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REC'D & FILED
2014 FEB 6 AM 8:51
ALAN GLOVER CLERK
BY DEPUTY _________
Case No.: 09OC00579 1B
Dept. No.: I
In
The First Judicial District Court of the State of
In
and for
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JED MARGOLIN, an individual, Plaintiff, VS.
OPTIMA TECHNOLOGY CORPORATION, a California corporation, OPTIMA TECHNOLOGY CORPORATION, a Nevada corporation, REZA ZANDIAN aka GOLAMREZA ZANDIANJAZI aka GHOLAM REZA ZANDIAN aka REZA JAZI aka J. REZA JAZI aka G. REZA JAZI aka GHONONREZA ZANDIAN JAZI, an individual, DOE Companies 1-10, DOE Corporations 11-20, and DOE Individuals 21-30, Defendants.
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ORDER DENYING DEFENDANT REZA ZANDIAN AKA GOLAMREZA ZANDIANJAZI AKA GHOLAM REZA ZANDIAN AKA REZA JAZI AKA J. REZA JAZI AKA G. REZA JAZI AKA GHONONREZA ZANDIAN JAZI' S MOTION TO SET ASIDE DEFAULT JUDGMENT
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This matter comes before the Court on REZA ZANDIAN aka GOLAMREZA ZANDIANJAZI aka GHOLAM REZA ZANDIAN aka REZA JAZI aka J. REZA JAZI aka G. REZA JAZI aka GHONONREZA ZANDIAN JAZI's ("Zandian") Motion to Set Aside Default Judgment, dated December 19, 2013. Plaintiff Jed Margolin filed an Opposition to Set Aside Default Judgment on January 19, 2014. Zandian served a reply in support of the Motion to Set Aside on January 23, 2014. Based upon the following facts and conclusions of law, Zandian's Motion to Set Aside is DENIED.
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I. FACTUAL BACKGROUND
Plaintiff Jed Margolin is the
named inventor on United States Patent No. 5,566,073 (‘the '073 Patent"),
United States Patent No. 5,904,724 ("the '724 Patent"), United States
Patent No. 5,978,488 (the '488 Patent") and United States Patent No.
6,377,436 ("the '436 Patent"} (collectively "the Patents").
See Amended Complaint, filed 8/11/11, ¶¶ 9-10. In 2004, Mr. Margolin granted to
Robert Adams, then CEO of Optima Technology, Inc. later renamed Optima
Technology Group (hereinafter "OTC'), a Cayman Islands Corporation
specializing in aerospace technology) a Power of Attorney regarding the
Patents.
In May 2006, OTG and Mr.
Margolin licensed the ‘073 and '724 Patents to Geneva Aerospace, Inc., and Mr.
Margolin received a royalty payment pursuant to a royalty agreement between J.
Margolin and OTG.
On or about December 5, 2007,
Zandian filed with the U.S. Patent and Trademark Office ("USPTO") assignment
documents allegedly assigning all four of the Patents to Optima Technology
Corporation ("OTC"), a company apparently owned by Zandian at the
time. Id_ at ¶ 15. Shortly thereafter, on November 9, 2007, Mr.
Margolin, Robert Adams, and OTG were named as defendants in the case titled Universal
Avionics Systems Corporation v. Optima Technology Group, Inc., No. CV
07-589-TUC-RCC (the "
On August 18, 2009, the United States District Court for the District of Arizona entered a default judgment against OTC and found that OTC had no interest in the ‘073 or ‘724 Patents, and that the assignment documents filed with the USPTO were "forged, invalid,
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void,
of no force and effect."
Due to Zandian's acts, title to
the Patents was clouded and interfered with Plaintiff s and OTG's ability to
license the Patents.
II. PROCEDURAL BACKGROUND
Plaintiff filed his Complaint
on December 11, 2009, and the Complaint was personally served on Zandian on
February 2, 2010, and on Defendants Optima Technology Corporation, a
The answers of Defendants
Optima Technology Corporation, a
The defaults were set aside and Zandian's motion to dismiss was denied on August 3, 2011. On September 27, 2011, this Court ordered that service of process against all Defendants may be made by publication. As manifested by the affidavits of service, filed herein on November 7, 2011, all Defendants were duly served by publication by November 2011.
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On February 21, 2012, the Court denied Zandian's motion to dismiss the Amended Complaint. On March 5, 2012, Zandian served a General Denial to the Amended Complaint On March 13, 2012, the corporate Defendants served a General Denial to the Amended Complaint.
On June 28, 2012, this Court issued an order requiring the corporate Defendants to retain counsel and that counsel enter an appearance on behalf of the corporate Defendants by July 15, 2012. The June 28, 2012 order further provided that if no such appearance was entered, the corporate Defendants' General Denial would be stricken. Since no appearance was their behalf of the corporate Defendants, a default was entered against them on September 24, 2012. A notice of entry of default judgment was filed and served on November 6, 2012.
On July 16, 2012, Mr. Margolin served Zandian with Mr. Margolin's First Set of Requests for Admission, First Set of Interrogatories, and First Set of Requests for Production of Documents, but Zandian never responded to these discovery requests. As such, on December 14, 2012, Mr. Margolin filed and served a Motion for Sanctions pursuant to NRCP 37. In this Motion, Mr. Margolin requested this Court strike the General Denial of Zandian, and award Mr. Margolin his fees and costs incurred in bringing the Motion,
On January 15, 2013, this Court issued an order striking the General Denial of Zandian and awarding his fees and costs incurred in bringing the NRCP 37 Motion. A default was entered against Zandian on March 28, 2013, and a notice of entry of default judgment was filed and served on April 5, 2013.
On April 17, 2013, Mr. Margolin filed an Application for Default Judgment, which was served on Zandian and the corporate Defendants. Since Zandian did not respond to the Application for Default Judgment a Default Judgment was entered on June 24, 2013. Notice of entry of the Default Judgment was served on Zandian on June 26, 2013 and filed on June 27, 2013.
Over five and a half month later, on December 19, 2013, Zandian served his Motion to Set Aside on Plaintiff. Zandian's Motion to Set Aside claims that he never received any written discovery or notice of the pleadings and papers filed in this matter after his counsel
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withdrew as his former counsel provided an erroneous last known address to the Court and the parties when he withdrew, and therefore Zandian requests that the judgment be set aside.
III. FINDINGS AND CONCLUSIONS OF LAW
A party seeking to set aside a
default judgment has the burden to prove mistake, inadvertence, surprise, or
excusable neglect by a preponderance of the evidence. Kahn
v. Orme, 108
Specifically, Zandian has not met the factors set forth in Kahn to compel the court to set aside the judgment. Id. at 513, 835 P.2d at 792-93 (holding that the district court must consider whether the party moving to set aside a judgment promptly applied to remove the judgment, lacked intent to delay the proceedings, lacked knowledge of the procedural requirements, and demonstrated good faith, in addition to considering the state's underlying policy of resolving on the merits). Zandian failed to promptly apply for relief, has not established a lack of intent to delay these proceedings or a lack of knowledge of the procedural requirements, and did not provide a good-faith reason for the over five-and-a-half-month gap between entry of default and the time he obtained new counsel and filed the Motion to Set Aside Default Judgment.
a. Zandian Did Not Promptly Apply To Remove The Judgment
Even though a motion to set
aside a judgment maybe filed within the six month deadline provided for in NRCP
60(b), a party can still fail to act promptly. See Kahn 109
Despite his knowledge of the default judgment, Zandian did not move to have the judgment set aside until nearly six months after its entry. Although Zandian argues he did not receive notice of the various proceedings, notice was mailed to his address. Therefore, the
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notice requirement of NRCP 55 was fulfilled as Plaintiff served written notice of the application for default judgment. Moreover, NRCP 55 is likely not implicated since the judgment ultimately resulted from sanctions arising from Zandian's failure to respond to discovery. See Durango Fire Protection, Inc. v. Troncoso, 120 Nev. 659 (2004) (trial court's entry of judgment for plaintiff, in action for breach of contract, after striking defendant's answer was a sanction for defendant's failure to appear at several hearings and calendar calls rather than a default judgment, and thus, civil procedure rule requiring written notice before entry of default judgment was not applicable).
Further, First Judicial District Court Rule 22(3) expressly states that "[a]ny form of order permitting withdrawal of an attorney submitted to the Court for signature shall contain the address at which the party is to be served with notice of all further proceedings." Plaintiff had a right to rely on the address given by Zandian's prior attorney.
No evidence supports Zandian's
claims that he lacked knowledge of this matter. Even if Zandian was living in
b. Zandian Has Failed To Show He Lacked Intent To Delay
Zandian received all of the papers and pleadings in this, matter. However, he failed to respond to Plaintiff's discovery and willfully ignored the proceedings of this matter. In fact, Zandian waited nearly six months to secure new counsel and Me the motion to set aside. Furthermore, Zandian failed to file an opposition to the application for judgment. Accordingly, the Court finds that Zandian has failed to establish the absence of an intent to delay.
c. Whether Zandian Lacked Knowledge Of Procedural Requirements
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Zandian unquestionably had
notice of the written discovery, motions and orders filed in this matter, and
yet he ignored all of these documents. All that was required of Zandian was to
either-personally respond, to the discovery and motions or obtain counsel to
appear on his behalf Zandian knew discovery had been served but deliberately
chose to ignore it Zandian knew a motion for sanctions and an application for
judgment had been filed, which led to the judgment, but Zandian chose to ignore
those items as well. Zandian's failure to obtain new counsel or otherwise act
on his own behalf is inexcusable, See Kahn 108
we are not confronted with some subtle or technical aspect of procedure, ignorance of which could readily be excused. The requirements of the rule are simple and direct. To condone the actions of a party who has sat on its rights only to make a last-minute rush to set aside judgment would be to turn NRCP 60(b) into a device for delay rather than the means for relief from an oppressive judgment that it was intended to be.
Zandian had sufficient knowledge to act responsibly. He had previously retained counsel to defend this action and retained new counsel to set aside the judgment. Therefore, this Court cannot conclude that Zandian failed to respond to set aside the default judgment because he was ignorant of procedural requirements.
d. Whether Zandian Acted In Good Faith
Zandian has not provided any valid reason for failing to respond to the requested discovery, the motion for sanctions or the application for judgment Furthermore, he has not provided a reasonable explanation for waiting over five months to obtain other counsel despite having knowledge of the judgment entered against him.
Based upon the fact that Zandian knew about this case and continued to receive the papers and pleadings from this matter, it was inexcusable for Zandian not to respond to the
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earlier discovery requests and motions. Zandian has not demonstrated good faith In fact, Zandian has only demonstrated inexcusable neglect by his willful failure to respond to, and participate in, this action. Accordingly, the Court determines that Zandian lacked good faith in contesting this action.
e. Whether This Case Should Be Tried On The Merits For Policy Reasons
The Nevada Supreme Court has
held that "good public policy dictates that cases be adjudicated on their
merits" See Kahn 108
We wish not to be understood, however, that this judicial tendency to grant relief from a default judgment implies that the trial court should always grant relief from a default judgment. Litigants and their counsel may not properly be allowed to disregard process or procedural rules with impunity. Lack of good faith or diligence, or lack of merit in the proposed defense, may very well warrant a denial of the motion for relief from the judgment
Zandian has disregarded the process and procedural rules of this matter with impunity. He has repeatedly ignored this matter and failed to respond to the written discovery and motions in this matter since his former attorney John Peter Lee withdrew from representation. Zandian's lack of good faith or diligence warrants a denial of the motion to set aside.
Zandian's complete failure to respond to the discovery requests and subsequent motions evidences his willful and recalcitrant disregard of the judicial process, which prejudiced Plaintiff. Foster v. Dingwall, 227 P.3d 1042, 1049 (Nev. 2010) (citing Hamlett v. Reynolds, 114 Nev. 863, 865, 963 P.2d 457, 458 (1998) (upholding the district court's strike order where the defaulting party's "constant failure to follow [the court's] orders was unexplained and unwarranted"); In re Phenylpropanolamine (PPA) Products, 460 F.3d 1217, 123 6 (9th Cir.2006) (holding that, with respect to discovery abuses, "(p]rejudice from unreasonable delay is presumed' " and failure to comply with court orders mandating discovery "is sufficient prejudice”.
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In light of Zandian's repeated
and continued abuses, the policy of adjudicating cases on the merits would not
be furthered in this case, and the ultimate sanctions are necessary to demonstrate
to Zandian and future litigants that they are not free to act with wayward
disregard of a court's orders. Foster, 227 P.3d
at 1049. Moreover, Zandian's failure to oppose Plaintiff's motion to strike the
General Denial or the application for judgment constitutes an admission that
the motion and application were meritorious.
IV. CONCLUSION
The record provides substantial
evidence to support this denial of Zandian's motion to set aside. Further, the policy
of resolving cases on the merits does not allow litigants “to disregard process
or procedural rules with impunity.” Kahn, 108
Zandian has failed to show mistake, inadvertence, surprise or excusable neglect pursuant to NRCP 60(b). Zandian had every opportunity to properly defend this action and instead made a voluntary choice not to. Therefore, Zandian's motion to set aside is hereby DENIED.
DATED: This 6th day of February, 2014. IT IS SO ORDERED.
_______________________
JAMES T. RUSSELL
DISTRICT COURT JUDGE
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CERTIFICATE OF MAILING
I hereby certify that on the 6 day of February, 2014, I placed a copy of the foregoing in. the United States Mail, postage prepaid, addressed as follows:
Matthew D. Francis
Adam P. McMillen
Watson Rounds
Geoffrey W. Hawkins
Johnathon Fayeghi
______________________
Samatha Valerius
Law Clerk, Department I