiced for having to
proceed with a case that it filed. As to whether GCI has a
meritorious defense, if GCI's answer is factual,
GCI's defense is meritorious. For these reasons-as well
as the Court's strong preference for adjudication on the
merits-the Court finds good cause to set aside the default of
GCI. The Clerk's entry will be set aside.
90-day period for Denovo to effectuate service has passed.
Fed.R.Civ.P. 4(m). Although it is Denovo's counsel's
responsibility to comply with the Federal Rules in
effectuating proper service, the insufficiency of the proof
of service is attributable more to the process server's
poor recordkeeping than any other reason. The Court finds
that good cause exists to allow Denovo the opportunity to
perfect service of process on GCI. See Fed. R. Civ.
P. 4(m) ("[I]f the plaintiff shows good cause for the
failure, the court must extend the time for service for an
appropriate period."). The Court will therefore extend
the period of time for perfecting service of process for an
additional 45 days from the date of this order.
THEREFORE ORDERED that Defendant's motion (Doc. 14) is
GRANTED and the Clerk's entry of default (Doc. 11) is SET
FURTHER ORDERED that the time for Plaintiff to perfect
service of process is extended to 45 days from the date of
entry of this order, ...