Dealer Specialties International, Inc. v. Car Data 24/7, Inc. et al

Filing 20

ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (Doc. 19 ). Signed by Judge Timothy S. Black on 8/4/2016. (mr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
DEALER SPECIALTIES
INTERNATIONAL, INC.,

Case No. 1:16-cv-499
Judge Timothy S. Black

Plaintiff,
vs.
CAR DATA 24/7, INC., et al.,
Defendants.
ORDER GRANTING PLAINTIFF’S
MOTION FOR DEFAULT JUDGMENT (Doc. 19)
This civil action is before the Court on Plaintiff’s motion for default judgment.
(Doc. 19). Defendants did not respond.
I.

PROCEDURAL HISTORY

Plaintiff 1 filed its complaint on April 27, 2016. (Doc. 1). Defendants Car Data
24/7, Inc., 2 Gary Lindsey, and Sherry Lindsey3 were served with a copy of the summons
and complaint on May 7, 2016. (Docs. 9-11). Pursuant to Federal Rule of Civil
Procedure 12(a)(1)(A), Defendants were required to file and serve their answers no later
than May 31, 2016. To date, no responsive pleadings have been filed or served.
Accordingly, Plaintiff filed applications to enter default (Docs. 12-14), and on June 2,
1

Plaintiff is a corporation organized and existing under the laws of the state of Ohio with its
principal place of business in Monroe, Ohio. (Doc. 1 at ¶ 4).

2

Defendant Car Data 24/7, Inc., is a corporation organized and existing under the laws of the
state of Florida with its principal place of business in Pompano Beach, Florida. (Doc. 1 at ¶ 5).
3

Defendants Gary and Sherry Lindsey are residents and citizens of Brevard County, Florida
and are the owners of Car Data 24/7. (Doc. 1 at ¶ 6).
2

2016, the Clerk properly entered default (Docs. 15-17). Subsequently, Plaintiff filed the
instant motion for default judgment. (Doc. 19).
II.

FACTUAL BACKGROUND

The parties entered into a written franchise agreement (“Franchise Agreement”)
which requires resolution of disputes by arbitration. (Doc. 1, Ex. A). Plaintiff initiated
an arbitration proceeding against Defendants before the American Arbitration
Association (“AAA”). (Doc. 1 at 2). Plaintiff and its parent corporation, Dealer
Specialties, Inc., also sued Defendants in this Court for injunctive relief, which relief is
exempt from the Franchise Agreement's arbitration clause. Dealer Specialties, Inc. v.
Car Data 24/7, Inc., Case No. 1:15-cv-170 (“Federal Lawsuit”). Defendants alleged a
counterclaim nearly identical to the claims raised in arbitration. (Doc. 1 at 2). This
Court referred Defendants’ claims to arbitration because the Franchise Agreement
expressly states that “[i]f a question shall arise as to whether a dispute is governed by
this clause, the determination of whether this clause applies to the disputed issue shall
be determined by [the] Arbitrator in accordance with the rules of the AAA.” (Case No.
1:15-cv-170, Doc. 27).
The arbitrator heard the dispute and rendered an award (“Award”) on April
12, 2016. (Id.) The Award ordered Defendants Car Data 24/7 and Gary Lindsey to
pay Plaintiff $1,224,315.77 in damages, $112,000.00 in attorney’s fees, and $22,573.47
in arbitration fees and expenses. (Doc. 1, Ex. B at ¶ 4). The Award granted Plaintiff
the total sum of $1,358,889.24. (Id.) The arbitrator denied Plaintiff’s claim against
Defendant Sherry Lindsey and denied Defendants’ counterclaim. (Id. at ¶ 2).
3

To date, Defendants Car Data 24/7 and Gary Lindsey have not paid any
damages. (Doc. 1 at 3). Plaintiff timely petitioned the Court for confirmation of the
Award. (Id.) No application to vacate, modify, or contest the Award had been made.
(Id.)
III.

STANDARD OF REVIEW

Applications for default judgment are governed by Fed. R. Civ. P. 55(b)(2).
Following the clerk’s entry of default pursuant to Fed. R. Civ. P. 55(a) and the party’s
application for default under Rule 55(b), “the complaint’s factual allegations regarding
liability are taken as true, while allegations regarding the amount of damages must be
proven.” Morisaki v. Davenport, Allen & Malone, Inc., No. 2:09cv298, 2010 U.S. Dist.
LEXIS 86241, at *1 (E.D. Cal. Aug. 23, 2010) (citing Dundee Cement Co. v. Howard
Pipe & Concrete Products, 722 F.2d 1319, 1323 (7th Cir. 1983)).
While liability may be shown by well-pleaded allegations, this Court is required to
“conduct an inquiry in order to ascertain the amount of damages with reasonable
certainty.” Osbeck v. Golfside Auto Sales, Inc., No. 07-14004, 2010 U.S. Dist. LEXIS
62027, at *5 (E.D. Mich. June. 23, 2010). To do so, the civil rules “require that the party
moving for a default judgment must present some evidence of its damages.” Mill’s
Pride, L.P. v. W.D. Miller Enter., No. 2:07cv990, 2010 U.S. Dist. LEXIS 36756, at *1
(S.D. Ohio Mar. 12, 2010).
IV.

ANALYSIS

Defendants having defaulted, the factual allegations in the complaint, except those
related to the amount of damages, are deemed true. Antoine v. Atlas Turner, Inc., 66 F.3d
4

105, 110 (6th Cir. 1995). To ascertain an uncertain sum of damages, Rule 55(b)(2)
“allows but does not require the district court to conduct an evidentiary hearing.”
Vesligaj v. Peterson, 331 F. App’x 351, 354-55 (6th Cir. 2009). An evidentiary hearing
is not required if the Court can determine the amount of damages by computation from
the record before it. HICA Educ. Loan Corp. v. Jones, No. 4:12cv962, 2012 U.S. Dist.
LEXIS 116166, at *1 (N.D. Ohio Aug. 16, 2012).
Under 9 U.S.C. § 9, an arbitration award must be confirmed by the court where the
award is not vacated, modified, or corrected. Allegra Network, LLC v. Horvath Co., No.
12-12683, 2012 U.S. Dist. LEXIS 171642, at *2 (E.D. Mich. Dec. 4, 2012).
Accordingly, the Court hereby confirms the arbitrator’s April 12, 2016 award. (Doc. 1,
Ex. B). Specifically, Plaintiff is entitled to damages against Defendants Car Data 24/7,
Inc. and Gary Lindsey, 4 jointly and severally, in the amount of $1,358,889.24, plus
interest. The Court has the authority to award interest pursuant to Ohio Revised Code §
1343.03(A). “[Plaintiff] is entitled to interest at the rate per annum determined pursuant
to section 5703.47 of the Revised Code.” (Id.). 5

4

The arbitration award specifically denied Plaintiff’s claim against Defendant Sherry Lindsey.
(Doc. 1, Ex. B at ¶ 2). While entry of default against all Defendants was proper because they
failed to answer, the Court declines to award damages against Defendant Sherry Lindsey because
an award is not supported by the record.
5

The language of Ohio Revised Code § 1343.03 will change on September 8, 2016. The only
substantive effect of the new language involves providing notice regarding interest rates.
5

V.

CONCLUSION

For these reasons, Plaintiff’s motion for default judgment (Doc. 19) is
GRANTED. The Arbitration Award is hereby confirmed, and the Clerk shall enter
Judgment in favor of Plaintiff and against Defendants Car Data 24/7, Inc. and Gary
Lindsey, jointly and severally, in the amount of $1,358,889.24, plus interest.
Upon entry of such judgment by the Clerk, this civil action is TERMINATED
on the docket of this Court.
IT IS SO ORDERED.

Date: 8/4/16

s/ Timothy S. Black
Timothy S. Black
United States District Judge

6