Boomerang1

I recieved some old RCM's from a friend & noticed some rather large ads for the Sport's Flyers Association.

Not starting to restart a war here but what hapened to this association?

Living out of the US I guess the happenings passed me by. - John.

Hossfly

They tried to sue AMA. AMA sued and won in court. SFA fell by the wayside.

Maybe Red might come on and fill you up to date.

Red Scholefield

My Feedback: (9)

THE SFA STORY

SFA/AMA Lawsuit Update AMA National Newsletter October 1993

As most are already aware, the AMA is currently involved in a lawsuit that was filed late last summer. Inquiries about the suit have been made from time to time by AMA members. Often asked are the questions "Why is the suit still pending?" and "Why is it the parties cannot settle their differences?" It has been the policy of the AMA to avoid commentary regarding specific details of the litigation upon instructions from our attorneys. That policy must, of legal necessity, continue in effect. However, we have been advised it would be appropriate to publish a status report. Therefore, we are responding to the most frequently voiced questions.

Mediation: At the request of the AMA, the parties met face-to-face this past June in an effort to see whether the differences could be ironed out with the assistance of a court-appointed mediator. Talks broke down when SFA refused to abandon its position that any resolution would require the AMA to pay it several million dollars.

Subsequent events: Following the mediation, SFA retained new lawyers and petitioned the trial judge to appoint a private attorney who would charge the parties $250 an hour to resolve procedural disputes that would otherwise be handled by the judge. Lawyers for both sides then became very active in preparation for an August hearing that was scheduled to be held on a motion for temporary relief filed by SFA. The hearing did not occur, however, because SFA's attorneys decided at the last moment not to go forward.

Legal expenses: The AMA (as well as the AMA officials and employees who have also been sued by SFA) are being defended in this case under a policy of insurance issued by Aetna. However, prior to the insurance company's decision to defend the suit, AMA had to assume the burden, which has amounted to over $100,000.

Trial date: The case is scheduled for trial by jury in Dallas County, Texas, on April 12, 1994. The court in which the case is pending schedules many cases for trial on the same day, so there is no way to know whether this case will be tried as scheduled or whether some other case will end up being selected for trial in its place.

The leadership of AMA knows only too well that the business of advancing our hobby is not served by expensive legal battles of both time and money. The number of hours AMA employees have had to devote to this has been substantial and resulted in slowing service to clubs and individuals in certain areas.

What interests of the AMA and its members can possibly be served by paying millions of your dollars that aren't owed, just to terminate a battle with someone else who will otherwise keep on fighting? This is the situation the AMA now finds itself in, which means that barring a radical about-face in the SFA's position, this case is destined to see the inside of a courtroom.

SFA Lawsuit Update January 1996

Sport Flyers Association has settled its lawsuit against the AMA. AMA has been advised by its commercial liability insurance carrier that the carrier's own negotiations with SFA have resulted in an agreement under which the carrier will pay SFA an undisclosed sum of money as a means of cutting off additional fees
and costs in handling AMA's defense. The agreement does not address the counterclaims asserted by AMA against SFA. Also, while the dollar amount of the settlement is unknown because SFA refused to settle unless the insurance carrier agreed not to disclose it to AMA officials, AMA has been informed that the amount of the settlement represents only a fraction of the $350,000 or more which SFA has incurred in legal fees throughout the litigation of this case.
AMA's commercial liability insurance is separate insurance that is provided by a different carrier than the insurance coverage which is provided to AMA's members, clubs, and site owners. The terms of AMA's liability insurance coverage provided its carrier with the right to enter into agreement without regard to AMA's position or its counterclaim. It appears that the carrier chose to exercise that right because it was cheaper than continuing to pay AMA's lawyer fees in defense of the case, not because of any merit to SFA's claims. In fact, the Federal Court Judge presiding over this case has already dismissed several of SFA's claims and entered judgement in favor of AMA as to various others, including SFA's claims for alleged violations of the antitrust laws.
SFA's willingness to give up now on any remaining claims may be explained simply by a desire to claim victory before those claims are also resolved against it. Certainly, if SFA believed the claims against AMA had merit, it would not agree to release them without an agreement by AMA to release the counterclaims that it has asserted.

SFA's Actions During This Lawsuit

Any representations by SFA as to the reasons for settlement of its claims against AMA should also be measured against a host of facts that AMA has not publicized before now because of the pending lawsuit. Court records will show, for example, that SFA is now on the fourth set of lawyers to represent it in the litigation. They will further reflect that SFA's abuses of the legal process have been so numerous that fines and penalties have been imposed upon it by the court and that a federal magistrate judge even made a formal recommendation that all of SFA's claims be dismissed due to such abuses. Government records will also reflect that SFA never filed a federal tax return and that its failure to pay corporate franchise taxes to the state of Texas in 1994 resulted in a revocation of its corporate charter during 1995. By settling its claims for a fraction of its legal expenses, SFA certainly cannot claim a victory from a monetary standpoint. Any claim that it has achieved a symbolic victory is also misplaced, since its pursuit of legal action has accomplished nothing positive for our sport or its participants and its settlement is no reflection of whether
or not its claims had merit. SFA filed a lawsuit and accused AMA of numerous bad acts which it did not and could not prove. At the same time, SFA engaged in a campaign to compete with AMA which was based on numerous false and misleading statements by SFA about the benefits offered by both organizations. In response, AMA has filed a countersuit which seeks to recover damages caused by SFA's false and misleading statements and for attorneys fees which AMA and its insurance carrier have been forced to incur in this case. AMA's decision to continue its pursuit of this counterclaim in the suit commenced by SFA is based on a strong belief that AMA should be compensated for damages, and that the SFA should be held accountable.


Date: March 18, 1997

JUDGMENT IN LAWSUIT AGAINST SFA

Litigation in the United States District Court in Dallas County, Texas
between AMA and SFA has been concluded by entry of a consent judgment in
favor of AMA against SFA pursuant to which SFA is obligated to compensate
AMA for attorneys' fees incurred by AMA in connection with prosecution of
its claims against SFA. The consent judgment also enjoins SFA from engaging
in negative advertising directed at AMA.

SFA made the business decision to accept this consent judgment in order
to end the accrual of attorneys' fees, the attendant distraction from its
core business, and the attendant devotion of its resources, both human and
otherwise, to this litigation. Resolution of the lawsuit also involves an
understanding that neither AMA nor SFA will further comment on the terms of
the consent judgment or circumstances leading to its entry.



May 1999

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION


ACADEMY OF MODEL AERONAUTICS, INC., Plaintiff,
v.
SPORT FLYERS OF AMERICA, INC., ET AL., Defendants.

ORDER DENYING MOTION TO VACATE DEFAULT JUDGMENT

Before the Court is the Notice of Motion to Vacate Default Judgment, filed by Defendants Sport Flyers of America, Inc., and Elliott Janss. The Court construes the Notice as a motion, although it does not contain a supporting brief. After considering the motion and Plaintiff’s response, the Court is of the opinion that the motion should be denied.

On February 5, 1999, the Court entered a final default judgment against Defendants. The Court found that Defendants’ agent for service was served with summons and complaint on December 2, 1998, and that Defendants had not answered or otherwise pleaded.

The Court also found from the uncontroverted facts that, in March 1997, Plaintiff Academy of Model Aeronautics, Inc., and an entity known as Sport Flyers Association, Inc., entered into a consent judgment under which Sport Flyers Association was to pay AMA scheduled payments totaling $124,000 plus post-judgment interest over a three year term ending December 1, 1999. The judgment provided that failure to make any required payment entitled AMA to accelerate the indebtedness and execute the judgment. AMA has not received any payments under the terms of the judgment.

The uncontroverted facts also established that Sport Flyers Association was stripped of its assets, and its principals disappeared from Texas. However, Sport Flyers of America, Inc., operated by Defendant Elliott Janss, continued the business affairs of Sport Flyers Association with the same membership, the same operational procedures, and the same insurance policy as Sport Flyers Association, but free from its former liabilities under the judgment.

From the uncontroverted evidence, the Court found that Sport Flyers of America is a continuation of Sport Flyers Association and that AMA’s evidence was sufficient to support entry of default judgment in favor of AMA in the amount of $124,000, plus post-judgment interest. The Court also awarded AMA reasonable attorney’s fees in the amount of $28,961.75 Along with $6,549.08 for expenses.

In the instant motion, Defendants move the Court to vacate the default judgment on the grounds that they were not properly served and for reasons of good cause and excusable neglect. In support of the motion, Defendants have filed the Certification of Elliott Janss.

First, Defendants argue that they were not properly served with summons and complaint because AMA served the Texas Secretary of State under the Texas Long Arm Statute. Defendants contend that the Secretary is not their agent for service because they have never done business in Texas. However, Defendants admit that they received a copy of the pleadings from the Secretary.

Section 17.044(b) of the Texas Civil Practice and Remedies Code provides:

The secretary of state is an agent for service of process on a nonresident who engages in business in this state, but does not maintain a regular place of business in this state or a designated agent for service of process, in any proceeding that arises out of the business done in this state and to which the nonresident is a party.

Thus, the Secretary of State’s certificate is conclusive evidence that the Secretary, as an agent for the defendant, received service of process for the defendant and forwarded the service as required by statute. See Capitol Brick, Inc. v. Fleming Mgf. Co., 722 S.W.2d 399, 401 (Tex. 1986). Moreover, service is complete when the Secretary is served, not when the defendant received notice. See Whitney v. L & L Rlty. Corp., 500 S.W.2d 94, 96 (Tex. 1973).

ORDER DENYING MOTION TO VACATE DEFAULT JUDGMENT


In support of the argument that AMA improperly served the Secretary as Defendants' agent, the Certification of Elliott Janss states that Sports Flyers of America does not operate in Texas and does not maintain an office in Texas. Janss further states that he never had an office in Texas and that he never did business in Texas. In response to Janss’s assertions, AMA has provided the Court with deposition testimony and bank records, which indicate that Defendants did conduct business in Texas. However, Defendants have not filed a reply to AMA’s response and have not attempted to refute this evidence. Therefore, the Court has nothing more than Janss's conclusory statements that Defendants were improperly served under the Texas Long Arm Statute.

Furthermore, the objective of the Texas Long Arm Statute is to provide reasonable notice of the suit and an opportunity to be heard. See Leedo Cabinetry v. James Sales & Distribution, Inc., 157 F.3d 410, 413 (5th Cir. 1998)(citing Barnes v. Frost Nat’l Bank, 840 S.W.2d 747, 750 (Tex. App.—San Antonio 1992, no writ)). Because

Defendants admit receiving a copy of the summons and complaint in this case, there is no question that they were given notice of the lawsuit and an opportunity to be heard. Under these circumstances, the Court finds no basis for setting aside the default judgment on the basis of Defendants’ unsupported contention that they were improperly served.

Defendants also move the Court to vacate the default judgment on the basis of good cause and excusable neglect. Courts generally look to three criteria to determine whether to vacate a default judgment: (1) whether the default was willful, (2) whether setting aside the judgment will prejudice the adversary, and (3) whether the defendant presented a meritorious defense. See CJC Holdings, Inc. v. Wright & Lato, Inc., 979 F.2d 60, 64 (5th Cir. 1992). However, the ultimate inquiry is whether the defendant has shown good cause to set aside the judgment. Id.

In the Certification of Elliott Janss, Janss states that he received a certified mailing of the pleadings and that his attorney immediately called AMA’s attorney, asking for an acknowledgment of service for Janss to sign. Janss also states that his attorney never received the acknowledgment of service document and that, because he was undergoing dialysis three times per week, he did not recall when or how papers had been disseminated. However, Janss states that he always understood that he had to be personally served with process.

After consideration, the Court finds that Defendants have not stated good cause to set aside the default judgment. They have presented no evidence of any mistake or inadvertence. Moreover, they admit that they received the summons and complaint, suggesting that they made a conscious decision not to respond to the lawsuit. Therefore, the Court concludes that Defendants willfully did not file an answer in the case or otherwise plead.

Also, the Court finds that AMA will be prejudiced if the default judgment is set aside. This lawsuit arises out of litigation that has been pending since 1992. According to AMA, attempts to enforce the underlying consent judgment have resulted in a search for hidden assets and extensive discovery to gather sufficient facts to bring enforcement proceedings against Janss and Sport Flyers of America. AMA contends that if the default judgment is set aside, Janss will have another opportunity to incorporate in another state, move or hide assets, and otherwise attempt to avoid paying the consent judgment. For these reasons, the Court finds that setting aside the default judgment will prejudice AMA.

Finally, Defendants have not shown that they have a meritorious defense to this lawsuit. They have not provided any facts to suggest that there is a reasonable probability of a different result if the default judgment is set aside. See Moldwood Corp. v. Stutts, 410 F.2d 351, 352 (5th Cir. 1969). The Court has nothing more than Janss’s conclusory statements, which are insufficient to show a meritorious defense. Id. Under these circumstances, Defendants’ motion to set aside the default judgment should be denied.

It is therefore ORDERED that the Notice of Motion to Vacate Default Judgment, filed by Defendants Sport Flyers of America, Inc., and Elliott Janss on March 31, 1999, is denied.

Signed this 20 day of May, 1999.

Robert B. Maloney
U.S. District Judge


August 23, 1999

Judgment In Lawsuit Against Sport Flyers of America, Inc. And Elliott Janss, Jr.


As originally reported in the June, 1997 issue of Model Aviation, AMA
obtained a consent judgment in its favor against Sport Flyers Association,
Inc. After Sport Flyers Association failed to live up to the terms of the
consent judgment, AMA filed suit in the United States District Court for the
Northern District of Texas, Dallas Division, against a new entity called Sport
Flyers of America, Inc., and its owner, Elliott Janss, Jr.

AMA argued that Sport Flyers of America had stripped the assets of Sport
Flyers Association, and that Mr. Janss was continuing the business affairs of
Sport Flyers Association with the same membership, the same operational
procedures, and the same insurance policies as Sport Flyers Association,
while claiming freedom from its former liabilities to AMA under the consent
judgment.

On February 4, 1999 the Court entered a judgment against Sport Flyers of
America and Elliott Janss, Jr. The Court agreed with AMA's claims that
Sport Flyers of America and Mr. Janss fraudulently used Sport Flyers of
America to avoid paying the money Sport Flyers Association owed AMA
under the consent judgment, and awarded $124,000 to AMA. Citing the
complicated nature of the case resulting from the fraudulent actions of Sport
Flyers of America and Mr. Janss, the court also awarded $28,961.75 in
attorneys' fees and $6,549.08 in expenses to AMA.

Sport Flyers of America and Janss then asked the Court to set aside this
judgment. In a five-page opinion dated May 20, 1999 the Court refused to
do so, finding that Mr. Janss and Sport Flyers of America did not present a
meritorious defense to AMA's claims.

On June 10, 1999 Mr. Janss filed bankruptcy, and on June 30, 1999 Sport Flyers of America filed Chapter 11 bankruptcy in U.S. Bankruptcy Court.

Red Scholefield

My Feedback: (9)

One individual's story as to why the SFA was started.


"I do have a great deal of knowledge about Al Zlogar, Marsha Howard and the SFA in its early years.

From June of 1992 until about April 1994 I worked extensively with Al Zlogar and his strange little spinoff of SFA that he called HobbyLab. I worked less extensively with the SFA itself, although I did a good bit of volunteer work
and edited a couple of the SFA newsletters that appeared in RCM about then. I spent hundreds of hours working directly with Al Zlogar and Marsha Howard at two of the Dallas area SFA headquarters locations. I was a member of the SFA while I worked with the organization

Before I began, let me mention that I felt that the SFA was a grand idea. It would (and did) put pressure on the AMA to be a little more customer service oriented towards it's lifeblood, the average R/C modeler. It offered people a choice and a bargain for insurance coverage while pursuing their model aviation hobby. I know that Marsha and Al did much yeoman work towards helping these same folks with the SFA, especially in the area of flying site insurance and retention. (Perhaps not as much as the legends have it, though) However, the SFA had a much darker side few were aware of in the early days. I was there, I spent many, many hours in the SFA/HobbyLab offices and I witnessed it first hand.

I have no knowledge of the current management of the SFA under Mr. Janss. I am speaking only of the early SFA under Al Zlogar and Marsha Howard.

Simply put, based on conversations I had with Al Zlogar directly, the lawsuit with the AMA appeared to be part of his business plan *even before* the SFA opened its doors for business. Al had plans to expand the SFA from *before* day one with the proceeds of the lawsuit that he felt that he knew he was going to win. He provoked the lawsuit on purpose, to meet his plan.

As the games began, Al would spin convoluted tales of how the AMA was systematically harassing SFA members at various flying sites. This was at the core of his lawsuit with the AMA. Any reasonable person (especially one well
versed in model club politics) could tell from these stories that if anything at all was actually happening, it was nothing more than overzealous model club members (every club seems to have one or two, at least) that, ndependent of AMA management, were trying to enforce club rules regarding AMA membership. Al took these simple, intra club disagreements, mixed them with some AMA remarks he regarded as libel, added a dash of conspiracy (always spicy) and charged into the lawsuit as planned. It always seemed to me he was trying to make 5
gallons of guacamole out of a few very small avocados.....<G> IMHO, this action negated the good being accomplished by the SFA. Who needs frivolous lawsuits besides lawyers? Certainly not our hobby.

As this began, I was also troubled by the business and management practices at SFA headquarters. Any employee who began to have a clue as to what the SFA was really up to behind the scenes did not have long to survive. The tenure of receptionists, assistants and the like was usually measured in weeks at best. There is something wrong at the very core of an organization that has this kind of turnover. Many bills were not paid (not from lack of funds) and at least one person was fired for paying an overdue bill without permission. I have first hand knowledge of this.

One of Al's other grand plans for the SFA was not illegal, but always made me a little uncomfortable. He viewed the ultimate purpose of the SFA not as a model fraternity supplying benefits to it's members, but as helping to create
a ready pool of customers for whatever model related marketing scheme he was focused on at the moment. (Complete vertical integration of customer, product and supplier) Early on, he attempted to buy a number of well known model companies, such as Sig Mfg., in hopes of pursuing this goal. He later created HobbyLab as his personal tool to do this with. Ever notice how SFA newsletters became extensive commercials for HobbyLab products that were barely under development, much less ready to ship? I thought you might have........<G>

I will not speak much of HobbyLab, as it is not not the subject under discussion here. I worked as a product designer while Al was firmly in charge of the management, the marketing and the money (much of which came from the
SFA). It became a morass of good ideas and intentions never realized, too much marketing and not enough substance, broken agreements and commitments and fingerprinting. We did invent some fun models and I view the experience as: "That which does not destroy you, makes you stronger".....<G>. Others involved lost more than me, to be sure.

Troubled by the mismanagement and many other issues, I severed my contacts with SFA and HobbyLab completely in late 1994. After the smoke had cleared, more than one person has noticed that the whole HobbyLab deal (and to a lesser extent, SFA) had an amazing resemblance to the plot of that classic Mel Brooks movie, "The Producers".

I will admit that I have very little in hard evidence to support this (but I have some....<G>) I do have an extensive list of people that were involved with the core of SFA and HobbyLab and came away with a very bad taste in their
mouth.( I know of no one, other than some SFA members, that came away with a good taste in their mouth.) I will provide these names privately on request for corroboration, should you wish to do so.

SFA...a great idea, poorly executed in many ways in the early years, but with too much attendant baggage to survive in its original form."

Boomerang1

Thanks guys.

I guess you could call that the long (Red) & the short (Horrace) of it!

There seems to be a pattern with organisations. Some one comes along, falls from favour
with the original organisation, trys to start an alternative organisation & comes unstuck.

Only when the original is rotten to the core do the 'new' organisations seem to succeed.

Thanks for the insight. - John.

scale only 4 me

My Feedback: (158)

,,, oops wrong thread

littlecrankshaf

My Feedback: (58)

It would be interesting to have the SFA's account of "the facts" as well...

scale only 4 me

My Feedback: (158)

Is this Red's story or just anonymous??

Red Scholefield

My Feedback: (9)

It was not my story, it was a post from an individual that worked for SFA from June of 1992 until about April 1994

scale only 4 me

My Feedback: (158)

I got that,, why no name?

Red Scholefield

My Feedback: (9)

Texas Court records are good enough for most people. SFA's "facts" were not enough to support their claim as court records show.

SFA (2nd reincarnation under Elliot Janss) ATTENTION!!! ATTENTION!!! ATTENTION!!! ATTENTION!!!

Dated 3/2/99 - Response to the legal document posted on the AMA's website!

The Academy of Model Aeronautics has recently posted a blatant misrepresentation of legal facts on their website and we can only assume it is from their enduring and unfounded malice towards Sport Flyers of America, Inc. or any other organization, which presents competition to their company.

FACT: This document refers to the same old lawsuit initiated years ago against Sport Flyers Association which was owned and operated by Marsha Howard in Texas. They have since attempted to get Sport Flyers of America, Inc. to pay some portion of this old settlement.

FACT: NO SUBPOENAS were ever served to Sport Flyers of America, Inc. (which is a New Jersey Corporation)
officers, employees and/or legal representatives in New Jersey or Texas, therefore making any such "DEFAULT
JUDGMENT" NULL AND VOID.

FACT: NOTHING HAS BEEN nor is in danger of being SEIZED as far as Sport Flyers of America, Inc. assets or
"anything else" is concerned.

Our clubs and members may REST ASSURED that all charters and memberships are current and are being actively
maintained by Sport Flyers of America, Inc.

FACT: Sport Flyers of America, Inc. provides INVALUABLE COMPETITION in an industry, which has been dominated by one organization for over 50 years. We can all attest to the fact that competition can promote fairness, lower prices, greater customer control, far better choices and overall economic growth.

Let us also concede that in an industry monopoly, the customers have virtually NO CONTROL over any of these
issues. The company becomes stagnant, over-priced, deaf to its customers concerns and is in the position to exercise entirely too much control over that particular industry. Customers then become forced to take it or leave it. Is that what we want to allow to happen to the sport of radio control?

FACT: Sport Flyers of America, Inc. has always been a proponent for a malice-free environment in the sport radio
control. We allow our members to fly anywhere. We sanction events allowing anyone to fly regardless of membership affiliations. We promote dual charters and insure SFA club charters, knowing that a vast majority of the club’s members belong to the AMA. Given time, we hope to begin lobbying to protect and increase frequencies as well as acquire club and flight training facilities in each state.

What has the OTHER organization done recently to support these ideals? Well, they have closed ranks with other
membership organizations forcing radio control sportsmen to either purchase their memberships or not be able to fly at "large scale" events. They initiated a letter-writing campaign to dual chartered clubs, threatening to drop their charters if they didn’t drop SFA first. We all know that these types of tactics are a direct attempt to keep a tight reign in on members.

In summary, we would like to take this opportunity to announce that Sport Flyers of America, Inc. is HERE TO
STAY! We will always strive to keep this sport new and exciting , innovative and popular as well as keeping it safe, protected and UNIFIED.

We also promise to keep our members aware and informed of all issues pertaining to this organization and the sport of radio control.

SO MOVE OVER AMA, IT'S TIME YOU GAVE US A LITTLE ELBOW ROOM!

Elliot Janss SFA

May 1999

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION


ACADEMY OF MODEL AERONAUTICS, INC., Plaintiff,
v.
SPORT FLYERS OF AMERICA, INC., ET AL., Defendants.

ORDER DENYING MOTION TO VACATE DEFAULT JUDGMENT

Before the Court is the Notice of Motion to Vacate Default Judgment, filed by Defendants Sport Flyers of America, Inc., and Elliott Janss. The Court construes the Notice as a motion, although it does not contain a supporting brief. After considering the motion and Plaintiff’s response, the Court is of the opinion that the motion should be denied.

On February 5, 1999, the Court entered a final default judgment against Defendants. The Court found that Defendants’ agent for service was served with summons and complaint on December 2, 1998, and that Defendants had not answered or otherwise pleaded.

The Court also found from the uncontroverted facts that, in March 1997, Plaintiff Academy of Model Aeronautics, Inc., and an entity known as Sport Flyers Association, Inc., entered into a consent judgment under which Sport Flyers Association was to pay AMA scheduled payments totaling $124,000 plus post-judgment interest over a three year term ending December 1, 1999. The judgment provided that failure to make any required payment entitled AMA to accelerate the indebtedness and execute the judgment. AMA has not received any payments under the terms of the judgment.

The uncontroverted facts also established that Sport Flyers Association was stripped of its assets, and its principals disappeared from Texas. However, Sport Flyers of America, Inc., operated by Defendant Elliott Janss, continued the business affairs of Sport Flyers Association with the same membership, the same operational procedures, and the same insurance policy as Sport Flyers Association, but free from its former liabilities under the judgment.

From the uncontroverted evidence, the Court found that Sport Flyers of America is a continuation of Sport Flyers Association and that AMA’s evidence was sufficient to support entry of default judgment in favor of AMA in the amount of $124,000, plus post-judgment interest. The Court also awarded AMA reasonable attorney’s fees in the amount of $28,961.75 Along with $6,549.08 for expenses.

In the instant motion, Defendants move the Court to vacate the default judgment on the grounds that they were not properly served and for reasons of good cause and excusable neglect. In support of the motion, Defendants have filed the Certification of Elliott Janss.

First, Defendants argue that they were not properly served with summons and complaint because AMA served the Texas Secretary of State under the Texas Long Arm Statute. Defendants contend that the Secretary is not their agent for service because they have never done business in Texas. However, Defendants admit that they received a copy of the pleadings from the Secretary.

Section 17.044(b) of the Texas Civil Practice and Remedies Code provides:

The secretary of state is an agent for service of process on a nonresident who engages in business in this state, but does not maintain a regular place of business in this state or a designated agent for service of process, in any proceeding that arises out of the business done in this state and to which the nonresident is a party.

Thus, the Secretary of State’s certificate is conclusive evidence that the Secretary, as an agent for the defendant, received service of process for the defendant and forwarded the service as required by statute. See Capitol Brick, Inc. v. Fleming Mgf. Co., 722 S.W.2d 399, 401 (Tex. 1986). Moreover, service is complete when the Secretary is served, not when the defendant received notice. See Whitney v. L & L Rlty. Corp., 500 S.W.2d 94, 96 (Tex. 1973).

ORDER DENYING MOTION TO VACATE DEFAULT JUDGMENT


In support of the argument that AMA improperly served the Secretary as Defendants' agent, the Certification of Elliott Janss states that Sports Flyers of America does not operate in Texas and does not maintain an office in Texas. Janss further states that he never had an office in Texas and that he never did business in Texas. In response to Janss’s assertions, AMA has provided the Court with deposition testimony and bank records, which indicate that Defendants did conduct business in Texas. However, Defendants have not filed a reply to AMA’s response and have not attempted to refute this evidence. Therefore, the Court has nothing more than Janss's conclusory statements that Defendants were improperly served under the Texas Long Arm Statute.

Furthermore, the objective of the Texas Long Arm Statute is to provide reasonable notice of the suit and an opportunity to be heard. See Leedo Cabinetry v. James Sales & Distribution, Inc., 157 F.3d 410, 413 (5th Cir. 1998)(citing Barnes v. Frost Nat’l Bank, 840 S.W.2d 747, 750 (Tex. App.—San Antonio 1992, no writ)). Because

Defendants admit receiving a copy of the summons and complaint in this case, there is no question that they were given notice of the lawsuit and an opportunity to be heard. Under these circumstances, the Court finds no basis for setting aside the default judgment on the basis of Defendants’ unsupported contention that they were improperly served.

Defendants also move the Court to vacate the default judgment on the basis of good cause and excusable neglect. Courts generally look to three criteria to determine whether to vacate a default judgment: (1) whether the default was willful, (2) whether setting aside the judgment will prejudice the adversary, and (3) whether the defendant presented a meritorious defense. See CJC Holdings, Inc. v. Wright & Lato, Inc., 979 F.2d 60, 64 (5th Cir. 1992). However, the ultimate inquiry is whether the defendant has shown good cause to set aside the judgment. Id.

In the Certification of Elliott Janss, Janss states that he received a certified mailing of the pleadings and that his attorney immediately called AMA’s attorney, asking for an acknowledgment of service for Janss to sign. Janss also states that his attorney never received the acknowledgment of service document and that, because he was undergoing dialysis three times per week, he did not recall when or how papers had been disseminated. However, Janss states that he always understood that he had to be personally served with process.

After consideration, the Court finds that Defendants have not stated good cause to set aside the default judgment. They have presented no evidence of any mistake or inadvertence. Moreover, they admit that they received the summons and complaint, suggesting that they made a conscious decision not to respond to the lawsuit. Therefore, the Court concludes that Defendants willfully did not file an answer in the case or otherwise plead.

Also, the Court finds that AMA will be prejudiced if the default judgment is set aside. This lawsuit arises out of litigation that has been pending since 1992. According to AMA, attempts to enforce the underlying consent judgment have resulted in a search for hidden assets and extensive discovery to gather sufficient facts to bring enforcement proceedings against Janss and Sport Flyers of America. AMA contends that if the default judgment is set aside, Janss will have another opportunity to incorporate in another state, move or hide assets, and otherwise attempt to avoid paying the consent judgment. For these reasons, the Court finds that setting aside the default judgment will prejudice AMA.

Finally, Defendants have not shown that they have a meritorious defense to this lawsuit. They have not provided any facts to suggest that there is a reasonable probability of a different result if the default judgment is set aside. See Moldwood Corp. v. Stutts, 410 F.2d 351, 352 (5th Cir. 1969). The Court has nothing more than Janss’s conclusory statements, which are insufficient to show a meritorious defense. Id. Under these circumstances, Defendants’ motion to set aside the default judgment should be denied.

It is therefore ORDERED that the Notice of Motion to Vacate Default Judgment, filed by Defendants Sport Flyers of America, Inc., and Elliott Janss on March 31, 1999, is denied.

Signed this 20 day of May, 1999.

Robert B. Maloney
U.S. District Judge

Red Scholefield

My Feedback: (9)

Post your name and I will give it to you.

scale only 4 me

My Feedback: (158)

*** ******

Red Scholefield

My Feedback: (9)

Name sent to you via e-mail

littlecrankshaf

My Feedback: (58)

Question asked here... answer to your question given here... Why the secrecy?

Red Scholefield

My Feedback: (9)

If scale only 4 me feels it is germain to the subject he is free to post the name given to him.

Thomas B

My Feedback: (4)

I would be the person that posted that report on the early SFA on rec.models.rc many years ago. Red can confirm that.

I stand by what I wrote.

If you look in some of the SFA news pages that were published in RCM while the original SFA was in operation, you can see my name in a couple of articles published therein.

I worked mostly for the HobbyLab part of the organization and was the person that designed the rocket powered HobbyLab SR-71 free flight or R/C model. I did spend a number of evenings and other days around the SFA offices in Dallas and witnessed what I posted.

Feel free to look up the orignal principals on SFA and ask them questions about it.....I predict that based on what I has written, they will not confirm....are you surprised?

RCKen

My Feedback: (9)

Ok, I've just removed some posts from this thread. Please keep all the little "secret spy games" out of the forum. The "reply sent by email" or anything else does not contribute to the discussion. Let's keep it simple, if you're not going to post a piece of information in the thread don't play little games here like you've got some big secret. Just send the information by email or PM and leave it at that.

Red Scholefield

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Tom, Thanks for jumping in. Yes, you were the one that sent me the information on the origin and intent for forming the SFA. This should pretty well answer most of the questions.

Thomas B

My Feedback: (4)

One of the reasons Red kept my name on the down low was that that original post stirred up discussions of legal subpoenas (not by the SFA folks, but by a couple of rabble rousers on rec.models.rc) that said that they might sue me for the SFAs misdeeds, since I was around and the founders weren't...

Now that it is about 15 years past SFA and about 10 years past that post, I think they have likely calmed down by now....

GerKonig

I think your answer is here:

http://www.rocketryplanet.com/conten...#axzz1Xsbbgyfi

It seems they are dead as their founder.

Gerardo

Thomas B

My Feedback: (4)

The Sport Flyers Association that ceased operations in 2000 was the second incarnation of the company.

rayliza

Repo Boats

Scar

My Feedback: (3)

Red,

I appreciate your matter-of-fact conveyance of the essentials.

I, on the other hand, allowed myself a chortle or two.

Dave Olson

thatairplaneguy

My Feedback: (50)

SFA was brought up in a conversation today.

Sense se they are gone, is there any other entity available to insure model aircraft users OR does the AMA have a monopoly on this?

I am not apposed or dislike AMA but I think we should have options. I do not like that AMA is secondary insurance. I'd rather pay more and not have to drag my home owners or car insurance into an Incident. This is why I pay AMA (aside from every field requiring it) so I have some coverage if there were an accident. With current AMA, they won't pay a dime unless there is no other avenue and every safety rule and suggestion was followed to a T.
Is it bad they cover themselves too? No. But then why am I giving my money away to an organization that does nothing for me or even my flying group if an accident occurred?