Chenevert v. Lunsford et al

Filing 27

MEMORANDUM OPINION AND ORDER granting 21 Motion for Default Judgment filed by Brett Thomas Chenevert and that the claims against John Does 1-3 are dismissed (see Order for specifics). Signed by Honorable Timothy L. Brooks on July 15, 2021. (tg)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION
BRETT THOMAS CHENEVERT
V.

PLAINTIFF

CASE NO. 5:20-CV-5172-TLB

MARY SMITH;
BLUE WATER TRANSPORT, LLC;
and JOHN DOES 1–3

DEFENDANTS

MEMORANDUM OPINION AND ORDER
On July 7, 2021, the Court held a hearing on Plaintiff Brett Thomas Chenevert’s
Renewed Motion for Default Judgment as to Defendants Mary Smith and Blue Water
Transportation, LLC (“Blue Water”) (Doc. 21).

The purpose of this hearing was to

determine what damages, if any, Mr. Chenevert is entitled to as against Ms. Smith and
Blue Water. Now having considered the pleadings and the testimony presented at the
hearing, the Court finds Mr. Chenevert is entitled to a default judgment against Ms. Smith
and Blue Water, GRANTS the Renewed Motion for Default Judgment (Doc. 21), and
enters a contemporaneous Judgment in the full amount of $206,843.28, plus interest.
I. BACKGROUND
This litigation arises out of a failed partnership between Mr. Chenevert, Jeff
Lunsford, Ms. Smith, and Blue Water. The purpose of the erstwhile partnership was to
finance and manufacture specialized trailers that would transport wind turbine blades for
General Electric. Mr. Chenevert is a freight broker, and he knew Mr. Lunsford and Ms.
Smith through that business, as the entity they own, Blue Water, is a freight carrier. Mr.
Chenevert provided the seed money for the venture. Specifically, Mr. Chenevert alleges
that he wired $186,000.00 to Mr. Lunsford, Ms. Smith, and Blue Water to purchase three

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specialized trailers from Hale Trailer Brake and Wheel. Mr. Lunsford, Ms. Smith, and
Blue Water then ceased communications with Mr. Chenevert. Mr. Chenevert discovered
that $20,000.00 was used as a down payment to Hale Trailer Brake and Wheel, but the
remainder of the funds went missing.

Hale Trailer Brake and Wheel refunded Mr.

Chenevert the $20,000.00, but Mr. Chenevert has not received back the remaining
$166,000.00. Accordingly, Mr. Chenevert brought claims for fraud and misrepresentation,
breach of contract, and conversion against Mr. Lunsford, Ms. Smith, Blue Water, and
several John Doe defendants. He seeks $166,000.00 in monetary damages, as well as
punitive damages and attorney’s fees and costs.
Mr. Chenevert served Ms. Smith and Blue Water in October 2020, see Docs. 8 &
9, and they have not answered. The Clerk entered an entry of default as to Ms. Smith
and Blue Water on December 11, 2020. See Doc. 13. Before serving Mr. Lunsford, Mr.
Chenevert prematurely sought a default judgment against Ms. Smith and Blue Water.
The Court denied that request, see Doc. 17, so Mr. Chenevert dismissed his claims
against Mr. Lunsford. See Doc. 19. As for the John Doe defendants, Mr. Chenevert has
failed to identify these defendants, so the Court will dismiss them. Thus, the only live
claims in this action are against Ms. Smith and Blue Water.
Turning to these remaining live claims, the Court has already held that Ms. Smith
and Blue Water are entitled to a default judgment, see Doc. 22, but the Court left open
the issue of damages. The Court held a hearing on damages on July 7, 2021, during
which Mr. Chenevert provided sworn testimony.

The Court previously directed Mr.

Chenevert’s counsel to mail a copy of the Order setting the hearing date and time to Ms.
Smith and Blue Water at their last known address, and counsel completed that task. See

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Docs. 24 & 25. However, no representative for Ms. Smith or Blue Water appeared at the
hearing.
II. LEGAL STANDARD
Rule 55 of the Federal Rules of Civil Procedure provides, in pertinent part, as
follows:
(a) Entering a Default. When a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must enter the party's
default.
(b) Entering a Default Judgment.
(1) By the Clerk. If the plaintiff's claim is for a sum certain or a sum that can
be made certain by computation, the clerk—on the plaintiff's request, with
an affidavit showing the amount due—must enter judgment for that amount
and costs against a defendant who has been defaulted for not appearing
and who is neither a minor nor an incompetent person.
(2) By the Court. In all other cases, the party must apply to the court for a
default judgment. . . . The court may conduct hearings or make referrals —
preserving any federal statutory right to a jury trial—when, to enter or
effectuate judgment, it needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
Fed. R. Civ. P. 55.
Rule 55 contemplates a two-step process for the entry of default judgments. United
States v. Williamson., 2013 WL 7864735, at *1 (E.D. Ark. Feb. 21, 2013) (citing Fraserside
IP L.L.C. v. Youngtek Sols., Ltd., 796 F. Supp. 2d 946, 950–951 (N.D. Iowa 2011) (citation
and internal quotation marks omitted)). First, pursuant to Rule 55(a), the party seeking a

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default judgment must have the clerk enter the default by submitting the required proof
that the opposing party has failed to plead or otherwise defend. Id. Second, pursuant to
Rule 55(b), the moving party may seek entry of judgment on the default under either
subdivision (b)(1) or (b)(2) of the Rule. Id.
In the instant case, Clerk entered a default under Rule 55(a) on December 13,
2020, then the Court found that Ms. Smith and Blue Water are were in default under Rule
55(b) (Doc. 22). All that is left for the Court to do is determine the amount of damages
reasonably owed to Mr. Chenevert under Rule 55(b)(2) and enter a Judgment.
III. DISCUSSION
A. Damages
The Court has considered Mr. Chenevert’s Complaint, his testimony in Court at the
hearing on the Motion, and the three exhibits he submitted during that hearing. According
to these documents and his testimony, Mr. Chenevert had an oral contract with Mr.
Lunsford, Ms. Smith, and Blue Water to purchase specialized trailers from a supplier. Mr.
Chenevert wired $186,000.00 to Mr. Lunsford, Ms. Smith, and Blue Water for that
purpose, and $20,000.00 of that sum was paid to the trailer supplier as a down payment.
The supplier eventually refunded Mr. Chenevert the $20,000.00 down payment, but the
remaining $166,000.00 went missing, and Mr. Chenevert’s entreaties to Mr. Lunsford and
Ms. Smith went unanswered. As of the July 7, 2021 hearing, Mr. Chenevert had not
received back any of the $166,000.00.
Based upon the pleadings and evidence before the Court, and for the reasons
explained from the bench, the Court finds that Mr. Chenevert is entitled to compensatory
damages for breach of contract, conversion, fraud, and misrepresentation. The Court

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therefore awards him $166,000.00 in compensatory damages as against Ms. Smith and
Blue Water. As to punitive damages, the Court finds that Mr. Chenevert has prevailed on
claims sounding in tort and has demonstrated that punitive damages are appropriate.
Accordingly, the Court awards him $34,000.00 in punitive damages as against Ms. Smith
and Blue Water.
B. Attorney’s Fees
Pursuant to Arkansas Code § 16-22-308, a court may award “a reasonable
attorney’s fee to the prevailing party in a breach-of-contract case.” Pursuant to the default
posture of this case, the Court finds that Mr. Chenevert, as the prevailing party on his
breach-of-contract claim, is entitled to the payment of a reasonable amount of attorney’s
fees spent in bringing this action. At the hearing, Mr. Chenevert presented evidence that
his attorney spent $6,120.00 worth of billable hours on this matter, and the Court finds
that this is a reasonable attorney’s fee for the quality and amount of legal work done in
this matter.
Mr. Chenevert also requests certain out-of-pocket expenses as part of his
attorney’s fee. Specifically, he requests $255.00 in service costs and $68.28 in postage
costs. Reasonable out-of-pocket expenses are recoverable because they are normally
charged to clients by attorneys. See Pinkham v. Camex, Inc., 84 F.3d 292, 295 (8th Cir.
1996). Mr. Chenevert’s lawyer’s reasonable out-of-pocket expenses include the $255.00
in service costs and $68.28 in postage costs, so the Court will include those costs in the
attorney’s fee award. Accordingly, the total award of attorney’s fees to Mr. Chenevert is
$6,443.28.

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C. Costs
At the hearing, Mr. Chenevert presented evidence that he has incurred a $400.00
filing fee. As the prevailing party, the law presumes that Mr. Chenevert is entitled to costs
as defined by Federal Rule of Civil Procedure 54(d)(1) and 28 U.S.C. § 1920. See
Leonard v. Sw. Bell Corp. Disability Income Plan, 408 F.3d 528, 533 (8th Cir. 2005) (citing
Martin v. DaimlerChrysler Corp., 251 F.3d 691, 696 (8th Cir. 2001)).

Pursuant to

18 U.S.C. § 1920(1), which provides that clerk fees may be taxed as costs, the Court
taxes the $400.00 filing fee against Ms. Smith and Blue Water.
D. Prejudgment and Postjudgment Interest
“Prejudgment interest is allowable where the amount of damages is definitely
ascertainable by mathematical computation, or if the evidence furnishes data that make
it possible to compute the amount without reliance on opinion or discretion.” Woodline
Motor Freight, Inc. v. Troutman Oil Co., Inc., 327 Ark. 448, 453 (1997). It is wellestablished that, in order to justify an award of prejudgment interest, “damages [must] be
capable of exact determination both in time and amount.” Id. at 451.
Here, the amount of precise damages at issue is easily calculable: $166,000.00.
As for the date upon which prejudgment interest started to accrue, that is a harder
question. Mr. Chenevert wired the funds in January 2020, but he did not learn that the
funds had been misappropriated until “March 2020.” See Doc. 2, p. 3. In the absence of
a more specific date, the Court will assess pre-judgment interest from March 31, 2020,
until the date of final Judgment. The rate of prejudgment interest for contracts where no
rate of interest is agreed upon—as is the case here—is 6% per annum, pursuant to
Arkansas Code § 4-57-101(d).

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The Court will also assess postjudgment interest. Postjudgment interest shall
accrue beginning on the date of entry of the Judgment that will be filed concurrently with
this Memorandum Opinion and Order, “at a rate equal to the weekly average 1-year
constant maturity Treasury yield, as published by the Board of Governors of the Federal
Reserve System, for the calendar week preceding the date of the judgment.” 28 U.S.C.
§ 1961(a).
IV. CONCLUSION
IT IS THEREFORE ORDERED that Plaintiff Brett Thomas Chenevert is entitled to
a default judgment against Defendants Mary Smith and Blue Water Transportation, LLC,
so the Court GRANTS the Renewed Motion for Default Judgment (Doc. 21). Specifically,
the Court awards the following:
1.

$166,000.00 in compensatory damages;

2.

$34,000.00 in punitive damages;

3.

$6,443.28 in attorney’s fees;

4.

$400.00 in costs;

5.

Prejudgment interest accruing from March 31, 2020, until the date of
Judgment, and postjudgment interest accruing from today’s date until paid
in full.

IT IS ORDERED, therefore, that the total award of damages, attorney’s fees, and
costs is $206,843.28. Judgment will issue on this date to reflect the total money damages,
fees, and costs awarded.
IT IS FURTHER ORDERED that the claims against John Does 1–3 are dismissed.

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IT IS SO ORDERED on this 15th day of July, 2021.

/s/ Timothy L. Brooks
TIMOTHY L. BROOKS
UNITED STATES DISTRICT JUDGE

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