HOWARD JOHNSON INTERNATIONAL, INC. v. EBUEHI et al

Filing 53

OPINION. Signed by Judge Claire C. Cecchi on 5/29/14. (DD, )

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

HOWARD JOHNSON TERNATIONAL,
INC..
Plaintiff,

Civil Action No.: 1 1-cv-1346

OPINION

V.

FINNIAN EBUEHI and
ELIZABETH EBUEHI,
Defendants.

CECCHI, District Judge.
This matter comes before the Court on Plaintiffs motion for default judgment against
Defendants (ECF No. 51). The Court decides this matter without oral argument pursuant to Rule
78 of the Federal Rules of Civil Procedure. For the reasons set forth below, the Court grants
Plaintiffs motion.
I.

BACKGROUND
Although Defendants originally participated in this action by answering the complaint

(ECF No. 4). they became unresponsive and ceased to defend. As a result, Judge Dickson entered
an order striking their answer and directing the court to enter default under Rule 55(a). (ECF No.
49). Plaintiff then tiled the instant motion for Default judgment under Rule 55(b), which
Defendants have not opposed.
The following facts, taken from the complaint. are deemed admitted by Defendant due to
its default. DIRECTV Inc. v.Pee 431 F.3d 162, 165 n.6 (3d Cir. 2005) (citing Comdyne I, Inc.

v. Corbin. 908 F.3d 1142, 1149 (3d Cir. 1990)). Non-party Viva Vista Ventures, Inc. entered into
a franchise agreement with Plaintiff dated June 6, 2008, and a connectivity agreement with
Plaintiff dated June 10, 2008. (Compi. Ex. A. Ex. B). Defendants are co-owners of Viva Vista, and
provided Plaintiff with a guarantee that if Viva Vista defaulted upon its obligations they would
perform its obligations. (Compi. ¶J 18-19, Ex. A

-

Schedule B. Ex. C). Viva Vista stopped

operating the facility as a Howard Johnson facility on April 1, 2009 and Plaintiff sent Viva Vista
a termination letter pursuant to Section 11.2(2) of the franchise agreement on April 15, 2009.
(Compi. ¶J 21-22, Ex. D). This termination triggered certain obligations by Viva Vista, including
liquidated damages under both agreements, payment of any past due recurring fees, and attorney’s
fees. (Compl. ¶J23-35, Ex. A

§ 7, 12.1, 17.4, Ex. B § 12(c)).

Plaintiff seeks payment of these obligations from Defendants, due to the Guarantee.
(Compi.
II.

¶ 35).

DISCUSSION
A.

Plaintiff Is Entitled To Default

Rule 55 authorizes a district court to enter a default judgment against a defendant who has
been properly served and has failed to answer or respond to the pleadings. Obtaining a default
judgment is a two-step process. First, when a party has failed to plead or otherwise defend. the
clerk must enter that party’s default. Fed. R. Civ, P. 55(a). Once the clerk enters default, a plaintiff
may move for a default ludguient. Fed R. Civ. P. 55(b). Here. the clerk has entered default, and so
the Court will address Plaintiffs motion on the merits.
In order to award a default judgment. a district court must make explicit findings regarding
the following factors: (1) whether the plaintiff would suffer prejudice if the default judgment were
denied, (2) whether the defendant has a meritorious defense, and (3) whether the defendants own
2

culpable conduct caused his delay. Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000));
Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987) (Emasco includes a fourth factor,
“the effectiveness of alternative sanctions.”). In making these findings, Plaintiff’s factual
allegations in the complaint will be taken as true, except for those relating to the amount of
damages. DIRECTV, Inc. v, Pepe, 431 F.3d 162, 165 n.6 (3d Cir. 2005) (citing Comdyne I, Inc.
v, Corbin, 908 F.3d 1142, 1149 (3d Cir. 1990)). “Default judgment is inappropriate, even where
defendants have failed to appear, unless the plaintiff has provided well pleaded facts sufficient to
establish a claim.” Days Inns Worldwide, Inc. v. Mayu & Roshan, LLC, No. 06-cv- 1581, 2007
WL 1674485, at *4 (D.N.J. June 8, 2007).
The Complaint clearly states a cause of action for breach of contract. In order to prove its
breach of contract claims, Plaintiff must prove (1) a valid contract; (2) defendant’s failure to
perform; and (3) damages. Sheet Metal Workers Intl Ass’n Local Union No. 27, AFL-CIO v. E.P.
Donnelly, Inc., 737 F.3d 879, 900 (3d Cir. 2013). The relevant contracts are before this Court, and
the uncontested facts in the Complaint demonstrate that neither Viva Vista nor Defendants have
performed the obligations required by the contracts.
With respect to the Emcasco factors, the Court finds that Plaintiff is harmed by not
receiving payment, and absent default Plaintiff will have no other means of vindicating its claims
against Defendants. Accordingly, Plaintiff will suffer prejudice without default. With respect to
the merits of any defenses, although Defendant’s stricken answer sets forth ten defenses, these
defenses are barebones and provide no factual detail for the Court to determine their merit.
Finally, the record of this case indicates that the clerk’s default was entered against Defendants
over six months ago, yet Defendants have not sought to lift default or otherwise defend against
this motion for default judgment. Accordingly, in light of these factors, the court finds the entry of
3

Default Judgment appropriate.
B.

Damages

All that remains is the issue of damages. Upon motion, the Court clerk may enter default

judgment if the damages are for a sum certain, Fed. R. Civ. P. 55(b)(l). A claim for damages is
not for a sum certain unless the amount the plaintiff seeks can be calculated without resorting to
extrinsic evidence. Trucking Emp. of N.J. Welfare Fund. Inc. v. Moskowitz N otor Transp.. Inc..
No. 05-cv-5605, 2007 WL 608436, *3 (D.N.J. Feb. 23, 2007) (quoting KPS, 318 F.3d at 21). Such
situations include “money judgments, negotiable instruments, or similar actions where the
damages sought can be determined without resort to extrinsic proof.”

If the damages are not

for a sum certain, the Court must determine damages by conducting a factual inquiry through
evidentiary hearings, detailed affidavits, or documentary evidence. Fed. R. Civ. P. 55(b)(2); Bds.
of Trs. of Operating Eng’rs Local 825 Welfare Fund v. Robert Silagy Landscaping Inc., 06-cv1795. 2006 WL 3308578, at *4 (D.N.J. Nov. 13, 2006) (citing KPS Assocs. Inc. v. Designs by

FMC, Inc., 318 F.3d 1, 20 (1st Cir. 2001)).
The Court proceeds under Fed. R. Civ. P. 55(b)(2), since Plaintiff relies upon extrinsic
evidence regarding its accounts. Having considered the assessment of reasonable costs and
attorney’s fees provided by Plaintiffs counsel, the Court concludes that Plaintiff should be
awarded $8,723.10 in attorney’s fees, and SL,772.08 in costs pursuant to the franchise agreement
and the guarantee. (Couch Dccl.

¶,

13-15), Having considered the damage assessment and

calculations of Ms. Fenimore. the Court concludes (1) that Plaintiff should be awarded $50.070.77
19; Ex. E);

inclusive of interest under the franchise agreements and guarantee (Fenimore Dccl,,

¶

(2) that Plaintiff should be awarded S276.000 for the liquidated damages pursuant to

§ 12.1 of the

franchise agreement and guarantee (Fenimore Dccl.
4

¶

26); (3) that Plaintiff should be awarded

S3.929.21 under section 12(c) of the connectivity aeernent and the guarantee (Fenimore Deci.
27); and (4) that Plaintiff should be awarded S229.439. 10 in interest under

agreement and the guarantee (Fenimore Deci.
lIE

¶

§ 7.3 of the franchise

¶ 29).

CONCLUSION

For the reasons stated above, Plaintiffs motion for default judgment is GRANTED and
default judgment will be entered against Defendants.

DATED:
CLAIRE C. CECCHI, U.S.D.J.