United States District Court, N.D. Indiana, Fort Wayne Division
OPINION AND ORDER
THERESA L. SPRINGMANN CHIEF JUDGE
This
matter is before the Court on the Plaintiff's, SelectSun
GmbH, Motion for Entry of Final Judgment against Defendant,
International Nautic LLC (Nautic) in the amount of $1, 032,
816.85, plus attorneys' fees and costs [ECF No. 240]. The
Court understands that this is a motion for final judgment
pursuant to Federal Rule of Civil Procedure 55(b)(2).
BACKGROUND
The
Plaintiff has litigated this case in the Northern District of
Indiana since July 2014. The Plaintiff's allegations
center around a boat he purchased that he cannot legally
operate within the European Union. (Op. and Order at 2, ECF
No. 228.) International Nautic ordered and purchased the boat
from Defendant Porter, a boat manufacturer. (Id. at
1.) The Plaintiff worked with International Nautic to have
the boat delivered to Germany. (Id.) The Plaintiff
alleges the following claims against International Nautic:
(i) fraudulent misrepresentation; (ii) negligent
misrepresentation; (iii) aiding and abetting; (iv) civil
conspiracy; (v) negligence; (vi) breach of express contract;
(vii) breach of implied-in-fact contract; (viii) breach of
duty of good faith and fair dealing; (ix) breach of express
warranties; (x) breach of implied warranties pursuant to UCC
§ 2-314; (xi) violation of Magnuson-Moss Warranty Act,
15 U.S.C. §§ 2301 et seq.; and (xii)
unjust enrichment.
International
Nautic filed an answer and motion to dismiss initially but
abandoned the litigation thereafter. International Nautic
stopped communication with its attorneys in early 2015 and
its local counsel filed a Motion to Withdraw Appearance in
February 2015 [ECF No. 99]. In the Motion, the attorneys
explained that there had been a breakdown in communication
and had been unable to reach the Defendant to discuss any
case matters. (Id. at 2-3.) The Court contacted
International Nautic's long-time Florida counsel, who
informed the Court that International Nautic intended to
abandon its defense of the case [ECF Nos. 109, 110]. On March
25, 2015, the Court granted local counsel's Motion to
Withdraw Appearance, ordered International Nautic to show
cause for its failure to attend the March 5, 2015 hearing,
and granted International Nautic up to and including April 9,
2015 to obtain new counsel and enter an appearance on its
behalf [ECF No. 122]. The Court warned International Nautic
that failure to obtain new counsel or show cause could result
in sanctions, up to and including the entry of a default
judgment. (Id.) Despite these admonitions,
International Nautic did not respond. On March 31, 2016, the
Court entered a default judgment against International Nautic
on all the Plaintiff's causes of action as a sanction
under Federal Rule of Civil Procedure 16(f)(1) [ECF No. 170].
The Court declined to enter final judgment on default until
the conclusion of litigation to “avoid the possibility
of inconsistent results.” (Id.)
The
Plaintiff's case against Defendant Porter was before the
Court on a four-day bench trial [ECF Nos. 222-25] and the
Court found against the Plaintiff on all its claims. In its
Opinion and Order, the Court stated that the Plaintiff failed
to provide sufficient evidence to “tie to the drive
shaft issues to Porter or International Nautic, and instead
focused its arguments around CE- certification.” (Op.
and Order at 33, ECF No. 228.) The Court noted that the boat
could become CE-certified with a different exhaust system.
(Id.) Specifically, the Court stated that two
different experts testified that a new exhaust system in
compliance with EU standards would cost around a few thousand
dollars. The Court thus withheld the entry of a final
judgment against International Nautic until the Plaintiff
provided evidence estimating the cost to replace the exhaust
system to bring the Boat into compliance with EU standards.
(Id.)
On
October 31, 2018, the Plaintiff filed an Affidavit of
Hubertus A. Kettner [ECF No. 239] in accordance with the
Court's ruling. The affiant disagreed with the
Court's finding that the boat could be equipped with an
exhaust system in compliance with EU standards. (Aff. of H.
Kettner ¶ 3.) According to the affiant, “[t]he
damages suffered are a total loss, i.e. the full purchase
price of $840, 000 together with the additional costs
incurred.” (Id. at ¶ 7.) On January 11,
2019, the Plaintiff filed a Motion for Entry of Final
Judgment [ECF No. 240]. The Plaintiff argues that the Kettner
affidavit indicates that the cost of repair is inadequate to
make the Plaintiff whole (Pl.'s Mot. for Entry of Final
J. at 6.) The Plaintiff claims that it established that the
final judgment entered against International Nautic should be
$1, 032, 816.85 ($840, 000.00 purchase price of boat $124,
000 financing charges $68, 816.85 purchase price of boat
lift). (Id. at 5.) Finally, the Plaintiff argues
that attorneys' fees and costs should be awarded, but
does not specify those costs. (Id. at 7.)
LEGAL
STANDARD
Federal
Rule of Civil Procedure 55 governs the entry of default and
default judgment. See Lowe v. McGraw-Hill Cos.,
Inc., 361 F.3d 335, 339 (7th Cir. 2004). There is a
clear distinction “between the entry of default and
entry of a default judgment.” Once the default of a
party has been established for failure to plead or otherwise
defend, Federal Rule of Civil Procedure 55 authorizes a party
to seek and a court to enter a default judgment. Provided a
plaintiff's allegations are well-pleaded, a default
judgment “‘establishe[s], as a matter of law,
that defendants [are] liable to plaintiff as to each cause of
action alleged in the complaint.'” Dundee
Cement Co. v. Howard Pipe & Concrete Prods., Inc.,
722 F.2d 1319, 1323 (7th Cir. 1983) (alterations in original)
(quoting Breuer Elec. Mfg. Co. v. Toronado Sys. of Am.,
Inc., 687 F.2d 182, 186 (7th Cir. 1982)); see also
O' Brien v. R.J. O'Brien & Assocs., Inc.,
998 F.2d 1394, 1404 (7th Cir. 1993). The party moving for a
default judgment must then establish entitlement to the
relief sought. In re Catt, 368 F.3d 789, 793 (7th
Cir. 2004). Courts must ascertain with reasonable certainty
the proper amount to award as damages to the prevailing
party, based upon either an evidentiary hearing or from
definite figures contained in documentary evidence or in
detailed affidavits. Id., Dundee Cement
Co., 722 F.2d at 1323.
ANALYSIS
The
default judgment entered on March 31, 2016 [ECF No. 170]
established International Nautic's liability, but the
default did not establish the extent of the damages resulting
therefrom, which remains the Plaintiff's burden.
Domanus v. Lewicki, 742 F.3d 290, 303 (7th Cir.
2014) (noting that “while a default judgment
conclusively establishes liability, the victor must still
prove up damages”); see also Jones-Bey v.
Wright, 1996 WL 476661, at *6 (N.D. Ind. Aug. 19, 1996)
(“The entry of default, however, does not resolve the
issue of damages, and the burden remains upon [the plaintiff]
to establish the amount of his damages which proximately
resulted from the acts and conduct of the defaulted
defendants.”). The Plaintiff is correct that
International Nautic, through its failure to defend, did not
present any evidence that the alleged damage did not occur
(Pl.'s Mot. for Entry of Final J. at 5), but the
Plaintiff must still prove the damages he sustained resulted
from International Nautic's wrongful conduct.
Within
the Seventh Circuit, judgment by default may not be entered
without a hearing unless “the amount claimed is
liquidated or capable of ascertainment from definite figures
contained in the documentary evidence or in detailed
affidavits.” Dundee Cement Co., 722 F.3d at
1323. The Seventh Circuit permits “broad
latitude” in quantifying damages, “especially
when the defendant's own conduct impedes
quantification.” BCS Servs., Inc. v.
Heartwood 88, LLC 637 F.3d 750, 759 (7th Cir. 2011).
“To prove the amount of damages, however, conclusory
allegations in an affidavit are generally
insufficient.” United States v. Bornes, 2011
WL 1769011, at *2 (N.D. Ind. May 9, 2011). Additionally, when
there are component parts to a damages total, the court
requires evidence to support the components of the total
damages. Id., (citing Dundee Cement Co.,
722 F.2d at 1324). The amount of damages sought, must also
“naturally flow from the injuries pleaded.”
Wehrs v. Wells, 688 F.3d 886, 893 (7th Cir. 2012).
Thus, an affidavit that does not provide details as to how
damages were calculated will be deemed insufficient to prove
damages. See, e.g., Bornes, 2011
WL 1769011, at *2; Trs. of The In. State Council of
Roofers Health & Welfare Fund v. Charles Gluth & Son
Roofers, Inc., 2010 WL 4687660, at *2 (N.D. Ind. Nov. 8,
2010).
In
support of its damages, the Plaintiff presents an affidavit
from Kettner, who testified during the bench trial. (Op. and
Order at 20.) The Plaintiff's affiant claims that the
boat cannot be equipped with an integral exhaust system
because the exhaust system cannot be rebuilt with the
boat's specific engine. (Aff. of Kettner ¶ 3.)
Additionally, the affiant states that there had already been
an attempt to alter the exhaust system, which was
unsuccessful. (Id. at ¶¶ 5-6.) The affiant
claims that the “damages suffered are a total
loss.” (Id. at ¶ 7.) The Plaintiff argues
that the Kettner affidavit demonstrates that the boat is
“worthless in the European Union” and the
Plaintiff is entitled to the $840, 000 purchase price of the
boat, the $68, 816.85 boat lift specifically acquired for the
boat, and financing charges in the amount of $124, 000.00.
(Pl.'s Mot. for Entry of Final J. at 5.)
As part
of establishing damages, the Court stated that it would use
the evidence presented over the course of the bench trial
related to damages to inform the default judgment against
International Nautic. (Op. and Order at 33.) The Seventh
Circuit has stated that “[e]ven when a default judgment
is warranted because on a party's failure to defend, the
allegations in the complaint with respect to the amount of
the damages are not deemed true. The district court must
instead conduct an inquiry in order to ascertain the amount
of damages with reasonable certainty.” In re
Catt, 368 F.3d at 793 (citation marks omitted).
Considering this record and the Court's own inquiry, the
Court finds that the Plaintiff has demonstrated that damages
in the amount of $68, 816.65 for the boat ...