Bockai v. Ruvanni Inc. et al
Filing
14
MEMORANDUM OPINION. Signed by Judge Peter J. Messitte on 6/19/2018. (c/m to Defendants 6/20/2018 tds, Deputy Clerk)
._FILED
AT GREENBELT
CLERK, U.S. DISTRICT COURT
DISTRICT OF MARYlAND
•
•
Plaintiff,
BY
•
v.
Defendants.
DEPUTV
Civil No. PJM 18-417
•
•
•
•
RUVANNI INC. ET AL.,
_RECENED
JUN 20 2018
•
•
SAHR BOCKAI
_ENTERED
_LOGGED
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
MEMORANDUM OPINION
On February 9, 2018, Sahr Bockai filed a Complaint against Ruvanni, Inc. ("Ruvanni")
and its President Ruth Macauley-Barrett
enrichment and misrepresentation.
("Defendants"),
alleging breach of contract, unjust
Bockai filed two Returns of Summons on March 19, 2018,
showing service of the summons and Complaint on both Defendants on February 21, 2018.
Neithcr Ruvanni nor Macauley-Barrett
answered
or entered an appearance
in the case.
Accordingly, on April 18, 2018, the Clerk of the Court, at the behest of Bockai, entered a Default
in his favor. ECF NO.8. Bockai has now filed a Motion for (Default) Judgment (ECF No.9),
seeking $200,000 in compensatory damages, as well as $100,000 in punitive damages.
For the following reasons, Bockai's Motion for Judgment (ECF No.9) is GRANTED IN
PART and REVISED IN PART.
•
I. FACTUAL AND PROCEDURAL HISTORY
On or about April 13, 2016, Bockai entered into a Joint Venture and Profit Sharing
Agreement (the "Agreement") with Ruvanni for the wholesale purchase and resale of 1,000 carat
rough diamonds. Complaint ~ 9, ECF No. I. The general terms of the Agreement were that
Bockai
would wire Ruvanni,
via Ruvanni's
authorized
representative
$33,000.00 to purchase the diamonds. Jd. ~~ 11-12. Macauley-Barrett,
had significant expertise and experience in this type of transaction,
diamonds for a significant profit. ~~ 14-15. Macauley-Barrett
Macauley-Barrett,
who represented that she
would then resell the
purportedly told Bockai that a
buyer for the diamonds had already been arranged before he entered into the Agreement, and that
Bockai was "guaranteed to receive roughly $200,000.00 in profit in return" for his $33,000.00
investment. Jd. '\1'\113,15.
The Agreement required Ruvanni to purchase and resell the diamonds within 60 days of
the execution of the Agreement, during which time Ruvanni would return Bockai's investment
and earned profits.
'\I'Ii
21-22; see also the Agreement
'Ii
2, ECF No. 9-2. If Ruvanni failed to
purchase the diamonds within the 60-day period, Bockai was entitled to demand, in writing, the
return of his investment of $33,000.00, which would be reimbursed within 30 days. Complaint
'\1'\126-27,ECF No. I; see also the Agreement '\I 4, ECF No. 9-2.
Bockai's investment never bore fruit. He alleges in fact that neither Macauley-Barrett nor
Ruvanni ever had a potential buyer for the diamonds, and that Macauley-Barrett
misrepresented
intentionally
the risk of the transaction "as a means of inducing [him] into executing the
Agreement and wiring the funds." Complaint ~ 19, ECF No. I. Bockai purportedly contacted
Ruvanni via email on February
13, 2017, requesting the return of his investment due to
2
Ruvanni's failure to perform its duties under the Agreement, but Ruvanni refused to return the
money. /d. ~~ 28-29.
On February 9, 2018, Bockai filed the present Complaint, alleging breach of contract,
unjust enrichment, and misrepresentation.
/d. On March 19, 2018, he filed two Returns of
Summons showing that a Summons and Complaint were served personally on Macauley-Barrett
on February 14, 2018, as to both herself individually and as the corporate representative
Ruvanni.
ECF Nos. 4 & 5. Neither Macauley-Barrett
of
nor Ruvanni has ever entered an
appearance in the case. On April 12, 2018, Bockai filed a Motion for Clerks Entry of Default
(ECF No.7), which the Clerk of the Court entered in favor of Bockai on April 18, 2018 (ECF
No.8). On May 18, 2018, Bockai subsequently filed the present Motion for (Default) Judgment
(ECF No.9), seeking $200,000 in compensatory damages and $100,000 in punitive damages.
II. LEGAL STANDARD
Pursuant to Fed. R. Civ. P. 55(a), "[w)hen a party against whom a judgment
for
affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by
affidavit or otherwise, the clerk must enter the party's default."
A defendant's
default does not automatically entitle the plaintiff to entry of a default
judgment; rather, that decision is left to the discretion of the court. See Baltimore Line Handling
Co. v. Brophy, 771 F. Supp. 2d 531, 540 (D. Md. 2011). The Fourth Circuit has a "strong policy
that cases be decided on the merits." United States v. Shaffer Equip. Co., 11 F.3d 450, 462 (4th
Cir. 1993). Nevertheless, default judgment may be appropriate where the "adversary process has
been halted because of an essentially unresponsive party." s.E.c. v. Lawbaugh, 359 F. Supp. 2d
418,421 (D. Md. 2005) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)).
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The Court takes as true the well.pleaded
factual allegations in the Complaint as to
liability, but is not obligated to do so as to damages. See Ryan v. Homecomings Fin. Network,
253 F.3d 778, 780 (4th Cir. 2001). In order to determine the appropriate damage award in a
default case, the court may hold a hearing to prove damages, but, again, it is not required to do
so; it may rely instead on "detailed affidavits or documentary
evidence to determine the
appropriate sum." Adkins v. Teseo, 180 F. Supp. 2d 15, 17 (D.D.C. 2001) (citing United Artists
Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979)); see also.Laborers'
v. E.G.S., Inc., Civ. No. 09.3174,2010
Disl. Council Pension
WL 1568595, at *3 (D. Md. Apr. 16,2010)
("[OJn
default judgment, the Court may only award damages without a hearing if the record supports the
damages requested."); DirecTV Inc. v. Yancey, 2005 WL 3435030, at *2 (W.O. Va. Dec. 12,
2005) (concluding that plaintiff "presented sufficient evidence to support its claim for damages,
costs and fees by way of uncontradicted affidavits").
III. ANALYSIS
Here, taken as true, Bockai's allegations clearly establish liability on the part of Ruvanni
for breaching the Agreement. Along with the language of the Agreement itself, they indicate that
Bockai entered into a contract with Defendants to purchase diamonds, that he performed his
contractual obligations by wiring Defendants $33,000, and that Defendants breached the contract
when they failed to return Bockai's investment to him within 30 days of his written demand.
Accordingly, the Court finds that Bockai has established a valid claim for breach of contract and
unj ust enrichment.
A. Compensatory
and Punitive Damages
In his Motion for (Default) Judgment, Bockai seeks $200,000 in compensatory damages,
the amount that he claims he would have received had his investment proceeded as anticipated.
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The Court declines to award that amount. It finds that Bockai is only entitled to those damages
that he has actually suffered, i.e. the $33,000 he invested in the deal that has not been returned to
him. Any additional damages would be entirely speculative,
assurances of Macauley-Barrett,
since Bockai, whatever the
was ncver guaranteed a $200,000 return on his investment.
Accordingly, the Court finds that Bockai has only submitted sufficient evidence to support a
damage award of $33,000, plus-as
will be addressed below-prejudgment
interest on that
amount.
Bockai also seeks $100,000 in punitive damages. None will be awarded. It is well
established in Maryland that "punitive damages cannot be awarded in a pure breach of contract
case, although they are recoverable in tort actions arising out of contractual relationships where
actual malice is present." Sims v. Ryland Group, Inc.. 37 Md.App. 470, 378 A.2d 1, 4
(Md.Ct.Spec.App.
1977). Maryland courts define "actual malice" as "conduct of the defendant
characterized by evil motive, intent to injure, ill will, or fraud." Darcars Motors o/Silver Spring.
Inc. v. Borzym, 379 Md. 249, 841 A.2d 828, 837 (Md.2004) (quoting Owens-Illinois,
Inc. v.
Zenobia, 325 Md. 420, 601 A.2d 633, 652 (Md. I992)). Thus, "'negligence alone, no matter how
gross, wanton, or outrageous, will not satisfy [the] standard [of actual malice].''' Darcars Motors
0/ Silver
Spring, Inc.. 841 A.2d at 837 (alteration in original) (quoting Owens-Illinois.
Inc., 841
A.2d at 837). Bockai has not shown that he is entitled to punitive damages. However wronged he
may feel, his allegations in no way rise to the level of "actual malice."
Additionally, the Court notes that Bockai does not make a demand for punitive damages
In his Complaint, which was what Defendants were given notice of when served with the
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Summons and Complaint.
I
Complaint ~~ 39, 44, 58, ECF No. I. This limits Bockai's ability to
recover punitive damages. Federal Rule of Civil Procedure 54( c) limits the judgment that may be
entered based on a party's default: "A default judgment must not differ in kind from, or exceed
in amount, what is demanded in the pleadings." Thus, where a complaint specifies the amount of
damages sought, the plaintiff is limited to entry of a default judgment in that amount. "When a
complaint demands a specific amount of damages, courts have generally held that a default
judgment cannot award additional damages ... because the defendant could not reasonably have
expected that his damages would exceed that amount." In re Genesys Data Techs., Inc., 204 F.3d
124, 132 (4th Cir. 2000). Because Bockai did not made a demand for punitive damages in his
Complaint, in addition to not having alleged sufficient facts to show that Defendants acted with
an "evil motive, intent to injure, ill will, or fraud:' the Court declines to award punitive damages.
B. Prejudgment Interest
Although
the Court does not award Bockai punitive damages,
it will grant him
prejudgment interest. Prejudgment interest "is allowable as a matter of right when 'the obligation
to pay the amount due had become certain, definite, and liquidated by a specific date prior to
judgment so that the effect of the debtor's withholding payment was to deprive the creditor of the
use of a fixed amount as of a known date.''' Buxton v. Buxton, 770 A.2d 152, 165 (Md. 200 I).
The right to prejudgment interest "arises under written contracts to pay money on a day certain,
such as bills of exchange or promissory notes, in actions on bonds under contracts providing for
the payment of interest, in cases where the money claimed has actually been used by the other
party, and in sums payable under leases as rent." Id. Because the Agreement specifies that
I In the ad damnum clause of the Complaint, Bockai requests "a Judgment in [his] favor against the Defendant[s]
...
in an amount in excess of 575,000.00, plus interest, costs, and attorney's fees together with such other and funher
relief deemed appropriate."
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Defendants owed Bockai the return of his investment on a certain day, Bockai is entitled to
prejudgment as a matter of right.
"While not bound by state law, the court may choose to apply the interest rate provided
for by state law." Hylind v. Xerox Corp., 749 F. Supp. 2d 340, 351 (D. Md. 2010), afJ'd in parI,
rev'd in parI and remanded, 481 F. App'x 819 (4th Cir. 2012) (upholding application of Virginia
pre-judgment interest rate) (citing Quesinberry v. Life. Ins. Co. of N. Am., 987 F.2d 1017, !O31
(4th Cir.1993). The legal rate of interest in Maryland is 6% per annum. Md. Const. art. 1Il, S 57.
Accordingly, the Court will award Bockai simple prejudgment interest at the rate of 6%
per annum on the $33,000 compensatory damages award, which began to accrue on March 15,
2017, thirty (30) days after Bockai made his written demand to Defendants for the return of his
investment. By the Court's calculation to date (June 19,2018), this amounts to $2,500.77 (461
days x .06 = 2,500.77).
C. Attorney's
Fees
The parties' Agreement also states that if "any party hereto default[s] in any of the
covenants and terms hereof, the defaulting party shall pay all costs and expenses including
reasonable attorney's fees ....
In any suit or action and on any appeal thereof, the prevailing
party shall be awarded attorney's
fees and courts [sic] costs." Agreement'
4, ECF No. 9-2.
Because this action falls squarely within this provision of the Agreement, the Court will award
Bockai reasonable attorney's fees.
To determine
whether an attorney's
fees are reasonable,
courts typically use the
principles of the well-known lodestar method as a guide. Friolo v. Frankel, 373 Md. 501, 50405, 819 A.2d 354, 356 (Md. 2003) (holding generally that "the lodestar approach is ordinarily the
appropriate one to use in determining a reasonable counsel fee"). The lodestar amount is the
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"reasonable hourly rate multiplied by hours reasonably expended." Grissom v. Mills Corp., 549
F.3d 313, 320 (4th Cir. 2008). An hourly rate is reasonable if it is "in line with those prevailing
in the community for similar services by lawyers of reasonably comparable skill, experience, and
reputation." Duprey v. Scotts Co. LiC, 30 F. Supp. 3d 404, 412 (D. Md. 2014) (quoting Blum v.
Stenson, 465 U.S. 886, 890 n.ll (1984».
In Appendix B to its Local Rules, this Court has established rates that are deemed
reasonable for lodestar calculations. Id. (citing Poole ex rei. Elliott v. Textron, Inc., 192 F,R.D.
494, 509 (D. Md. 2000». Plaintiffs are expected to provide all documentation necessary for the
Court to make a lodestar determination as to the hours reasonably expended, including but not
limited to declarations establishing the hours expended by counsel, broken down for each task
performed. Saman, 2013 WL 2949047, at *7; Local Rule 109.2; Appendix B to the Local Rules,
Counsel for Plaintiff has submitted sufficient documentation of the fees and costs
incurred in the form of a detailed billing statement. This statement indicates that counsel billed
25.2 hours total on this matter, and also specifies the hours billed by each professional. John L.
Doran, Esq., who has been practicing law since 2014 and is admitted to the state and federal
courts of Maryland, incurred $1,145.50 in fees lor 7.9 hours of work (at a rate of$145 per hour).
Doran's colleague, Justin Michael Hollimon, Esq., who was admitted to the bar in 2013 and is
also admitted to practice in state and federal courts in Maryland, incurred $1,870.50 in fees for
12.9 hours of work (at a rate of$145 per hour). Doran and Hollimon worked with two paralegals,
M. Greenberg and M, Castro, who billed $484 in fees for 4.4 hours of work (at a rate of$110 per
hour). The total in attorneys' fees thus amounts to $3,500.
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Per Appendix B, lawyers admitted to the bar for five (5) to eight (8) years may
reasonably bill $165-300 per hour, and those admitted to the bar for less than five (5) years may
reasonably bill $150-225. Paralegals and law clerks may reasonably bill $95-150 per hour.
Given that the rates billed by each individual in this matter comports with the rates
provided for by the Local Rules, the Court is satisfied that the fees sought are reasonable and
awards Bockai $3,500 in attorney's fees.
IV. CONCLUSION
For the foregoing reasons, Bockai's Motion for Judgment (ECF No.9) is GRANTED in
the total amount of$39,000.77
against Ruvanni and Macauley-Barrett jointly and severably. This
total reflects $33,000 in compensatory damages, $2,500.77 in pre-judgment interest, and $3,500
in attorney's fees. Post-judgment interest shall accrue at the recognized federal rate, beginning
June 19,2018 until the judgment is satisfied. A separate Order will ISSUE.
~
lsI
PETER J. MESSITTE
D STATES DISTRICT JUDGE
JUnJ~2018
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