United States District Court, D. Hawaii
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND
E. KOBAYASHI UNITED STATES DISTRICT JUDGE.
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”). [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). 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
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. 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.
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
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.
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)). 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
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.
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.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; 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
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.
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.
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.
Hermon is the owner of Bear Valley. [Amended Complaint at
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.]
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).
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.]
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).]
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.
Bear Valley Defendants willfully “creat[ed],
display[ed], offer[ed] and/or s[old]” the Bear Valley
Map. [Id. at ¶ 35.]
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).
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).
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
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.]
Amount of Damages
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.]
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 ¶
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 ¶
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
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.
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.
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.]
reasonable cost for the printing of a map is one dollar per
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).]
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
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.]
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).]
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
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.]
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. ...