Curves International, Inc. v. Cleveland et al

Filing 15

MEMORANDUM-DECISION & ORDER that pltf's 13 Motion for Default Judgment is denied without prejudice. Signed by Judge Norman A. Mordue on 1/17/2013. (see)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
gggggggggggggggggggggggggggggggggggggggggggggggggggggggg

Curves International, Inc.,
Plaintiff,
-v-

5:11-CV-426 (NAM/ATB)

Nancy S. Cleveland,
Defendant.
N
gggggggggggggggggggggggggggggggggggggggggggggggggggggggg

APPEARANCES:

A

Chronakis, Siachos LLC
Peter G. Siachos, Esq., of counsel
Philip C. Chronakis, Esq., of counsel
Suite 304
50 Harrison Street
Hoboken, New Jersey 07030
Attorneys for Plaintiff

Hon. Norman A. Mordue, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
After obtaining a Clerk’s Entry of Default (Dkt. No. 7), plaintiff moved for default
judgment against Nancy S. Cleveland and NV Fitness (Dkt. No. 8). This Court issued an order
(Dkt. No. 11) denying the motion without prejudice on the ground that the factual allegations of
M

the complaint were insufficient to support the legal conclusion that defendants were liable on
plaintiff’s claim. The Court stated:
A party’s default is deemed to constitute an admission of all well-pleaded
allegations. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir.
1981). It is for the Court, however, to determine whether such allegations
support the legal conclusion that a defaulting defendant is liable on the
plaintiff’s claim. See id. In the instant action, the complaint, verified by Jeff
Burchfield, Curves’ Assistant General Counsel, does not set forth facts from
which the Court can conclude that defendants abandoned the franchise
agreement as defined in section 18A thereof or were otherwise in breach. The

complaint merely alleges in paragraph 30: “On September 22, 2010, Curves
sent [defendant Nancy S.] Cleveland correspondence ... acknowledging the
termination of Cleveland’s interests and rights under the Franchise Agreement
as a result of certain violations of the Franchise Agreement, including but not
limited to the abandonment of the franchise.” Absent factual allegations
supporting the conclusion that Curves had a proper legal basis to terminate
defendants’ interests and rights under the agreement, the Court cannot
properly hold that defendants are liable on Curves’ claims, nor can the Court
calculate the amount of money damages, if any, to which Curves is entitled.
The Court denied the motion for default judgment without prejudice. Subsequently, plaintiff
N

voluntarily dismissed the complaint against NV Fitness (Dkt. No. 12).
Plaintiff now renews its motion for default judgment (Dkt. No. 13). Plaintiff has filed a
certificate of service on Nancy S. Cleveland (Dkt. No. 14); she has not responded.
On its renewed motion, plaintiff wholly fails to comply with the Court’s direction that it
present factual allegations that would enable the Court to reach the legal conclusion that plaintiff

A

properly terminated the franchise agreement by way of the September 22, 2010 letter. Where, as
here, a defendant defaults in pleading, the Court treats all well-pleaded allegations in the
complaint as true. It is for the Court to decide, however, “‘whether the unchallenged facts
constitute a legitimate cause of action, since a party in default does not admit conclusions of
law.’” Jemine v. Dennis, 2012 WL 4482769, *3 (E.D.N.Y. Sept. 28, 2012) (quoting Leider v.
Ralfe, 2004 WL 1773330, *7 (S.D.N.Y. Jul. 30, 2004)); accord Au Bon Pain, 653 F.2d at 65

M

(stating that, although the Court must accept as true all of the factual allegations of the complaint,
it “need not agree that the alleged facts constitute a valid cause of action”). In the instant case,
the only fact pleaded in the complaint regarding defendant’s pre-termination violation of the
Franchise Agreement is that “Curves sent Cleveland correspondence (‘the September 22, 2010
Letter’) acknowledging the termination of [her] interests and rights under the Franchise

-2-

Agreement as a result of certain violations of the Franchise Agreement, including but not limited
to the abandonment of the franchise.” The factual allegation that plaintiff sent such a letter is
insufficient to enable the Court to conclude that plaintiff had a legal basis for sending such a
letter, or that defendant in fact abandoned or otherwise violated the franchise. Plaintiff has not
supplemented its application with additional facts as required to make out a cognizable cause of
action. Thus, the Court cannot properly hold that defendants are liable on Curves’ claims, nor can
N

the Court determine whether and to what extent plaintiff sustained damages proximately caused
by defendant’s wrongful conduct. The motion (Dkt. No. 13) for default judgment is denied.
The Court gives plaintiff one more opportunity to make a proper motion; thus, the denial
is without prejudice. The Court does not reach the question of damages or attorneys fees.
It is therefore

A

ORDERED that plaintiff’s motion (Dkt. No. 13) for a default judgment is denied without
prejudice.
IT IS SO ORDERED.
Date: January 17, 2013
Syracuse, New York

M

-3-