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Lentini v. Ruggiero

United States District Court, Third Circuit

October 31, 2013

NICHOLAS RUGGIERO, et al., Defendants.


MICHAEL A. SHIPP, District Judge.

This matter comes before the Court on Plaintiff Jacquelyn Lentini's ("Plaintiff') Motion for Default Judgment. (Pl.'s Mot., ECF No. 18; Pl.'s Req. to Enter Default, ECF No. 17.) Defendant Nicholas Ruggiero ("Defendant" or "Ruggiero") filed a Certification in opposition to Plaintiff's Motion. (Opp'n Cert., ECF No. 28.) In addition, Defendant submitted two Answers to Plaintiff's Complaint. (Def.'s 1st Answer, ECF No. 19; Def.'s 2nd Answer, ECF No. 29.) The Court has carefully considered the Parties' submissions and decided the matter without oral argument pursuant to Local Civil Rule 78.1. For the reasons stated below, and for other good cause shown, Plaintiff's Motion for Default Judgment is denied as to Ruggerio and denied without prejudice as to Five Star Capital. In addition, the Court vacates the Clerk's entry of default as to Ruggiero.

I. Background & Procedural History

Plaintiff's Complaint alleges a Racketeer Influenced and Corrupt Organizations Act ("Civil RICO") claim, breach of contract, breach of covenant of good faith and fair dealing, material misrepresentation, breach of fiduciary duty, unjust enrichment, intentional infliction of emotional distress, and negligent infliction of emotional distress. (Compl., ECF No. 1.) The Complaint alleges that Defendant rented a home located in Bay Head, New Jersey, to Plaintiff. (Compl., Facts Common to All Counts, ¶ 3.) According to the Complaint, Defendant approached Plaintiff and her husband about an opportunity to purchase gold dust from the African country of Ghana. ( Id. ¶ 4.) Specifically, on March 12, 2011, Defendant sent Plaintiff's husband an e-mail message about "programs" that promised large returns in the hundred thousand dollar range, "with no risk of capital." The e-mail message also related that the capital would be secured by a promissory note. ( Id. ¶ 5.)

Plaintiff alleges that Defendant advised her that he previously participated in three successful purchases of gold from the Nana Agyemang and Awuku Family Stool Lands in Ghana. (Compl. ¶¶ 7-8.) Defendant also represented that he personally visited Ghana, helped facilitate one transaction, and returned with gold. ( ld. ¶ 9.)

On July 25, 2011, Defendant sent Plaintiff's husband another e-mail message and explained that he required a "CIS-Client Information Sheet-for compliance since this is a gold asset platform and they must screen the applicant." ( Id. ¶ 11.) Defendant represented that any monies Plaintiff invested would receive a 50% rate of return and would be returned within 14 days of the original investment. ( Id. ¶ 12.) An attorney allegedly administered the funds. ( Id. ¶ 13.) Defendant signed a promissory note secured by a mortgage on the Bay Head property, and Plaintiff agreed to make the initial $40, 000.00 investment. ( Id. ¶ 14.)

On August 8, 2011, Defendant gave Plaintiff a draft agreement stating that the investment of $40, 000.00 dollars would be returned in 14 days, at a 50% rate of return. The note was to be secured by a second mortgage. ( Id. ¶ 15.) On August 9, 2011, Defendant e-mailed Plaintiff's husband documents needed to complete the "gold transaction." The documents referred to the Republic of Ghana and Timechase and indicated that the purchase would be proceeding with Five Star Capital Group LLC ("Five Star Capital"). ( ld. ¶ 16.) Defendant later advised Plaintiff that she would need to invest an additional $50, 000.00 because the export fees nearly doubled, the Value Added Tax (VAT) needed to be paid, and the process had changed from the previous year, resulting in the need for an "investor pool." ( Id. ¶ 17.) The August 25, 2011 promissory note provided that the funds would be used to purchase gold and indicated that Defendant would repay the loan within 30 days. ( ld. ¶ 19.)

Plaintiff alleges that on September 1, 2011, Defendant forwarded an e-mail message indicating that the promissory notes had been signed. Defendant also requested the wire transfer. ( Id. ¶ 21.) After Defendant failed to repay the loan, Plaintiff demanded repayment. Defendant then showed Plaintiff multiple e-mail messages and documents, including a gold dust sample document from the Republic of Ghana, Timechase, and Five Star Capital, explaining that the gold was delayed in Customs in Ghana. ( Id. ¶¶ 23-24.)

According to the Complaint, public records revealed that Timechase, the Nana Agyemang and Awuku Family Stool Lands did not exist. In addition, the Geological Survey Department in Ghana found the gold dust sample document fraudulent. ( Id. ¶¶ 25-27.) Moreover, Ghana's Revenue Authority found that the Customs-related documents were forgeries and stated that there were no records of any of the individuals or corporations cited by Defendant. Further, Ghana's Immigration Services and Customs noted that there was no gold in Customs related to the alleged transactions. ( Id. ¶¶ 28-29.)

On February 12, 2013, Plaintiff filed a request for entry of Clerk's default. (ECF No. 16.) The Clerk entered default as to Nicholas Ruggiero and Five Star Capital on February 13, 2013. On March 7, 2013, Plaintiff filed a Motion for Default Judgment against Defendant. (ECF No. 18.) Plaintiff seeks treble damages under RICO[1], punitive damages under the common law fraud claim, as well as attorney's fees and costs. (Pl.'s Cert. of Counsel, ECF No. 17-2, ¶¶ 14, 20, 21, 30.) Instead of filing opposition to the motion, Defendant filed an answer to the complaint on March 18, 2013. (ECF No. 19.) On August 9, 2013, the Court ordered that Defendant must file opposition to Plaintiff's motion by August 30, 2013. (ECF No. 26.) On August 29, 2013, Defendant filed a Certification in opposition to the motion. (ECF No. 28.) He also filed another answer to the complaint. (ECF No. 29.)

II. Discussion

Default judgment is left "primarily to the discretion of the district court." Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984) (citing Tozer v. Charles A. Krause Milling Co., 189 F.2d 242, 244 (3d Cir. 1951)). Nevertheless, it is preferable that "cases be disposed of on the merits whenever practicable." Id. at 1181 (internal citation omitted). The Court "does not favor defaults and... in a close case doubts should be resolved in favor of setting aside the default and reaching a decision on the merits." Gross v. Stereo Component Sys., Inc., 700 F.2d 120, 122 (3d Cir. 1983); see also Feliciano v. Reliant Tooling Co., 691 F.2d 653, 656 (3d Cir. 1982).

Pleadings filed by parties proceeding pro se "must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 94 (2007). Here, the Court will consider Defendant's opposition papers to consist of his Certification in Opposition to the Motion for Default Judgment and both Answers. In addition, the Court will treat Defendant's opposition papers as a request to vacate the Clerk's default.

In deciding motions to vacate entry of default and motions to vacate default judgment, the Court must consider whether: (1) the defendant appears to have a meritorious defense; (2) the plaintiff will be prejudiced; and (3) the default was due to defendant's culpable conduct. United States v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984). However, ...

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