Rabuck v. Clemmer Moving & Storage
Filing
22
MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 10/31/11. (apls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
WILLIAM RABUCK,
Plaintiff,
v.
Civil Action No. ELH-10-1129
CLEMMER MOVING & STORAGE,
Defendant.
MEMORANDUM OPINION
William Rabuck, plaintiff, filed a two-count Complaint (ECF 1) against Clemmer
Moving and Storage (“Clemmer”), defendant,1 asserting breach of contract and “violation of
truth in leasing regulations.”
Clemmer has not appeared or filed a response to plaintiff‟s
Complaint, and its default was entered by the Clerk on August 16, 2011 (ECF 20). Now pending
is plaintiff‟s “Motion for Entry of Deafult [sic] Judgment” (“Motion”) (ECF 19). 2 For the
reasons that follow, I will neither grant nor deny the Motion at this juncture.
Background
Plaintiff filed his Complaint on May 6, 2010. In his Complaint, plaintiff asserted that he
“is in the business of transporting goods as the owner of motor carrier equipment.” Complaint
¶ 4. Plaintiff claimed that he entered into an “independent contractor agreement” with Clemmer
1
Clemmer is apparently a business entity, but plaintiff does not specify whether it is a
corporation, an LLC, a partnership, or merely a trade name. However, plaintiff asserts that
Clemmer “is a resident of the State of Pennsylvania, with a principal office location” in Telford,
Pennsylvania. Subject matter jurisdiction is based on diversity, in that plaintiff is a Maryland
resident, unlike defendant, and more than $75,000 is in controversy. See 28 U.S.C. § 1332(a).
2
Plaintiff subsequently filed a second “Motion for Entry of Deafult [sic] Judgment”
(ECF 21) that is substantively identical to the first Motion. I will refer to both motions
collectively as the “Motion.”
to “make available his equipment, a truck and to drive or arrange a driver for services related to
transporting goods in connection with Defendant‟s business.” Id. ¶ 6. The Complaint did not
specifically state whether the “independent contractor agreement” was oral or written, although
Count II of the Complaint, discussed below, implies that the parties had no written agreement.
In any event, if the “independent contractor agreement” was written, plaintiff did not quote its
provisions in the Complaint, nor did he submit a copy of the agreement as an exhibit. However,
in Count I of his Complaint (alleging breach of contract), plaintiff claimed that, “pursuant to the
terms of the contract between the parties,” Clemmer was obligated to reimburse him for “100%
of any and all fuel surcharges assessed in relation to the deliveries” that he performed. Id. ¶ 8.
According to plaintiff, he provided services to defendant pursuant to the agreement “over the
course of the four years during which said agreement was in effect between the parties,” id. ¶ 7,
but defendant did not compensate him for fuel surcharges, and thereby breached the agreement.
Id. ¶ 12. Plaintiff seeks $300,000 in damages. Id. ¶ 13.
As to Count II, which asserted a “violation of truth in leasing regulations,” plaintiff
alleged only that defendant “was required under the applicable regulations covering the
Defendant as an authorized carrier to, among other things, enter into a written lease agreement
with the Plaintiff governing the relationship between the parties,” id. ¶ 15, and that defendant
“failed to do so leading to damages suffered by the Plaintiff, including the Defendant failing to
properly compensate the Plaintiff for services rendered, including among other items, failing to
properly provide monies set out as fuel surcharges.” Id. ¶ 16. Plaintiff did not cite or otherwise
specify the “truth in leasing” regulations on which he relied. He seeks $300,000 damages as to
Count II, although this request appears to be duplicative, rather than cumulative, of his request
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for relief under Count I.
After delays in effectuating service that are unnecessary to catalog, plaintiff‟s counsel
filed an Affidavit of Service (ECF 15), asserting that, on April 22, 2011, after four prior
unsuccessful attempts to serve defendant‟s registered agent, Michael Rjabanebeli, plaintiff‟s
counsel effectuated substituted service on defendant by mailing the summons and a copy of the
complaint to the Maryland State Department of Assessments and Taxation (“SDAT”). See Md.
Rule 2-124(o)(iii) (permitting substituted service, via service on SDAT, on a corporation or other
business entity required to have a resident agent, where “two good faith attempts on separate
days to serve the resident agent have failed”); see also Fed. R. Civ. P. 4(h)(1)(A), (e)(1)
(permitting service on a corporation or other business entity by “following state law for serving a
summons in an action brought in courts of general jurisdiction where the district court is
located”). Thereafter, as indicated, defendant did not respond to the Complaint, and defendant‟s
default was entered by the Clerk.
As noted, plaintiff seeks entry of a default judgment. In support of his request, plaintiff
relies solely “upon the record in this case” and an “Affidavit” of his attorney, Thomas E. Neary,
Esq. (“Neary Aff.”) (ECF 19 at 3-5).3 Mr. Neary avers that defendant is not in military service,
and otherwise essentially reiterates, verbatim, the facts alleged in the Complaint, without
additional detail or explanation. Mr. Neary does, however, provide a modicum of clarification
regarding plaintiff‟s damages claim. Mr. Neary asserts that defendant has wrongfully “withheld
3
Although the submission is styled as an “affidavit,” Mr. Neary does not attest to the
truth of its contents under the penalty of perjury, either based on personal knowledge or to the
best of his knowledge, information, and belief. See Md. Rule 1-304 (prescribing form of
affidavits). Moreover, Mr. Neary does not make clear the source of his personal knowledge of
the relevant facts.
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$100,000 in payment due to the plaintiff for the fuel surcharges involved”; that plaintiff seeks
interest on those funds at the rate of 10% per annum “from the time [o]f the termination of the
business relationship,” totaling $20,000 in interest;4 and that he seeks an additional $180,000 in
damages “for violation of the applicable Truth in Leasing Regulations.” Neary Aff. ¶ 13. Thus,
plaintiff seeks a judgment in the total amount of $300,000. Id.
Discussion
Upon a showing that a party against whom judgment is sought has failed to plead or
otherwise defend, the clerk must enter the party‟s default. Fed. R. Civ. P. 55(a). After the clerk
has entered a default, the plaintiff may seek a default judgment. See Fed. R. Civ. P. 55(b). Entry
of default judgment “is left to the discretion of the court.” SEC v. Lawbaugh, 359 F. Supp. 2d
418, 421 (D. Md. 2005). To be sure, it is the “„strong policy‟” of the Fourth Circuit to decide
cases on their merits. Id. (citation omitted). But, default judgment may be proper if “the
adversary process has been halted because of an essentially unresponsive party.” Id.
Upon default, the well-pleaded factual allegations of the complaint regarding liability are
deemed admitted, in contrast to the allegations regarding damages. Id. at 422; see Fed. R. Civ. P.
8(b)(6) (a defaulting party is deemed to admit factual allegations of the plaintiff‟s complaint,
“other than [those] relating to the amount of damages”). Although a defaulting party “„admits
the plaintiff‟s well-pleaded allegations of fact‟‟” as to liability, the party in default is “„not
held . . . to admit conclusions of law‟” or allegations regarding liability that are not “wellpleaded.” Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (citation
omitted). Thus, “„a default is not treated as an absolute confession by the defendant of his
4
Apparently, plaintiff seeks two years‟ worth of interest.
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liability and of the plaintiff's right to recover.‟” Id. (citation omitted). See also 10A WRIGHT,
MILLER & KANE, FEDERAL PRACTICE & PROCEDURE, § 2688, at 60-61 (3d ed. 1998) (“WRIGHT,
MILLER”) (“[L]iability is not deemed established simply because of the default, and the court, in
its discretion, may require some proof of the facts that must be established in order to determine
liability.”).
A plaintiff‟s allegations regarding liability are not regarded as well-pleaded (and thus not
admitted) if the allegations are “„made indefinite or erroneous by other allegations in the same
complaint,‟” or the allegations “„are contrary to uncontroverted material in the file of the case.‟”
Id., § 2688, at 62 (quoting Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 63 (2d Cir. 1971),
rev’d on other grounds, 409 U.S. 363 (1973)). See Danning v. Levine, 572 F.2d 1386, 1388 (9th
Cir. 1978). Put another way, the papers of record cannot support a default judgment if “they
disclose on their face a fact that would defeat the [plaintiff‟s] claim.” Nishimatsu Const. Co. v.
Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).
When reviewing a motion for default judgment, “it remains for the court to consider
whether the unchallenged facts constitute a legitimate cause of action . . . .” 10A WRIGHT,
MILLER, § 2688, at 63.
“The court must, therefore, determine whether the well-pleaded
allegations in [the plaintiff‟s] complaint support the relief sought . . . .” Ryan, 253 F.3d at 780.
As to damages, when the “plaintiff‟s claim is for a sum certain or a sum that can be made
certain by computation,” the clerk must enter a default judgment on the plaintiff‟s affidavit. Fed.
R. Civ. P. 55(b)(1).5 But, a mere “generalized statement of the amount due in [the] plaintiff‟s
5
Under Fed. R. Civ. P. 54(c), the relief granted in a default judgment “must not differ in
kind from, or exceed in amount, what is demanded in the pleadings.” See In re Genesys Data
Technologies, Inc., 204 F.3d 124, 132 (4th Cir. 2000) (“courts have generally held that a default
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complaint” does not establish a “sum certain” for purposes of Rule 55(b)(1). 10A WRIGHT,
MILLER, § 2683, at 23 (citing Anderson v. United States, 182 F.2d 296, 297 (1st Cir. 1950)).
Federal Rule of Civil Procedure 55(b)(2) is also relevant. It 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.
When damages are contested by the defendant, the court ordinarily must hold a hearing to
establish the amount of damages. See, e.g., Ins. Servs. of Beaufort, Inc. v. Aetna Cas. & Surety
Co., 966 F.2d 847, 853 (4th Cir. 1992). Although “[p]roceeding without a hearing is the
exception,” the court may award damages without a hearing if “the record supports the damages
requested,” such as through comprehensive, detailed, and uncontroverted exhibit and affidavit
evidence establishing the amount of damages. Monge v. Portofino Ristorante, 751 F. Supp. 2d
789, 795 (D. Md. 2010) (citing, inter alia, Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty
Corp., 973 F.2d 155, 158 (2d Cir. 1992); Virgin Records Am., Inc. v. Lacey, 510 F. Supp. 2d 588,
593 (S.D. Ala. 2007); U2 Home Entm't, Inc. v. Fu Shun Wang, 482 F. Supp. 2d 314, 318
(E.D.N.Y. 2007)). See Stephenson v. El-Batrawi, 524 F.3d 907, 917 n.11 (8th Cir. 2008)
(“Foregoing an evidentiary hearing may constitute abuse of discretion when the existing record
is insufficient to make necessary findings in support of a default judgment.”); see also 10A
WRIGHT, MILLER, § 2688, at 57-58 & 63-70.
judgment cannot award additional damages . . . because the defendant could not reasonably have
expected that his damages would exceed that amount”).
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Plaintiff‟s Motion and the accompanying Neary Affidavit are insufficient to support a
default judgment. As I shall explain, with respect to Count I, the Complaint alleges a breach of
contract; however, plaintiff has submitted insufficient documentation of his damages. With
respect to Count II, the Complaint suffers from the same inadequacies as Count I, and also fails
to identify the “truth in leasing regulations” allegedly violated by defendant. Accordingly, I will
hold the Motion sub curia, pending receipt of supplemental documentation and briefing from
plaintiff.
Preliminarily, plaintiff‟s evidence as to both counts is insufficient, because the Neary
Affidavit, which is the only evidence submitted by plaintiff beyond the pleadings, is not
competent evidence to establish any fact, for two reasons.
First, although styled as an
“affidavit,” the Neary Affidavit is, in fact, neither a proper affidavit nor an admissible unsworn
statement, because it is not attested under the penalties of perjury, upon the affiant‟s personal
knowledge. See, e.g., Md. Rule 1-304; 28 U.S.C. § 1746.6 Second, even if Mr. Neary has
personal knowledge of the underlying facts in support of plaintiff‟s claim (which seems
doubtful), the affidavit is improper because it is an affidavit of plaintiff‟s counsel. As the Fourth
Circuit explained in an analogous situation in Spivey v. United States, 912 F.2d 80, 84 (4th Cir.
1990), “[w]hile affidavits submitted by counsel are permissible under some circumstances, this
[is] not one of them. It is elementary that counsel may not participate both as an advocate and as
6
Plaintiff himself signed his Complaint, under the heading “verification,” declaring
“under the penalties of perjury” that the facts alleged were “true and correct to the best of
[plaintiff‟s] knowledge, information and belief.” However, an attestation to the best of the
affiant‟s knowledge, information, and belief is not equivalent to an attestation on personal
knowledge. See, e.g., Fed. R. Evid. 602 (“A witness may not testify to a matter unless evidence
is introduced sufficient to support a finding that the witness has personal knowledge of the
matter.”).
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a witness, absent special circumstances.” See Md. Rule of Prof. Conduct 3.7 (barring generally a
lawyer from acting “as advocate at a trial in which the lawyer is likely to be a necessary
witness”). See also Credit Lyonnais Securities (USA), Inc. v. Alcantara, 183 F.3d 151, 154-55
(2d Cir. 1999) (“At the time judgment was entered, the court had before it only the allegations in
the complaint and the affidavit of plaintiff‟s counsel, who did not purport to have personal
knowledge of the facts . . . . This was insufficient evidence upon which to enter the amount of
the judgment.”); Oceanic Trading Corp. v. Vessel Diana, 423 F.2d 1, 4 (2d Cir. 1970) (“Unless
there are very unusual circumstances to justify it, the evidentiary material offered in support of a
final judgment should consist of material within the personal knowledge of the affiant and not
hearsay, and attached exhibits should be accompanied by sworn statements of the circumstances
that would qualify them as full exhibits.”).
Nevertheless, the facts alleged in plaintiff‟s Complaint, which are taken as true by virtue
of defendant‟s default, establish that plaintiff and defendant had an “independent contractor
agreement” by which defendant agreed to reimburse plaintiff for “any and all fuel surcharges
assessed in relation to the deliveries” that plaintiff made on defendant‟s behalf. Count I of the
Complaint asserts that defendant failed to reimburse plaintiff for the fuel surcharges, thereby
breaching the agreement. There is no evidence to establish plaintiff‟s damages from the breach,
however; plaintiff baldly asserts the right to recover $100,000 in unpaid fuel surcharges, plus
$20,000 in prejudgment interest at the rate of 10% per annum. Therefore, I will direct plaintiff to
submit competent evidence as to the exact terms of the agreement as to fuel surcharges
(including whether the agreement was oral or written and, if written, a copy of the agreement),
and the terms of the agreement with respect to interest. Plaintiff shall also submit itemized
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evidence as to the fuel surcharges he allegedly incurred and which he claims were unpaid by
defendant.
In Count II, plaintiff asserts that defendant violated “truth in leasing regulations.” But,
plaintiff does not cite the regulations he claims were breached, nor does he even identify what
governmental entity promulgated them. Nor does he demonstrate that the alleged regulations
afford him a private right of action for damages for defendant‟s alleged failure to comply with
them. In short, on the basis of plaintiff‟s Complaint as presently pleaded, regardless of what
evidence as to his damages plaintiff might be able to adduce, I cannot conclude that “the wellpleaded allegations in [the plaintiff‟s] complaint support the relief sought.” Ryan, supra, 253
F.3d at 780.
Accordingly, I will direct plaintiff to submit a memorandum addressing the
regulations he claims were breached and the grounds for his entitlement to damages from the
alleged violation. Plaintiff shall also submit evidence itemizing his damages.
Conclusion
For the foregoing reasons, plaintiff‟s two motions entitled “Motion for Entry of Deafult
[sic] Judgment” (ECF 19 & 21), will be held sub curia, pending submission of additional
evidence by plaintiff. An Order implementing this ruling follows.
Date: Octobe r 31, 2011
/s/
Ellen Lipton Hollander
United States District Judge
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