Filing 21

OPINION filed. Signed by Judge Anne E. Thompson on 9/11/2017. (km)

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NOT FOR PUBLICATION UNITED STATES DISTRICT COURT I DISTRICT OF NEW JERSEY RECEIVED SEP 11 2017 LM INSURANCE CORP., AT 8:30 WILLIAM T. WALSH Plaintiff, Civ. No. 16-06071 CLERK v. OPINION JAMALI DEVELOPERS, LLC, Defendant. THOMPSON, U.S.D.J. INTRODUCTION I This matter comes before the cob on a Motion for Default Judgment by Plaintiff LM Insurance Corporation ("Plaintiff') agmlst Defendant J amali Developers, LLC ("Defendant"). Defendant has not formally opposed thij motion. The Court has decided this motion based upon the written submissions of the parties plant to Local Civil Rule 78.1 (b). I BACKGROUND This case is a claim for payment bf insurance premiums for the value of workers · compensation and employer's liability lurance provided by Plaintiff to Defendant through the New Jersey Workers Compensation Plj administered by the New Jersey Compensation Rating . I and Inspection Bureau. (See Compl., EGF No. 1.) Defendant was successfully served on October 18, 2016 with an answer due NJvember 8, 2016. (ECF No. 3.) The Clerk of the Court . entered default against Defendant on Delember 28, 2016. Following discovery Plaintiff filed a Motion for Default Judgment on May 31, 2017. (ECF No. 16.) On June 5, 2017, Mr. Hussain Burhanpurwala, the sole member of Defendant Jamali Developers, LLC, (Compl. ~ 3) wrote a letter to Magistrate Judge Bongiovanni rLuesting an extension of time in order to hire defense 1 M counsel and prepare counter-calculations to Plaintiff's premium calculations. The Court approved this request on June 8, 2017. lLetter Order Resetting Deadlines, ECF No. 17.) In lieu of an opposition brief, Mr. BurhanpurwLa sent another letter to Judge Bongiovanni on July 24, 2017, refuting Plaintiff's calculations Jd providing Defendant's organizational chart. Plaintiff included this letter as an exhibit to its B~ef in Support of its Motion for Default Judgment on July 31, 2017. (ECF No. 18.) DISCUSSION I. Default Judgment A. Legal Standard Under Federal Rule of Civil Procedure 55, following the entry of default by the Clerk of the Court, default judgment may be en+ed when "a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend." Fed. R. Civ. P. 55(a). A party who has made a proper showing lder Rule 55 is not entitled to default judgment as of right; the entry of defauit is left to the ltrict court's discretion. Hritz v. Woma Corp., 732 F.2d · I 1178, 1180 (3d Cir. 1984); United State1 v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194-95 (3d Cir. 1984). "Default judgment is pLissible only if plaintiff's factual allegations establish a I right to the requested relief." Eastern Constr. & Elec., Inc. v. Universe Techs., Inc., 2011 WL 53185, at *3 (D.N.J. Jan. 6, 2011). j . The court is to consider three fa tors in deciding whether default judgment is appropriate: "(l) prejudice to the plaintiff if default ii denied, (2) whether the defendant appears to have a I litigable defense, and (3) whether defendant's delay is due to culpable conduct," taken willfully and in bad faith. Chamberlain v. Giam+pa, 210 F.3d 154, 164 (3d Cir. 2000). The Third Circuit has cautioned that default judgment is a sanction of last resort-cases are more 2 appropriately decided on their merits where practicable. See Hill v. Williamsport Police Dep 't, 69 F. App'x 49, 51 (3d Cir. 2003); HriJ. 732 F.2d at 1181. B. Analysis 1. Defendant's Appearances and Representation First, Plaintiff argues that it is jtitled to Default Judgment because Defendant has not filed any opposition to this case that th, Court can legally recognize. (Pl.' s Mot. for Default Judgment at 4-5, ECF No. 16.) The Third Circuit has unequivocally taken the position that, like corporations, Limited Liability CompJes ("LLCs" or "LLC"), including single-member LLCs, . I must be represented by licensed counsel when appearing in federal court. Doughterty v. Snyder, 496 F. App'x 71, 72 (3d Cir. 2012) (p, curiam) ("[E]ven single-member LLCs have a legal identity separate from their members."); In re 69 North Franklin Turnpike, LLC, 2017 WL I. 3263525, at *2 (3d Cir. Aug. 1, 2017) (finding district court did not err in dismissing notice of I appeal when defendant LLC wrongfulli continued to make representations before district court and Third Circuit pro se). Because a coworate defendant or LLC cannot stand before the court prose, failure to obtain counsel pursjt to a court order to do so is a failure to defend itself, thus I I warranting default judgment. Mendelsdhn, Drucker, & Assoc., P. C. v. Titan Atlas Mfr., Inc., 2013 WL 1842124, at *5 (E.D. Pa. MaJ 2, 2013) (citing Hoxworth v. Blinder, Robinson & Co., Inc., 980 F.2d 912, 918 (3d Cir. 1992)); see also Falato v. Fotografixusa, LLC, 2013 WL 387260, at *1 (D .N.J. July 25, 2013) (,anting default judgment proper where defendant LLC had no licensed counsel after magistrate! entered default for its failure to seek new counsel); BP Products N.A. Inc. v. Top Speed Gas, UC, 2008 WL 4724006, at *5--{) (D.N.J. Oct. 23, 2008) (granting default judgment against defjdant LLC after magistrate warned individual representative of LLC twice that defaulJ would result if not represented). 3 Here, Defendant has not made any official appearance before the Court. Its sole member, Mr. Burhanpurwala, has sent two lettJ to the Court on its behalf. Mr. Burhanpurwala's first I letter dated June 5, 2017 to Magistrate Judge Bongiovanni indicated his intent to seek defense counsel and present counter-calculatioi to Plaintiff's exhibits, in response to which Judge Bongiovanni extended the deadlines fJ Plaintiff's Motion for Default Judgment, noting that the extension "should afford Defendant jple time to retain Counsel and/or to resolve this motion." I (ECF No. 17.) This raised a presumption that Defendant would obtain counsel prior to any additional representations to the Court. Mr. Burhanpurwala then sent a second letter dated July 24, 2017 with his counter-arguments and calculations, as well as Defendant's organizational I chart. (Crump Deel. Support of Pl.'s Mot. Default J., Ex. A, ECF No. 18-3.) Neither letter was I presented by licensed counsel, as there is nothing in the record to indicate Mr. Burhanpurwala is a licensed attorney qualified to represjt his LLC in federal court. In light of these facts, these representations were inappropriately m1e pro se, and Plaintiff's motion is deemed unopposed. Respecting the Third Circuit's reticenJ towards default judgments, however, the Court will also I I weigh the other factors relevant to a default judgment analysis to determine whether it is warranted in the present case. 2. Default Judgment Falctors Because Defendant has not trulyl filed a responsive pleading, the Court will next apply each of the default judgment factors in turn. First, Plaintiff argues that denial of this motion will leave it without remedy. (Pl.' s Mot. for Default J. at 6.) Prejudice refers to i impairment of a plaintiff's ability to pursue its claim. Feliciano v. Reliant Tooling Co., 691 F.Qd 653, 657 (3d Cir. 1982). Although failure to file any I responsive pleadings may leave a plaintiff without recourse on its claims, United Comm., LLC v. 4 Hallowell Int'/, LLC, 2012 WL 5880295 (D.N.J. Nov. 21, 2012), that is not clearly the case here. Defendant has made some representati,ns to the Court. While not officially cognizable, they indicate Plaintiff's willingness to engage in dispute resolution. Denial of this motion may permit this case to reach disposition on the mlts, through which Plaintiff may still succeed and receive compensation for its alleged damages. Next, Defendant does not propose a meritorious defense. Whether defendant has a meritorious or litigable defense is consilered one of the most important factors and should be regarded as a dispositive threshold issJ. Nat'/ Specialty Insur. Co. v. Papa, 2013 WL 1952151, I at *2 (D.N.J. May 9, 2013); see also $5§,518.05 in U.S. Currency, 728 F.2d at 195 ("This is a critical issue because without a meritorilus defense [Defendant] could not win at trial. Therefore, there would be no point in setting aside re default judgment ...."). A meritorious defense is one that would constitute a complete defense at trial. $55,518.05 in U.S. Currency, 728 F.2d at I 195; Williams v. Zhou, 2015 WL 4940817, at *1 (D.N.J. Aug. 19, 2015). Here, Plaintiff argues that Defendant has failed to comply wiJ its policy requirements, provide an accounting, and pay the accurate insurance premiums for his workers compensation and employer liability insurance plan. (See Compl.) Mr. Burhanpurwala only asserts that Plaintiff made various errors. . . . I. . 1s . .. m1scaI cuI atmg its rates by meIud' certam cash payments m h' premrnm caI cuI atton and . mg improperly classifying certain employel. (Crump Deel. Support of Mot. Default J., Ex. A, ECF No. 18-3.) But Plaintiffbases each calJlation on New Jersey statutes found in the New Jersey I Workers Compensation and Employers Liability Insurance Manual created by the Compensation Rating and Inspection Bureau. (Pl.'s BJ at 7-9, ECF No. 18; Crump Deel. Support of Mot. Default J., Exs. B, C, ECF Nos. 18-4, 18l5.) Given Plaintiffs statutory support and extensive j calculations, Defendant fails to present defense likely to succeed on the merits at trial. 5 . . Finally, Plaintiff asserts that Defendant acted culpably in causing this delay. Culpable conduct refers to "actions taken willfull~ or in bad faith," Gross v. Stereo Component Sys., Inc., 700 F .2d 120, 124 (3d Cir. 1983), risinJ above the level of mere negligence, Sourcecorp, Inc., 412 F. App'x at 460. As noted above, ~laintiff's exhibits demonstrate repeated advice to obtain defense counsel (Kuller Deel. Support dfMot. Default J., Exs. B, C, ECF No. 18-1), and Mr. - I Burhanpurwala represented to the coJ that he intended to seek counsel-arguably the basis for his extension of time. Although the coL has not expressly directed Defendant to obtain counsel to justify default judgment alone, he hj willfully caused delay in this case by failing to do so. Defendant actively neglected to obtain lunsel, which is both relevant and persuasive in this analysis. On balance, the factors weigh in favor of default judgment for the Plaintiff. II. Damages While the Court need not acceptlthe plaintiff's allegations regarding damages as true, Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008), final judgment may be entered where damages are for a sum cehain, Fed. R. Civ. Pro. 55(b)(2). Even where the damages are uncertain, the Court can a1ard damages without a hearing where there is a specific basis for damages, Malik v. Hannah, 661 F. Supp. 2d 485, 493 (D.N.J. 2009), or "the amount claimed [is] capable of ascertainment frjm definite figures contained in the docwnentary evidence or in detailed affidavits,'' Bd. iTrustees ofOperating Eng 'r Local 825 Welfare Fund v. Robert Silagy Landscaping Inc., 2006 WL 3308578, at *4 (D.N.J. Nov. 13, 2006) (internal citations omitted). Plaintiff has clearly articulated a lwn certain for damages in the amount of $261, 294.00, representing Defendant's outstanding prrwn balance owed. (Pl.' s Mot. Default J. at 2, ECF No. 16; Crump Deel. Support of Entry of Default if 23, ECF No. 16-2.) Plaintiff provides 6 detailed rate sheets and calculations for each of Defendant's policies, providing the basis for its damages calculation. (Crump Deel., Ex. D, ECF No. 16-2.) Mt. Burhanpurwala asserts that Plaintiff miscalculated its rates by inclulg certain cash payments in his premium calculation I and improperly classifying certain employees. As the Court previously noted, Plaintiff's calculations are based on authoritative lovisions in the New Jersey Workers Compensation and Employers Liability Insurance Manual. (Pl.'s Br. at 7-9; Crump Deel., Exs. B, C, ECF Nos. 183, 18-4.) I I Plaintiff also requested "subseq~ent lawful interest" on its proposed award of damages, (Pl.'s Mot. Default J. at 2, ECF No. 16)l which it later clarified to be a request for interest from the date of the entry of judgment at the ltatutory rate under 28 U.S.C. § 1961(a) (ECF No. 20.). The statute specifies that "interest shall be calculated ... at a rate equal to the weekly average 1year constant maturity Treasury yield published by the Board of Governors of the Federal Reserve." 28 U.S.C. § 1961(a). The lent weekly average 1-year constant maturity Treasury yield is 1.24%. 1 The Court finds this lormation sufficiently reliable as a basis for an initial award of damages with post-judgment lierest at 1.24%. CONCLUSION For the reasons stated herein, Plaintiff's motion is granted. An appropriate order will follow. Date: ~ /11/11- 1 The Court bases its interest award on le weekly rate as of past Friday, September 1, 2017 pursuant to the Federal Reserve's daily/H.15 Rate Chart. Selected Interest Rates Daily-H.15, Board of Governors of the Federal Res,rve System, Federal.Reserve, https://www.federalreserve.gov/releases/Hl5/ (last visited Sep. 5, 2017). 7

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