UNITED COMMUNITIES, LLC v. HALLOWELL INTERNATIONAL, LLC et al

Filing 31

OPINION. Signed by Magistrate Judge Karen M. Williams on 1/10/2013. (TH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
UNITED COMMUNITIES, LLC,
Plaintiff,
Civil No. 11-2689-JHR-KMW
v.
HALLOWELL INTERNATIONAL, LLC,
et al.,
Defendants.

OPINION
THIS MATTER comes before the Court by way of motion of
Plaintiff United Communities, LLC seeking final judgment by default
against Defendant Hallowell International, LLC pursuant to Fed. R.
Civ. P. 55(b)(2).

No opposition to the motion has been filed.

The

Court granted in part Plaintiff's motion seeking final judgment by
default against Defendant Hallowell International, LLC on November
21, 2012, but reserved on the issue of damages because Plaintiff
failed to submit sufficient evidence to the Court to prove the
damages claimed in the motion to enter final judgment by default.
On December 19, 2012, the Court conducted a hearing at which
Plaintiff submitted evidence by way of the testimony of Matthew
Haydinger

("Haydinger"),

a

principal

of

Plaintiff

United

Communities, LLC, and clarified the amount of damages sought.
I.

Background
On May 11, 2011, Plaintiff filed a complaint against

Duane Hallowell and Hallowell International, LLC alleging breach of

warranty

against

Hallowell

International,

LLC

and

New

Jersey

Consumer Fraud Act and fraud claims against both defendants arising
out of a transaction wherein Plaintiff purchased 1,340 heat pumps
from Defendants. (Doc. No. 1).

On May 19, 2011, Plaintiff filed an

amended complaint setting forth the same causes of action against
the same defendants.

(Doc. No. 6).

Both Hallowell International,

LLC and Duane Hallowell were served a copy of the Summons and
Complaint in this matter on May 24, 2011.

(Doc Nos. 7 and 8).

Defendant Duane Hallowell filed an answer to the amended complaint
on June 13, 2011. (Doc. No. 9). Defendant Hallowell International,
LLC never filed an answer to the amended complaint.
on July 11, 2011, Plaintiff filed a request for default
against Hallowell International, LLC pursuant to Fed. R. Civ. P.
55(a).

(Doc. No. 11).

The Clerk of Court entered default against

Hallowell International, LLC for failure to plead or otherwise
defend pursuant to Fed. R. Civ. P. 55(a) on July 12, 2011.

On

February 22, 2012, the Court ordered this matter referred to Judge
Williams to conduct all proceedings and order the entry of a final
judgment in accordance to 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73.
(Doc. No. 20).
Plaintiff

applied to

this Court

for

final

entry

of

judgment in default against defendant Hallowell International, LLC
for damages in the amount of $1,377,800 through March 27, 2012 plus
reasonable attorney's fees and costs. On October 8, 2012, Plaintiff

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then submitted an affidavit of Haydinger providing evidence of
Plaintiff's damages in the form of invoices and checks paid by
Plaintiff

for

replacement

heat

pumps,

control

boards

to

fix

inoperable heat pumps, and labor to install the pumps and parts, as
well as W-2 statements and wage reports for employees hired by
Plaintiff to fix and service the inoperable heat pumps. On November
21, 2012, the Court granted in part Plaintiff's motion for final
entry

of

judgment

in

default

against

defendant

Hallowell

International, LLC on Plaintiff's breach of warranty and fraud
claims.

The Court reserved, however, on the amount of damages to

be awarded to Plaintiff because Plaintiff failed to submit adequate
evidence to prove the amount of damages Plaintiff claimed to have
incurred.

The Court conducted a hearing on December 19, 2012 at

which Haydinger testified about Plaintiff's damages incurred as a
result of Hallowell International, LLC's breach of warranty and
fraud.
II.

Discussion
When determining whether to enter judgment on default,

"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 party

seeking an entry of default must show proof of damages.

See Malik

v. Hannah, 661 F. Supp. 2d 485, 490 (D.N.J. 2009).
a. Replacement Heat Pumps and Parts
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Plaintiff has submitted evidence, by way of affidavit of
Haydinger with accompanying invoices and checks paid by Plaintiff,
that Plaintiff incurred costs totaling $179,097.50 for heat pumps to
replace the failed pumps provided by Hallowell International, LLC
and $21,686.74 for replacement control boards to fix the failed
pumps

provided

Plaintiff

has

by

Hallowell

provided

International,

sufficient

evidence

LLC.
to

the

Therefore,
Court

that

Plaintiff incurred a total of $200,784.24 in damages for replacement
heat pumps and replacement parts for heat pumps as a result of
Hallowell International, LLC's breach of warranty and fraud.
b.

Labor To Replace Heat Pumps and Parts

Plaintiff has also submitted evidence, by way of affidavit
of

Haydinger

with

accompanying

invoices

and

checks

paid

by

Plaintiff, that Plaintiff incurred costs totaling $67,172.50 for
labor to replace parts of the heat pumps provided by Hallowell
International, LLC.

Therefore, Plaintiff has provided sufficient

evidence to the Court that Plaintiff incurred a total of $67,172.50
in damages for labor to replace parts of heat pumps as a result of
Hallowell International, LLC's breach of warranty and fraud.
c.

Employees Hired By Plaintiff To Service Heat Pumps

Plaintiff further submitted evidence of five employees
whose wages and cost of benefits Plaintiff claims are damages
recoverable in this case, as Plaintiff either transferred the
employees

or

hired

the

employees

4

to

service

the

Hallowell

International, Inc. heat pumps that did not function properly.
First, Plaintiff submits W-2 statements from 2010 and 2011 totaling
$110,176.48 for Brian Houston, an employee who was transferred in
2010 to handle repairs of the Hallowell International, LLC heat
pumps. Prior to the time that he was transferred, Brian Houston was
employed by United Communities, LLC in a position wherein he was not
charged with repairing Hallowell International, LLC heat pumps.

At

the hearing on December 19, 2012, Haydinger testified that he could
not remember when in 2010 Brian Houston was transferred to the
position wherein he handled repairs of the Hallowell International,
LLC heat pumps.
continued

in

his

Haydinger further testified that Brian Houston
position

handling

repairs

International, LLC heat pumps through 2011.

of

the

Hallowell

Since Haydinger could

not provide the Court with testimony or evidence regarding when in
2010 Brian Houston was transferred to his position repairing the
Hallowell International, LLC heat pumps, the Court finds that
Plaintiff failed to meet its burden of proving a relationship
between Brian Houston's employment in 2010 and Defendant Hallowell
International, LLC's breach of warranty and fraud.

Therefore, the

Court finds that Plaintiff may not recover Brian Houston's 2010
wages, but may recover his 2011 wages, totaling $53,592.64, as
damages for Hallowell International, LLC's breach of warranty and
fraud.

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Plaintiff also submitted wage reports from January 1, 2011
through August 30, 2012 for four United Communities, LLC employees
whom Haydinger testified were hired specifically for the purpose of
repairing and servicing the Hallowell International, LLC heat pumps
as well as installing new heat pumps to replace the malfunctioning
Hallowell International, LLC heat pumps.
the

cost

of

those

four

employees'

Further, Plaintiff seeks

benefits,

which

Haydinger

testified costs Plaintiff twenty-five percent of the employees'
wages. Haydinger testified that while the four employees were hired
specifically for the above-listed purposes, approximately ninety
percent of their time is spent repairing and servicing Hallowell
International, LLC heat pumps and installing new heat pumps, while
ten percent of their time is spent performing other duties for
United Communities, LLC.

Therefore, the Court finds that Plaintiff

may recover ninety percent of the four employees' wages and cost of
benefits for January 1, 2011 through August 30, 20121, totaling
$309,693.77.
Finally, Plaintiff also submitted testimony that it would
cost Plaintiff an additional $275,283.20 in employee wages and
benefits

to

continue

to

service,

repair

and

replace

the

malfunctioning Hallowell International, LLC heat pumps until the end
1. The four employees' wages for January 1, 2011 through August 30,
2012 total $275,283.35. The cost to Plaintiff of providing the four
employees with benefits, according to Haydinger's testimony that the
benefits cost Plaintiff twenty-five percent of the employees' wages,
is $68,820.84.
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of 2013, which would have constituted the end of the warranty period
on the heat pumps.

Since Haydinger testified that the employees at

issue spend approximately ninety percent of their time repairing,
servicing and installing heat pumps and ten percent of their time
performing other duties for United Communities, LLC, the Court finds
that Plaintiff may recover ninety percent of the continued cost of
employing the individuals hired to service, repair and install the
heat pumps through the end of 2013, totaling $247,754.80.
III.

Conclusion
Based on the foregoing, and based on the Court's Order

dated November 21, 2012 granting default judgment to the Plaintiff
on Plaintiff's breach of warranty and fraud claims, the Court will
enter judgment in Plaintiff's favor and against Defendant Hallowell
International,

LLC

in

the

amount

of

$878,997.95.

A

judgment

consistent with this Opinion will be entered.

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

Hon. Joseph H. Rodriguez

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