Walter S. Johnson Building Company, Inc. v. Baggage or Container Automation, Inc. et al
Filing
19
DECISION AND ORDER granting 18 Motion to Strike, directing Clerk of Court to enter default judgment. Clerk of Court to close case. Signed by Hon. Richard J. Arcara on 10/21/2011. (JMB)
UNITED STATES DISTRICT COURT
W ESTERN DISTRICT OF NEW YORK
W ALTER S. JOHNSON BUILDING
COMPANY, INC.,
Plaintiff,
DECISION AND ORDER
09-CV-1083A
v.
LAW RENCE MAJEW SKI and
SHANNON MAJEW SKI,
Defendants.
On November 12, 2009, plaintiff W alter S. Johnson Building Company, Inc.
filed a complaint against defendants Baggage or Container Automation, Inc.,
Lawrence Majewski, and Shannon Majewski in New York State Supreme Court,
Niagara County. Plaintiff accused defendants of breach of contract, among other
allegations, and sought damages of $495,736 plus interest and reasonable
attorney fees. On December 21, 2009, defendants removed the case to this
Court, claiming diversity jurisdiction under 28 U.S.C. § 1332. W hen defendants
answered the complaint, the Court referred the case to Magistrate Judge H.
Kenneth Schroeder, Jr., and Magistrate Judge Schroeder issued a case
management order to guide discovery.
On March 26, 2010, counsel for defendants filed a motion to withdraw from
the case and submitted a supporting affidavit filed under seal. On March 29,
2010, Magistrate Judge Schroeder issued an order granting the request to
withdraw (Dkt. No. 13). In that order, which was mailed to defendants’ last known
address, Magistrate Judge Schroeder gave defendants 60 days to retain new
counsel or—with respect to the individual defendants—to affirm that they would
proceed pro se. Magistrate Judge Schroeder cautioned defendants that failure to
comply with the order would lead to a recommendation that this Court enter
default judgment against them.
Since Magistrate Judge Schroeder issued his order, defendants have not
retained new counsel, have not announced that they will proceed pro se, and
generally have taken no further actions in this case. To the extent that
defendants are proceeding pro se, the docket reflects that they have not complied
with Local Civil Rule 5.2(d) requiring them to keep the Court apprised at all times
of their current mailing address. A docket entry dated April 6, 2010 indicates that
a copy of Magistrate Judge Schroeder’s order was sent to defendants’ last known
mailing address but returned as undeliverable with no forwarding address.
After 16 months of inactivity, the Court issued an order directing plaintiff to
provide an update about the status of the case. (See Dkt. No. 15.) Specifically,
the Court directed plaintiff to advise whether defendants could be located,
whether they were sufficiently aware of the current status of the case, and
whether default proceedings should commence. On August 26, 2011, plaintiff
filed an update regarding the status of the case. Plaintiff advised that defendants
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had not contacted it since the withdrawal of counsel in March 2010. Plaintiff
advised further that the corporate defendant filed for Chapter 7 bankruptcy
protection in the United States Bankruptcy Court for the District of Rhode Island
on September 20, 2010. As of the filing of the status report, no activity had
occurred in that bankruptcy case since June 24, 2011. Given the prior warning in
Magistrate Judge Schroeder’s order that failure to comply would lead to a
recommendation of default judgment, plaintiff suggested that the Court allow it to
move forward with default judgment proceedings. On August 29, 2011, the Court
issued an order (Dkt. No. 17) terminating the corporate defendant pursuant to 11
U.S.C. § 362(a) and directing plaintiff to commence default proceedings against
the individual defendants within 30 days.
On October 12, 2011, plaintiff filed a motion to strike the answer as to the
individual defendants, to direct the Clerk of the Court to file an entry of default,
and to enter a default judgment in the amount of $495,736 plus interest. “W hen a
party against whom a judgment for affirmative relief is sought has failed to plead
or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk
must enter the party’s default.” Fed. R. Civ. P. 55(a) (emphasis added). “W e
have embraced a broad understanding of the phrase ‘otherwise defend.’” City of
N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 129 (2d Cir. 2011). Among
other circumstances, failure to obey a court order to obtain counsel to allow a
case to proceed can constitute a failure to defend. Cf. Shapiro, Bernstein & Co.
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v. Cont’l Record Co., 386 F.2d 426, 427 (2d Cir. 1967) (“[W ]e note that for eight
months prior to the motion and for well over a year prior to the decision below,
defendant was under an order of the district court to appoint counsel so that this
case could proceed to trial. W ithout question, such cavalier disregard for a court
order is a failure, under Rule 55(a), to ‘otherwise defend as provided by these
rules.’”); see also Rodriguez v. Almighty Cleaning, Inc., 784 F. Supp. 2d 114,
123–24 (E.D.N.Y. 2011) (granting default judgment where “both the corporate
and individual Defendants ignored this Court’s order to seek substitute counsel by
a given date and subsequently did not respond to the Court’s Order to Show
Cause. Furthermore, Defendants’ counsel withdrew in part due to the clients’
failure to communicate regarding this case. This repeated conduct shows a
willful and deliberate disregard for this Court’s orders, which militates in favor of a
default judgment.”) (citations omitted). Here, the individual defendants have
made apparent through their long inactivity in this case that they no longer wish to
pursue any defenses to plaintiff’s allegations. Also, the individual defendants
have been on notice about the consequences of failing to obtain new counsel and
to resume a defense of this case, as Magistrate Judge Schroeder ordered.
Leaving the case open indefinitely at this point would serve no purpose. The
Court accordingly strikes the individual defendants’ answer and directs the Clerk
of the Court to file an entry of default.
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Next, the Court will consider the request for default judgment. “Federal
Rule of Civil Procedure 55 is the basic procedure to be followed when there is a
default in the course of litigation. And it tracks the ancient common law axiom
that a default is an admission of all well-pleaded allegations against the defaulting
party.” Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241, 246
(2d Cir. 2004) (citation omitted). Because the Court has stricken the individual
defendants’ answer, all allegations in the complaint are now deemed admitted.
Nonetheless, “[w]hile a party’s default is deemed to constitute a concession of all
well pleaded allegations of liability, it is not considered an admission of
damages.” Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155,
158 (2d Cir. 1992) (citations omitted). Under Fed. R. Civ. P. 55(b)(2), the Court
may conduct a hearing to determine damages but is not required to do so if
plaintiff has provided sufficient documentation of the damages claimed in the
complaint. See Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir.
1989) (affirming a default judgment and holding that “it was not necessary for the
District Court to hold a hearing, as long as it ensured that there was a basis for
the damages specified in a default judgment”). Here, plaintiff has submitted with
the pending motion documentary evidence of the $495,736 sought in the
complaint. (See generally Dkt. No. 18-5.) The documentation consists of copies
of the checks that plaintiff paid under the contract in question that added up to
$495,736. W ith this information and the contract that was entered into the docket
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previously, the Court finds that plaintiff has justified the amount claimed in the
complaint and that a hearing would not elicit any more useful information. The
Court accordingly grants the motion for default judgment.
CONCLUSION
For all of the foregoing reasons, the Court grants plaintiff’s motion (Dkt. No.
18). The answer is hereby stricken as to individual defendants Lawrence
Majewski and Shannon Majewski. The Clerk of the Court shall file an entry of
default accordingly. The Clerk of the Court thereafter shall enter default judgment
against individual defendants Lawrence Majewski and Shannon Majewski in the
amount of $582,287.94, representing the claimed damages of $495,736 plus prejudgment interest running from November 12, 2009 at 9% simple interest,
pursuant to N.Y. CPLR 5004.1 Plaintiff also is awarded post-judgment interest
pursuant to 28 U.S.C. § 1961(a).
SO ORDERED.
s/ Richard J. Arcara
HONORABLE RICHARD J. ARCARA
UNITED STATES DISTRICT JUDGE
DATED: October 21, 2011
1
By the Court’s calculation, 708 days elapsed between the filing of the
complaint on November 12, 2009 and the date of entry of this Decision and
Order. See Matusick v. Erie County Water Auth., 774 F. Supp. 2d 514, 529–30
(W .D.N.Y. 2011) (Arcara, J.) (calculating pre-judgment interest by daily period).
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