Sweet Craft Limited v. Operational Solutions, Inc. et al

Filing 22

MEMORANDUM AND ORDER: The court adopts Report and Recommendations 20 and default judgment on liability is granted for the plaintiff and entered against the defendants on the actions as pled in the complaint. plaintiff's response 21 is grant ed insofar as asking for default judgment on the actions pleaded and is denied insofar as asking for leave to add new claims and parties. case is referred to the Magistrate Judge to conduct any hearings necessary pursuant to Fed. R. Civ P. 55(b)(2) a nd to make a report and recommendation on the appropriate amount of compensatory damages and other equitable relief to which the plaintiff is entitled based on the default judgment. Signed by U.S. District Senior Judge Sam A. Crow on 4/16/15. (msb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
SWEET CRAFT LIMITED,
Plaintiff
vs.

Case No. 14-2187-SAC

OPERATIONAL SOLUTIONS, INC.,
and KENT GOSS,
Defendants.
MEMORANDUM AND ORDER
The case comes before the court on the Magistrate Judge's
report and recommendation filed March 25, 2015. (Dk. 20). It recommends
granting the plaintiff’s motion for sanctions (Dk. 18) and “rendering default
judgment against the defendants in an amount to be determined by the
district judge.” (Dk. 20, p. 6). The defendants have filed no objections and
have waived their right to de novo review pursuant to 28 U.S.C. §
636(b)(1). The plaintiff has filed a response asking the district court to enter
default judgment against the defendants on all claims and to conduct a
hearing pursuant to Fed. R. Civ. P. 55(b)(2) to determine the amount of
damages and to investigate other matters necessary for entering an
effective default judgment. (Dk. 21). In the body of its pleading, the plaintiff
also asks the court to grant it leave to amend its complaint adding a new
defendant and new claims against all defendants. (Dk. 21, p. 2).

After reviewing the record, the district court accepts, approves
and adopts as its order the Magistrate Judge’s report and recommendation
as filed. The court grants default judgment against the defendants and for
the plaintiff on the claims as pled. Default judgment is imposed as a proper
and appropriate sanction pursuant to Fed. R. Civ. P. 37(b)(2)(A)(vi) for all
the reasons stated in the report and recommendation.
In the absence of a proper motion to amend/add, the court will
not consider or grant the other relief most recently suggested in the
plaintiff’s response. The plaintiff’s complaint seeks to recover a sum certain
for the wired funds in the amount of $166,923.55, but it also prays for other
forms of relief (lost profits, lost business opportunities, damage to business
reputation, and additional costs and expenses) which are not a sum certain
and are not readily capable of mathematical calculation. “A court may not
enter a default judgment without a hearing unless the amount claimed is a
liquidated sum or one capable of mathematical calculation.” Niemi v.
Lasshofer, 770 F.3d 1331, 1352 (10th Cir. 2014) (internal quotation marks
and citation omitted). Rule 55(b)(2) of the Federal Rules of Civil Procedure
provides, in part:
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.
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The burden is on the plaintiff to provide evidence in support of its damage
claims. Jennings v. River, 394 F.3d 850, 853 (10th Cir. 2005). After entry of
the default judgment, “a defendant cannot defend a claim on the merits.”
Olcott v. Delaware Flood Co., 327 F.3d 1115, 1125 n. 11 (10th Cir.) (citation
omitted), cert. denied, 540 U.S. 1089 (2003); see Meitler Consulting, Inc. v.
Dooley, 2007 WL 1834008 at *7 n.37, *8 n.39 (D. Kan. 2007) (entry of Rule
37(b) default judgment generally establishes liability for each pled action, for
the defendant is deemed to have admitted all well-pled allegations other
than allegations on damages).
The court refers the case to the Magistrate Judge to conduct any
hearings necessary pursuant to Fed. R. Civ. P. 55(b)(2) and to submit a
report and recommendation on the amount of compensatory damages and
other relief to which the plaintiff is entitled based on the actions as pled for
which default judgment is hereby entered.
IT IS THEREFORE ORDERED that the court accepts, approves
and adopts as its order the Magistrate Judge’s report and recommendation
filed March 25, 2015 (Dk. 20), and default judgment on liability is granted
for the plaintiff and entered against the defendants on the actions as pled in
the complaint;
IT IS FURTHER ORDERED that the plaintiff’s response is granted
insofar as asking for default judgment on the actions pleaded and is denied
insofar as asking for leave to add new claims and parties (Dk. 21);
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IT IS FURTHER ORDERED that the case is referred to the
Magistrate Judge to conduct any hearings necessary pursuant to Fed. R. Civ
P. 55(b)(2) and to make a report and recommendation on the appropriate
amount of compensatory damages and other equitable relief to which the
plaintiff is entitled based on the default judgment.
Dated this 16th day of April, 2015, Topeka, Kansas.

s/Sam A. Crow
Sam A. Crow, U.S. District Senior Judge

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