United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
P. SIMON, JUDGE UNITED STATES DISTRICT COURT
matter is before the Court on plaintiff Washington Square
Development, LLC's motion for default judgment [DE 14.]
Because defendant LED Solar Direct, LLC has failed to respond
to the complaint or Washington Square's motion for
default judgment and plaintiff has sufficiently proven the
bulk of its damages, I will grant Washington Square's
motion for default judgment.
Square filed this lawsuit against LED Solar on February 16,
2018. [DE 1.] Washington Square affected service on LED Solar
in numerous ways. On March 28, 2018 and March 29, 2018,
summonses and copies of the complaint were delivered to LED
Solar's principals (Brett Halperin and Jason Cho, who are
not named as defendants) via certified mail. [DE 14 at ¶
2.] In addition, Washington Square completed service via the
New Jersey Department of Treasury, as agent for LED Solar
pursuant to New Jersey law, as LED Solar had failed to
maintain a deliverable address for any registered agent.
[Id. at ¶ 4.] Service via the New Jersey
Department of Treasury was completed on April 9, 2018.
[Id. at ¶5-6.] Counsel for Washington Square
further sent letters via email to LED Solar's principals
and attempted to contact them via telephone, to no avail.
[Id. at ¶¶ 8-13.]
Solar failed to appear, plead or otherwise defend the lawsuit
as required by the Federal Rules of Civil Procedure.
Accordingly, Washington Square moved for entry of default on
May 30, 2018 [DE12], which the clerk entered on May 31, 2018.
[DE 13.] After the clerk entered default under Rule 55(a),
Washington Square filed its motion for default judgment on
June 27, 2018. [DE 14.]
complaint, Washington Square alleges that LED Solar breached
a contract by failing to perform and deliver lighting
fixtures which were to be used as part of the renovation of a
hotel in downtown South Bend, Indiana. [DE 1 ¶¶
5-9.] Washington Square alleges that LED Solar's actions
further constitute criminal conversion under Indiana law.
Washington Square alleges that pursuant to the contract, it
pre-payed for the light fixtures to the tune of $94, 991.00.
[Id. at ¶ 9.] LED Solar apparently failed to live
up to its end of the bargain, missed deadlines, and in the
end did not deliver the light fixtures per the contract.
[Id. at ¶¶ 10-13.] Based upon Washington
Square's investigation and correspondence, it appears
that LED Solar was attempting to import counterfeit fixtures
which were detained by U.S. Customs and consequently never
delivered to Washington Square. [DE 14-9 at 42.] Washington
Square requested a return of its money and sought alternative
arrangements to secure the necessary lighting fixtures, but
LED Solar did not return any of the money paid. [Id.
at ¶ 13.] Indeed, rather than discuss the issue further,
LED Solar seems to have ghosted Washington Square and stopped
responding to all communications and inquiries. Washington
Square filed three counts against LED Solar for (1) breach of
contract; (2) conversion; and (3) unjust enrichment. [DE 1.]
pending motion, Washington Square asks the Court to order LED
Solar to pay $305, 928.55 which represents (1) $94, 991.00 in
direct damages, trebled pursuant to the Indiana conversion
statute, Ind. Code § 35-43-4-3, representing money paid
by Washington Square to LED Solar as pre-payment for the
lighting fixtures; (2) $9, 534.55 in consequential damages
for additional payments made relating to shipping costs above
and beyond the original contract price; and (3) $11, 421.00
in attorney's fees relating to this litigation. [DE 14 at
¶ 37.] In support of its claim to damages, Washington
Square submitted an declaration from Merkourios
“Mike” Angeliades, the “Manager of the
Company” of Washington Square, as well as
communications with LED Solar regarding the transaction. [DE
14-6.] Washington Square also submitted a declaration and
partially redacted billing records from its counsel, Alice J.
Springer, regarding attorney's fees. [DE 14-5.]
Rule of Civil Procedure 55 governs the entry of defaults and
default judgments. See Lowe v. McGraw-Hill Cos.,
Inc., 361 F.3d 335, 339 (7th Cir. 2004). Prior to
obtaining a default judgment under Rule 55(b)(2), there must
be an entry of default as provided by Rule 55(a). See
Wolf Lake Terminals, Inc. v. Mut. Marine Ins. Co., 433
F.Supp.2d 933, 941 (N.D. Ind. 2005). Under Rule 55(a), the
clerk is to enter the default of a party against whom a
judgment is sought when that party has failed to plead or
otherwise defend. Fed.R.Civ.P. 55(a).
the clerk already entered a default, I may now enter a
default judgment under Rule 55(b)(2), and it is within my
discretion to do so. See O'Brien v. R.J. O'Brien
& Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir.
1991). A default judgment establishes, as a matter of law,
that the defendant is liable to the plaintiff for each cause
of action in the complaint. E360 Insight v. The Spamhaus
Project, 500 F.3d 594, 602 (7th Cir. 2007).
I am to
consider a number of factors when deciding a motion for
default judgment, including “whether there is a
material issue of fact, whether the default is largely
technical, whether the plaintiffs were substantially
prejudiced, and how harsh an effect a default judgment might
have.” Wolf Lake, 433 F.Supp.2d at 941;
see Wright & Miller 10A Federal Prac. &
Proc. § 2683 (3d ed.). All well-pleaded facts are taken
as true for purposes of liability. Cameron v. Myers,
569 F.Supp.2d 762, 764 (N.D. Ind. 2008).
case, the grounds for default are established and I will
grant Washington Square's motion. This case has been
pending since February 2018, but the defendant has not
answered, entered an appearance through counsel, responded to
Washington Square's motion for default judgment, or
responded Washington Square's counsel's attempts to
contact the principals of LED Solar. The default is thus not
a simple technicality. No disputed material issues of fact
have been presented due to LED Solar's failure to
participate in the lawsuit. Likewise, it seems clear that
Washington Square made the contractually required payments
and LED Solar failed to deliver the lighting fixtures in
question (save for a de minimus quantity of fixtures,
approximately 40 of more than 800 contracted for).
Additionally, delay in judgment will prejudice Washington
Square, as it paid LED Solar nearly $100, 000 more than a
year ago. Finally, while the amount at issue is substantial,
LED Solar is presumably well-aware of the amount of money at
stake, as it has wrongfully taken that amount of money from
Washington Square and thus it cannot be said that the effect
of the judgment will be unnecessarily harsh.
established liability, I must now determine the amount of
damages to actually award to Washington Square. In the
context of a default judgment, the amount of damages must be
proven with facts beyond the allegations fo the complaint.
See Yang v. Hardin, 37 F.3d 282, 286 (7th Cir. 1994)
(citing United States v. DiMucci, 879 F.2d 1488,
1497 (7th Cir. 1988)). Thus, upon considering a motion for
default judgment, a court may need to hold a hearing to
determine damages. See Dundee Cement Co. v. Howard Pipe
& Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th
Cir. 1983). But in cases where damages are capable of
ascertainment from definite figures contained in the
documentary evidence or in detailed affidavits, such a
hearing is unnecessary. See O'Brien, 998 F.2d at
1404 (citing Dundee Cement Co., 722 F.2d at 1323);
E360 Insight, 500 F.3d at 602.
Washington Square offers Mr. Angeliades's declaration, as
well copies of three separate wire transfer requests (all to
LED Solar Direct LLC) and a check stub (also to LED Solar
Direct LLC), totaling $94, 991.00. [DE 14-7 and 14-8.] I am
further satisfied that, based upon the allegations of
duplicity and intentional misconduct in the complaint, LED
Solar's continued possession of Washington Square's
funds amounts to conversion under Indiana law because it has
continued without Washington Square's consent. See
Auto Liquidation Ctr., Inc. V. Chaca, 47 N.E.3d
650, 655 (Ind.Ct.App. 2015); Smeigh v. Johns ...