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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION BERNINA OF AMERICA, INC., Plaintiff, v. IMAGELINE, INC., ISLANDVIEW TECHNOLOGIES LLC, ISLANDVIEW DESIGNS LLC, and GEORGE P. RIDDICK, III, Defendants. ) ) ) ) ) ) ) ) ) ) ) )
Case Number: 1:10-cv-4917
Judge Milton I. Shadur
Magistrate Judge Martin C. Ashman
PLAINTIFF’S MOTION FOR ENTRY OF DEFAULT JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS IMAGELINE, INC., ISLANDVIEW TECHNOLOGIES LLC, AND ISLANDVIEW DESIGNS LLC NOW COMES Plaintiff, Bernina of America, Inc. (“Bernina”), by and though counsel, and respectfully requests this Court to enter a default judgment, pursuant to Rule 55 of the Federal Rules of Civil Procedure, against Defendant Imageline Inc., Defendant Islandview Technologies LLC, and Defendant Islandview Designs LLC, (hereinafter “Defaulting Defendants”) and a permanent injunction against Defaulting Defendants in favor of Bernina. In support of its Motion, Bernina states as follows: 1. On August 4, 2010, Bernina caused this case to be filed against
Defaulting Defendants and filed a motion for Temporary Restraining Order. See Complaint (Doc. No. 1); Plaintiff’s Motion for Temporary Restraining Order (Doc. No. 7). 2. On August 9, 2010, the Court held a hearing on Bernina’s motion, at
which the Defaulting Defendants were unrepresented and Defendant George P. Riddick, III (“Riddick”), entered an appearance pro se on behalf of himself. At the hearing, the Court explicitly notified Riddick (who is the sole member or primary shareholder and registered agent 1
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of each of the Defaulting Defendants) that, while it was his right to represent himself in the matter, he could not appear on behalf of the Defaulting Defendants, because they are corporations. See Aug. 9, 2010 Court Tr. at 2:23-3:6 (excerpt attached as Exhibit A). Riddick indicated that he was aware that he could not represent the Defaulting Defendants. Id. at 3:7. The Court ultimately entered and continued Bernina’s motion for ten days to allow Riddick to locate counsel to represent the Defaulting Defendants and to submit a “professional” response to Bernina’s motion. Id. at 7:19-8.6. 3. On August 18, 2010, Riddick attempted to file two untimely and
procedurally improper pro se briefs on behalf of himself and the Defaulting Defendants opposing Bernina’s motion for a Temporary Restraining Order. See Riddick’s Opposition and Rebuttal Briefs (Doc. Nos. 23 & 24). On the same day, the Court sua sponte issued a memorandum order “prompted by Riddick’s efforts to speak for his codefendants as well as for himself,” (Aug. 18, 2010 Ct. Order (Doc. No. 14) at 1), in which the Court stated: . . . this Court will treat [Defaulting Defendants] as nonresponding parties, absent (1) a showing by Riddick that he himself is a lawyer (coupled with a completed application to appear here pro hac vice, including the required fee) or (2) the filing of an appearance by either counsel. Id. at 2. 4. At the August 19, 2010 scheduled Court hearing on Bernina’s continued
Motion for a Temporary Restraining Order, Riddick again appeared pro se and the Defaulting Defendants again were unrepresented. The Court once again advised Riddick that he could not represent the Defaulting Defendants and further advised Riddick that it was in his best interests to obtain counsel to represent both himself and the Defaulting Defendants. See Aug. 19, 2010 Ct. Tr. 2:7-16, 18:22-19:6 (excerpt attached as Exhibit B). After hearing argument, the Court granted Bernina’s motion for a Temporary Restraining Order. See Temporary Restraining Order (Doc. No. 25). 2
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Also on August 19, 2010, each of the Defaulting Defendants were
properly served with a summons and a copy of the Complaint by way of personal service on Riddick, who is the official registered agent for all three of the Defaulting Defendants. Bernina filed returns of service on that same day. See Executed Summonses Doc. Nos. 18-21 (also attached as Exhibit C). Based on the service date of August 19, 2010, appearances and answers were due to be filed by Defaulting Defendants on or before September 9, 2010. 6. On August 31, 2010 and September 3, 2010 the Court held further status
hearings and took up the issue of Bernina’s request for a preliminary injunction. At both of these hearings the Court (as it had already previously done on multiple occasions) advised Riddick that he could not represent the Defaulting Defendants and advised him of the need to obtain counsel to appear on behalf of the Defaulting Defendants. See, e.g., Sept. 3, 2010 Ct. Tr. at 5:23-7:24 (excerpt attached as Exhibit D). The Court also granted all Defendants an extension of time until September 16, 2010 to answer or otherwise plead to the Complaint and explicitly advised Riddick that “all the parties have the responsibility to file a responsive pleading.” Id. Riddick responded that the was aware of the rules. Id. 7. On September 16, 2010 Defendant Riddick served a copy of a pro se
answer to the Complaint on behalf of himself. However, as of this date, Defaulting Defendants have failed to appear, answer, or otherwise plead, and are therefore in default. See Owners Ins. Co. v. Complete Mechanical Services, Inc., No. 08 C 4201, 2008 WL 4821654, at *1 (N. D. Ill. Oct. 31, 2008) (Shadur, J.) (holding a defendant who failed to properly appear at court hearings or file a proper response to the complaint to be default) (attached as Exhibit E); see also WMS Gaming, Inc. v. WPC Prods. Ltd., 542 F.3d 601, 604-605 (7th Cir. 2008) (district court properly
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entered default judgment against defendants who were properly served but failed to appear or answer plaintiff’s complaint). 8. By virtue of the above default, the material factual allegations of the
Complaint filed in the instant action have not been denied and, indeed, are deemed admitted. See Dundee Cement Co. v. Howard Pipe & Concrete Products, Inc., 722 F.2d 1319, 1323 (7th Cir. 1983) (noting that when there has been a default “the factual allegations of a complaint relating to liability are taken as true”). Specifically, the Complaint alleged that the Defaulting
Defendants (1) had made false allegations of copyright infringement and threats of litigation against Bernina and its authorized dealers; (2) had engaged in misuse of copyright to extort money and gain concessions from Bernina; (3) had engaged in bad faith publication of defamatory statements about Bernina; and (4) had maliciously and tortiously interfered with Bernina’s valid and existing business relationships. See Compl. ¶ 1. 9. In Count I of the Complaint, naming Defendant Imageline, Bernina sought
a declaratory judgment of non-infringement alleging that Imageline does not have any protectable rights in the individual underlying images contained in Imageline’s six copyright registrations, which include registrations for “Imageline Design Gallery” (Reg. No. VA 841-528) and “Imageline Master Gallery” (Reg. No. VA 751-565), issued in 1997 and 1996 respectively. Id. at ¶¶ 30, 44. Bernina also alleged in Count I, that Bernina has not reproduced any of the images contained in the six registrations that were registered by Imageline, prepared derivative works based upon the images, distributed copies of the images to the public, or engaged in any of the other activities that are reserved for the owner of copyright pursuant to 15 U.SC. § 106. Id. at ¶ 45. The relief requested by Bernina in Count I was, inter alia, that the Court determine and
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adjudge that Plaintiff has not infringed upon protectable creative authorship lawfully owned by Imageline (which includes the six copyright registrations). 10. Counts II and III of the Complaint alleged that all Defendants including
the Defaulting Defendants are liable for Defamation, Defamation Per Se, and Tortious Interference with Business Relationships due to, among other things, the Defaulting Defendants’ false statements to third parties, including the dealers who sell Bernina’s products (with whom Bernina maintains contractual relationships), indicating that (1) Bernina has engaged in willful copyright infringement; (2) Bernina and its corporate officers have acted unethically; (3) Bernina and its corporate officers have ignored the best interests of the dealers and has exposed the dealers to legal liability; (4) Bernina and its corporate officers have knowingly made false statements to the Bernina dealers; (5) Bernina and its corporate officers have directly caused damage to the Bernina independent dealers; and (6) Bernina and its corporate officers have engaged in unlawful activities. Id. at ¶¶ 47-59. Part of the relief that was requested by Bernina in Counts II and III was a permanent injunction enjoining Defendants, jointly and severally, and their agents, servants, employees, officers, attorneys, successors, and assigns, from making further defamatory allegations against Bernina including, but not limited to making false allegations of copyright infringement and/or statements inconsistent with the judgments of noninfringement and from making contact with Bernina’s authorized dealers for the purpose of making such allegations. 11. As a general rule, a “default judgment establishes, as a matter of law, that
defendants [are] liable to plaintiff as to each cause of action alleged in the complaint.” Dundee Cement Co., 722 F.2d at 1323 (citing Breuer Electric Mfg. Co. v. Toronado Systems of Am., Inc., 687 F.2d 182, 186 (7th Cir. 1982)). The decision to enter a default judgment lies within the
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discretion of the district court. American National Bank and Trust Co. of Chicago v. Alps Electric Co., Ltd., No. 99 C 6990, 2002 WL 484845, at *2 (N.D. Ill. Mar. 29, 2002) (attached as Exhibit F). Factors that courts may consider include the amount of money potentially involved, the presence or absence of disputed factual issues or issues of public importance, whether the default was largely technical, whether the plaintiff was substantially prejudiced by the delay, and whether the grounds for default are clearly established. Id. at *1. 12. In this case, Defaulting Defendants have (1) been properly served with
process, (2) been given numerous explicit warnings and admonishments about the need for an appearance and to file a responsive pleading (via the Court’s statements to the registered agent and sole member/primary shareholder for all three Defaulting Defendants), and (3) have already been granted an extension of time to answer or otherwise plead to the Complaint. Nonetheless, Defaulting Defendants have failed to appear in this action and have also failed to file an answer to the Complaint or otherwise plead by the extended and Court-ordered due date of September 16, 2010. It is clear that this failure to appear or answer the Complaint is not a mere technicality but rather a willful disregard for this litigation and the procedures of this Court. See Owners Ins. Co., 2008 WL 4821654, at *1 (citing Sun v. Board of Trustees of University of IL, 473 F.3d 799, 811 (7th Cir. 2007); Davis v. Hutchins, 321 F.3d 641, 646 (7th Cir. 2003) (finding default judgment an appropriate remedy where party chooses to disregard litigation and procedures of court by failing to answer or otherwise plead). 13. Pursuant to Rule 54(b) that “there is no just reason to delay” final
judgment against the Defaulting Defendants even though other claims remain pending against Riddick. See Owners Ins. Co., 2008 WL 4821654, at *2 (finding that in a similar case where one of several defendants was in default for failing to properly appear and respond to the Complaint,
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there was no just reason to delay final judgment and it was appropriate to direct final judgment in the plaintiff’s favor against the defaulting defendant). 14. Accordingly, Bernina requests that the Court (1) hold Defaulting
Defendants in default; (2) deem Bernina’s well-pleaded allegations in the Complaint pertaining to the Defaulting Defendants as true, including, but not limited to Bernina’s well-pleaded allegation that Defaulting Defendants have no protectable interests in the individual images contained in the copyright registrations at issue; (3) find the Defaulting Defendants liable for the claims asserted against them in the Complaint; and (4) grant Bernina the relief requested with respect to its claims against Defaulting Defendants including a declaratory judgment order holding that Bernina is not-liable for infringement of any of the six copyright registrations registered by Defendant Imageline or any of the works contained in those registrations. 15. Additionally, because as a result of the Defaulting Defendants’ violations,
Bernina has suffered, and will continue to suffer irreparable harm, Bernina requests that the Court issue a permanent injunction enjoining Defaulting Defendants, jointly and severally, and their agents, servants, employees, officers, attorneys, successors, and assigns, from making further defamatory allegations against Bernina including, but not limited to, making false allegations of copyright infringement and/or statements inconsistent with the judgment of noninfringement and from making contact with Bernina’s authorized dealers for the purpose of making such allegations. 16. Should the Court find that entry of default is appropriate against the
Defaulting Defendants, Bernina requests that the Court award costs of the action and attorney’s fees to Bernina pursuant to 17 U.S.C. § 505, which allows the recovery of full costs by or against any party in a civil copyright action as well as an award a reasonable attorney’s fee to the
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prevailing party as part of the costs, and the law of this Circuit. See Riviera Distribs. v. Jones, 517 F.3d 926 (7th Cir. 2008) (affirming award of attorney’s fees to party found not liable for copyright infringement). 17. Further, should the Court find that entry of default is appropriate against
the Defaulting Defendants, Bernina requests a reasonable period of time to prove up its damages against the Defaulting Defendants and to tender a proposed declaratory judgment order as sought in Count I and a permanent injunction order as sought in Counts II and III. WHEREFORE, Plaintiff Bernina respectfully requests the entry of an order of default judgment on liability against Defaulting Defendants, a permanent injunction against Defaulting Defendants, and a schedule of further proceedings to determine the amount of Bernina’s damages and for the entry of final judgment against Defaulting Defendants. Date: September 17, 2010 Respectfully submitted, BERNINA OF AMERICA, INC.
__/s/ Norman K. Beck_____________
Norman K. Beck (ARDC 2425205) Brian D. Fergemann (ARDC 6269728) Marc H. Trachtenberg (ARDC 6290927) Kevin P. McCormick (ARDC 6294455) Winston & Strawn LLP 35 W. Wacker Drive Chicago, IL 60601 (312) 558-5600 email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org Attorneys for Bernina of America, Inc.
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CERTIFICATE OF SERVICE The undersigned, an attorney, hereby certifies that a copy of the foregoing Plaintiff’s Motion for Entry of Default Judgment and Permanent Injunction against Defendants Imageline, Inc., Islandview Technologies LLC, and Islandview Designs LLC was served on: Imageline Incorporated Islandview Technologies LLC Islandview Designs LLC George P. Riddick III 202 England Street Ste A Ashland, VA 23005-0000 email@example.com Copyrights@imageline2.com firstname.lastname@example.org email@example.com George P. Riddick III 319 MacMurdo Street Ashland, VA 23005 firstname.lastname@example.org via electronic mail before 4:00 p.m. CT and Federal Express Overnight Mail this September 17, 2010.
By: /s/ Kevin P. McCormick One of The Attorneys for Plaintiff
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