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Franko Maps, Ltd. v. Nielsen

United States District Court, D. Hawaii

April 29, 2019

FRANKO MAPS, LTD., Plaintiff,



         Plaintiff Franko Maps Ltd. (“Plaintiff”) filed this action on November 7, 2016. Plaintiff filed its Amended Complaint on November 15, 2016. [Dkt. no. 12.] Plaintiff's claims against Defendants Palm Traders LLC (“Palm Traders”) and Vicki Whitter (“Whitter” and collectively “Palm Traders Defendants”) were dismissed without prejudice. [Order, filed 1/7/19 (dkt. no. 129).] Plaintiff settled its claims against Defendant Gale Dean Lattman (“Lattman”) and Defendants Frank Nielsen (“F. Nielsen”), Cynthia Nielsen (“C. Nielsen”), and Green Planet Maps, LLC (“Green Planet”).[1] [Consent judgment & permanent injunction (as to Lattman), filed 12/27/18 (dkt. no. 113); Consent judgment & permanent injunction (as to the Nielsen Defendants) (“Nielsen Consent Judgment”), filed 12/27/18 (dkt. no. 114).[2] Thus, the only remaining claim is Plaintiff's claim against Defendant Bear Valley Bikes Speed-Evolution, Inc. (“Bear Valley”) and pro se Defendant Derek T. Hermon (“Hermon” and collectively “Bear Valley Defendants”) for violation of the consent judgment and permanent injunction, filed on March 18, 2014, in Franko Maps Ltd., et al. v. Trident Diving Equipment, et al., CV 13-00637 LEK-KSC (“2014 Consent Judgment” and “Count VII”).[3]

         The Amended Complaint also included a claim against the Bear Valley Defendants asserting false advertising and misrepresentation, pursuant to the Lanham Act and common law, as well as defamation (“Count VIII”). However, that claim was dismissed without prejudice for lack of personal jurisdiction. [Order Granting in Part and Denying in Part Motions to Dismiss, filed 9/29/17 (dkt. no. 60) (“9/29/17 Order”), at 30-31.[4] In the 9/29/17 Order, this Court concluded that there was a basis to assert personal jurisdiction over the Bear Valley Defendants - in spite of their lack of contacts with Hawai`i - to enforce the 2014 Consent Judgment as to the Bear Valley Defendants' allegedly intentional violations. 2017 WL 4381669, at *11 (citing S.E.C. v. Homa, 514 F.3d 661 (7th Cir. 2008)). Because this analysis only applied to Count VII, Count VIII was dismissed without prejudice. Id. at *11-12. Only Count VII is before this Court because Plaintiff did not attempt to cure the jurisdictional defect as to Count VIII by filing a second amended complaint.

         On January 4, 2019, default was entered against Bear Valley because it failed to have counsel appear at a show cause hearing, and because corporate entities are required to be represented by counsel. See Order Directing Entry of Default Against Bear Valley Bikes Speed-Evolution, Inc., dkt. no. 126; see also Local Rule LR83.11 (“Business entities, including but not limited to corporations, . . . cannot appear before this court pro se and must be represented by an attorney.”).[5]

         On January 17, 2019, Plaintiff was granted default judgment against the Bear Valley Defendants. [EO: Court Order Granting Pltf.'s Motion in Limine #4 for Default Judgment Against Derek T. Hermon and Bear Valley Bikes Speed-Evolution, Inc., for Failure to Comply with Deadlines Set by the Court (“Default Judgment EO”), dkt. no. 141.[6]


         The default judgment “conclusively establishes the liability of” the Bear Valley Defendants. See Adriana Int'l Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th Cir. 1990) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)).[7] The default judgment has not been set aside. See generally Fed.R.Civ.P. 55(c) (stating a “court may set aside an entry of default for good cause”). Thus, the only issue remaining before this Court is the amount of the damages award against the Bear Valley Defendants. To the extent Hermon's Defense to Claims of Damages (“Hermon Damages Filing”), [filed 2/11/19 (dkt. no. 143), ] attempts to contest his liability as to Count VII, those arguments will not be considered.

         Plaintiff argues this Court should not consider the arguments in paragraphs 1 through 12 of the Hermon Damages Filing because the arguments: 1) are beyond the scope of the briefing allowed by this Court; 2) rely on materials that he failed to file in a form that would be admissible; and 3) rely on documents that were not produced in discovery, even though those documents were responsive to Plaintiff's discovery requests. As to the first argument, the minutes of the hearing on the Sanctions Motion state: “Plaintiff's damages are addressed in its Proposed Findings of Fact and Conclusions of Law and its trial submissions. Plaintiff's supplement regarding additional damages is due 1/30/2019. Defendant Derek T. Hermon's Objections to damages only are due 2/13/2019. Plaintiff's Reply is due 2/20/2019.” [Minutes, filed 1/16/19 (dkt. no. 140) at 1 (emphasis in original).] A fair reading of the Court's minutes is that Hermon was permitted to submit materials objecting to all of Plaintiff's claimed damages, not only Plaintiff's supplement addressing its attorneys' fees and costs. This is particularly so in light of the fact that, although default judgment has been granted, Plaintiff still has the burden of proof as to the amount of its damages. See Geddes, 559 F.2d at 560; see also Mancuso v. Tauber, No. CV 12-10360 FMO (JCx), 2016 WL 7647658, at *7 (C.D. Cal. May 31, 2016) (“A plaintiff seeking default judgment is ‘required to prove all damages sought in the complaint.'” (citing Philip Morris USA, Inc. v. Castworld Products, Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003))). This Court therefore rejects Plaintiff's argument that the Hermon Damages Filing exceeds the scope of the briefing permitted by this Court.

         As to Plaintiff's second argument, the Hermon Damages Filing relies on various supporting material that is not attached to the Hermon Damages Filing in the form of exhibits.[8]Because Hermon is proceeding pro se, this Court must liberally construe his filings. See Blaisdell v. Frappiea, 729 F.3d 1237, 1241 (9th Cir. 2013) (“Courts in this circuit have an obligation to give a liberal construction to the filings of pro se litigants . . . ” (citations omitted)). Further, a pro se party is “h[e]ld to less stringent standards than” the standards applicable to attorneys. See Haines v. Kerner, 404 U.S. 519, 520 (1972) (per curiam). Plaintiff's objection is not persuasive because, with four exceptions, Plaintiff's supporting documents were submitted in the same manner as Hermon's - i.e., relevant excerpts of documents were copied into Plaintiff's filings, rather than attaching the documents as exhibits. See, e.g., Pltf.'s submission of direct trial testimony, Decl. of Peter Cannon (“P. Cannon Decl.”), filed 1/8/19 (dkt. no. 134), at pgs. 23-24;[9] Pltf.'s proposed Findings of Fact and Conclusions of Law (“Pltf.'s Proposed FOF/COL”), filed 1/8/19 (dkt. no. 135), at 21-22. Moreover, some of the materials copied into the Hermon Damages Filing are also copied into Plaintiff's Proposed FOF/COL. Compare Hermon Damages Filing at 12-13, with Pltf.'s Proposed FOF/COL at 21-22 & 23-24. This Court therefore rejects Plaintiff's argument that Hermon's supporting materials should not be considered because Hermon did not submit them in admissible form.

         Plaintiff also contends this Court should not consider the documents copied on pages 2, 4, 7, 9, 11, and 16 through 22 of the Hermon Damages Filing because Hermon did not produce them in discovery. The documents copied on pages 2 and 4 are not being considered because they improperly contest Hermon's liability; the first email copied on page 7 is not being considered because Hermon did not submit the attachments that were purportedly transmitted in that email; and the documents copied on pages 16 through 22 are not being considered because they are not relevant to this Court's analysis. Plaintiff's objection to those documents are therefore denied as moot.

         The second email on page 7 is to the Bear Valley Defendants' former counsel, transmitting a table of the sales of and profits from the Bear Valley Map, and page 9 is the table itself. See Hermon Damages Filing at 5, ¶ 4. The document on page 11 is an invoice showing the price that Hermon paid for the bicycle he traded to F. Nielsen in exchange for F. Nielsen's work on the Bear Valley Map. See id. at 10, ¶ 5. Although Hermon did not produce those documents in response to Plaintiff's written discovery requests, this Court will consider them because of the unusual circumstances of this case. The Bear Valley Defendants' counsel moved to withdraw on December 3, 2018, and the magistrate judge granted the motion on December 17, 2018. [Dkt. nos. 98, 107.] The withdrawal was approximately a month before the scheduled trial date. See Amended Rule 16 Scheduling Order, filed 10/3/18 (dkt. no. 97), at ¶ 1 (stating the nonjury trial was to commence on 1/22/19). To the extent Plaintiff argues it would be unfairly prejudiced by the Court's consideration of materials not produced in discovery, the Court notes that neither Plaintiff nor any other party in this case took depositions. See Pltf.'s Statement that It Designates No Deposition Transcripts Because No Depositions Were Taken in this Case, filed 1/2/19 (dkt. no. 116). Plaintiff did not file a motion to compel the Bear Valley Defendants to respond to discovery requests, nor is there any indication in the record that Plaintiff utilized the Expedited Discovery Assistance process provided in Local Rule 37.1(c). Further, Plaintiff knew, by May 2017, the identity of three vendors who sold the Bear Valley Map. See infra Finding of Fact No. 9. There is no evidence in the record of Plaintiff's attempts to obtain information from those vendors about how many Bear Valley Maps they purchased, when, and for what price. Therefore, Plaintiff's objection is denied, and this Court will consider the materials copied on the second part of page 7 and pages 9 and 11 of the Hermon Damages Filing.

         The Court, having considered the entry of default judgment and the relevant filings in this case, makes the following Findings of Fact and Conclusions of Law. Any finding of fact that should more properly be deemed a conclusion of law and any conclusion of law that should more properly be deemed a finding of fact shall be so construed.


         1. Hermon is the owner of Bear Valley. [Amended Complaint at ¶ 10.]

         2. The Nielsen Defendants have admitted that they infringed upon valid and enforceable copyrights owned by Plaintiff, and these infringements also constituted violations of the 2014 Consent Judgment. [Nielsen Consent Judgment at ¶ 2.]

         3. Plaintiff's copyrights addressed in the Nielsen Consent Judgment include trail maps of the Big Bear area in California. Id. at 6, ¶ 5; see also Amended Complaint, Exh. O (excerpts of Plaintiff's Big Bear map and the map's copyright information from the United States Copyright Office).

         4. Hermon knew about Plaintiff's copyright to Plaintiff's Big Bear map, and Hermon knew, by sometime in 2012, that F. Nielson's employment with Plaintiff had been terminated. Hermon purchased Plaintiff's Big Bear map every year from 2005 until F. Nielsen's termination. [Amended Complaint at ¶¶ 32-33.]

         5. In 2015, F. Nielsen created “The Definitive Big Bear Trail Map” for the Bear Valley Defendants (“Bear Valley Map”). [Amended Complaint at ¶ 34 & Exh. Q (excerpts of Bear Valley Map).]

         6. Hermon asserted he owned the copyrights to the Bear Valley Map by placing “© 2015 Derek Hermon” on the Bear Valley Map. [Amended Complaint at ¶ 34.] This representation was false.

         7. The Bear Valley Defendants willfully “creat[ed], display[ed], offer[ed] and/or s[old]” the Bear Valley Map. [Id. at ¶ 35.]

         8. At the latest, the Bear Valley Defendants had a copy of the 2014 Consent Judgment in November 2016 because it is an exhibit to the Amended Complaint. See P. Cannon Decl. at ¶ 20; Stipulation for Waiver of Service of Summons and for Extension of Time to Respond to Amended Complaint, filed 3/17/17 (dkt. no. 23) (stating the Bear Valley Defendants received the Amended Complaint by mail in November 2016).

         9. The Bear Valley Defendants continued to distribute and/or sell the Bear Valley May through at least May 4, 2017. See Pltf.'s submission of direct trial testimony, Decl. of Wilson P. Cannon, III (“W. Cannon Decl.”) at ¶¶ 2-6 (stating that, on 5/4/17, he purchased the Bear Valley Map from four locations in the Big Bear area: Goldsmith's, Bear Valley Bikes, the Visitor Center, and Lakeview Market).[10]

         10. The Bear Valley Defendants continued to display and/or advertise the Bear Valley Map through various Internet-based platforms, at least through January 7, 2019. [P. Cannon Decl. at ¶ 38.] Plaintiff, however, has presented no evidence of the damages it has suffered as a result of the online displays and/or advertisement.

         11. Hermon states he no longer sells nor distributes the Bear Valley Map. [Hermon Damages Filing at 4, ¶ 3.] However, he has three copies of the laminated version of the Bear Valley Map, and he asks that he be allowed to retain those copies “for personal use and records.” [Id. at 23, ¶ 12.]

         A. Amount of Damages

         Plaintiff's Position

         12. Plaintiff asserts it has suffered significant damages as a result of the Bear Valley Defendants' wrongful actions. Plaintiff's damages include: lost profits, because the sales of the Bear Valley Map decreased the sales of Plaintiff's Big Bear map; and “loss of goodwill, trust and reputation in the relevant business community.” [Amended Complaint at ¶ 39.]

         13. Plaintiff argues the following measures of damages would approximate Plaintiff's lost profits, prevent unjust enrichment to the Bear Valley Defendants, and deter them from future violations: disgorgement of the Bear Valley Defendants' marginal profits; [P. Cannon Decl. at ¶¶ 40;] and the statutory damages that would be available for copyright infringement, [id. at ¶ 42].[11]

         14. Neither F. Nielsen nor the Bear Valley Defendants produced discovery reflecting the number of Bear Valley Maps that were printed. Further, they did not produce discovery showing how many Bear Valley Maps were sold. [P. Cannon Decl. at ¶ 40.]

         15. P. Cannon estimates the Bear Valley Defendants obtained 10, 000 copies of the Bear Valley Map in 2016, based on F. Nielsen's statements that: a) in late 2016, he asked Hermon for $10, 000 as compensation for his work on the Bear Valley Map; and b) his desired compensation rate was one dollar per map. [Id. (citing Trial Exhibits 12 and 28).]

         16. Plaintiff's position appears to be that the Bear Valley Defendants ordered approximately 3, 000 copies of the Bear Valley Map from F. Nielsen in 2015, and another 10, 000 copies in 2016. See Pltf.'s Proposed FOF/COL at 9, ¶ 10; id. at 24, ¶ 28.

         17. Because Hermon has previously stated he has no copies of the Bear Valley Map to turn over, Plaintiff argues this Court should assume the Bear Valley Defendants sold all 10, 000 copies of the Bear Valley Map. [P. Cannon Decl. at ¶ 41.] However, Plaintiff provides no citation for this statement by Hermon.

         18. There is no evidence that Hermon paid F. Nielsen the $10, 000. Further, Plaintiff argues that, even if the Bear Valley Defendants did pay F. Nielsen, deducting the amount would allow F. Nielsen and the Bear Valley Defendants to retain benefits from their wrongdoing. [Id. at ¶ 40.]

         19. A reasonable cost for the printing of a map is one dollar per map. [Id.]

         20. The Bear Valley Map was sold for approximately ten dollars. [W. Cannon Decl., Exh. 1 (receipt reflecting $9.99 price), Exh. 2 (receipt reflecting $10 price), Exh. 3 (receipt reflecting $10 price) at 1, Exh. 4 (receipt reflecting $9.99 price).]

         21. Plaintiff's position is that the Bear Valley Defendants had marginal profits of $90, 000 from the sale of the Bear Valley Map, i.e. (10, 000 maps at $10 each) minus (10, 000 at $1 each for printing costs). [P. Cannon Decl. at ¶ 40.]

         Hermon's Position

         22. Hermon argues the amount of damages available in a claim for copyright infringement is not an appropriate measure of damages in this case because Count VIII was dismissed in the 9/29/17 Order. [Hermon Damages Filing at 1, ¶ 1.]

         23. As to the number of Bear Valley Maps that were produced, Hermon presents an invoice, dated March 26, 2015, to Hermon from Green Planet, for 3, 100 copies of the Bear Valley Map (“3/26/15 Invoice”). [Id. at 5, ¶ 4; id. at 8 (3/26/15 Invoice).]

         24. Hermon also presents a list that he prepared of the estimated number of Bear Valley Maps sold, or given away, between 2015 and 2017 (“Estimated Distribution List”). [Hermon Damages Filing at 5, ¶ 4; id. at 7 (email transmitting the list to the Bear Valley Defendants' former counsel); id. at 8 (Estimated Distribution List).]

         25. The Estimated Distribution List includes the price received per map in each sale, as well as the $2, 900 reflected on the 3/26/15 Invoice, and a $1, 254 “distribution fee.” [Hermon Damages Filing at 8.]

         26. According to the Estimated Distribution List, only the 222 copies sold at the Bear Valley Bikes store, and single copies sold to two individuals, were sold for ten dollars each. The other sales were for either five dollars each or $5.75 each. [Id.] Each of the vendors named in the W. ...

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