INTERSTATE REALTY MANAGEMENT COMPANY v. PF HOLDINGS, LLC.

Filing 10

MEMORANDUM OPINION. Signed by Chief Judge Jerome B. Simandle on 1/4/2017. (TH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

INTERSTATE REALTY MANAGEMENT
COMPANY,
Plaintiff,

HONORABLE JEROME B. SIMANDLE

Civil Action
No. 16-4095 (JBS/JS)

v.
PF HOLDINGS, LLC,

MEMORANDUM OPINION

Defendant.

SIMANDLE, Chief Judge:
This matter comes before the Court on Plaintiff Interstate
Realty Management Company’s (“IRM”) motion for default judgment.
Plaintiff brought this suit against Defendant PF Holdings, LLC,
after Defendants failed to pay monthly fees due under a real
estate management contract between the parties. Because
Defendant has not answered or otherwise responded to Plaintiff’s
Complaint, Plaintiff now seeks default judgment against it under
Fed. R. Civ. P. 55(b). For the reasons that follow, Plaintiff’s
unopposed motion for default judgment will be granted, and the
Court will enter a Default Judgment in favor of Plaintiff and
against Defendant in the amount of $316,841.70.
The Court finds as follows:
1.

Factual and Procedural Background. Plaintiff filed a

Complaint [Docket Item 1] on July 7, 2016, alleging that

Plaintiff and Defendant entered into an agreement by which IRM
would manage an apartment development for Defendant in Florida,
in exchange for a monthly fee, but that Defendant has not paid
the amount owed under the terms of the agreement. (Compl. ¶¶ 615.) As a result of these allegations, Plaintiffs seek to
recover, under the terms of the agreement, $311,773.03, plus
interest, costs, and attorney’s fees.
2.

The Complaint together with the summons was served

upon William Moffett, a Vice President of PF Holdings, on July
28, 2016 at 10 Jill Street, Newark, New Jersey. [See Docket Item
4.] Defendant filed no response to Plaintiff’s Complaint, and
the Clerk of Court accordingly entered default against Defendant
on September 9, 2016.1 Plaintiff’s motion for default judgment
followed. To date, Defendant has not filed a response.2 [See
Docket Item 7.]
3.

In support of the pending motion, Plaintiff filed an

affidavit from Sandy Cipollone, a Senior Vice President of IRM,
submitting copies of spreadsheets and invoices to PF Holdings of
the monthly fees owed under the agreement. [Docket Item 7-2.]

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The deadline to respond to Plaintiff’s Complaint was August 18,
2016.
2

The deadline to oppose Plaintiff’s motion for default judgment
was October 3, 2016.
2

The invoices show that Defendant owes IRT $311,663.11 in
management fees, payroll, health and dental insurance, data
processing, 401(k) matching, licensing fees, employment
screening, and other fees. IRT additionally seeks $4,322.25 in
accrued interest, $456.17 in costs related to the filing and
service of the Complaint, and $4,612.50 in attorney’s fees, for
a grand total of $321,054.03.
4.

Standard of Review. Federal Rule of Civil Procedure

55(b)(2) authorizes courts to enter a default judgment against a
properly served defendant who fails to a file a timely
responsive pleading. See Fed. R. Civ. P. 55(b)(2); see also
Chanel v. Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008)
(citing Anchorage Assoc. v. Virgin Is. Bd. of Tax Rev., 922 F.2d
168, 177 n.9 (3d Cir. 1990)). A party seeking default judgment
is not entitled to relief as a matter of right; the Court may
enter default judgment “only if the plaintiff’s factual
allegations establish the right to the requested relief.” Ramada
Worldwide Inc. v. Courtney Hotels USA, LLC, Case No. 11-896,
2012 WL 924385, at *3 (D.N.J. Mar. 19, 2012) (internal
quotations and citation omitted). Thus, before granting default
judgment, a court must determine: (1) whether the plaintiff
produced sufficient proof of valid service and evidence of
jurisdiction, (2) whether the unchallenged facts present a

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sufficient cause of action, and (3) whether the circumstances
otherwise render the entry of default judgment “proper.”
Teamsters Health & Welfare Fund of Phila. v. Dubin Paper Co.,
No. 11–7137, 2012 WL 3018062, at *2 (D.N.J. July 24, 2012)
(internal citations omitted). A court must accept as true every
“well-pled” factual allegation of the complaint, but no
presumption of truth applies to the plaintiff’s legal
conclusions or factual assertions concerning damages. Comdyne I.
Inc. v. Corbin, 908 F.2d 1149 (3d Cir. 1990); 10 C. Right, A.
Miller, & M. Kane, Federal Practice and Procedure (2d ed. 1983),
§ 2688, at 444. The Court addresses each element in turn.
5.

Subject Matter Jurisdiction. The Court begins by

noting that subject matter jurisdiction is proper under 28
U.S.C. § 1332. Plaintiff’s Affidavit in Further Support of
Motion to Enter Default Judgment [Docket Item 6] avers that IRT
is incorporated in and has its principal place of business in
New Jersey and that PF Holdings is incorporated in and has its
principal place of business in New York, and that the amount in
controversy exceeds $75,000.
6.

Evidence of Personal Jurisdiction and Proof of

Service. In addition, Plaintiff has produced sufficient evidence
of proof of service. According to the Certificate of Service
[Docket Item 4], PF Holding’s Vice President, William Moffett,

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was personally served with the summons and Complaint on July 28,
2016. The certification of service appended to the present
motion also reflects that Plaintiff served PF Holdings with a
copy of the default judgment submission. [Docket Item 7-4.] The
Court has personal jurisdiction over PF Holdings because the
summons and complaint were served upon an officer of the
corporation within the state. N.J.S.A. 4:4-4(a)(6).
7.

Legitimate Cause of Action. The Court readily finds

that Plaintiff has asserted a valid cause of action for breach
of contract.3 To make out a claim for breach of contract under
New Jersey law, a plaintiff must allege that (1) there is a
contract between the parties; (2) the contract was breached; (3)
the breach caused damages; and (4) the party stating the claim
performed its own contractual obligations. Frederico v. Home
Depot, 507 F.3d 188, 203 (3d Cir. 2007) (citing Video Pipeline,
Inc. v. Buena Vista Home Entertainment, Inc., 210 F. Supp. 2d
552, 561 (D.N.J. 2002)). Here, Plaintiff has alleged: (1) that
IRT and PF Holdings entered into a management agreement on
October 1, 2014 regarding an apartment development in Florida

3

The Complaint also asserts claims, in the alternative, for
breach of good faith and fair dealing, quantum meruit, unjust
enrichment, promissory estoppel, intentional misrepresentation,
and common law fraud. (See generally Compl.)
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(Compl. ¶¶ 6-9); (2) that IRT performed the management services
under the agreement (id. ¶¶ 11, 14 & 24); (3) that PF Holdings
has not compensated IRT under the terms of the management
agreement (id. ¶ 15); and (4) that IRT has suffered damages in
the form of the $311,773.03 that remains due and owing under the
terms of the agreement (id. ¶ 16). Therefore, Plaintiff has
sufficiently alleged a cause of action for breach of contract to
establish Defendant’s liability for the purposes of this default
judgment.
8.

Appropriateness of Default Judgment. The Court must

finally examine whether the entry of default judgment would be
proper, taking into consideration whether the party subject to
default has a meritorious defense, the prejudice suffered by the
party seeking default, and the culpability of the party subject
to default. Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 73 (3d
Cir. 1987).
9.

In this case, Defendant has failed to proffer any

defense, meritorious or otherwise, to Plaintiff’s claims, and
the Complaint itself reflects no fatal deficiency. See Hill v.
Williamsport Police Dept., 69 Fed. App'x 49, 52 (3d Cir. 2003)
(“Because the defendants had not yet filed an answer, the
District Court was unable to evaluate whether they had a
litigable defense, [rendering this] factor . . .

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inconclusive.”); Surdi v. Prudential Ins. Co. of Am., No. 08–
225, 2008 WL 4280081, at *2 (D.N.J. Sept. 8, 2008) (“The facts
as alleged in the Complaint provide no indication of a
meritorious defense.”).
10.

Moreover, as Plaintiff has no other means to recover

damages from Defendant, Plaintiff will be prejudiced in the
absence of default judgment. See Joe Hand Promotions, Inc. v.
Waldron, 2013 WL 1007398, at *4 (D.N.J. Mar. 13, 2013) (noting
prejudice to plaintiff “because it has no alternative means of
vindicating its claim against the defaulting parties.”); Gowan
v. Cont’l Airlines, Inc., No. 10–1858, 2012 WL 2838924, at *2
(D.N.J. July 9, 2012) (inability to “vindicate rights” absent a
default judgment constitutes prejudice).
11.

Lastly, the Court notes that Defendant was served with

the Complaint nearly six months ago, yet to date has never
responded to or defended against Plaintiff’s claims, nor even
entered an appearance in this case. Defendant may be presumed
culpable for their inaction. See Lee v. A to Z Trading LLC, No.
12-4624, 2014 WL 7339195, at *3 (D.N.J. Dec. 23, 2014) (finding
the defendant’s failure to respond despite awareness of the
litigation “due to culpable conduct”); Teamsters Health &
Welfare Fund, 2012 WL 3018062, at *4 (“Defendant’s failure to
answer demonstrates Defendant’s culpability in its default”);

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Slover v. Live Universe, Inc., No. 08-2645, 2009 WL 606133, at
*2 (D.N.J. Mar. 9, 2009) (Defendant is presumed culpable where
it has failed to answer, move, or otherwise respond). On
balance, these factors weigh in Plaintiffs’ favor, and the Court
will accordingly grant default judgment. See Joe Hand
Promotions, Inc., 2013 WL 1007398, at *4 (finding that factors
weigh in favor of default where there was no indication of a
cognizable defense to plaintiffs’ claims, plaintiff had no
alternative means of seeking damages, and defendants failed
entirely to respond).
12.

Damages. The Court turns now to the question of

damages. In considering the amount of damages, where the
plaintiff seeks damages in a sum certain, the Court may rely
upon detailed affidavits, without resorting to a hearing. Durant
v. Husband, 28 F.3d 12, 15 (3d Cir. 1994); Golia v. IBCS Group,
Inc., Case No. 14-2577, 2015 WL 1914652, at *4 (D.N.J. April 27,
2015). As stated above, IRT seeks $311,773.03 in damages as a
result of PF Holdings’ breach of the management agreement, and
has substantiated these claims with an affidavit from a senior
official of IRT and a voluminous number of invoices and
spreadsheets. [Docket Item 7-2 (“Cipollone Cert.”).] The Court
will accordingly award that amount in damages to Plaintiff.

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13.

Plaintiff also seeks interest on its damages at a rate

of 2.25% daily under N.J. Ct. R. 4:42-11. Plaintiff mis-cites
the rule, which provides for pre-judgment interest only in tort
cases. Interest in a contract case derives from the provision
for interest in the contract itself, and no such clause
providing for pre-judgment interest is in the record.
Accordingly, no pre-judgment interest will be awarded. Interest
on an unpaid federal judgment, however, will accrue in the
future pursuant to 28 U.S.C. § 1961 at the federal post-judgment
interest rate prevailing when the judgment was entered.
14.

Finally, Plaintiff seeks $456.17 in costs and

$4,612.50 in attorney’s fees. (Cipollone Cert. ¶¶ 5-6.) The
starting point for this Court's determination of reasonable
attorney's fees is the lodestar calculation, which is the
reasonable number of hours expended on the litigation multiplied
by a reasonable hourly rate. United Auto. Workers Local 259 Soc.
Sec. Dept. v. Metro Auto Ctr., 501 F.3d 283, 290 (3d Cir. 2007).
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.” Id. at 291 (quoting
Evans v. Port Auth., 273 F.3d 346, 361 (3d Cir. 2001)).
Moreover, “where the documentation of hours is inadequate, the

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district court may reduce the award accordingly.” Id. (quoting
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)).
15.

The Court has reviewed the four-page billing record

from Plaintiff’s counsel, Levine, Staller, Sklar, Chan & Brown,
P.A., containing individual entries memorializing the work spent
on this case, (see Ex. B to Cipollone Cert.), and

notes that it

contains sufficient detail to determine whether the fees and
costs are reasonable. See Teamsters Health & Welfare Fund, 2012
WL 3018062, at *5. The record reflects that attorneys spent
14.10 hours on research, client contact, drafting pleadings, and
filing the present motion for default judgment. Counsel charged
reasonable hourly rates between $215 and $325. In addition,
counsel accrued $456.17 in costs from the Complaint filing fee,
postage, and service on Defendant. Having carefully examined the
itemized invoice submitted, the Court is satisfied that the fees
and costs are well documented and do not appear to be
“excessive, redundant, or otherwise unnecessary,” and that 14.1
hours of work at the stated hourly rate is reasonable in light
of the nature of the case and the services rendered. Interfaith
Cmty Org. v. Honeywell Intern., Inc., 426 F.3d 694, 711 (3d Cir.
2005). Accordingly, the Court will award fees and costs in the
requested amount of $5,068.67.

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16.

For the reasons stated above, the Court will grant

Plaintiff’s motion for default judgment, and the Court will
enter Default Judgment against Defendant and in favor of
Plaintiffs in the amount of $316,841.70, consisting of
$311,773.03 in total damages, no pre-judgment interest, and
$5,068.67 in reasonable attorneys’ fees and litigation costs.
17.

An accompanying Order for Default Judgment will be

entered.

January 4, 2017
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

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