Buckley v. Paperboy Ventures, LLC , 869 F. Supp. 2d 9 ( 2012 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
JOHN V. BUCKLEY,
Plaintiff,
v. Civil Action No. 11-00208 (CKK)
PAPERBOY VENTURES, LLC,
Defendant.
MEMORANDUM OPINION
(June 19, 2012)
Plaintiff John V. Buckley brings this breach of contract action against Defendant
Paperboy Ventures, LLC. When Defendant failed to respond to the [1] Complaint or otherwise
defend, the Clerk of the Court entered a default at Plaintiff’s request. Plaintiff then filed a [5]
Motion for Entry of Default Judgment, which the Court denied without prejudice, with leave to
re-file, because Plaintiff failed to provide an adequate factual and legal basis to allow the Court
to determine the amount of damages to be awarded. See Buckley v. Paperboy Ventures, LLC,
277 F.R.D. 20 (D.D.C. 2011). Currently before the Court is Plaintiff’s [12] Renewed Motion for
Default Judgment, which responds to the concerns previously articulated by the Court. Upon
careful consideration of Plaintiff’s submissions, the relevant authorities, and the record as a
whole, the motion shall be GRANTED.
I. BACKGROUND
In the spring of 2008, Defendant, a merchant bank investing in life sciences- and
technology-based companies, retained Plaintiff to serve as a management consultant for a period
of one year, agreeing to compensate Plaintiff at a rate of $250 per hour and to reimburse him for
expenses (the “Management Consulting Agreement”). Compl., ECF No. [1], ¶ 5.1 Plaintiff later
submitted invoices to Defendant in the amounts of $52,000, $17,444, and €19,946 for services
rendered and expenses incurred. Id. ¶ 9. Defendant failed to render payment. Id. ¶ 10.
In addition, in 2008 and 2009, Plaintiff and Defendant entered into a series of agreements
by which Plaintiff loaned Defendant varying amounts of money, including: (1) a March 2008
agreement whereby Plaintiff loaned Defendant £50,000, payable within thirty days (the “March
2008 Agreement”); (2) a December 2008 agreement whereby Plaintiff loaned Defendant
€65,000, payable within thirty days (the “December 2008 Agreement”); and (3) a January 2009
agreement whereby Plaintiff loaned Defendant $25,000, payable within thirty days (the “January
2009 Agreement”). Id. ¶¶ 6-8. Defendant failed to repay each loan. Id. ¶ 10.
Plaintiff commenced this action on January 27, 2011. Defendant’s registered agent was
properly served with process on February 11, 2011. See Aff. of Service, ECF No. [3]; Pl.’s
Suppl. Br. in Supp. of His Renewed Mot. for Default J., ECF No. [14], Ex. A; see also FED. R.
CIV. P. 4(h)(1)(B). This Court has jurisdiction because Plaintiff is a citizen of “a foreign state”
and Defendant is a “citizen of a State” and the “matter in controversy exceeds the sum or value
of $75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a)(2).
1
The Court’s recitation of the factual background of this case is derived from the well-pleaded
factual allegations in the Complaint, which are deemed to be admitted. See infra Part II; see also
Second Decl. of John V. Buckley, ECF No. [12-2].
When Defendant’s deadline to respond to the Complaint elapsed on March 4, 2011,
Plaintiff asked the Clerk of the Court to enter Defendant’s default, which the Clerk of the Court
did on March 16, 2011. See Entry of Default, ECF No. [6]. Plaintiff then filed a [5] Motion for
Entry of Default Judgment, which the Court denied without prejudice on October 12, 2011
because Plaintiff failed to provide an adequate factual and legal basis to allow the Court to
determine the amount of damages to be awarded. See Buckley v. Paperboy Ventures, LLC, 277
F.R.D. 20 (D.D.C. 2011). Plaintiff, with the Court’s leave, filed the instant [12] Renewed
Motion for Default Judgment on November 17, 2011. Plaintiff filed a [14] Supplemental Brief
in Support of his Renewed Motion for Default Judgment on December 16, 2011.2 Defendant has
not responded to the motion. Indeed, Defendant has never entered an appearance or defended in
this case.3
II. LEGAL STANDARD
Federal Rule of Civil Procedure 55 provides that the clerk of the court must enter a
party’s default “[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.” FED. R.
CIV. P. 55(a). Upon entry of a default by the clerk, the well-pleaded allegations in the complaint
are deemed admitted. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir.
2011). Thereafter, unless the claim is for a sum certain, the plaintiff must apply to the court for a
2
Plaintiff’s supplemental brief explains why the suspension of Defendant’s “good standing”
status in its home state for failure to pay certain annual taxes does not preclude entry of a default
judgment in this case. See DEL. CODE ANN. tit. 6, § 18-1107(i), (k), (m).
3
Periodically, an individual named Allen Andersson (“Andersson”), who purports to be
Defendant’s sole member and owner, has attempted to file documents with the Court. Andersson
was advised of the “rule . . . that artificial entities must be represented by licensed counsel in
federal court,” and the Court provided him with ample opportunity to secure legal counsel to
represent Defendant’s interests. Order (Nov. 12, 2011), ECF No. [11], at 2. Andersson did not
take advantage of the opportunity.
default judgment. FED. R. CIV. P. 55(b). Presented with a proper application, the district court
must inquire whether the well-pleaded allegations in the complaint state a valid claim for relief
and make an independent determination of the sum to be awarded. Finkel v. Romanowicz, 577
F.3d 79, 84 (2d Cir. 2009). In determining the amount of damages to be awarded, the district
court may conduct an evidentiary hearing or it may, in appropriate circumstances, rely on
detailed declarations or documentary evidence. See FED. R. CIV. P. 55(b)(2); Int’l Painters &
Allied Trades Industry Pension Fund v. R.W. Amrine Drywall Co., Inc., 239 F. Supp. 2d 26, 30
(D.D.C. 2002).
III. DISCUSSION
The Court has already concluded that Plaintiff’s Complaint alleges sufficient facts to
support Defendant’s liability for breach of the relevant agreements. See Buckley, 277 F.R.D. at
21. All that remains is for the Court to make an independent determination of the sum to be
awarded. Here, some of the underlying contractual obligations are denominated in a foreign
currency. The treatment of contractual obligations denominated in a foreign currency raises a
question of substance, not procedure. See Vishipco Line v. Chase Manhattan Bank, N.A., 660
F.2d 854, 865 (2d Cir. 1981), cert. denied, 458 U.S. 976 (1982). The Court is satisfied that
District of Columbia law applies here because Defendant is headquartered in the District of
Columbia, Defendant negotiated and executed the relevant agreements in the District of
Columbia, and performance was expected to occur, and in fact did occur, partly in the District of
Columbia. See generally Ideal Elec. Sec. Co v. Int’l Fid. Ins. Co., 129 F.3d 143, 148 (D.C. Cir.
1997) (outlining the applicable choice-of-law inquiry).
Under District of Columbia law, where the underlying contractual obligation is
denominated in a foreign currency, in whole or in part, courts generally apply the “day of
judgment” rule, calculating damages based on the prevailing exchange rate on the date of
judgment. Tramontana v. S.A. Empresa De Viacao Aerea Rio Grandense, 350 F.2d 468, 478
(D.C. Cir. 1964), cert. denied, 383 U.S. 943 (1966).4 The prevailing exchange rate for the pound
sterling is 1.6, and the prevailing exchange rate for the euro is 1.3351.5 Applying the “day of
judgment” rule, the €19,946 invoice under the Management Consulting Agreement is converted
to $26,629.90; the £50,000 due under the March 2008 Agreement is converted to $80,000; and
the €65,000 due under the December 2008 Agreement is converted to $86,781.50. Adding these
amounts to the of $52,000 and $17,444 invoices under the Management Consulting Agreement
and the $25,000 due under January 2009 Agreement, Plaintiff is entitled to a judgment in the
total amount of $287,855.40.
IV. CONCLUSION
For the reasons set forth above, the Court shall GRANT Plaintiff’s [12] Renewed Motion
for Default Judgment and enter judgment in Plaintiff’s favor in the amount of $287,855.40. An
appropriate Order and Judgment accompanies this Memorandum Opinion.
Date: June 19, 2012
_____/s/______________________
COLLEEN KOLLAR-KOTELLY
United States District Judge
4
Plaintiff seems to be laboring under the misapprehension that Tramontana does not reflect the
law of the District of Columbia because it was issued by the United States Court of Appeals for
the District of Columbia Circuit. However, “decisions of the United States Court of Appeals [for
the District of Columbia Circuit] rendered prior to February 1, 1971 . . . constitute the case law
of the District of Columbia.” M. A. P. v. Ryan, 285 A.2d 310, 312 (D.C. 1971); see also Kozup
v. Georgetown Univ., 851 F.2d 437, 439 n.2 (D.C. Cir. 1988).
5
The Court relies upon exchange rate information published by the Financial Management
Service pursuant to 22 U.S.C. § 2363(b).