Texas State Aquarium v. Fishman Chemical of North Carolina, LLC et al

Filing 71

ORDER granting 66 MOTION for Default Judgment against Asiamerica Enterprise, Inc., 65 MOTION for Default Judgment against Asiamerica Enterprise, Inc. (Signed by Judge Hilda G Tagle) Parties notified.(mserpa, 2)

United States District Court
Southern District of Texas

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
TEXAS STATE AQUARIUM,

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Plaintiff,
VS.
FISHMAN CHEMICAL OF NORTH
CAROLINA, LLC, et al,
Defendants.

ENTERED
March 31, 2017
David J. Bradley, Clerk

CIVIL NO. 2:15-CV-214

ORDER
BE IT REMEMBERED that on March 31, 2017 the Court GRANTED
Plaintiff Texas State Aquarium’s Motion for Default Judgment against Asiamerica
Enterprise, Inc., Dkt. No. 65; and GRANTED Third Party Plaintiff Fishman
Chemical of North Carolina, LLC’s Motion for Default Judgment against
Asiamerica Enterprise, Inc., Dkt. No. 66.
I.

Relevant Background
On May 14, 2015 Plaintiff Texas State Aquarium Association D/B/A Texas

State Aquarium (“TSA”) filed a complaint against Defendants Fishman Chemical of
North Carolina, L.L.C. (“Fishman Chemical”), David A. Fishman (“D. Fishman”),
and Michael Fishman (“M. Fishman”) (collectively “Defendants”). Compl., Dkt. No.
1. TSA filed its first amended complaint on May 18, 2015, alleging, inter alia, a
breach of contract claim against Fishman Chemical. First Am. Compl., Dkt. No. 4.
TSA alleged that on April 8, 2015 it purchased 1 kilogram of trichlorfon, a chemical
used to treat parasites in water systems, from Fishman Chemical, and subsequently
received a package labeled as 1 kilogram of tricholorfon. Id., ¶ 3.6. TSA alleged that
after administering chemicals from this package to its 240,000-gallon seawater
system, the system immediately experienced a 98% mortality rate, resulting in the
almost immediate loss of 389 specimens. Id., ¶¶ 3.2, 3.10. TSA further alleged that
the death of these specimens resulted from Fishman Chemical’s provision to TSA, in
violation of the parties’ contract, “a product that was not trichlorofon,” but instead
the highly toxic chemical hydroquinone. Id., ¶ 4.4. TSA filed a motion for summary
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judgment on its breach of contract claim against Fishman Chemical on July 22,
2016. Dkt. No. 49.
On December 16, 2015, with leave of the Court, TSA filed its third amended
complaint adding Defendants A-FAM, LLC d/b/a National Fish Pharmaceuticals,
Asiaamerica Enterprise, Inc. d/b/a 2A Pharmachem USA (“Asiamerica”), and AA
Tech Solution, Inc.. Third Am. Compl., Dkt. No. 32. In this complaint TSA alleged,
among other things, a breach of contract claim against Fishman Chemical
essentially identical to the contract claim raised in TSA’s initial filing. See Dkts. No.
1 and 32. Fishman Chemical filed an answer to this complaint on December 28,
2015. Dkt. No. 28. Meanwhile, on December 22, 2015, with leave of the Court,
Fishman Chemical filed a third party complaint against Asiamerica, alleging the
company “is liable for all of Plaintiff’s claims against Defendant [TSA]” on the basis
that “the chemical it sold to Defendant,” which was “subsequently sold to TSA,” was
“not trichlorfon as represented, but was hydroquinone.” Third Party Compl., Dkt.
No. 27 ¶¶ 7, 9. Asiamerica, unrepresented by counsel, responded to this complaint
in letter form on April 11, 2016. See Dkt. No. 38. TSA then filed a motion for default
judgment against Asiamerica on September 6, 2016. Dkt. No. 56.
In a September 13, 2016 Order, the Court denied TSA’s motion for summary
judgment against Fishman Chemical, on the basis that it had failed to substantiate
damages resulting from Fishman Chemical’s breach of contract. Dkt. No. 57. In this
same Order the Court also struck TSA’s motion for default judgment against
Asiamerica, on the basis that TSA had failed to service proper notice of its motion
on Asiamerica and filed its motion out of time. Id. On September 22, 2016, TSA and
Fishman Chemical filed an unopposed motion and stipulation to enter final
judgment between these two parties, attaching affidavit and other evidence from
TSA attesting to its damages as a result of Fishman Chemical’s breach of contract.
Dkt. No. 63. On this same date, the Court heard argument from TSA and Fishman
Chemical on their joint motion in a hearing, and approved their stipulated final
judgment, ordering, among other relief, “that plaintiff, TSA, recover the sum of
$993,311.44 and its court costs from defendant Fishman Chemical.” Dkt. No. 64 at
1. In this hearing, the Court also granted leave for TSA and Fishman Chemical to
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file dispositive motions as to third-party defendant Asiamerica. Asiamerica did not
appear at this hearing.
On September 23, 2016, TSA filed a Motion for Default Judgment against
Asiamerica. Dkt. No. 65. On October 17, 2016, Fishman Chemical followed suit.
Dkt. No. 66. Asiamerica’s deadlines to respond to these motions lapsed on October
14, 2016 and November 7, 2016, respectively, and the company has yet to file any
response to either motion. On November 16, 2016, Asiamerica filed an Involuntary
Petition under Chapter 7 of the United States Bankruptcy Code, and this case was
automatically stayed pursuant to 11 U.S.C. § 362. See Dkt. No. 68. This stay was
lifted on February 10, 2017. See Dkt. No. 70. As Asiamerica’s deadlines to respond
to TSA and Fishman Chemical’s motions for default judgment lapsed before
Asiamerica entered Chapter 7 proceedings, the Court ordered that it would not
extend any deadlines or reschedule any trial settings prior to its resolution of these
pending motions. See Dkt. No. 70.
II.

Legal Standard
Federal Rule of Civil Procedure 55 authorizes a court to enter a default

judgment when a defendant fails to appear in an action after service of process.
Fed. R. Civ. P. 55(b)(2). Nonetheless, a plaintiff is not entitled to default judgment
as of right. Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001). Instead, the court must
consider the pleadings and find sufficient basis therein. Nishimatsu Constr. Co. v.
Hous. Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). A defendant “admits the
plaintiff’s well-pleaded allegations of fact.” Id. That is, “[u]nlike questions of actual
damage, which must be proved in a default situation, conduct on which liability is
based may be taken as true as a consequence of the default.” J & J Sports Prods.,
Inc. v. Gamez, No. 7:12-CV-333, 2013 WL 1790129, at *1 (S.D. Tex. Apr. 26, 2013)
(quoting Frame v. S–H, Inc., 967 F.2d 194, 205 (5th Cir. 1992) (citations omitted)).
III.

Analysis
a. TSA’s Motion for Default Judgment against Asiamerica
In its Motion for Default Judgment, TSA states that pursuant to Federal

Rule of Civil Procedure 12, Asiamerica was required to file a responsive pleading or
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otherwise defend the action against it. Dkt. No. 65 at 3. Asiamerica did file a
response to TSA’s third amended complaint adding Asiamerica as a defendant, but
in letter format and unrepresented by counsel. See Dkt. No. 38. TSA’s motion for
default argues that because this communication was not an “appropriate federal
court answer” and because Asiamerica has not appeared before the Court with
licensed counsel, Asiamerica has “failed to properly appear.” Dkt. No. 65 at 3. TSA
further states that Asiamerica is “not in the military service.” Id. Finally, TSA
states that it sent a copy of its motion by certified mail to Asiamerica, in compliance
with Local Rule 5.5. Id. Finally, TSA requests a default judgment against
Asiamerica under Federal Rule of Civil Procedure 55(a). Id.
TSA alleges it is entitled to relief against Asiamerica because Asiamerica
“manufactured, designed, tested, and/or distributed” a chemical distributed to
Fishman Chemical, which then became the “producing and proximate cause of the
death of fish and mammals owned and cared by [sic] TSA.” Id. TSA requests that
the Court enter default judgment against Asiamerica awarding “unliquidated
damages in the amount of $993,311.44.” Dkt. No. 65 at 4. Its allegations and
calculation of damages are supported by affidavit and other evidence that were
reviewed by the Court in its September 22, 2016 hearing.
The Court finds that TSA has demonstrated it is entitled to default judgment
against Asiamerica, and GRANTS its instant motion, Dkt. No. 65.
b. Fishman Chemical’s Motion for Default Judgment against
Asiamerica
In its Motion for Default Judgment, Fishman Chemical argues that default
judgment is appropriate against Asiamerica by detailing the same facts and
arguments explicated in TSA’s motion. See Dkt. No. 66. Fishman Chemical states
that it sent a copy of its motion by certified mail to Asiamerica, in compliance with
Local Rule 5.5. Id. at 4. Finally, TSA requests a default judgment against
Asiamerica under Federal Rule of Civil Procedure 55(a). Id. at 3. Fishman Chemical
alleges it is entitled to relief against Asiamerica because Asiamerica “manufactured,
designed, tested, and/or distributed” a chemical and provided it to Fishman
Chemical, “thereby causing damages at the Texas State Aquarium.” Id.
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Fishman Chemical requests that the Court enter default judgment against
Asiamerica in the amount of “$993,311.44 in actual damages, court costs,
$83,787.50 in attorneys’ fees, and post-judgment interest at the rate of .61%.” Dkt.
No. 66 at 4. Its allegations and calculation of damages are supported by affidavit
and other evidence. The Court finds that Fishman Chemical has demonstrated it is
entitled to default judgment against Asiamerica, and GRANTS its instant motion,
Dkt. No. 66.
IV.

Analysis

For the foregoing reasons, the Court:


GRANTS TSA’s motion for default judgment against Asiamerica, Dkt.
No. 65;



GRANTS Fishman Chemical’s motion for default judgment against
Asiamerica, Dkt. No. 66;



ORDERS that a default judgment be entered against Defendant
Asiamerica as to Plaintiff TSA;



ORDERS that a default judgment be entered against Third Party
Defendant Asiamerica as to Third Party Plaintiff Fishman Chemical;



AWARDS to TSA:
1) $993,311.44 in actual damages;
2) $83,787.50 in attorneys’ fees as well as full costs of court; and
3) Post-judgment interest at the rate of .61%; and



AWARDS to Fishman Chemical:
1) $993,311.44 in actual damages;
2) $83,787.50 in attorneys’ fees as well as full costs of court; and
3) Post-judgment interest at the rate of .61%.

SIGNED this 31st day of March, 2017.
___________________________________
Hilda Tagle
Senior United States District Judge

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