ISPEC, INC. v. TEX R.L. INDUSTRIAL CO., LTD. et al
OPINION. Signed by Judge Madeline C. Arleo on 8/3/2015. (nr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
TEX R.L. INDUSTRIAL, INC., et al.,
Civil Action No. 12-4339
ARLEO, UNITED STATES DISTRICT JUDGE
This matter comes before the Court on Plaintiff ISPEC, Inc.’s (“Plaintiff”) Motion for
Default Judgment pursuant to Federal Rule of Civil Procedure 55(b)(2). For the reasons set forth
herein, the motion is GRANTED.
Plaintiff is a New Jersey corporation. Dkt. No. 30, Am. Compl. ¶ 4. Defendant Tex R.L.
Industrial Co., Ltd (“Tex R.L.”) is a Taiwanese corporation which designs, produces, and exports
packages for perfume and make-up products worldwide. Id. ¶ 26. Tex R.L. and Plaintiff signed
and executed a contract in New Jersey on April 21, 2009, which enabled Plaintiff to act as a sales
representative for Tex R.L.’s products. 1 Id. ¶¶ 24, 27. Plaintiff had twenty-eight customers of its
own before January 2009. Id. ¶ 28. As part of the contract, Tex R.L. agreed to “indefinitely and
permanently” pay Plaintiff 8% of the total purchase price of any purchase from Tex R.L. by
The contract, and other allegations concerning Tex R.L., also include other defendants which
have been settled out of this case (“Albea Defendants”). Because those defendants are no longer
involved, the Court does not discuss them now.
Plaintiff’s existing customers. Id. ¶ 29. Plaintiff and Tex R.L. agreed to different commission
rates (3% and 5%) for two special projects.
Id. ¶ 30.
Plaintiff received payment for its
commissions earned up to and including February 2012, but commissions following that date have
not been paid. Id. ¶ 33. On April 19, 2012, Plaintiff received a letter requesting termination of the
contract and Plaintiff and Tex R.L.’s sales relationship. Id. ¶ 34. Plaintiff has moved for and
obtained entry of default against Tex R.L. It now seeks default judgment.
STANDARD OF REVIEW
“The district court has the discretion to enter default judgment, although entry of default
judgments is disfavored as decisions on the merits are preferred.” Animal Sci. Prods., Inc. v. China
Nat’l Metals & Minerals Imp. & Exp. Corp., 596 F. Supp. 2d 842, 847 (D.N.J. 2008).
entering default judgment the court must: (1) determine it has jurisdiction both over the subject
matter and parties; (2) determine whether defendants have been properly served; (3) analyze the
Complaint to determine whether it sufficiently pleads a cause of action; and (4) determine whether
the plaintiff has proved damages. See Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532, 535-36
(D.N.J. 2008); Wilmington Savings Fund Soc., FSB v. Left Field Props., LLC, No. 10-4061, 2011
WL 2470672, at *1 (D.N.J. June 20, 2011). Although the facts pled in the Complaint are accepted
as true for the purpose of determining liability, the plaintiff must prove damages. See Comdyne
I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).
Additionally, prior to granting default judgment, the Court must make explicit factual
findings as to: (1) whether the party subject to the default has a meritorious defense; (2) the
prejudice suffered by the party seeking default judgment; and (3) the culpability of the party
subject to default. Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177
A. Jurisdiction & Service
The Court concludes it has both subject matter jurisdiction over this dispute and personal
jurisdiction over Tex R.L. First, the Court has subject matter jurisdiction under 28 U.S.C. §
1332(a)(2). See Ramada Worldwide Inc. v. Courtney Hotels USA, LLC, No. 11-896, 2012 WL
924385, at *3 (D.N.J. Mar. 19, 2012). Plaintiff has also provided the Court with proof of service
as to Tex R.L. After having the Clerk of the Court send letters rogatory to Taiwan requesting
international judicial assistance in service, Plaintiff then had the Clerk of the Court send mail via
Fed-Ex which required a signed receipt. Dkt. No. 87, Kim Cert. ¶¶ 1-2. This satisfies the service
requirements of Federal Rules of Civil Procedure 4(h) and 4(f)(2)(C)(ii), specifically, “unless
prohibited by the foreign country’s law by . . . using any form of mail that the clerk addresses and
sends to the individual and that requires a signed receipt . . . .” Plaintiff has provided a sworn
certification indicating that both the U.S. Department of State and the Taiwan Central Authority
indicated that service via mail with required signature is not prohibited in Taiwan. Dkt. No. 88,
Kim Aff. ¶ 4. Plaintiff has therefore satisfied the service requirements of the Federal Rules.
The Court concludes Plaintiff has pled at least a breach of contract claim against the Tex
R.L. Plaintiff has pled the existence of a contractual relationship, Dkt. No. 30, Am. Compl. ¶¶ 2627, that Tex R.L. breached the contract by failing to pay commissions as required, id. ¶ 41, and
resulting damages. See id. at 11-12.
Plaintiff has also pled violation of the New Jersey Sales Representatives’ Rights Act,
N.J.S.A. § 2A:61A-1 et. seq. The New Jersey Sales Representatives’ Rights Act requires that, for
“contracts[s] between a principal and a sales representative . . . , the commissions and other
compensation earned as a result of the representative relationship and unpaid shall become due
and payable within 30 days . . . .” N.J.S.A. § 2A:61A-2. Failure to pay a sales representative their
commission when due renders the principal “liable to the sales representative for all amounts due
the sales representative, exemplary damages in an amount three times the amount of commissions
owed to the sales representative and all attorney’s fees actually and reasonably incurred by the
sales representative in the action and court costs.” N.J.S.A. § 2A:61A-3.
Here, Plaintiff pled that it entered into a contract as a sales representative and is owed
$88,485.50 in commissions that went unpaid by Tex R.L., the principal. This is sufficient to plead
a violation of N.J.S.A. § 2A:61A-2.
C. Appropriateness of Default Judgment
Next, the Court must consider: (1) whether the party subject to the default has a meritorious
defense; (2) the prejudice suffered by the party seeking default judgment; and (3) the culpability
of the party subject to default. Doug Brady, 250 F.R.D. at 177. The Court concludes that in the
absence of any responsive pleading and based upon the facts alleged in the Complaint, Tex R.L.
does not have a meritorious defense. See Ramada, 2012 WL 924385, at *5. Second, the Court
finds that Plaintiff will suffer prejudice absent entry of default judgment as Plaintiff will have no
other means of obtaining relief. Finally, the Court finds Tex R.L. acted culpably as it has been
served with the Amended Complaint, is not an infant or otherwise incompetent, and is not presently
engaged in military service. See Super 8, 2014 WL 4388697, at *2; see also Nationwide Mut. Ins.
Co. v. Starlight Ballroom Dance Club, Inc., 175 F. App’x 519, 523 (3d Cir. 2006) (holding that a
defendant’s failure to respond to communications from the plaintiff and the court can constitute
D. Monetary Damages
Plaintiff first seeks $265,456.50 in unpaid commissions ($88,485.50 multiplied by three
pursuant to N.J.S.A. § 2A:61A-3(a)) under the sales contract. Plaintiff has provided sufficient
evidence of these damages through an affidavit from Plaintiff’s CEO and an invoice from Plaintiff
dated March 7, 2013. See Dkt. No. 89, Lee Aff. Ex B-1.
Plaintiff also seeks $974,495.20 in future lost profits. To prove these damages, Plaintiff
provides its commission profits from the last four years. See Dkt. No. 89-3, Lee Aff. Ex B-2.
Averaging these yields $97,449.52 per year, which Plaintiff multiplies by ten to account for the
future life of the contract. The Court finds that Plaintiff has provided sufficient evidence of these
Finally, Plaintiff seeks attorneys’ fees and costs.
Violations of New Jersey Sales
Representatives Act render the violator liable for attorneys’ fees and costs. N.J.S.A. § 2A:61A-3.
Plaintiff has provided the Court with sufficient proof of $14,245.06 in attorneys’ fees, Dkt. No.
89-3, Lee Aff. Ex B. But only $2,854.06 of the attorneys’ fees identified are facially attributable
to the action against Tex R.L., as opposed to the Albea Defendants. 2 Id. Ex. B-3. Plaintiff has
also proven $3,825 in costs attributable to the action against Tex R.L. Id. Thus, Plaintiff has
proven $6,679.06 of attorneys’ fees and costs.
Based upon the foregoing, judgment shall be entered against Tex R.L. for: (1) $265,456.50
in unpaid commissions; (2) $974,495.20 in future lost profits; and (3) $6,679.06 in attorneys’ fees
Plaintiff’s affidavits do not identify what portion of the fees and costs are attributable to Tex
R.L., as opposed to the Albea Defendants. The Court therefore only awards those fees and costs
which the exhibits clearly attribute only to Tex R.L. See id. Ex. B-3 ($1,954.06 in attorney’s fees
after Albea Defendants dismissed and $900 for “Motion for default judgment Tex RL”); id. Ex B4 ($3,825 of service costs).
For the reasons set forth above, Plaintiff’s motion for final judgment by default is
GRANTED. An appropriate order accompanies this opinion.
Date: August 3, 2015
/s/ Madeline Cox Arleo
Hon. Madeline Cox Arleo
UNITED STATES DISTRICT JUDGE
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