SFR SERVICES, LLC v. CLARK et al

Filing 59

ENTRY Regarding Damages-The Court finds that default judgment in the amount of $586,348.01 against Defendants Michael Clark, RSACR Holdings, LLC and Remodeling Services & Complete Construction, Inc, is appropriate. This includes actual damages of $189,939.92, exemplary damages under the Indiana Crime Victims Act in the amount of $379,879.84, attorney fees in the amount of $16,040.25, and costs in the amount of $488.00. The Court finds that there is no just reason for d elay, and therefore will enter judgment against these Defendants pursuant to FRCP 54(b). This case shall continue against Defendant Remodeling Services & Complete Restoration, Inc, but shall be STAYED pending the lifting of the bankruptcy stay. The Plaintiff shall promptly notify the Court when the bankruptcy shay is lifted, and shall file a status report regarding the status of the bankruptcy proceedings six months from the date of the Damages Hearing if the bankruptcy stay has not been lifted by that time. Signed by Judge William T. Lawrence on 6/26/2019 (dist made)(CBU)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
SFR SERVICES, LLC,

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) Cause No. 1:18-cv-1900-WTL-DLP
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Plaintiff,
vs.
MICHAEL CLARK, et al.,
Defendants.

ENTRY REGARDING DAMAGES
Entry of default was made by the Clerk against each of the Defendants in this case on
August 14, 2018. See Dkt. Nos. 15, 16, 17, and 18. The Plaintiff now seeks default judgment
against the following Defendants: Michael Clark; RSACR Holdings, LLC; and Remodeling
Services & Complete Construction, Inc.1 The Court held a damages hearing on June 24, 2019, at
which the Plaintiff appeared, by counsel. The Court reporter was Cathy Jones. The Court, being
duly advised, rules as follows.
I. FACTS
The allegations in the Complaint are as follow.
Defendant Michael Clark controls each of the other Defendants. In or around August
2017, the Defendants traveled to Florida “in anticipation of collecting disaster relief funds under
the guise of offering repair and remediation services to Florida residents after Hurricane Irma.”
Dkt. No. 1 at 3. The Defendants solicited storm restoration jobs from homeowners and received

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The claims against Defendant Remodeling Services and Complete Restoration, Inc., are
subject to an automatic bankruptcy stay; accordingly, the Plaintiff does not seek judgment
against it at this time.

over one million dollars of relief funds in exchange for their promise to perform these jobs.
However, the Defendants performed little, if any, of the work, leading to over thirty homeowners
lodging complaints against them for unfair practices.
As part of their scheme, the Defendants solicited the Plaintiff to work as a roofing repair
subcontractor. The parties entered into a contract pursuant to which the Defendants promised
that they would pay the Plaintiff an amount equal to the replacement cost value, as determined
by the applicable insurance, for each roof repaired or replaced by the Plaintiff. The Defendants
agreed to open a joint checking account at JP Morgan Chase Bank, NA (the “Joint Account”)
and deposit funds into that account for every project for which Defendants were retained to
repair hurricane damage.
Pursuant to the contract, the Plaintiff completed three roofing projects in Marco Island,
Florida. The Defendants received payment for the three projects but did not deposit the funds in
the Joint Account as required by the Contract and did not pay the Plaintiff for its work.
II. DISCUSSION
The Plaintiff asserts claims for breach of contract, promissory estoppel, unjust
enrichment, criminal conversion, including a claim for treble damages, costs, and fees pursuant
to Indiana Code § 34-24-3-12 (the Indiana Crime Victims Act), and fraud.
By operation of the entry of default, all of the allegations in the Complaint relating to the
Defendants’ liability are conclusively established. Domanus v. Lewicki, 742 F.3d 290, 303 (7th
Cir. 2014). “The defaulting party cannot contest the fact of his liability unless the entry of

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The Complaint contains a scriveners error when citing to the statute, but it is clear from
the context that it is referring to the Indiana Crime Victims Act.
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default is vacated under Rule 55(c).” VLM Food Trading Int’l, Inc. v. Illinois Trading Co., 811
F.3d 247, 255 (7th Cir. 2016) (citing 10 James W.M. Moore et al., Moore’s Federal Practice §
55.32[1][a] (3d ed. 2013) (“The effect of an entry of default, if not set aside, is to establish the
liability of the defaulting party as a basis for default judgment. After defaulting, a party has no
right to dispute the issue of liability.”)). However, the Plaintiff is “still required to establish [its]
entitlement to damages based upon [its] actual injury or loss suffered.” Graham v. Satkoski, 51
F.3d 710, 713 (7th Cir. 1995).
At the damages hearing, the Plaintiff established that it was entitled to be paid
$189,939.92 for the work it performed for the Defendants. The Plaintiff further requests treble
damages, costs, and attorney fees pursuant to the Indiana Crime Victims Act, which the Court
finds to be applicable in light of the fact that the Plaintiff has established, by means of obtaining
an entry of default, that the Defendants are liable to it for conversion and that it suffered
pecuniary loss as a result. See Ind. Code § 34-24-3-1 (providing for up to three times actual
damages, reasonable attorney fees, and costs for “pecuniary loss as a result of a violation of,”
inter alia, “IC 35-43,” which includes criminal conversion). The Court finds that treble damages
are appropriate given the nature of the Defendants’ actions and the fact that they received the
funds from the homeowners and/or their insurance companies but failed to use those funds to pay
the Plaintiff for its work.
With regard to the award of attorney fees and costs, the Court finds that the amounts
requested by the Plaintiff, $16,040.25 in fees and $488 in costs, are reasonable. Specifically, the
Court has reviewed the affidavit of counsel and billing records submitted and finds that the
hourly rates and number of hours billed are reasonable and that the costs sought—the filing fee
and process server fees—are recoverable.
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For the reasons set forth above, the Court finds that default judgment in the amount of
$586,348.01 against Defendants Michael Clark, RSACR Holdings, LLC, and Remodeling
Services & Complete Construction, Inc., is appropriate. This includes actual damages of
$189,939.92, exemplary damages under the Indiana Crime Victims Act in the amount of
$379,879.84, attorney fees in the amount of $16,040.25, and costs in the amount of $488.00.
The Court finds that there is no just reason for delay, and therefore will enter judgment against
these Defendants pursuant to Federal Rule of Civil Procedure 54(b).
This case shall continue against Defendant Remodeling Services & Complete
Restoration, Inc., but shall be STAYED pending the lifting of the bankruptcy stay. The Plaintiff
shall promptly notify the Court when the bankruptcy stay is lifted, and shall file a status report
regarding the status of the bankruptcy proceedings six months from the date of the Damages
Hearing if the bankruptcy stay has not been lifted by that time.
SO ORDERED: 6/26/2019

Copies to all counsel of record via electronic notification
By US Mail:
Michael A. Clark
2390 W. Main Street
Greenfield, IN 46140

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