SIEGMEISTER v. BENFORD et al

Filing 13

OPINION. Signed by Judge John Michael Vazquez on 6/1/17. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

TODD SIEGMEISTER,
Plaint

Civil Action No. 15-07099
OPINION

V.

VASSAL BENFORD, LEON DAVIS t/a NEW
NATION VENTURES and RONALD M.
LEBOW, Esquire Attorney at law, State of
California, and Jane Doe and John Doe 1 to 5,
Defendants.

John Michael Vazguez, U.S.D.J.
I.

INTRODUCTION
This matter comes before the Court on pro se Plaintiff Todd Siegmeister’s (“Plaintiff’)

unopposed motion for default judgment against Defendants Vassal Benford; Leon Davis, trading
as New Nation Ventures; and Ronald M. Lebow (collectively “Defendants”) under Fed. R. Civ. P.
55(b). D.E. 12. The Court reviewed all submissions made in support of the motion, and considered
the motion without oral argument pursuant to L. Civ. R. 78.1(b). For the reasons that follow,
Plaintiffs motion is denied.

FACTS’ AND PROCEDURAL HISTORY

IL

Around April 2014, Plaintiff alleges that he entered into a transaction where he was to
purchase “a parcel of rough diamonds” from New Nation Ventures for $10,000,000. Compl. at 4,

¶ 3. Benford negotiated the tenns of the transaction on behalf of New Nation Ventures and
requested that Plaintiff “produce proof of financial capacity” to purchase the diamonds, which
Plaintiff provided, and Defendants accepted.2 Id.,

¶ 4-5. Additionally, Benford, Davis, and

Lebow told Plaintiff that as a condition precedent to purchasing the diamonds, Plaintiff must
deposit $50,000 into Lebow’s attorney trust account, which would be applied toward the full
purchase price. Id. at 5-6,

¶J 6, 11. On April 30, 2014, Plaintiff completed the transfer.

Id. at 6,

¶12.
In addition, on April 30, 2014, Plaintiff entered into a memorandum of understanding (the
“MOU”) with Benford, Davis, and New Nation Ventures. Id. at 5,

¶ 9. Lebow, as attorney for

Benford, Davis, and New Nation Ventures, prepared the MOU. Id. The MOU stated that “the
transaction was to begin in Los Angeles, no later than Thursday May 1, 2014,” and that if it was
not concluded within five business days, the deposited $50,000 was to be returned to Plaintiff. Id.
at 6,

¶ 13.
Plaintiff alleges that Defendants sent him emails leading him to believe that the diamonds

were located in Benford’s home and were to be sent to a “Brinks [s]ecurity facility located in Los
Angeles, California,” and maintained there by Benford. Id. at 6-7, ¶ 14. On May 1, 2014, Plaintiff
and his gemologist went to the Brinks security facility to inspect the diamonds only to discover

The facts of this matter derive from the Complaint, which the Court accepts as true for purposes
of this motion for default judgment. Teamsters Pension Fund ofPhila. & Vicinity v. Am. Helper,
Inc., No.11-624, 2011 WL 4729023, at *2 (D.N.J. Oct. 5,2011).
2

It is not clear what form of “proof of financial capacity” was provided.
2

that no such diamonds existed at the location. Id. at 7,

¶

15. Plaintiff alleges that to date, the

transaction has not taken place and no funds have been returned to him. Id. at 6,

¶ 13.

Plaintiff filed a Complaint alleging causes of action for (1) breach of contract, (2) breach
of implied contract, (3) fraudulent inducement, (4) fraud, and (5) unjust enrichment. Default was
entered against each Defendant. Plaintiff subsequently filed this motion for default judgment.
D.E. 12.
III. LAW AND ANALYSIS
A. Standard of Review

“Once a party has defaulted, the consequence is that ‘the factual allegations of the
complaint, except those relating to the amount of damages, will be taken as true.” Teamsters
Pension Fund ofPhila. & Vicinity v. Am. Helper, Inc., No.11-624, 2011 WL 4729023, at *2 (D.N.J.
Oct. 5, 2011) (quoting DIRECTV, Inc. v. Pepe, 431 f.3d 162, 165 n.6 (3d Cir.2005)). “The entry

of a default judgment is largely a matter of judicial discretion, although the Third Circuit has
emphasized that such ‘discretion is not without limits, however, and [has] repeatedly state{d] [its]
preference that cases be disposed of on the merits whenever practicable.”
Gordashevslcy, 558 F. Supp. 2d 532, 535 (D.N.J. 2008) (quoting Hritz

V.

Chanel, Inc. v.

Woma Corp., 732 F.2d

1178, 1181 (3dCir.1984)).

Prior to entering a default judgment, the court is required to: “(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.” Moroccanoil, Inc. v. JMG
Freight Grp. LLC, No. 14-5608, 2015 WL 6673839, at *1 (D.N.J. Oct. 30, 2015). Additionally,
the Court must consider the following three factors: “(1) prejudice to the plaintiff if default is

3

denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant’s
delay is due to culpable conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000);
see also Nationwide Mitt. Ins. Co. v. Starlight Ballroom Dance Clttb, Inc., 175 F. App’x 519, 522
(3d Cir. 2006).
B. Jurisdiction and Service

“Before entering a default judgment as to a party ‘that has not filed responsive pleadings,
the district court has an affirmative duty to look into its jurisdiction both over the subject matter
and the parties.” HICA Educ. Loan Corp. v. Surikov, No. 14-1045, 2015 WL 273656, at *2
(D.N.J. Jan.22, 2015) (quoting Ramada Worldwide, Inc. v. Benton Harbor Han Ohm, L.L.C., No.
08—3452, 2008 WL 2967067, at *9 (D.N.J. July 31, 2008)).
1. Subject Matter Jurisdiction

To establish diversity jurisdiction, pursuant to 28 U.S.C.

§ 1332(a), “the party asserting

jurisdiction must show that there is complete diversity of citizenship among the parties” as well as
an amount in controversy that exceeds the statutory threshold. Schnetler ex rel Schneller v. Crozer
Chester Med. Ctr., 387 Fed. App’x 289, 292 (3d

Cir. 2010). Here, Plaintiff states that he resides

in Lake Hopatcong, New Jersey as well as East Lagon, Ghana. Compi. at 1. Plaintiff alleges that
Lebow, Benford, Davis, and New Nation Ventures are all residents of California. Id. at 2. Plaintiff
claims damages in an amount greater than the statutory threshold. Id. at 12; Roy v. Ramsey Moving
Sys., No. 15-3330, 2016 WL 1163932, at *2 (D.N.J. Mar. 23, 2016) (stating that “[i]n diversity
cases, courts generally rely on the plaintiffs allegations of the amount in controversy contained in
the complaint” and that “[tJhe sum claimed by the plaintiff controls if the claim is apparently made
in good faith” (internal quotation marks omitted)).

4

Accordingly, the Court has diversity

jurisdiction because Plaintiff and Defendants are citizens of different states and the amount in
controversy exceeds the statutory threshold.
ii. Personal Jurisdiction

“[A] federal district court may assert personal jurisdiction over a nonresident of the state
in which the court sits to the extent authorized by the law of that state.” Marten v. Godwin, 499
F.3d 290, 296 (3d Cir. 2007). In New Jersey, “courts may exercise jurisdiction over a non-resident
defendant to the uttermost limits permitted by the United States Constitution.” Nicastro v.
McIntyre Mach. Am., Ltd., 201 N.J. 48, 72 (2010) (internal quotation marks omitted), rev’d on
other grottnds sub nom., I McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011). “Accordingly,

in determining whether personal jurisdiction exists, we ask whether, under the Due Process Clause,
the defendant has certain minimum contacts with [New Jersey] such that the maintenance of the
suit does not offend traditional notions of fair play and substantial justice.” 0 ‘Connor v. Sandy
Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007) (internal quotation marks omitted).
Personal jurisdiction may be established by means of general jurisdiction or specific
jurisdiction over a defendant. Goodyear Dim/op Tires Operations, S.A. v. Brown, 131 S. Ct. 2846,
2851 (2011) (noting that “opinions in the wake of the pathrnarking International Shoe decision
have differentiated between general or all-purpose jurisdiction, and specific or case-linked
jurisdiction”). “F or an individual, the paradigm forum for the exercise of general jurisdiction is
the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation
is fairly regarded as at home.” Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014). “With respect
to a corporation, the place of incorporation and principal place of business are paradigm bases for
general jurisdiction.” Id. (internal quotation marks omitted). Here, Plaintiff does not allege facts
to support a finding of general jurisdiction in New Jersey over any Defendants. Lewbow, Benford,

5

and Davis are not New Jersey residents and New Nations Ventures is neither incorporated in New
Jersey nor does it have its principal place of business there. Therefore, the question turns on
whether New Jersey has specific jurisdiction over Defendants.
Specific jurisdiction requires that the defendant “has purposefully directed his activities at
residents of the forum and the litigation results from alleged injuries that arise out of or relate to
those activities.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal citations

and quotation marks omitted). A court’s exercise of personal jurisdiction “requires some act by
which the defendant purposefully avails itself of the privilege of conducting activities within the
forum State, thus invoking the benefits and protections of its laws.” J McIntyre Mach., Ltd. v.
Nicastro, 564 U.S. 873, 880 (2011) (emphasis added) (internal quotation marks omitted).
Additionally, due process requires that “maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice.” Helicopteros Nacionales de Colombia, S.A. v. Halt,

466 U.S. 408, 414 (1984) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)); see
also O’Connor, 496 F.3d at 316 (discussing three-step process in determining personal
jurisdiction). Importantly, “the defendant’s conduct and connection with the forum State [must
be] such that he should reasonably anticipate being haled into court there.”

World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).

“In determining whether personal jurisdiction can be established in connection with a
breach of contract claim, the court ‘must consider the totality of the circumstances, including the
location and character of the contract negotiations. the terms of the contract, and the parties’ actual
*7 (D.N.J. Mar.
course of dealing.” Knierim v. Siemens Corp., No. 06-4935, 2008 WL 906244, at
31, 2008) (quoting Remick v. Manfredy, 23$ f.3d 248, 256 (3d Cir. 2001)). “A contract may
provide a basis for the exercise of personal jurisdiction that meets due process standards, but a

6

contract alone does not ‘automatically establish sufficient minimum contacts in the other party’s
home forum[.]” Grand Entm ‘t Grp., Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 482 (3d Cir.
1993) (quoting Bttrger King, 471 U.S. at 478); Mellon Bank (F.) PSFS, N.A. v. Di Veronica Bros.,

983 f.2d 551, 557 (3d Cir. 1993) (“Contracting with a resident of the forum state does not alone
justify the exercise of personal jurisdiction over a non-resident defendant[.]”). “[I]nformational
communications in furtherance of [a contract between a resident and a nonresident] does not
establish the purposeful activity necessary for a valid assertion of personal jurisdiction over tthe
nonresident defendant].” Vetrotex Certainteed Corp. v. ConsoL fiber Glass Prod. Co., 75 F.3d
147, 152 (3d Cir. 1996) (quoting Sitnbelt Corp. v. Noble, Denton & Assoc., Inc., 5 F.3d 28, 32 (3d

Cir. 1993)).
In Vetrotex, the Third Circuit found that there was no personal jurisdiction when, aside
from two contracts between the parties, “[t]he only contacts that [the defendant] had with [the
forum state] consisted of some telephone calls and letters written to [the plaintiff] in [the forum
state].” Id. at 152. The Court distinguished the facts from other matters where the defendant had
substantial contacts with the forum state, beyond the contract at issue. The Third Circuit explained
that
this is not a case where the defendant solicited the contract or
initiated the business relationship leading up to the contract. Nor is
this a case where the defendant sent any payments to the plaintiff in
the forum state, or where the defendant engaged in extensive post
sale contacts with the plaintiff in the forum state.
Id. at 152-53 (internal citations omitted).

Here, the facts alleged do not support a finding of personal jurisdiction over Defendants
for the breach of contract claim. Plaintiff alleges that Defendants described the diamonds for sale
“in a series of correspondence, telephone calls, emails, and a contract of sale.” Compi. at 4,

7

¶ 3.

On April 30, 2014, Plaintiff entered into an MOU3 with Benford, Davis, and New Nation Ventures
agreeing to complete the sale and exchange of diamonds. Next, Plaintiff claims that Defendants
required him to wire S50,000 to Lebow’s trust account. Plaintiff alleges that on May 1, 2014, he
traveled to California to inspect the diamonds and complete the transaction, but that the diamonds
were not present at the storage facility and the transaction never took place.
These facts are similar to Vetrotex where there was no personal jurisdiction when the
plaintiff alleged that, aside from the contract at issue, the defendant’s only contacts with the forum
state consisted of “some telephone calls and letters written to [the plaintiff] in [the forum stateJ.”
Vetrotex, 75 F.3d at 152. Here, Defendants’ only contacts with New Jersey were the MOU,

correspondence, telephone calls, and emails. These contacts, without more, are insufficient to hale
Defendants into court in New Jersey. See Team first Consulting, LLC

V.

Hangliter, No. 07-311,

2007 WL 1302440, at *6 (D.N.J. Apr. 27, 2007). (“Because nothing in the Complaint indicates
that anything other than communications related to the alleged contract were sent to and from New
Jersey, the court finds that it does not have personal jurisdiction over Plaintiffs’ contract claims.”).
Additionally, none of the distinguishing factors identified in Vetrotex are present here.
Plaintiff does not allege that Defendants “solicited the contract or initiated the business relationship
leading up to the contract.” Vetrotex, 75 f.3d at 152. Defendants did not send money to Plaintiff
in New Jersey or engage “in extensive post-sale contacts” with Plaintiff in New Jersey. Id.
Notably, the only exchange of money was when Plaintiff sent $50,000 to Defendants in California.
Additionally, it was Plaintiff who traveled to California where the diamonds were allegedly being
stored and where the transaction was to take place. In short, Defendants have not “purposely

Although it is not entirely clear from the Complaint, it appears that the MOU is the same
document as the “contract of sale” between the parties.
8

availed” themselves of the privilege of doing business in New Jersey to establish the “minimum
contacts” necessary for specific jurisdiction.
Plaintiff may amend the Complaint to add more specific facts as to why the Court may
have personal jurisdiction over Defendants. F or instance, Plaintiff may provide more details
regarding the frequency and nature of the communications with Defendants regarding the
formation of the MOU. See Grand Entrn

‘t

Grp. v. Star Media Sales, Inc., 988 F.2d 476, 482 (3d

Cir. 1993) (holding that the court had personal jurisdiction over a breach-of-contract case in which
the defendants had not physically entered the forum, but had sent at least twelve telexes into the
forum and initiated twenty telephone calls with the plaintiffs in the forum regarding contract
negotiations); Lebet v. Everglades Marina, Inc., 115 N.J. 317, 324-25 (1989) (finding personal
jurisdiction in New Jersey where “defendant allegedly telephoned the buyer in New Jersey to iron
out the details of the contract, mailed the contract to the buyer in New Jersey for signing in New
Jersey, and received payment from the plaintiff, who defendant knew was a New Jersey resident”).
Additionally, if true, Plaintiff may describe whether any of the contract’s performance was to take
place in New Jersey. See Burke v. Quartey, 969 F. Supp. 921, 925—26 (D.N.J. 1997). Finally, if
accurate, Plaintiff could provide more detail regarding whether he executed the MOU in New
Jersey.4 See Rernick v. Manfredy, 238 F.3d 248, 256 (3d Cir. 2001) (finding it a factor supporting
jurisdiction where the defendant’s “solicitation eventually resulted in the fee agreement between
[the plaintiff] and [the defendant], which [the plaintiff] signed in, and [the defendant] signed and
returned to, [the forum state]”).

The Complaint merely states that Plaintiff and Defendants “entered into” the MOU without
providing any details as to location.
9

For the same reasons discussed above, the Court does not have personal jurisdiction over
the remaining four counts in the Complaint. The counts alleging breach of implied contract,
fraudulent inducement, fraud, and unjust enrichment are premised on the same underlying factual
allegations as the breach of contract claim. Accordingly, the Court also does not have personal
jurisdiction over Defendants as to these counts. See Blystra

Fiber Tech Gip., Inc., No. 00-4593,

2005 WL 2807361, at *4 (D.N.J. Oct. 25, 2005) (stating that when “most of the claims arise out
of the same set of facts and are tightly interwoven, an individualized discussion of each claim is
unnecessary, as the jurisdictional analysis is the same”).
iii. Sufficiency of Proof of Service

In a motion for default judgment, the Court must determine whether the defendants were
properly served. Teamsters Pension Fund of Phi/a., 2011 WL 4729023, at *2 (citing Gold Kist,
Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 19 (3d Cir.1985)). Lebow, Benford, and Davis, all
individuals, may be served by:
(1) following state law for serving a summons in an action brought in courts
of general jurisdiction in the state where the district court is located or
where service is made; or
(2) doing any of the following:
(A) delivering a copy of the summons and of the complaint to the
individual personally;
(B) leaving a copy of each at the individual’s dwelling or usual
place of abode with someone of suitable age and discretion who
resides there; or
(C) delivering a copy of each to an agent authorized by appointment
or by law to receive service of process.
Fed. R. Civ. P. 4(e). New Nation Ventures, a commercial entity, maybe served in the same manner
prescribed in Rule 4(e)(1) or “by delivering a copy of the summons and of the complaint to an
10

officer, a managing or general agent, or any other agent authorized by appointment or by law to
receive service of process.” Id. at 4(h)(l)(B).
Here, service was improper on all Defendants. The affidavits of service indicate that each
Defendant was served by leaving a copy of the Summons and Complaint with Lebow’s assistant
at Lebow’s place ofbusiness. Therefore, as to Benford, Davis, and New Nation Ventures, the only
way this could be effective service would be if Lebow were an agent authorized to accept service
on their behalf. However, service on one’s attorney is proper only when the client expressly or
impliedly authorizes the attorney to accept service on his or her behalf. Mandale v. Des Moines
Tria Tower, LLC, No. 08-0488 8, 2009 WL 2412596, at *23 (E.D. Pa. Aug. 5, 2009). “The mere
relationship between a defendant and his attorney does not, in itself, convey authority to accept
service.” United States v. Ziegler Bolt & Parts Co., 111 F.3d 878, 881 (Fed. Cir. 1997). In this
case, there are no facts in the Complaint or affidavits of service indicating that Benford, Davis,
and/or New NationVentures authorized Lebow (or his assistant for that matter) to accept service
on their behalf. Therefore, service was improper as to these Defendants.
As to Lebow, service was also improper. “Courts have held that service on receptionists
or secretaries at defendants’ places of business generally is insufficient under Rule 4(e) unless the
defendants expressly appointed those employees to receive process.”

McDonald v. SEIU

Healthcare Pa., No. 1:13-2555, 2014 WL 4672493, at *7 (M.D. Pa. Sept. 18, 2014); see also
Allison v. Utah Cty. Corp., 335 F. $upp. 2d 1310, 1314 (D. Utah 2004) (finding that service of
process on the defendant’s receptionist was invalid when the defendant “had not authorized anyone
to receive service on her behalf’); Amnay v. Del Labs, 117 F. $upp. 2d 283, 286 (E.D.N.Y. 2000)
(concluding service was improper under Rule 4(e)(2) when summons and complaint was left with
defendant’s secretary); Lamont V. Haig, 539 F. Supp. 552, 557-58 (D.S.D. 1982) (finding service

11

invalid when service was made on defendants’ secretaries and defendants filed affidavits stating
that they had not appointed secretaries to receive service on their behalves). Here, Lebow’s
assistant was served with the Summons and Complaint at his place of business. There is no
indication that Lebow authorized his assistant to accept service on his behalf.5 Therefore, Lebow
was not properly served.
C. Sufficiency of Causes of Action
L Breach of Contract

“To establish a breach of contract claim, a plaintiff has the burden to show that the parties
entered into a valid contract, that the defendant failed to perform his obligations under the contract
and that the plaintiff sustained damages as a result.” Murphy v. Implicito, 392 N.J. Super. 245,
265 (App. Div. 2007). Here, Plaintiff adequately pleaded the elements of breach of contract.
Plaintiff pleaded that he and Defendants entered into a written agreement where (1) Plaintiff was
to pay Defendants $10,000,000 with $50,000 paid up front, (2) Defendants were to provide
Plaintiff with “a parcel of rough and some cut diamonds,” (3) Plaintiff paid the initial $50,000, (4)
Defendants did not deliver the diamonds, and (5) Plaintiff sustained damages as a result.
Therefore, Plaintiff plausibly states a claim in Count One.
ii. Breach of Implied Contract and Unjust Enrichment

Plaintiff alleges that Defendants breached an implied contract by breaching the provisions
of the MOU when they failed to sell the rough diamond parcel to Plaintiff. These allegations do
not state a claim for breach of an implied contract. As explained by the New Jersey Supreme
Court, “[t]he true implied contract consists of an obligation arising from mutual agreement and

Although the affidavits of service state that Lebow’s assistant was “authorized to accept,” this
conclusory allegation is insufficient for the Court to conclude that service was proper.
12

intent to promise but where the agreement and promise have not been expressed in words.” St.
Paul Fire & Marine Ins. Co. v. Indem. Ins. Co. ofN. Am., 32 N.J. 17, 23 (1960) (internal quotation

marks omitted); see also Dtff’ v. Charles Schwab & Co., 123 F. Supp. 2d 802, 816-17 (D.N.J.
2000) (“The only difference between an implied-in-fact contract and an express contract is that the
parties’ agreement has been manifested by conduct instead of words.”). Here, Plaintiff does not
allege any facts indicating that he and Defendants entered into a mutual agreement that was not
expressed in words. Instead, the crux of Plaintiffs breach of implied contract claim appears to be
premised on a breach of the MOU’s express terms. Therefore, Count Two does not plausibly state
a cause of action.
iii. Fraudulent Inducement and Fraud

A claim for fraudulent inducement must meet the heightened pleading standard of Federal
Rule of Civil Procedure 9(b). Kare Distribution, Inc. v Jam Labels & Cards LLC, No. 09-00969,

2009 WL 3297555, at *4 (D.N.J. Oct. 9, 2009). A Plaintiff states a claim for fraudulent inducement
by pleading the following five elements: “(1) a material representation of a presently existing or
past fact; (2) made with knowledge of its falsity; and (3) with the intention that the other party rely
thereon; (4) resulting in reliance by that party; (5) to his detriment.” RNC

Sys., Inc. v. Modern

Tech. Grp., Inc., 861 F. Supp. 2d436, 451 (D.N.J. 2012). Here, Plaintiff adequately pleads all five
elements. Plaintiff alleges that on April 30, 2014, Defendants induced him to wire transfer $50,000
to Lebow’s bank account by knowingly misrepresenting to Plaintiff that the transfer would be
applied toward the full payment for the diamonds he was to buy from Defendants. Plaintiff relied
on this representation to his detriment by making the transfer and not receiving any benefit in
exchange. These facts plausibly state a claim for fraudulent inducement.

13

The elements of common law fraud are nearly the same as fraudulent inducement. See
Allstate New Jersey Ins. Co. v. Lajara, 222 N.J. 129, 147 (2015) (“The elements of common-law
fraud are (1) a material misrepresentation of a presently existing or past fact; (2) knowledge or
belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable
reliance thereon by the other person; and (5) resulting damages.”). Therefore, for the same reasons
discussed above, Plaintiff also adequately states a claim for common law fraud.
iv. Unjust Enrichment

“Under New Jersey law, a claim under the quasi-contractual theory of unjust enrichment
has two essential elements: ‘(1) that the defendant has received a benefit from the plaintiff, and (2)
that the retention of the benefit by the defendant is inequitable.” Canadian Nat. Ry. v. Vertis,
Inc., 811 F. Supp. 2d 1028, 1034 (D.N.J. 2011) (quoting Wanaque Borottgh Sewerage Auth. v.
West Milford. 144 N.J. 564, 575 (1996)). “Quasi-contract liability will not be imposed when a

valid, umescinded contract governs the rights of the parties.” Diffy, 123 F. Supp. 2d at 814. Here,
Plaintiff alleges that “Defendants have been unjustly enriched by their failure to abide by the terms
and provisions of the [MOU].” Defendants’ alleged breach of the MOU may not serve as the basis
for Plaintiffs unjust enrichment claim because he asserts breach of contract.6 Therefore, Count
Five does not plausibly state a claim.

6

The Court notes that Plaintiff may plead alternative theories of liability, but he may not premise
his unjust enrichment claim on the breach of an express contract. See Fatly V. Hotlihan ‘s
Restaurants, Inc., No. 12-0025, 2012 WL 6652754, at *3 (D.N.J. Dec. 20, 2012) (“[A] plaintiff
can plead alternative theories of recovery, one based upon a valid contract, another based upon
quasi-contract that does not depend on there being an express contract.” (internal quotation marks
omitted)). Thus, if Plaintiffs breach of contract claim were defective, he maybe able to proceed
under an unjust enrichment theory.
14

D. Damages

Plaintiff seeks damages for the $50,000 he deposited into Lebow’s account, lost profits in
the amount of $10,000,000, costs of suit, and attorneys’ fees (although he is proceeding pro se).
“On a motion for default judgment, a court does not accept as conceded allegations pertaining to
the amount of damages.” Carolee, LLCv. efashion Sols., LLC, No. 12-02630, 2013 WL 5574594,
at *4 (D.N.J. Oct. 9, 2013). “The district court must instead conduct an inquiry in order to ascertain
the amount of damages with reasonable certainty.” Belmonte v. Spitzer, No. 09-4715, 2010 WL
2195651, at *1 (D.N.J. May 27, 2010) (quoting Credit Lyonnais Secs. (USA), Inc. v. Alcantara,
183 F.3d 151, 155 (2d Cir. 1999)); see also Malik v. Hannah, 661 f.Supp.2d 485, 490 (D.N.J.
2009) (plaintiff seeking default judgment “must still offer some proof of damages” before court
can decide whether or not to enter default judgment).
Here, Plaintiff offers no proof of damages other than the allegations in the Complaint.
Plaintiff has not presented the Court with proof of the $50,000 wire transfer. There is no evidence
presented to support Plaintiffs conclusion that he would have made $10,000,000 in profit from
the diamond transaction. Additionally, Plaintiff has not provided the Court with the MOU or any
of the underlying communications that took place with Defendants regarding the diamond
transaction. Therefore, Plaintiff has not set forth any evidence to support his claim for damages.

15

IV.

CONCLUSION

For the reasons set forth above. Plaintiffs motion for default judgment is denied without
prejudice. Within forty-five days of this Opinion, Plaintiff may file, if he chooses, an amended
complaint addressing the deficiencies identified herein. An appropriate Order accompanies this
Opinion.

Dated: June 1,2017

Johi Michael Vazqj, LS.D.J.

16