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Craftline Graphics, Inc. v. Total Press Sales & Service LLC

United States District Court, N.D. Indiana, Fort Wayne Division

May 16, 2019




         This matter comes before the Court on Plaintiffs' Second Verified Motion for Default Judgment (ECF No. 25) and Plaintiffs' Request for Ruling on Second Motion for Default Judgment (ECF No. 27).


         Plaintiffs filed their Complaint for Damages and Jury Demand (ECF No. 1) on November 6, 2017. Despite basing this Court's jurisdiction on 28 U.S.C. § 1332 (Id., p. 2, ¶4), Plaintiffs failed to properly allege their own citizenship as well as that of Defendant. As a result, this Court entered an Opinion and Order (ECF No. 4) on November 8, 2017, directing Plaintiffs to “supplement the record by filing an amended complaint that properly alleges the citizenship of each of the parties on or before November 22, 2017.” (Id., p. 2). Plaintiffs filed their Motion to Amend Complaint (ECF No. 5), which included a proposed complaint that properly identified the citizenship of the parties, on November 9, 2017, and that motion was granted on November 13, 2017 (ECF No. 6).

         On January 9, 2018, Plaintiffs filed their Verified Motion for Entry of Default Judgment (ECF No. 11), an Affidavit of Debt signed by Plaintiffs counsel, Kevin P. Podlaski (“Podlaski”) (ECF No. 12), an Affidavit of Attorney Fees, Costs and Expenses, also signed by Podlaski (ECF No. 13), and a proposed order entering judgment in favor of Plaintiffs in the amount of $1, 195, 226.50 (ECF No. 14). These filings put the judgment cart before the entry horse; Fed.R.Civ.P. 55(a) requires an entry of default by the clerk before a default judgment can be sought. Accordingly, on January 19, 2018, Plaintiffs filed their Request for Entry of Default (ECF No. 15), and a default was entered against Defendant on January 22, 2018 (ECF No. 16).

         Entry in hand, Plaintiffs filed a one paragraph Motion for Default Judgment (ECF No. 17) on January 24, 2018. The motion contained no evidence or argument, but merely asked this Court to enter judgment in favor of the Plaintiffs in the amount of $1, 195, 226.50. This Court entered its Opinion and Order on the motion (ECF No. 18) on April 17, 2018. In its Opinion and Order, this Court identified several deficiencies in the Plaintiffs' request for a seven-figure judgment, including:

• Plaintiffs provided no documentation in support of their request for attorney fees;
• Plaintiffs made no attempt to demonstrate the reasonableness of their request for attorney fees; and
• Plaintiffs provided no explanation as to why they were entitled to pre-judgment interest, or how the pre-judgment interest rate was calculated.

         Plaintiffs were granted until May 17, 2018, to provide additional documentation and citation in support of their Motion for Default Judgment and Motion for Attorney Fees, Costs and Expenses. (Id., p. 5).

         On May 17, 2018, Plaintiffs filed their Response to the Court (ECF No. 19). In response to the Court's concerns regarding their claim for pre-judgment interest, Plaintiffs relied on the Indiana Tort Prejudgment Interest Statute (“TPIS”), Ind. Code § 34-51-4-1 et seq. As the name would suggest, the TPIS provides for prejudgment interest in “any civil action arising out of tortious conduct” where certain statutory requirements are fulfilled.[1] I.C. § 34-51-4-1. In response to the Court's concerns regarding the request for attorney fees, Plaintiffs provided an Amended Affidavit of Attorney Fees, Costs and Expenses (ECF No. 21), which included a redacted Matter Ledger Report purporting to show time entries totaling $12, 744.00 in attorney fees allocated to a claim that did not proceed to a responsive pleading. Plaintiffs also filed an Amended Affidavit for Entry of Default Judgment (ECF No. 20), again signed by Podlaski, which now sought judgment in favor of the Plaintiffs in the amount of $1, 039, 966.40.

         On September 19, 2018, this Court entered its Opinion and Order on Plaintiffs' Motion for Default (ECF No. 17) and related filings (ECF Nos. 19-21). While this was the Plaintiffs' second attempt to provide the evidence necessary to support the requested judgment, the Court was again forced to point out multiple deficiencies in Plaintiffs' filings, including:

• Plaintiffs' Affidavit of Debt was signed by Podlaski rather than an individual with personal knowledge of the damages;
• Plaintiffs failed to explain their theory of damages, particularly where contractual damages were claimed against the Defendant arising from a contract to which the Defendant was not a party;
• Plaintiffs sought relief under the TPIS in a case of purely economic damages, which sounded in contract instead of tort;
• Plaintiffs relied on Indiana law where the contract between Plaintiff Kappa Graphics, L.P. (“Kappa”) and Defendant contained a choice of law provision identifying Pennsylvania law as governing the contract; and
• Plaintiffs continued to fail to demonstrate their right to attorney fees or the reasonableness of their claimed fees.

         Plaintiffs' Motion for Default and request for attorney's fees were denied without prejudice and with leave to refile.

         On October 12, 2018, Plaintiffs filed their Second Verified Motion for Entry of Default (ECF No. 25), [2] their Response to the Court's September 19, 2018 Opinion and Order (ECF No. 24) (the “Response”), and yet another Affidavit of Debt (ECF No. 26), this time signed by the Vice President and General Counsel for Spartan Organization, Inc., “the management company for Craftline Graphics, Inc. and Kappa Graphics, L.P.” (internal parentheticals omitted). Plaintiffs now seek judgment in the amount of $1, 164, 171.00. The Court will address these most recent filings below.


         Plaintiffs' allegations, as taken from their First Amended Complaint, are as follows. On July 31, 2015, Kappa and Defendant entered into a service agreement (the “Contract”) under which Defendant was to dismantle a printing press owned by Kappa (the “Press”) and located at Kappa's facility in Pittston, Pennsylvania, and then clean, refurbish, load, transport, rig, and reassemble the Press at Plaintiff Craftline Graphics, Inc.'s (“Craftline”) facility in Fort Wayne, Indiana. Defendant began disassembly of the Press on August 10, 2015, and began reassembly of the Press on December 7, 2015. On January 19, 2016, Kappa and Craftline entered into an Equipment Lease Agreement (the “Agreement”), whereby Kappa agreed to lease the Press at a rate of $16, 435.00 per month for a total of sixty months. Assuming Craftline made all payments required under the Agreement, Craftline would pay Kappa a total of $986, 100.00.

         In “Late January, 2016, ” Defendant encountered electrical problems when it attempted to operate the reassembled Press. Defendant asked Craftline to contact the Press' manufacturer, ManRoland, for help getting the Press running. Defendant agreed to pay for ManRoland's charges. On February 1, 2016, ManRoland diagnosed the problems with the Press, concluding that Defendant improperly shutdown the Press in “perfect mode, ” and then compounded the problem by reassembling the Press in the same “perfect mode.” This resulted in the destruction of the Press' main gearbox. ManRoland cleared the electrical errors and reprogrammed the software to allow Defendant to continue with its work. Over the subsequent three months, Defendant continued to try to reassemble the Press in working condition, but all attempts failed. Defendant ultimately gave up and abandoned its work on May 27, 2016.

         As a result of the foregoing, Plaintiffs allege three legal theories: Count I - Breach of Contract; Count II - Breach of Warranty; and Count III - Negligence. In support of Count III, Plaintiffs alleged the following acts of negligence: Defendant stopped the Press and disassembled it in “perfect mode;” Defendant moved and reassembled the Press while still in “perfect mode;” Defendant failed to reassemble the Press within manufacturer tolerances; and Defendant ran the Press in a compromised and damaged condition, resulting in additional damage.

         LEGAL ...

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