PNC Equipment Finance, LLC v. Taos Ventures, LLC et al
Filing
55
ORDER TO SHOW CAUSE 47 Motion for Default Judgment. On or before March 11, 2015, the Court directs FLCM to file a written memorandum of law that does not exceed seven pages. Therein, FLCM shall explain and provide legal support for: (1) why FLCM is entitled to change the amount of damages it seeks from the amounts alleged in its Complaint and First Affidavit; and (2) why it is entitled to change the facts upon which the damages are calculated, i.e., the date of default. Also, on or before March 11, 2015, FLCM shall present clear and concise evidence of its claimed damages that support both its alleged dates of default. See order for additional details. Signed by Magistrate Judge Philip R. Lammens on 3/3/2015. (SEJ)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
OCALA DIVISION
FLCM ACQ VIII, LLC,
Plaintiff,
v.
Case No: 5:13-cv-529-Oc-PRL
TAOS VENTURES, LLC, RAVINDRA
KOLAVENTY and DON BOVELL
Defendant.
ORDER TO SHOW CAUSE
Pending before the Court is Plaintiff FLCM ACQ VIII LLC’s motion for entry of default
judgment as to Defendant Taos Ventures, LLC. (Doc. 47). This Court previously found that
FLCM was entitled to default judgment and ordered FLCM to provide additional documentation to
establish its claimed money damages, attorney’s fees, and costs. (Doc. 49). For the reasons
discussed below, FLCM has again failed to provide an adequate basis for damages, fees, and costs.
I.
Background
FLCM ACQ VIII LLC (“FLCM”)1 seeks to hold Taos Ventures, LLC (“Taos”) liable for a
breach of contract due to Taos’ default under two equipment leases and now requests all rent
payments and other sums due under the contract.2 (Doc. 1, pp. 4–6). FLCM filed a motion for
default judgment (Doc. 47) and the supporting affidavit of Santosh Govindaraju, the chief
1
PNC Equipment Finance, LLC filed the original lawsuit against Defendants, but it subsequently assigned
all of its interest in the lease and lease documents to FLCM. (Doc. 33; Doc. 48, pp. 35–39). Accordingly,
the Court substituted FLCM as the plaintiff. Id.
2
Plaintiff dismissed its claims against Defendant Ravindra Kolaventy. (Doc. 40). Plaintiff is unable to
proceed with its claims against Defendant Don Bovell as he is currently in a pending bankruptcy proceeding
in the United States Bankruptcy Court for the Middle District of Florida where there is a stay in effect.
(Doc. 54). See In re: Don Bovell and Ann Burnett, Case No. 6:14-bk-02983-KSJ. Therefore, the only
Defendant remaining is Taos.
executive officer and managing member of Convergent Management LLC (“First Affidavit.”).3
At that time, FLCM claimed that it was owed $327,805.10 under Lease No. 1 and $229,225.24
under Lease No. 2, for a total of $557,030.24 in damages.4 (Doc. 1, p. 5; Doc. 28, p. 5). FLCM
further alleged that Taos defaulted under Lease No. 1 on or about March 27, 2013, (Doc. 1, p. 4, ¶
19), which corresponded to a Stipulated Loss Value of $383,557.55, and a total unpaid rent of
$419,824.08. (Doc. 1, p. 5, ¶ 21). FLCM did not specify how much it was owed in attorney’s
fees.
This Court found that FLCM was entitled to an entry of default judgment, but found
FLCM’s evidentiary support for the requested damages and fees inadequate. (Doc. 49). Thus,
this Court ordered FLCM to provide a supplemental evidentiary submission. Id. In response,
FLCM submitted an amended and supplemental affidavit of Santosh Govindaraju and attached
Exhibits 1 and 2, which contain numerous pages of itemized transactions between Taos and PNC
(“Second Affidavit”).
(Doc. 52, Exs. 1–2).
FLCM claims, therein, that Taos owes
$1,036,598.67 under Lease No. 1 and $233,035.70 under Lease No. 2 for a total of $1,269,634.37
in damages. Id. FLCM further alleged that “[t]he last payment received with respect to Lease
[No.] 01 was . . . on or about March 31, 2011” (Doc. 52, p. 5, ¶ 15), which corresponded to a new
Stipulated Loss Value of $736,398.99, and a new total unpaid rent value of $597,441.96. (Doc.
52, p. 7, ¶ 27). FLCM also submitted an affidavit and exhibit with itemized expenses to support
its claim for $2,830.00 in attorney’s fees. (Doc. 53).
3
Convergent Management LLC is the managing member of FLCM. (Doc. 52, p. 3).
The amount of damages alleged in the First Affidavit was substantively the same as the damages alleged
in the Complaint. The only difference was that, between the filing of the Complaint and the First
Affidavit, Taos made two payments of $350,000.00 and $313,749.00 to satisfy some of the debt on Lease
No. 1. (Doc. p. 7, ¶ 27). These payments by Taos changed the final total between the Complaint and the
First Affidavit, but the original components of the amounts owed did not change. (Docs. 1 & 48). Those
unchanged components were: (1) total invoiced unpaid rent, (2) stipulated loss value, (3) late fees, and (4)
personal property taxes. Id.
4
-2-
II.
Discussion
As the Background discussion makes clear, FLCM has alleged various amounts of
damages throughout the litigation. It has done so in such a way that this Court cannot reasonably
determine which amounts it is entitled under the law or based on its inadequate supporting
exhibits. I discuss a few of the major discrepancies below, but it is not an exhaustive list of the
unexplained amendments in FLCM’s evolving damage calculations.
As noted in the prior order to show cause, “[w]hile well-pleaded facts in the Complaint are
deemed admitted, plaintiffs’ allegations relating to the amount of damages are not admitted by
virtue of default; rather, the court must determine both the amount and character of damages.”
Virgin Records America, Inc. v. Lacey, 510 F. Supp. 2d 588, 593 n. 5 (S.D. Ala. 2007). “Rather
than merely telling the Court in summary fashion what its damages are, a plaintiff seeking default
judgment must show the Court what those damages are, how they are calculated, and where they
are from.” PNCEF, LLC v. Hendricks Bldg. Supply LLC, 740 F. Supp. 2d 1287, 1292 (S.D. Ala.
2010).
In its Second Affidavit, FLCM claims that it is owed $1,036,598.67 on Lease No. 1, a
three-fold increase in its claimed damages from its Complaint and First Affidavit (filed as recently
as November 20, 2014).5 (Docs. 1 & 47). In the previous order to show cause (Doc. 49), the
Court gave FLCM leave to substantiate the damages it had claimed in its Complaint, but did not
grant leave for FLCM to completely recalculate its damages in light of the Court’s determination
that it is entitled to a default judgment. (Doc. 49). FLCM has failed to provide any legal support
indicating that it is entitled to amend the damages that it requested in its Complaint and First
Affidavit.
5
In the first affidavit, FLCM requested $327,805.10 on Lease No. 1. (Doc. 28, p. 5).
-3-
Further, FLCM now calculates its damages for Lease No. 1 based on a different default
date than alleged in the Complaint. The Complaint alleges that Taos defaulted under the Lease
No. 1 on March 27, 2013 (Doc. 1, p. 4, ¶ 19), but the Second Affidavit calculates its damages for
the Stipulated Loss Value based on a default date of March 27, 2011. (Doc. 15). FLCM’s change
in default date increased the Stipulated Loss Value from $383,557.55 to $736,398.99. FLCM has
not affirmatively alerted the Court to this change, nor has it provided any legal support or
justification that the Court should accept the earlier default date over the latter, particularly when
the change nearly doubles the Stipulated Loss Value. Further, even if FLCM’s calculations in the
Second Affidavit are correct as to this new date of default, it has not provided any legal support for
the proposition that it can change the facts it has alleged in the Complaint.6 See Virgin Records
America, Inc., 510 F. Supp. 2d at 593 n.5 (stating that under a default judgment, the facts in the
Complaint are deemed admitted).
Moreover, FLCM originally claimed in its Complaint and First Affidavit that it was owed
$419,824.08 in total invoiced unpaid rent under Lease No. 1. (Doc. 1, p. 5, ¶ 21; Doc. 48, p. 4, ¶
20). In its Second Affidavit, however, the amount increased to $597,441.96. (Doc. 52, p. 7, ¶
27).
FLCM has not provided any explanation as to why this number has increased by
$177,617.88. It simply claims in its Second Affidavit that Taos only made 44 payments out of the
81 payments required by the contract. (Doc. 52, p. 5, ¶ 16). Its only (tenuous) support for this
claim appears in the form of an incomprehensible spreadsheet. (Doc. 52, Exs. A & B). The
6
While it is true that “plaintiffs’ allegations relating to the amount of damages are not admitted by virtue of
default,” the facts upon which plaintiff’s claims rest are deemed admitted by the defendant. Virgin
Records America, Inc., 510 F. Supp. 2d at 593 n. 5 (“[the] well-pleaded facts in the Complaint are deemed
admitted”). Because the date of default is not an allegation relating to the amount of damages, but is,
instead, an element of the cause of action for a breach of contract, it would seem that it is among the facts
which are deemed admitted by the defendant. See Baldwin v. Panetta, 4 So. 3d 555, 561 (Ala. Civ. App.
2008) (listing among the elements for a breach of contract “defendants nonperformance” under the
contract).
-4-
spreadsheet lists every transaction between PNC and Taos and does not contain any intelligible
breakdown of the character of those transactions. FLCM has made it impossible for the Court to
understand exactly which payments by Taos are attributable to rent sufficiently to account for the
increased sum of money that it is seeking between its First and Second Affidavits.
III.
Conclusion
In response to the discrepancies set forth above, on or before March 11, 2015, the Court
directs FLCM to file a written memorandum of law that does not exceed seven pages. Therein,
FLCM shall explain and provide legal support for: (1) why FLCM is entitled to change the
amount of damages it seeks from the amounts alleged in its Complaint and First Affidavit; and (2)
why it is entitled to change the facts upon which the damages are calculated, i.e., the date of
default.7
Also, on or before March 11, 2015, FLCM shall present clear and concise evidence of its
claimed damages that support both its alleged dates of default.8 Specifically, FLCM shall provide
a comprehensible breakdown of its claimed damages which will allow the Court to verify that
those damages accurately reflect the amounts owed at default. Such a breakdown shall not be a
ledger of every transaction between Taos and PNC, as provided within the Second Affidavit;
instead, it shall separate each component of the claimed damages (total unpaid rent, late charges
accrued, and personal property taxes) in separate spreadsheets. Those spreadsheets shall contain
appropriately divided subtotals, i.e., monthly or quarterly payment subtotals. Such spreadsheets
7
FLCM has failed to address the choice of law issue in this case. The contract specifically states that
Alabama law shall govern the lease, “excluding conflicts-of-law principles” (Doc. 48, p.15, ¶ XIX(i)),
while Florida’s conflicts-of-laws principles state that the nature, validity, and interpretation of the contract
shall be governed by the place where the contract was made, and that remedies under the contract shall be
governed by the place where the action is brought. See Goodman v. Olsen, 305 So. 2d 753, 755 (Fla.
1974). The Court cautions FLCM to apply the appropriate law when making its arguments pursuant to this
Order.
8
If it is not possible to provide evidence of damages that support both of the alleged dates of default,
FLCM must explain why it is unable to do so.
-5-
shall be submitted to the Court via email in electronic Excel format. FLCM should further
provide specific references to the parts of the contract that entitle it to each portion of its claimed
damages, fees, and costs. Based on its production, the Court should be able to decipher the
requested damages using either of the dates of default.
DONE and ORDERED in Ocala, Florida on March 3, 2015.
Copies furnished to:
Presiding District Judge
Counsel of Record
Unrepresented Party
Courtroom Deputy
-6-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?