UNITED STATES OF AMERICA et al v. APS CONTRACTING, INC. et al

Filing 21

OPINION. Signed by Magistrate Judge Karen M. Williams on 7/10/2013. (TH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
UNITED STATES OF AMERICA, et al.,
Plaintiffs,
Civil No. 11-779-KMW
v.
APS CONTRACTING, INC., et al.,
Defendants.
OPINION
THIS MATTER comes before the Court by way of motion of
Plaintiff Cardinal Contracting Company, LLC (“Plaintiff”), seeking
final judgment by default against Defendant A.C.C. Construction,
Limited Liability Company (“Defendant”) pursuant to Fed. R. Civ. P.
55(b)(2).

The Court granted Plaintiff’s motion seeking final

judgment by default against Defendant ACC on February 11, 2013, but
reserved on the issue of damages because Plaintiff failed to submit
sufficient evidence to the Court to prove the damages claimed.
No. 18).

(Doc.

The Court ordered Plaintiff to file an affidavit

supplementing Plaintiff’s submissions regarding damages sought from
Defendant ACC within fourteen (14) days of the date of this Order.
Id.

Plaintiff submitted a Declaration of Sean E. Regan, Esquire on

February 22, 2013 attaching a billing summary evidencing a total of
$34,313.50 in attorney’s fees and costs accrued by Plaintiff and an
Affidavit of Martin Costa on April 16, 2013 attaching invoices and
checks evidencing an unpaid balance of $74,002.50 due to Plaintiff
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from Defendant and a chart displaying the prime rates from 2001 to
2012. See Decl. of Sean E. Regan, Esquire (“Regan Decl.”) (Doc. No.
19), Aff. of Martin Costa (“Costa Aff.”) (Doc. No. 20-1).
I.

Background
Plaintiff

filed

a

Complaint

against

Defendants

APS

Contracting, Inc., Fidelity and Deposit Company of Maryland, and ACC
on February 11, 2011 alleging that ACC entered into a subcontract with
Plaintiff under which Plaintiff agreed to furnish a portion of the
labor and material required for construction of a Combined Maintenance
Facility at the Fort Dix United States Army Installation (“Fort Dix”),
Plaintiff performed the work required under the contract, and ACC
failed to pay Plaintiff as agreed under the contract.
9-18, Doc. No. 1).

(Compl. ¶¶

Plaintiff sets forth claims for breach of contract

and violations of the Prompt Payment Act against Defendant ACC.
(Compl., Doc. No. 1).

Defendant ACC was served on March 25, 2011 at

the following address and service was accepted by Suezanne Zimmerman,
an agent of ACC:
NJ 08755.

ACC Construction LLC, 2303 Owen Court, Toms River,

(Affidavit of Service, Doc. No. 8).

Defendant ACC failed

to respond to the Complaint or otherwise appear in this action.

The

Clerk of Court entered Default against Defendant ACC on May 13, 2011.
The Court granted Plaintiff’s motion for final judgment by default,
but reserved on damages.
II.

Analysis
a. Legal Standard – Damages on Motion for Default
Judgement
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When entering a default judgment, “the Court need not accept
the moving party’s legal conclusions or allegations relating to the
amount of damages.”

Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532,

535-36 (D.N.J. 2008).

The Plaintiff must show proof of the amount of

damages “to a reasonable degree of certainty.”

JPMorgan Chase Bank,

N.A. v. Candor Constr. Grp., Inc., Civ. No. 08-3836, 2010 WL 3210521,
at *1 (D.N.J. Aug. 12, 2010) (quoting Video Pipeline, Inc. v. Buena
Vista Home Entm't Inc., 275 F. Supp. 2d 543, 566 (D.N.J. 2003)).
b. Damages Recoverable Pursuant To Plaintiff’s Claims
Against Defendant
The Court granted Plaintiff’s motion for final judgment by
default on Plaintiff’s claims for breach of contract and violation of
the New Jersey Prompt Payment Act.
damages:

Plaintiff seeks the following

$74,002.50 in damages representing the unpaid balance for

work performed by Plaintiff; plus $4,956.60 in interest; and $34,
313.50 in attorney’s fees and costs.
i.

Breach of Contract

Under New Jersey law, a party may recover damages from a
breach of contract if the damages arose “naturally,” and they were a
“reasonably certain consequence of the breach.”

Donovan v.

Bachstadt, 453 A.2d 160, 166 (N.J. 1982) (citing Kozlowski v.
Kozlowski, 403 A.2d 902 (N.J. 1979)).

The plaintiff must show enough

evidence to allow the trier of fact to determine a “fair and reasonable
estimate.” RNC Sys., Inc. v. Modern Tech. Grp., Inc., 861 F. Supp. 2d
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436, 457 (D.N.J. 2012) (quoting Caldwell v. Haynes, 643 A.2d 564, 571
(N.J. 1994)).

Therefore, Plaintiff is entitled to the outstanding

amount due to Plaintiff under the contract under its breach of contract
claim.
ii.

Prompt Payment Act

The New Jersey Prompt Payment Act provides that “[i]f a .
. . subsubcontractor has performed in accordance with the provisions
of its contract with the . . .

subcontractor and the work has been

accepted . . . and the parties have not otherwise agreed in writing,
the prime contractor shall pay to its subcontractor and the
subcontractor shall pay to its subsubcontractor within 10 calendar
days of the receipt of each . . . payment, . . . the full amount received
for the work of the . . . subsubcontractor based on the work completed
or the services rendered under the applicable contract.”
Ann. § 2A: 30A-2(b).

N.J. Stat.

“If a payment due pursuant to the provisions of

this section is not made in a timely manner, the delinquent party shall
be liable for the amount of money owed under the contract, plus interest
at a rate equal to the prime rate plus 1%.”
30A-2(c).

Additionally, “the prevailing party shall be awarded

reasonable costs and attorney fees.”
(f).

N.J. Stat. Ann. § 2A:

N.J. Stat. Ann. § 2A: 30A-2(b),

Therefore, Plaintiff is entitled to the outstanding amount due

to Plaintiff under the contract, interest, and attorney’s fees and
costs under its New Jersey Prompt Payment Act claim.
c. Plaintiff’s Damages
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i.

Unpaid Balance For Work Performed

Plaintiff has submitted an affidavit of Martin Costa, the
Controller for Plaintiff, attaching invoices and checks showing the
money owed to Plaintiff by Defendant.
20-1).

Costa Aff. ¶ 7-11 (Doc. No.

Evidence of the amount of damages is sufficient when a

plaintiff submits invoices and checks proving the defendant’s unpaid
balance.

See, e.g., JPMorgan Chase Bank, N.A., 2010 WL 3210521, at

*2-3 (Director of Construction for plaintiff testified and showed
invoice spreadsheets displaying unpaid balances and payments
plaintiff made on behalf of defendant); Imperial Constr. Grp., Inc.
v. Jocanz Inc., Civ. No. 06-709, 2008 WL 2966794, at *4-6 (D.N.J. July
31, 2008) (plaintiff showed evidence of damages by submitting checks
plaintiff paid on behalf of defendant and unpaid invoices sent to
defendant).

The evidence shows that Plaintiff sent Defendant an

invoice for $185,752.50 on December 22, 2009, and another invoice for
$3,250.00 on April 23, 2010, for a total of $189,002.50 Defendant owed
to Plaintiff.

Costa Aff. Ex. A. (Doc. No. 20-1).

Defendant paid

Plaintiff $80,000 on March 16, 2010 and $35,000 on March 22, 2010
through two checks, for a total of $115,000.00 paid, leaving $74,002.50
outstanding.

Costa Aff. Ex. A. (Doc. No. 20-1).

Therefore,

Plaintiff has shown sufficient evidence that Defendant owes $74,002.50
to Plaintiff for the work Plaintiff performed under the subcontract
with Defendant.

Costa Aff. Ex. A-B. (Doc. No. 20-1).
ii.

Interest
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The New Jersey Prompt Payment Act provides that the interest
rate for late payments is prime rate plus 1%.

When the prime rate is

“easily ascertainable from financial publications,” the Court may
“take judicial notice of the applicable rate.”

Rankin v. DeSarno, 89

F.3d 1123, 1134 n.11 (3d Cir. 1996), overruled on other grounds.
“‘Prime rate’ means the average predominant prime rate, as determined
by the Board of Governors of the Federal Reserve System, quoted by
commercial banks to large businesses . . . .” N.J. Stat. Ann. § 54:48-2.
Plaintiff submitted evidence that the prime rate during the applicable
time period is 3.25%, by way of a chart of prime rates from Cyprus Credit
Union quoted by the Wall Street Journal.

Costa Aff. ¶ 9, Ex. C (Doc.

No. 20-1).
According to the agreement between Plaintiff and Defendant,
Defendant agreed to pay Plaintiff “thirty days after the date of any
invoice plus interest accruing on any payment not received within
forty-five days.”

Costa Aff. ¶ 5 (Doc. No. 20-1).

Therefore,

interest must be calculated beginning February 5, 2010, forty-five
days after the invoice issued by Plaintiff, which was dated December
22, 2010. Costa Aff. Ex. B (Doc. No. 20-1).

The interest rate of 4.25%1

multiplied by the unpaid balance of $74,002.50, divided by 365 days,
is $8.62 per day.

The number of days from February 5, 2010 to July

10, 2013 is 1251, multiplied by $8.62, is a total of $10,783.62.
iii.

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Attorney’s Fees

The applicable interest rate is the prime rate plus 1% pursuant to the New
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Plaintiff is entitled to “reasonable costs and attorney
fees” under the New Jersey Prompt Pay Act.

§ 2A: 30A-2(f).

The Court

has the discretion to determine whether an amount of requested
attorney’s fees is reasonable.

Spectrum Produce Distrib., Inc. v.

Fresh Mktg., Inc., Civ. No. 11-06368, 2012 WL 2369367, at *3 (D.N.J.
June 20, 2012).

“To the extent the affidavit leaves any doubt as to

the amount of fees to be awarded, these doubts shall be resolved against
an award of fees.”

Veneziano v. Long Island Pipe Fabrication & Supply

Corp., 238 F. Supp. 2d 683, 695 (D.N.J. 2002).
Calculation of the “lodestar amount” is an appropriate
method of determining whether a requested amount of attorney’s fees
is reasonable.

See Spectrum Produce Distrib., Inc., 2012 WL 2369367,

at *3; see also Litton Indus., Inc. v. IMO Indus., Inc., 982 A.2d 420,
441 (N.J. 2009).

“The lodestar is the ‘number of hours reasonably

expended on the litigation multiplied by a reasonable hourly rate.’”
Spectrum Produce Distrib., Inc., 2012 WL 2369367, at *3 (quoting
Hensley v. Eckerhart, 461 U.S. 424 (1983)).

The party seeking damages

must provide evidence of a reasonable hourly rate “in line with those
prevailing in the community for similar services by lawyers of
reasonably comparable skill, experience, and reputation.”
Stenson, 465 U.S. 886, 896 n.11 (1984).

Blum v.

The party seeking damages must

also provide evidence that the amount of time spent on the matter was
reasonable.

Spectrum Produce Distrib., Inc., 2012 WL 2369367, at *5.

Jersey Prompt Payment Act.

N.J. Stat. Ann. § 2A:30A-2(c).
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“A request for fees must be accompanied by ‘fairly definite information
as to hours devoted to various general activities, e.g., partial
discovery, settlement negotiations, and the hours spent by various
classes of attorneys.’”

Teamsters Health & Welfare Fund of

Philadelphia and Vicinity v. Dubin Paper Co., Civil No. 11–7137, 2012
WL 3018062, at *5 (D.N.J. July 24, 2012) (quoting Evans v. Port Auth.,
273 F.3d 346, 361 (3d Cir. 2001)).

The Court must use its discretion

to determine whether the hours billed were “excessive, redundant, or
otherwise unnecessary.” Maldonado v. Houstoun, 256 F.3d 181, 184 (3d
Cir. 2001) (quoting Pub. Interest Research Grp. of N.J., Inc. v.
Windall, 51 F.3d 1179, 1188 (3d Cir. 1995)).
Here, Plaintiff submitted evidence of attorney’s fees by way
of a Declaration of Sean E. Regan, Esq. certifying that Plaintiff has
incurred $34,313.50 in attorney’s fees and costs, with rates of
approximately $200 per hour and $300 per hour.

Regan Decl. ¶ 11, (Doc.

No. 19); see also Costa Aff. ¶ 10 (Doc. No. 20-1).

Plaintiff also

submitted billing summaries with the dates of each invoice, the total
billed on each invoice, Plaintiff’s payments, and costs incurred.
Regan Decl., 5-7 (Doc. No. 19).

Plaintiff’s counsel has certified

that the billing rates are reasonable and customary in Monmouth County,
New Jersey where Plaintiff’s counsel is located.
(Doc. No. 19).

Regan Decl. ¶ 11

However, Plaintiff fails to describe the activities

and hours spent on the matter.

Plaintiff does not provide the Court

with a breakdown of how many hours were spent on each activity, nor
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does Plaintiff even provide the Court with general descriptions of the
work performed by Plaintiff’s attorneys.

Therefore, the Court is

unable to use its discretion to determine whether the hours spent were
reasonable.

For example, the Court is unsure whether Plaintiff seeks

attorney’s fees for the time Plaintiff’s attorneys spent pursuing its
claims against the other Defendants, APS Contracting Company and
Fidelity & Deposit Co. of Maryland, who ultimately prevailed during
arbitration.

Additionally, Plaintiff did not describe each

attorney’s experience or set forth evidence to show that the hourly
rates for each attorney were appropriate.

Because Plaintiff’s

affidavit and supporting documentation leave doubt as to the
reasonableness of the attorney’s fees sought, the Court is unable to
award an amount of attorney’s fees at this time.

Therefore,

Plaintiff’s request for attorney’s fees is denied without prejudice.
Plaintiff may submit an application for attorney’s fees within
twenty-one days of the date of this Opinion and accompanying Order and
Judgment in accordance with applicable case law and Rules of Court.
IV.

Conclusion
Based on the foregoing, and based on the Court’s Order dated

February 11, 2013 granting default judgment to the Plaintiff on
Plaintiff’s breach of contract and violation of the New Jersey Prompt
Payment Act claims, the Court will enter judgment in Plaintiff’s favor
against Defendant A.C.C. Construction, Limited Liability Company in

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the amount of $84,786.12.

An Order and Judgment consistent with this

Opinion will be entered.

s/ Karen M. Williams
KAREN M. WILLIAMS
United States Magistrate Judge
Dated:

July 10, 2013

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