Inland & Offshore Contractors, Ltd. v. Hasselman et al
Filing
13
ORDER AND REASONS re 10 MOTION for Default Judgment; ORDERED that plaintiff's motion for default judgment is GRANTED IN PART AND DENIED IN PART. The motion is GRANTED as to plaintiff's breach of contract claim under Florida law, and jud gment is entered in favor of plaintiff and against defendants in the amount of $100,000.00 plus prejudgment interest calculated using the statutory rate of interest found in Fla. Stat. § 55.03, with the accrual of prejudgment interest beginning on September 25, 2015. The motion is DENIED in all other respects. FURTHER ORDERED that plaintiff's remaining claims are DISMISSED WITHOUT PREJUDICE. Signed by Judge Lance M Africk on 3/4/2016.(blg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
INLAND & OFFSHORE
CONTRACTORS, LTD.
CIVIL ACTION
VERSUS
No. 15-5675
DAVID HASSELMAN ET AL.
SECTION I
ORDER AND REASONS
Plaintiff has filed a motion 1 for entry of a default judgment with the Clerk of Court
(“Clerk”). Pursuant to Rule 55(b)(1) of the Federal Rules of Civil Procedure, however, the Clerk
is without power to grant a default judgment unless the plaintiff’s claim is for a “sum certain or a
sum that can be made certain by computation” and the claim is supported by “an affidavit showing
the amount due.” If the claim is not for a sum certain, a party must apply to the Court for a default
judgment pursuant to Rule 55(b)(2).
Plaintiff’s complaint alleges that it suffered damages in the amount of $100,000.00 as the
result of defendants’ actions as well as “lost profits due to [plaintiff’s] inability to utilize the
Engines [that were the subject of plaintiff’s contract with defendants]” and consequential
damages. 2 It also alleges that plaintiff is entitled to treble damages, attorney’s fees, and costs
pursuant to Florida law. 3 See Fla. Stat. § 772.11. Accordingly, plaintiff’s motion for a default
judgment claims entitlement to a “sum certain” of $300,000.00, which consists of the $100,000.00
of actual damages trebled. Plaintiff’s proposed judgment suggests that the Clerk award plaintiff
$300,000.00 “plus costs and attorney’s fees together with judicial interest from the date of
1
R. Doc. No. 10.
R. Doc. No. 1, at 4.
3
R. Doc. No. 1, at 7.
2
demand,” and it also provides that “[t]he award of attorney’s fees shall be fixed upon separate
motion to the Court.” 4
This proposed order cannot be granted by the Clerk. The proposed judgment awards
plaintiff attorney’s fees without determining the amount of those fees. The Clerk cannot enter
judgment as to that undetermined amount because it is not a “sum certain.” See Fed. R. Civ. P.
55(b)(1); Duncan v. Tangipahoa Par. Council, No. 08-3840, 2009 WL 2514150, at *2 (E.D. La.
Aug. 12, 2009) (Engelhardt, J.) (holding that the Clerk’s entry of a default judgment that contained
“no specific assessment of damages” was “improvidently entered and should be set aside”); C.
Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2683 at 416 (3nd ed. 2015) (the
Clerk cannot enter a judgment for reasonable attorney’s fees).
Furthermore, even with respect to the $300,000.00 requested by plaintiff, the Court
concludes that entry of judgment in that amount by the Clerk would be improper. See Dahill
Mgmt. LLC v. Moore, No. 09-CV-10934-DT, 2009 WL 1664559, at *2 (E.D. Mich. June 15, 2009)
(holding that a request for treble damages and attorney’s fees was not a request for a “sum certain”
and so could not be granted by the Clerk); Volstad v. Collings, 983 F.2d 1080 (Table), 1993 WL
7251, at *2 (9th Cir. Jan. 13, 1993) (Rule 55(b)(1) “carefully limits the clerk’s authority to those
cases where the entry of judgment is purely a ministerial act, since sound policy dictates that the
clerk should not be invested with discretionary power”) (internal quotation marks, notations, and
citations omitted).
While the Court must accept pleaded facts as true, it retains the obligation to determine
whether those facts state a claim upon which relief may be granted. Lewis v. Lynn, 236 F.3d 766,
767 (5th Cir. 2001); see also Lindsey, et al. v. Prive Corp., et al., 161 F.3d 886, 893 (5th Cir. 1998)
4
R. Doc. No. 10-4.
2
(entry of default judgment is completely within the Court’s discretion). Because, for the reasons
set forth below, the Court concludes that the factual allegations in plaintiff’s complaint do not state
a claim for treble damages pursuant to Fla. Stat. § 772.11, a default judgment in the amount of
$300,000.00 is not warranted.
BACKGROUND
The facts alleged in the complaint, which are deemed admitted, 5 are simple and
straightforward. Defendant, International Marine Sales and Export, LLC (“International Marine”),
is a broker of vessels and marine equipment. 6 Defendant, David Hasselman (“Hasselman”), is
International Marine’s principal. 7 In April 2015, International Marine agreed to sell four marine
engines to plaintiff. 8 International Marine, through Hasselman, requested advances from plaintiff
that totaled $100,000.00. 9 Plaintiff provided these advances, and Hasselman confirmed that
International Marine received them on June 29, 2015. 10 Hasselman promised that the engines
would be delivered within the week. 11
Three weeks later, on Monday, July 20, 2015, when the engines had still yet to be received,
Hasselman again informed plaintiff that he expected “delivery to the freight forwarder by
Wednesday.” 12 On July 29, 2015, having received no engines and no further updates, plaintiff
demanded the return of the advance payments if the engines could not be shipped by the end of
5
See Jackson v. FIE Corp., 302 F.3d 515, 524–25 (5th Cir. 2002) (explaining that a defendant’s
failure to respond constitutes an admission of the plaintiff’s well-pleaded allegations of fact that
relate to liability, but not damages) (internal quotations and citation omitted).
6
R. Doc. No. 1, at 2.
7
R. Doc. No. 1, at 2.
8
R. Doc. No. 1, at 2.
9
R. Doc. No. 1, at 3.
10
R. Doc. No. 1, at 3.
11
R. Doc. No. 1, at 3.
12
R. Doc. No. 1, at 3.
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the week. 13 On August 10, 2015, Hasselman agreed that International Marine would refund the
amounts. 14 Plaintiff has still yet to receive those funds or the engines 15 and it has now filed the
above-captioned lawsuit for damages.
LAW AND ANALYSIS
Despite being served, 16 defendants failed to answer plaintiff’s complaint, and the Clerk
entered a default 17 against them on December 24, 2015. See Fed. R. Civ. P. 55(a). Plaintiff moved
for a default judgment on March 1, 2016, 18 and defendants have not filed any response. Although
Rule 55(b)(2) of the Federal Rules of Civil Procedure provides that the Court may hold an
evidentiary hearing on this motion, plaintiff does not request a hearing and no hearing is necessary.
See James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993) (stating that a hearing to decide the amount
of damages is unnecessary when that amount can be determined “with certainty by reference to
the pleadings and supporting documents”).
Accepting as true the allegations of fact in the complaint, the Court finds that plaintiff has
sufficiently established that defendants are liable for the $100,000.00 they were advanced by
plaintiff. 19 With respect to plaintiff’s contention that it is entitled to treble damages, costs, and
13
R. Doc. No. 1, at 4.
R. Doc. No. 1, at 4.
15
R. Doc. No. 1, at 4.
16
R. Doc. Nos. 4, 5.
17
R. Doc. No. 7.
18
R. Doc. No. 10.
19
Plaintiff’s complaint advances four causes of action: (1) fraud in the inducement pursuant to
Louisiana Civil Code article 1953, et seq. and attorney’s fees pursuant to Louisiana Civil Code
article 1958; (2) conversion; (3) breach of contract; and (4) civil theft or exploitation pursuant to
Florida Statute § 772.11. R. Doc. No. 1, at 5-7. Plaintiff does not specify which state’s laws apply
to his second and third causes of action. However, as explained below, plaintiff argues in his
motion for default judgment that Florida law applies. R. Doc. No. 10-1, at 2. Furthermore,
plaintiff’s motion only addresses its claim pursuant to Florida Statute § 772.11. The Court
therefore addresses only the claims asserted pursuant to Florida law.
14
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attorney’s fees pursuant to Fla. Stat. § 772.11,20 however, the Court disagrees with plaintiff and
finds that those penalties are not recoverable pursuant to plaintiff’s motion.
Under Florida’s civil theft statute, “[a]ny person who proves by clear and convincing
evidence that he or she has been injured in any fashion by reason of any violation of ss. 812.012812.037 or s. 825.103(1) has a cause of action for threefold the actual damages sustained” as well
as for “reasonable attorney’s fees and court costs.” Fla. Stat. § 772.11. 21 However, a potential
plaintiff must first make a written demand for payment of treble damages upon a defendant and, if
the defendant complies with the demand within thirty days, the defendant is released from further
civil liability. McCormack v. Flens, 27 So. 3d 179, 181 (Fla. 2d Dist. Ct. App. 2010) (citing Fla.
Stat. § 772.11). Plaintiff sent a letter demanding treble damages to Hasselman on September 25,
While the Court finds that Fla. Stat. § 772.11 does not entitle plaintiff to damages,
defendants’ breach of contract clearly entitles plaintiff to recover its $100,000.00 pursuant to
Florida law. See Murciano v. Garcia, 958 So. 2d 423, 423 (Fla. 3d Dist. Ct. App. 2007) (per
curiam) (to prevail on a claim for breach of contract under Florida law, the plaintiff must prove
“(1) a valid contract; (2) a material breach; and (3) damages”). Accordingly, the Court will enter
judgment in favor of plaintiff in the amount of $100,000.00 pursuant to its claim under Florida
contract law. The Court declines, however, to enter default judgment with respect to the other
three causes of action contained in plaintiff’s complaint.
20
Plaintiff mistakenly alleges that it is entitled to treble damages pursuant to Florida Statute §
722.11, but the correct section is § 772.11, which provides, in pertinent part:
Any person who proves by clear and convincing evidence that he or she has been
injured in any fashion by reason of any violation of ss. 812.012-812.037 or s.
825.103(1) has a cause of action for threefold the actual damages sustained and, in
any such action, is entitled to minimum damages in the amount of $200, and
reasonable attorney’s fees and court costs in the trial and appellate courts. Before
filing an action for damages under this section, the person claiming injury must
make a written demand for $200 or the treble damage amount of the person liable
for damages under this section. If the person to whom a written demand is made
complies with such demand within 30 days after receipt of the demand, that person
shall be given a written release from further civil liability for the specific act of
theft or exploitation by the person making the written demand. . . .
21
Plaintiff argues that Florida law applies because both defendants are domiciliaries of Florida
and because the advance payments were made in Florida. R. Doc. No. 10-1, at 2.
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2015. 22 More than thirty days have elapsed since that date. Plaintiff has therefore satisfied the
demand provision with respect to treble damages.
Plaintiff claims that “Hasselman’s and/or [International Marine]’s failure to return to
[plaintiff], and continued unlawful possession of, the Advance Payments constitutes theft or grand
theft in the second degree pursuant to F.S.A. § 812.014(1)(a) and (2)(a)(1).” 23 Florida Statute §
812.014(1)(a) provides that a person commits theft if he or she (a) knowingly (b) obtained or used,
or endeavored to obtain or use, plaintiff’s property with (c) felonious intent (d) either temporarily
or permanently (e) to (1) deprive plaintiff of its right to or a benefit from the property or (2)
appropriate the property to his or her own uses or to the use of any person not entitled to the use
of the property. Florida Statute § 812.014(2)(a)(1) provides that if the value of the stolen property
22
R. Doc. No. 1-1, at 4.
R. Doc. No. 10-1, at 2-3. Based on plaintiff’s allegations, the Court concludes that the claim for
treble damages against both defendants should be conducted as a single inquiry. As the court
explained in Priority Healthcare Corp. v. Surajit Chaudhuri, M.D., P.A., No. 6:08-CV-425-ORLKRS, 2008 WL 4459041, at *3 (M.D. Fla. Oct. 1, 2008):
23
The general rule in Florida is that an employer may be held vicariously liable for
the tortious or criminal acts of its employee when the acts “are committed during
the course of employment and to further a purpose or interest, however excessive
or misguided, of the employer.” Nazareth v. Herndon Ambulance Serv., Inc., 467
So.2d 1076, 1078 (Fla. 5th Dist. Ct. App. 1985). Further, the corporate employer
of the perpetrator of a theft or conversion is vicariously liable for punitive damages
or treble damages when “(a) the theft or conversion was committed by a managerial
employee of the corporation within the scope of the latter’s employment; or (b) the
theft or conversion was committed by a non-managerial employee of the
corporation within the scope of the latter’s employment, provided further that the
management of the corporation was guilty of some fault which foreseeably
contributed to the plaintiff's injury.” McArthur Dairy, Inc. v. Original Kielbs, Inc.,
481 So.2d 535, 540 (Fla. 3d Dist. Ct. App. 1986) (internal citations omitted).
Plaintiff’s allegations here are sufficient for the Court to find that Hasselman was a “managerial
employee” of International Marine and that his conduct was within the scope of his employment.
Accordingly, plaintiff’s claims for treble damages should be sustained against both defendants, or
against neither defendant.
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is $100,000.00 or more, “the offender commits grand theft in the second degree.” Fla. Stat. §
812.014(2)(a)(1).
In order to establish an action pursuant to either statute, “the claimant must prove the
statutory elements of theft, as well as criminal intent.” Rhodes v. O. Turner & Co., LLC, 117 So.
3d 872, 875 (Fla. 4th Dist. Ct. App. 2013) (citing Gersh v. Cofman, 769 So.2d 407, 409 (Fla. 4th
Dist. Ct. App. 2000)). “[I]ntent may be shown by circumstantial evidence.” Aspen Investments
Corp. v. Holzworth, 587 So. 2d 1374, 1376 (Fla. 4th Dist. Ct. App. 1991). However, “a contract
claim standing by itself will never support an award of treble damages.” Trend Setter Villas of
Deer Creek v. Villas on the Green, Inc., 569 So. 2d 766, 767 (Fla. 4th Dist. Ct. App. 1990). “Where
the property at issue is also the subject of a contract between the parties, a civil theft claim requires
additional proof of an intricate sophisticated scheme of deceit and theft.” Gersh, 769 So. 2d at 409
(quoting Trend Setter Villas, 569 So.2d at 767). Finally, “[i]t is well-established law in Florida
that a simple debt which can be discharged by the payment of money cannot generally form the
basis of a claim for conversion or civil theft.” Deforest v. Johnny Chisholm Glob. Events, LLC,
No. 3:08CV498MCREMT, 2010 WL 1792094, at *12 (N.D. Fla. May 4, 2010) report and
recommendation adopted, No. 3:08CV498/MCR/EMT, 2010 WL 2278356 (N.D. Fla. June 4,
2010) (citations omitted).
The allegations in the complaint are not sufficient to permit this Court to conclude that
International Marine and Hasselman “knowingly obtain[ed] . . . the property of [plaintiff] with
intent to, either temporarily or permanently . . . [d]eprive [plaintiff] of a right to the property or a
benefit from the property.” See Fla. Stat. § 812.014(1)(a). While plaintiff’s complaint clearly
demonstrates that defendants violated their agreement with plaintiff, the circumstances alleged do
not support the conclusion that defendants obtained plaintiff’s money already intending not to
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follow through with their contractual obligations. Simply put, plaintiff has not alleged an “intricate
sophisticated scheme of deceit and theft.” Gersh, 769 So. 2d at 409. Accordingly, based on the
showing made, treble damages—as well as costs and attorney’s fees—are inappropriate under Fla.
Stat. § 772.11. 24
24
The Court also declines to award attorney’s fees pursuant Louisiana Civil Code article 1958
given plaintiff’s admission that Florida law governs its claim. The Court does, however, award
prejudgment interest from the date of plaintiff’s demand. As the U.S. Eleventh Circuit Court of
Appeals recently explained:
Under Florida law, there are two prerequisites to an award of prejudgment interest:
“(1) [o]ut of pocket pecuniary loss, and (2) a fixed date of loss.” Underhill Fancy
Veal, Inc. v. Padot, 677 So.2d 1378, 1380 (Fla. 1st Dist. Ct. App. 1996) (citation
omitted); see also Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212, 215 (Fla.
1985) (“[P]laintiff is entitled, as a matter of law, to prejudgment interest . . . from
the date of [ ] loss.”). In a breach of contract action, the date of loss is the date the
debt was due. Butler Plaza, Inc. v. Allen Trovillion, Inc., 389 So.2d 682, 683 (Fla.
5th Dist. Ct. App. 1980) (citation omitted); Nat’l Fire Ins. Co. of Hartford v.
Fortune Constr. Co., 320 F.3d 1260, 1279 (11th Cir. 2003).
Specialized Transp. of Tampa Bay, Inc. v. Nestle Waters N. Am., Inc., 356 F. App’x 221, 230 (11th
Cir. 2009). Furthermore, “Florida applies the demand requirement to determine the date of loss
where no fixed sum was due and no fixed due date was set.” Id.
In this case, plaintiff clearly suffered an out of pocket pecuniary loss. Therefore, the Court
must only determine whether there was a fixed date of loss. After a series of exchanges, plaintiff
contacted defendants on July 29, 2015, demanding a refund of the advance payments if the engines
“could not be shipped by the end of the week.” R. Doc. No. 1, at 4. On August 10, 2015,
Hasselman wrote to plaintiff and agreed that International Marine would refund the advance
payments. R. Doc. No. 1, at 4. No refund ever came. On September 25, 2015, counsel for plaintiff
made a written demand for the return of the payments. The Court will treat September 25, 2015
as the fixed date of plaintiff’s loss, and it will award prejudgment interest beginning on that date.
This being a diversity case, the Court finds that the applicable prejudgment rate of interest
is that provided in Fla. Stat. § 55.03. See Boston Old Colony Ins. Co. v. Tiner Associates Inc., 288
F.3d 222, 234 (5th Cir. 2002) (“Under 28 U.S.C. § 1961(a), in diversity cases, post-judgment
interest is calculated at the federal rate, while pre-judgment interest is calculated under state law.”);
Morris-Piard v. Piard, No. 2D13-5661, 2015 WL 7280167, at *1 (Fla. 2d Dist. Ct. App. Nov. 18,
2015) (“Courts [in Florida] apply the statutory judgment interest rate from the date of loss or
entitlement under section 55.03 for purposes of calculation of prejudgment interest.”) (citing
Genser v. Reef Condo. Ass’n, 100 So.3d 760, 762 (Fla. 4th Dist. Ct. App. 2012)); Holston
Investments Inc. B.V.I. v. Lanlogistics, Corp., No. 08-21569-CIV, 2010 WL 2495413, at *14 (S.D.
Fla. June 18, 2010) (calculating the amount of prejudgment interest in a breach of contract claim
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CONCLUSION
For the foregoing reasons,
IT IS ORDERED that plaintiff’s motion for default judgment is GRANTED IN PART
AND DENIED IN PART. The motion is GRANTED as to plaintiff’s breach of contract claim
under Florida law, and judgment is entered in favor of plaintiff and against defendants in the
amount of $100,000.00 plus prejudgment interest calculated using the statutory rate of interest
found in Fla. Stat. § 55.03, with the accrual of prejudgment interest beginning on September 25,
2015. The motion is DENIED in all other respects.
IT IS FURTHER ORDERED that plaintiff’s remaining claims are DISMISSED
WITHOUT PREJUDICE.
.
New Orleans, Louisiana, March 4, 2016.
_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE
under Florida law by using “the statutory rate of interest found in section 55.03 of the Florida
Statutes”).
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