Forbush v. NTI-CA Inc. et al, No. 3:2022cv00141 - Document 23 (S.D. Cal. 2023)
Court Description: ORDER denying 19 Motion for Reconsideration re 19 MOTION for Reconsideration filed by Michael J. Forbush. Signed by Judge Marilyn L. Huff on 08/07/2023. (mjw)
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Forbush v. NTI-CA Inc. et al Doc. 23 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MICHAEL J. FORBUSH, an individual, Plaintiff, 12 13 v. 14 NTI-CA INC., a Nevada corporation, dba NTI GROUND TRANS; JOHN E. KINDT, an individual; and DOES 1 through 10 inclusive 15 16 18 20 21 22 23 24 25 26 27 28 ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION [Doc. No. 19.] Defendants. 17 19 Case No.: 22-cv-00141-H-RBB On May 3, 2023, the Court denied Plaintiff Michael J. Forbush’s motion for default judgment against Defendants NTI-CA Inc. (“NTI”) and John E. Kindt without prejudice on the grounds that Plaintiff failed to demonstrate that he properly served either of the Defendants in this action. (Doc. No. 18.) On May 31, 2023, Plaintiff filed a motion for reconsideration of the Court’s May 3, 2023 order. (Doc. No. 19.) On June 26, 2023, the Court took the motion for reconsideration under submission. (Doc. No. 22.) For the reasons below, the Court denies Plaintiff’s motion for reconsideration. /// /// /// 1 22-cv-00141-H-RBB Dockets.Justia.com 1 Background 2 The following factual background is taken from the allegations in Plaintiff’s 3 complaint. Defendant NTI is a national transportation company that provides airport 4 shuttle and luxury sedan and SUV transportation services in San Diego, California, Los 5 Angeles, California, Las Vegas, Nevada, and New York City, New York. (Doc. No. 1, 6 Compl. ¶ 13.) Defendant Kindt is the Executive Vice-President and Chief Operating 7 Officer of NTI. (Id. ¶ 10.) 8 In January 2020, Plaintiff began working as a full-time employee of NTI as a 9 manager for NTI’s San Diego office. (Id. ¶¶ 14, 15.) On January 29, 2021, Kindt informed 10 Plaintiff that he was being furloughed from his employment at NTI due to a reduction in 11 work force. (Id. ¶ 16.) At the time of Plaintiff’s furlough and/or termination, Kindt 12 promised that NTI would continue to provide Plaintiff with health insurance coverage 13 under NTI’s group health plan. (Id. ¶ 17.) 14 Plaintiff’s furlough and/or termination on January 29, 2021, was a “qualifying 15 event” under NTI’s group health plan. (Id. ¶¶ 18, 30.) In light of that, NTI had an 16 obligation under 29 U.S.C. § 1166 to provide Plaintiff with notice of his rights under 17 COBRA within 44 days of his furlough and/or termination. (Id. ¶ 32.) 18 On March 28, 2021, NTI provided Plaintiff with an enrollment form for NTI’s group 19 health plan effective April 1, 2021. (Id. ¶ 19.) Plaintiff completed the enrollment form 20 and submitted it to NTI the next day. (Id.) 21 On March 30, 2021, Kindt emailed Plaintiff and asked him to obtain alternative 22 health insurance. (Id. ¶ 20.) Plaintiff then became concerned that NTI was ending his 23 coverage under NTI’s group health plan, so Plaintiff contacted James Gleich, NTI’s CEO, 24 to clarify his coverage status. (Id.) Later that same day, Kindt sent an email to Plaintiff 25 “stating that he ‘was not going to push [Forbush] off until and unless [he found] 26 something.’” (Id.) Based on that statement, Plaintiff reasonably believed that NTI would 27 continue to provide him with health insurance under NTI’s group health plan. (Id.) 28 On June 8, 2021, Plaintiff suffered a heart attack which required emergency heart 2 22-cv-00141-H-RBB 1 surgery. (Id. ¶ 21.) Plaintiff was billed $511,223.56 for the medical services he received 2 related to his heart surgery. (Id. ¶ 23; see Doc. No. 11-3, Hallet Decl. Ex. A.) 3 On July 30, 2021, Plaintiff received a notice from NTI’s human resources manager 4 stating that his medical benefits were to be terminated effective August 1, 2021, due to a 5 COBRA qualifying event (“termination”) and provided information regarding his COBRA 6 rights. (Doc. No. 1, Compl. ¶ 22; see Doc. No. 11-6, Hallet Decl. Ex. D.) Plaintiff never 7 received notice of his COBRA rights prior to the July 30, 2021 notice. (Doc. No. 1, Compl. 8 ¶ 22.) 9 Plaintiff received an Explanation of Benefits letter dated October 22, 2021 from 10 Employer Driven Insurance Services (“EDIS”) – the claim administrator for NTI’s health 11 plan. (Id. ¶ 23; Doc. No. 11-3, Hallet Decl. Ex. A.) The letter stated that coverage for the 12 medical services related to Plaintiff’s emergency heart surgery was being denied on the 13 grounds that Plaintiff was not an eligible member of the plan at the time of service. (Id.) 14 Plaintiff appealed EDIS’s denial of the claims. (Doc. No. 1, Compl. ¶ 24; Doc. No. 11-6, 15 Hallet Decl. Ex. D.) In a letter dated December 1, 2021, EDIS affirmed its denial of the 16 claims based on information from NTI stating that Plaintiff’s termination date and “last 17 date actively at work” was January 29, 2021. (Doc. No. 1, Compl. ¶ 25; Doc. No. 11-6, 18 Hallet Decl. Ex. E.) 19 On February 1, 2022, Plaintiff filed a complaint against Defendants NTI and Kindt, 20 alleging claims for: (1) failure to provide notification of COBRA rights in violation of 29 21 U.S.C. § 1166; (2) failure to provide notification of Cal-COBRA rights in violation of 22 California Insurance Code § 10128.55; (3) breach of contract; (4) negligence; (5) negligent 23 misrepresentation; (6) intentional misrepresentation; and (7) declaratory relief. (Doc. No. 24 1, Compl. ¶¶ 27-84.) On February 18, 2022, Plaintiff filed a proof of service as to NTI. 25 (Doc. No. 3.) On March 3, 2023, Plaintiff filed a proof of service as to Kindt. (Doc. No. 26 4.) 27 On April 26, 2022, Plaintiff filed a notification of bankruptcy proceedings as to NTI. 28 (Doc. No. 6.) On April 27, 2022, the Clerk of Court entered default against Defendant 3 22-cv-00141-H-RBB 1 Kindt. (Doc. No. 7.) On July 14, 2022, Plaintiff filed a notice stating that NTI’s Chapter 2 11 bankruptcy proceedings had been dismissed. (Doc. No. 8.) On July 15, 2022, the Clerk 3 of Court entered a default against Defendant NTI. (Doc. No. 10.) 4 On December 8, 2022, Plaintiff filed a motion for default judgment against 5 Defendants. (Doc. No. 11.) On May 3, 2023, the Court denied Plaintiff’s motion for 6 default judgment without prejudice on the grounds that Plaintiff failed to demonstrate that 7 he properly served either of the Defendants in this action. (Doc. No. 18.) On June 1, 2023, 8 Plaintiff filed new proofs of service as to Defendants NTI and Kindt. (Doc. Nos. 20, 21.) 9 By the present motion, Plaintiff moves for reconsideration of the Court’s May 3, 10 2023 order denying his motion for default judgment. (Doc. No. 19-1.) Specifically, 11 Plaintiff moves for reconsideration of the Court’s holding that Plaintiff failed to 12 demonstrate that his initial service of the Defendants was proper. (Id. at 1-2.) 13 14 Discussion I. Legal Standards Governing a Motion for Reconsideration 15 A district court has inherent jurisdiction to modify, alter, or revoke a prior order. 16 United States v. Martin, 226 F.3d 1042, 1049 (9th Cir. 2000). “Reconsideration [of a prior 17 order] is appropriate if the district court (1) is presented with newly discovered evidence, 18 (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an 19 intervening change in controlling law.” School Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 20 1263 (9th Cir. 1993); accord Smith v. Clark Cnty. Sch. Dist., 727 F.3d 950, 955 (9th Cir. 21 2013). 22 Reconsideration of a prior order is an “extraordinary remedy, to be used sparingly 23 in the interests of finality and conservation of judicial resources.” Carroll v. Nakatani, 342 24 F.3d 934, 945 (9th Cir. 2003); accord Berman v. Freedom Fin. Network, LLC, 30 F.4th 25 849, 858–59 (9th Cir. 2022); see also Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH 26 & Co., 571 F.3d 873, 880 (9th Cir. 2009) (“‘[A] motion for reconsideration should not be 27 granted, absent highly unusual circumstances . . . .’”); Raiser v. San Diego Cnty., No. 19- 28 CV-00751-GPC, 2021 WL 4751199, at *1 (S.D. Cal. Oct. 12, 2021) (“Motions for 4 22-cv-00141-H-RBB 1 reconsideration are disfavored and should only be granted in narrow instances.”). A motion 2 for reconsideration may not be used to relitigate old matters, or to raise arguments or 3 present evidence for the first time that reasonably could have been raised earlier in the 4 litigation. Exxon Shipping Co. v. Baker, 554 U.S. 471, 486 n.5 (2008); see Berman, 30 5 F.4th at 859 (“Reconsideration motions may not be used to raise new arguments or 6 introduce new evidence if, with reasonable diligence, the arguments and evidence could 7 have been presented during consideration of the original ruling.” (citing Kona Enterprises, 8 Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000)); Williams v. Cnty. of San 9 Diego, 542 F. Supp. 3d 1070, 1071 (S.D. Cal. 2021) (“A motion for reconsideration is not 10 a vehicle to reargue the motion or to present evidence which should have been raised 11 before.”). “‘A motion to reconsider is not another opportunity for the losing party to make 12 its strongest case, reassert arguments, or revamp previously unmeritorious arguments.’” 13 Raiser, 2021 WL 4751199, at *1; see also Kilbourne v. Coca-Cola Co., No. 14CV984- 14 MMA (BGS), 2015 WL 10943610, at *2 (S.D. Cal. Sept. 11, 2015) (“‘[M]otions for 15 reconsideration are not the proper vehicles for rehashing old arguments and are not 16 intended to give an unhappy litigant one additional chance to sway the judge.’”). “A party 17 seeking reconsideration must show more than a disagreement with the Court’s decision.” 18 United States v. Westlands Water Dist., 134 F. Supp. 2d 1111, 1131 (E.D. Cal. 2001); 19 accord Williams, 542 F. Supp. 3d at 1071. 20 II. Analysis 21 Before evaluating the merits of a motion for default judgment, a district court must 22 consider the adequacy of service of process on the parties against whom the default is 23 requested. Indian Hills Holdings, LLC v. Frye, 572 F. Supp. 3d 872, 884 (S.D. Cal. 2021); 24 DFSB Kollective Co. v. Bourne, 897 F. Supp. 2d 871, 877 (N.D. Cal. 2012); see also Gold 25 Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 19 (3d Cir. 1985) (“A default judgment 26 entered when there has been no proper service of the complaint is, a fortiori, void, and 27 should be set aside.”). This is because “[a] federal court does not have jurisdiction over a 28 defendant unless the defendant has been served properly under [Federal Rule of Civil 5 22-cv-00141-H-RBB 1 Procedure] 4.” Direct Mail Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 2 685, 688 (9th Cir. 1988); see also Omni Cap. Int’l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 3 97, 104 (1987) (“Before a federal court may exercise personal jurisdiction over a defendant, 4 the procedural requirement of service of summons must be satisfied.”); Mason v. Genisco 5 Tech. Corp., 960 F.2d 849, 851 (9th Cir. 1992) (“A person is not bound by a judgment in 6 a litigation to which he or she has not been made a party by service of process.”). 7 The Ninth Circuit has explained that “‘Rule 4 is a flexible rule that should be 8 liberally construed so long as a party receives sufficient notice of the complaint.’” Direct 9 Mail, 840 F.2d at 688. “Nonetheless, without substantial compliance with Rule 4 ‘neither 10 actual notice nor simply naming the defendant in the complaint will provide personal 11 jurisdiction.’” Id.; see Hensley v. Interstate Meat Distribution, Inc., No. 3:19-CV-0533- 12 YY, 2020 WL 1677658, at *2 (D. Or. Jan. 10, 2020) (“‘A liberal construction of Rule 4 13 cannot be utilized as a substitute for the plain legal requirement as to the manner in which 14 service of process may be had.’” (quoting Reeder v. Knapik, No. 07-CV-362-L(LSP), 2007 15 WL 1655812, at *1 (S.D. Cal. June 5, 2007)). A plaintiff bears the burden of demonstrating 16 that service is proper. Kyung Cho v. UCBH Holdings, Inc., 890 F. Supp. 2d 1190, 1198 17 (N.D. Cal. 2012) (citing Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004)); Silva v. 18 Gonzales, No. 3:13-CV-1587-CAB-KSC, 2014 WL 12663140, at *4 (S.D. Cal. May 23, 19 2014); see also Donell v. Keppers, 835 F. Supp. 2d 871, 876 (S.D. Cal. 2011) (“‘It is the 20 plaintiff’s burden to establish the court’s personal jurisdiction over a defendant.’”). 21 In his motion for reconsideration, Plaintiff argues that his initial service of 22 Defendants was proper pursuant to Federal Rule of Civil Procedure 4 and the California 23 Code of Civil Procedure. (Doc. No. 19-1 at 1.) As an initial matter, Plaintiff asserts that 24 his motion for default judgment “did not address the specifics of service as Plaintiff had 25 filed proofs of service.” (Id. at 4.) This is inaccurate, and the Court rejects this assertion. 26 In his motion for default judgment, Plaintiff acknowledged that “[t]he Court must also 27 assess whether the defendants against whom default judgment is sought were properly 28 served with notice of the action.” (Doc. No. 11-1 at 5 (citing Solis v. Cardiografix, 2012 6 22-cv-00141-H-RBB 1 WL 3638548, at *2 (N.D. Cal. Aug. 22, 2012).) Plaintiff then provided the purported 2 substantive basis for his assertion that the Defendants had been properly served in this 3 action. (Id. at 5–6.) Thus, the record shows that Plaintiff was well aware that he needed 4 to demonstrate that the Defendants had been properly served in order to be entitled to a 5 default judgment against them, and that Plaintiff did address the issue of service in his 6 motion for default judgment. Plaintiff may not use a motion for reconsideration as a vehicle 7 to relitigate the issue of proper service of the Defendants. See Exxon Shipping, 554 U.S. 8 at 486 n.5; Raiser, 2021 WL 4751199, at *1; Kilbourne, 2015 WL 10943610, at *2. The 9 Court further addresses Plaintiff’s individual arguments as to Defendant NTI and 10 Defendant Kindt below. 11 A. 12 In his prior motion for default judgment, Plaintiff asserted that he perfected service 13 of process on Defendant NTI on February 7, 2022 by serving NTI with the summons and 14 complaint pursuant to Federal Rule of Civil Procedure 4(h)(1)(B). (Doc. No. 11-1 at 3.) 15 Rule 4(h)(1)(B) permits service on “a domestic or foreign corporation” “by delivering a 16 copy of the summons and of the complaint to an officer, a managing or general agent, or 17 any other agent authorized by appointment or by law to receive service of process.” Fed. 18 R. Civ. P. 4(h). Defendant NTI 19 The proof of service Plaintiff filed on February 18, 2022 as to NTI asserted that it 20 was served by leaving the summons and complaint at NTI’s Inglewood office with “Yahira 21 Gonzalez, Human Resources Manager.” (Doc. No. 3.) In the Court’s 2023 order denying 22 Plaintiff’s motion for default judgment, the Court held that service on Defendant NTI was 23 not proper under Rule 4(h)(1)(B) because Plaintiff failed to demonstrate that Ms. Gonzalez 24 was a “managing or general agent” of NTI. (Doc. No. 18 at 5–6 (citing Bender v. Nat’l 25 Semiconductor Corp., No. C 09-01151 JSW, 2009 WL 2912522, at *2–3 (N.D. Cal. Sept. 26 9, 2009) (declining to find service proper where the defendant was a large corporation and 27 the facts did not suggest that the recipient played a large role in the overall structure of the 28 corporation and the defendant had a registered agent for service of process that plaintiff 7 22-cv-00141-H-RBB 1 did not attempt to serve); Quanex IG Sys., Inc. v. Panjin CLL Insulating Glass Material 2 Co., No. CV1507138JVSRAOX, 2015 WL 13918224, at *2 (C.D. Cal. Dec. 4, 2015) 3 (declining to find service proper even though the recipient carried the titles “‘Manager of 4 International Sales,’ ‘Business Manager,’ ‘Sales Manager,’ and ‘Senior Head of 5 Marketing, Sales, Advertising, and PR’” where the district court had no information 6 regarding the size of the company or the recipient’s role in the company).) 7 In his motion for reconsideration, Plaintiff does not address the cited district court 8 decisions in Bender or Quanex or attempt to distinguish the two decisions. Rather, Plaintiff 9 presents new evidence in the form of a declaration from David E. Hallett in an effort to 10 demonstrate that Ms. Gonzalez was a “managing or general agent” of NTI. (See Doc. No. 11 19-2, Hallet Decl; see also Doc. No. 19-1 at 7-9.) A motion for reconsideration may not 12 be used to introduce new evidence for the first time that reasonably could have been raised 13 earlier in the litigation. See Exxon Shipping, 554 U.S. at 486 n.5; Berman, 30 F.4th at 859; 14 Kona, 229 F.3d at 890. The Hallet declaration and the attached exhibits could have been 15 presented to the Court earlier in the litigation when Plaintiff filed his motion for default 16 judgment. As such, Plaintiff’s reliance on the contents of the Hallet declaration is 17 insufficient to demonstrate that reconsideration of the Court’s May 3, 2023 order is proper. 18 Plaintiff also argues that service on NTI was proper under Federal Rules of Civil 19 Procedure 4(h)(1)(A) and 4(e)(1) and California Code of Civil Procedure §§ 415.20(a) and 20 416.10.1 (Doc. No. 19-1 at 5, 9-12.) Plaintiff’s motion for default judgment did not cite 21 to Rule 4(h)(1)(A), Rule 4(e)(1), California Code of Civil Procedure § 415.20(a), or 22 California Code of Civil Procedure § 416.10. (See generally Doc. No. 11-1 at 5-6; see also 23 24 25 26 27 28 1 Federal Rule of Civil Procedure 4(h)(1)(A) permits service on a corporation “in the manner prescribed by Rule 4(e)(1) for serving an individual.” Fed. R. Civ. P. 4(h)(1)(A). Rule 4(e)(1) permits service on an individual by “following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made.” Fed. R. Civ. P. 4(e)(1). Rules 4(h)(1)(A) and 4(e)(1) combine to permit service of NTI pursuant to California law. 8 22-cv-00141-H-RBB 1 Doc. No. 3.) A motion for reconsideration may not be used to raise arguments for the first 2 time that reasonably could have been raised earlier in the litigation. See Exxon Shipping, 3 554 U.S. at 486 n.5; Berman, 30 F.4th at 859; Kona, 229 F.3d at 890. As such, Plaintiff 4 cannot attempt to raise his new arguments regarding service under California Code of Civil 5 Procedure §§ 415.20(a) and 416.10 via a motion for reconsideration. As a result, Plaintiff 6 has failed to demonstrate that reconsideration of the Court’s May 3, 2023 order regarding 7 service of Defendant NTI is appropriate. 8 B. 9 In his prior motion for default judgment, Plaintiff asserted that he perfected service 10 of process on Defendant Kindt on February 18, 2022 by serving Kindt with the summons 11 and complaint pursuant to Federal Rule of Civil Procedure 4(h)(1)(B). (Doc. No. 11-1 at 12 3.) In the Court’s May 3, 2023 order denying Plaintiff’s motion for default judgment, the 13 Court held that service on Defendant Kindt was not proper under Rule 4(h)(1)(B) because 14 Rule 4(h)(1)(B) only applies to corporations and partnerships and, therefore, it is 15 inapplicable as to Defendant Kindt. (Doc. No. 18 at 7.) In his motion for reconsideration, 16 Plaintiff concedes that the Court correctly held that service as to Kindt under Rule 17 4(h)(1)(B) was improper. (See Doc. No. 19-1 at 12.) Defendant Kindt 18 In an effort to demonstrate proper service, Plaintiff now argues that Defendant Kindt 19 was properly served pursuant to Federal Rule of Civil Procedure 4(e)(1) and California 20 Code of Civil Procedure § 415.20(b). (Id. at 12-14.) Plaintiff’s motion for default 21 judgment did not cite to Rule 4(e)(1) or California Code of Civil Procedure § 415.20(b) or 22 contain the evidence that Plaintiff now relies on to support his new basis for service of 23 Kindt. (See generally Doc. No. 11-1 at 5-6; see also Doc. No. 4.) A motion for 24 reconsideration may not be used to raise new arguments or new evidence for the first time 25 that reasonably could have been raised earlier in the litigation. See Exxon Shipping, 554 26 U.S. at 486 n.5; Berman, 30 F.4th at 859; Kona, 229 F.3d at 890. As such, Plaintiff cannot 27 attempt to raise his new argument regarding service of Kindt under Rule 4(e)(1) and 28 California Code of Civil Procedure § 415.20(b) via a motion for reconsideration. As a 9 22-cv-00141-H-RBB 1 result, Plaintiff has failed to demonstrate that reconsideration of the Court’s May 3, 2023 2 order regarding service of Defendant Kindt is appropriate. 3 Conclusion 4 For the reasons above, the Court denies Plaintiff’s motion for reconsideration of the 5 Court’s May 3, 2023 order denying Plaintiff’s motion for default judgment without 6 prejudice. 7 8 9 10 IT IS SO ORDERED. DATED: August 7, 2023 MARILYN L. HUFF, District Judge UNITED STATES DISTRICT COURT 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 22-cv-00141-H-RBB
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