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Progressive Freight, Inc. v. Framaur Associates, L.L.C.
United States District Court, D. New Jersey
February 6, 2018
PROGRESSIVE FREIGHT, INC., Plaintiff,
FRAMAUR ASSOCIATES, LLC; TEE WAY LOGISTICS, LLC; and TEE WAY TRANSPORTATION, LLC, Defendants.
ORDER AND JUDGMENT
FREDA L. WOLFSON UNITED STATES DISTRICT JUDGE.
MATTER having been opened to the Court by Kevin M.
Capuzzi, Esq., counsel for Plaintiff Progressive Freight,
Inc. (“Plaintiff” or “Progressive”),
on a motion for default judgment against Tee Way Logistics,
LLC (“Tee Way Logistics”) and Tee Way
Transportation, LLC (“Tee Way Transportation”)
(collectively, “Tee Way”), as well as on a motion
to strike the answer of, and enter default and default
judgment against, Framaur Associates, LLC
(“Framaur”) (collectively with Tee Way,
“Defendants”); it appearing that that Defendants,
having been duly served, have failed to oppose or otherwise
respond to Plaintiff's motions; the Court, having
reviewed Plaintiff's submissions in connection with its
motions, makes the following findings:
1. This is a contract dispute arising out of several
agreements to provide transportation brokerage services for
the delivery of goods. Progressive is a Georgia corporation
that operates as a transportation services broker. Compl.
¶¶ 1, 6. Framaur and Tee Way Logistics are New
Jersey limited liability companies that are also in the
transportation brokerage industry. See Id. at
¶¶ 2-3, 6. Tee Way Transportation is a New Jersey
based limited liability company that operates a trucking
business. See Id. at ¶¶ 4, 6. The
Complaint alleges that Framaur operates and conducts business
through Tee Way Logistics and Tee Way Transportation.
Id. at ¶ 9. In that regard, Plaintiff alleges
that Framaur, Tee Way Logistics, and Tee Way Transportation
each operate from the same principal place of business in New
Jersey, and are controlled by members of the D'Agostino
family. See Id. at ¶¶ 2-4.
2. According to the Complaint, non-party MillerCoors LLC
contracted with Defendants to provide transportation
brokerage services for the delivery of MillerCoors' beer
and other alcoholic beverages (the “Goods”).
Compl. ¶¶ 6, 10. The Complaint alleges that between
April 2016 and October 2016, Defendants entered into several
written contracts (collectively, the “Contracts”)
with Plaintiff, under which Plaintiff agreed to broker the
actual transportation of the Goods. See Id. at
¶¶ 11, 17. Specifically, the Complaint alleges that
the Contracts were memorialized through bills of lading and
invoices issued by each of the Defendants, and stated that
Defendants would, collectively or separately, compensate
Plaintiff for transportation services rendered, including
freight and brokerage charges. Id. at ¶¶
17-18. Importantly, as alleged, Plaintiff contracted with
each of the Defendants in this regard.
3. The Complaint alleges that Plaintiff retained various
inline carriers to deliver the Goods to their final
destinations, and fully compensated those carriers upon
delivery. Id. at ¶¶ 11-13. Additionally,
the Complaint alleges that MillerCoors fully compensated
Defendants for delivery of the Goods. Id. at ¶
16. However, according to the Complaint, despite the fact
that Plaintiff performed all of its obligations under the
Contracts, Defendants failed to pay Plaintiff $261, 195.00
allegedly due and owing under the terms of the agreements.
Id. at ¶¶ 23-27.
4. On December 19, 2016, Plaintiff filed its Complaint,
asserting three causes of action against Defendants. Count
One asserts a claim for breach of contract, alleging that
Defendants breached the Contracts by failing to compensate
Plaintiff for freight and brokerage charges upon completion
of Plaintiff's obligations under the Contracts. See
id. at ¶¶ 21-27. Count Two asserts a related
claim for account stated under New Jersey law. See
Id. at ¶¶ 28-32. Finally, Count Three asserts
a claim for unjust enrichment. See Id. at
5. On February 3, 2017, Framaur filed its answer. ECF No. 8.
On the same date, Tee Way moved to dismiss the Complaint,
pursuant to Federal Rule of Civil Procedure 12(b)(6), for
failure to state a claim. ECF No. 12. On September 5, 2017,
this Court issued an Opinion and Order denying Tee Way's
motion to dismiss. ECF Nos. 26-27.
6. On September 14, 2017, Tee Way applied for an extension of
time to file their answer or otherwise respond to the
Complaint. ECF No. 28. On September 15, 2017, the Clerk of
the Court entered an Order directing Tee Way to file an
answer to the Complaint on or before October 3, 2017. ECF No.
29. As a result of Tee Way's failure to file an answer
before that date, Plaintiff moved for the entry of default
against Tee Way on October 4, 2017. ECF No. 31. Default was
entered against Tee Way on October 5, 2017. ECF No. 32.
7. On October 6, 2017, Plaintiff filed the instant motion for
default judgment against Tee Way, which Tee Way has not
opposed. ECF No. 33.
8. On October 10, 2017, James K. Webber, Esq. and Webber
McGill, LLC moved to withdraw as counsel for all Defendants,
on the basis that Defendants had incurred substantial debts,
and had ignored counsel's numerous correspondences. ECF
No. 34. On October 26, 2017, the Magistrate Judge granted the
motion to withdraw as counsel for all Defendants,
further ordered Framaur to retain replacement counsel within
twenty-one (21) days thereof. ECF No. 36. In his Order, the
Magistrate Judge warned Framaur that failure to timely obtain
replacement counsel could lead to Framaur being held in
9. Framaur did not timely retain substitute
counsel. As a result, on November 22, 2017,
Plaintiff moved to strike Framaur's answer and enter
default and default judgment against Framaur. ECF No. 37.
That motion is unopposed.
10. Having set forth the facts underlying this dispute, the
Court turns, first, to Plaintiff's motion to strike
Framaur's answer and enter default against Framaur for
Framaur's failure to comply with the Magistrate
Judge's Order to retain new counsel. The Federal Rules of
Civil Procedure authorize district courts to impose sanctions
against a party that fails to comply with a court order.
See Fed. R. Civ. P. 16(f) (“On motion or on
its own, the court may issue any just orders, including those
authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its
attorney . . . fails to obey a scheduling or other pretrial
order.”); Fed.R.Civ.P. 37(b)(2) (setting forth
sanctions for failure to comply with a court order). In that
regard, where a party fails to comply with a pretrial order,
Rule 37(b)(2)(A) provides specifically that a court may,
inter alia, “strik[e] pleadings in whole or in
part” and “render a default judgment against
the disobedient party.” Fed.R.Civ.P. 37(b)(2)(A).
Additionally, courts have “inherent equitable powers to
dismiss actions or enter default judgments for failure to
prosecute, contempt of court, or abusive litigation
practices.” Lightning Lube, Inc. v. Witco
Corp., 4 F.3d 1153, 1179 n. 4 (3d Cir. 1993) (citation
omitted). The Third Circuit has recognized that sanctionable
conduct includes the failure of a party to comply with an
order to obtain substitute counsel. See Hoxworth v.
Blinder, Robinson & Co., 980 F.2d 912, 918 (3d Cir.
1992) (recognizing that a district court may “impose
a default judgment . . . for failure to comply with its own
unambiguous orders to obtain substitute counsel.”).
11. To determine whether sanctions that “deprive a
party of the right to proceed with or defend against a claim,
” are appropriate, id. at 919, courts apply
the six factor test set forth in Poulis v. State Farm
Fire & Cas. Co., 474 F.2d 863 (3d Cir. 1984). To
that end, in deciding whether to strike Framaur's answer
and to enter default against Framaur in this case, the Court
must consider: “(1) the extent of the party's
personal responsibility; (2) the prejudice
to the adversary caused by the failure to meet scheduling
orders and respond to discovery; (3) a history of
dilatoriness; (4) whether the conduct of the party or the
attorney was willful or in bad faith; (5)
the effectiveness of sanctions other than dismissal, which
entails an analysis of alternative sanctions; and
(6) the meritoriousness of the claim or
defense.” Id. at 868 (emphasis in original).
12. Upon consideration of the Poulis factors, the
Court finds that striking Framaur's answer and entering
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