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UM Technologies, Inc. v. Hilts Global (Cayman) Ltd.

United States District Court, M.D. Pennsylvania

April 3, 2019

UM TECHNOLOGIES, INC., Plaintiff,
v.
HILTS GLOBAL (CAYMAN) LIMITED et al., Defendants.

          Mariani Judge

          REPORT AND RECOMMENDATION

          MARTIN C. CARLSON UNITED STATES MAGISTRATE JUDGE.

         I. Factual Background

         We are now called upon to write the first draft of the final chapter in this litigation and recommend the proper scope of a liquidated damages order in this lawsuit, following the corporate defendants' failure to respond to this complaint in a meaningful fashion or otherwise litigate this case.[1]

         This is a breach of contract and fraud action brought by a Pennsylvania company against various Cayman island business entities, and the principal behind these businesses, Mark Brooke. The plaintiff commenced this action on November 1, 2017, in order to collect on a $200, 000 promissory note allegedly executed by Brooke on behalf of these Cayman island companies in order to secure financing from the plaintiff.

         The plaintiff filed proof of service upon the following named corporate defendants in March of 2018: HILTS GLOBAL US, HILTS GLOBAL CAYMAN, and HILTS GLOBAL UK. (Doc. 7.) Despite the passage of many months, none of these defendants ever answered or otherwise appeared in this action. Accordingly, on December 17, 2018, we directed the plaintiff to either seek entry of default judgments against these previously served corporate defendants who have failed to respond to this complaint, or provide the court with a status report regarding the plaintiff's proposed course of action with respect to these other defendants. (Doc. 13.) The plaintiff then moved for entry of default against these defendants. (Doc. 15.) When the time for responding to this motion passed without any response from the defendants, we recommended that the motion be granted, but that this case be remanded to us in order to liquidate the amount of damages owed in this case. (Doc. 17.) The district court adopted this recommendation, (Doc. 18), and on March 19, 2019, the plaintiff filed a motion to liquidate its damages as to these corporate defendants. (Docs. 22 and 23.) Once again, the defendants have failed to respond to this motion, and the time for responding has passed. Therefore, this motion is now ripe for resolution.

         For the reasons set forth below, it is recommended that the court enter a default judgment in favor of the plaintiff in the amount of $238, 723.07.

         II. Discussion

         We have previously determined that the entry of judgment in favor of the plaintiff is appropriate given the corporate defendants' on-going defaults in this litigation. However, “[w]hen a plaintiff prevails by default, he or she is not automatically entitled to the damages they originally demanded. Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990). Rather, defaults are treated as admissions of the facts alleged, but a plaintiff may still be required to prove that he or she is entitled to the damages sought. Id.; DIRECTV Inc. v. Pepe, 431 F.3d 162, 165 (3d Cir. 2005).” Rainey v. Diamond State Port Corp., 354 Fed.Appx. 722, 724 (3d Cir. 2009). In performing this task:

The district court has considerable latitude in determining the amount of damages. Jones v. Winnepesaukee Realty, 990 F.2d 1, 4 (1st Cir. 1993). In determining the amount, the district court may conduct a hearing. Fed.R.Civ.P. 55(b)(2). The court is not required to do so, however, “as long as it ensure[s] that there [is] a basis for the damages specified in the default judgment.” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105, 111 (2d Cir. 1997). “It is familiar practice and an exercise of judicial power for a court upon default, by taking evidence when necessary or by computation from facts of record, to fix the amount which the plaintiff is lawfully entitled to recover and to give judgment accordingly.” Pope v. United States, 323 U.S. 1, 12, 65 S.Ct. 16, 89 L.Ed. 3 (1944). IBEW Local Union No. 102 v. Dane Const. Co., LLC, No. 08B907, 2009 WL 872018, at *2 (D.N.J. Mar. 30, 2009).

Malik v. Hannah, 661 F.Supp.2d 485, 493 (D.N.J. 2009). As part of this process, “the defaulting party is entitled to be heard on the amount of damages.” Tristrata Tech., Inc. v. Med. Skin Therapy Research, Inc., 270 F.R.D. 161, 164-65 (D. Del. 2010) (citing 5 James Wm. Moore et al., Moore's Federal Practice' 55.32[1][c], [f]).

         Here we have provided these corporate defendants an opportunity to be heard on the amount of damages, but they have elected to forego this opportunity. Therefore, we will assess the plaintiff's right to recover damages based upon the information that is presently before us.

         Turning first to the plaintiff's request for principal damages of $200, 000 and accrued interest of $38, 203.20, we recognize that “defaults are treated as admissions of the facts alleged, but a plaintiff may still be required to prove that he or she is entitled to the damages sought.” Rainey v. Diamond State Port Corp., 354 Fed.Appx. 722, 724 (3d Cir. 2009). In this case, UM plainly alleges a breach of contract claim against these defendants relating to a $200, 000 note memorializing a loan made by UM to the defendants, a loan that has not been repaid. The corporate defendants' default is an admission to these facts, establishing principal liability of $200, 000 that is due and owing in this case.

         The plaintiff has also tendered to the court an authentic copy of this ...


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