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Parise v. Suarez

United States District Court, D. New Jersey

December 19, 2018

JOHN PARISE, et al., Plaintiffs,
v.
ALEX E. SUAREZ, et al., Defendants.

          MEMORANDUM OPINION

          JEROME B. SIMANDLE U.S. District Judge.

         This matter comes before the Court on the motion for default judgment [Docket Item 12] on behalf of Plaintiffs' John Parise (“J. Parise”), Michael Parise (“M. Parise”), and Cooper Beech Financial Group, LLC's (“Cooper Beech” and, collectively, “Plaintiffs”). Default having been entered as to all Defendants, Plaintiffs now seek default judgment under Fed.R.Civ.P. 55(b). Plaintiffs' motion for default judgment will be granted in part and dismissed without prejudice in part, and the Court will enter a Default Judgment in favor of Plaintiffs jointly and against Defendants Alex E. Suarez (“Suarez”), Family Office Partners, Inc. (“FOP, Inc.”), Family Office Partners, LLC (“FOP, LLC”), Merchantbanquiers Club, Inc., and Private Borrowers Club II, LLC (collectively, “Defendants”), jointly and severally, in the amount of $300, 000.00. The Court finds as follows:

         1. Factual and Procedural Background.

         On or around September 15, 2016, Plaintiffs executed a Directorship and RIA Management Engagement Agreement with Defendant Suarez, as Chairman of Family Office Partners, LLC (“the September 15, 2016 Agreement”). [See generally Ex. E to Docket Item 17.] Under the terms of the September 15, 2016 Agreement, Plaintiffs were to pay Defendant Suarez $150, 000.00 in exchange for equity positions in several entities, including The Merchant Bankers Club II, LLC and Private MerchantBankers II, LLC. [Id.]

         2. Plaintiffs filed the Complaint [Docket Item 1] on September 11, 2017, alleging, inter alia, that J. Parise and M. Parise agreed to enter into the September 15, 2016 Agreement and subsequently wire three payments totaling $150, 000.00 to Defendants FOP, LLC and FOP, Inc., at Defendant Suarez's direction, as a result of and in reliance on material misrepresentations made to them by Defendant Suarez (Count One), and that Defendant Suarez breached the September 15, 2016 Agreement by failing to perform (Count Two). Plaintiffs seek compensatory damages under against Defendants in the amount of $150, 000.00, as well as double damages and attorneys' fees.[1] [Id. at ¶¶ 15-19.] [Id. at ¶ 33, 40.]

         3. All Defendants were served personally or by registered agents on various dates: Alex E. Suarez, Family Office Partners, Inc., Family Office Partners, LLC, and The Merchant Bankers Club II, LLC on September 26, 2017 [Docket Item 4]; Defendant Private Borrowers Club II, LLC on September 18, 2017 [Docket Item 5]; and Defendant Merchantbanquiers Club, Inc. on October 3, 2017. [Docket Item 6.] No. party timely answered or otherwise responded to the Complaint, and Plaintiffs' Request to Enter Default [Docket Item 7] was initially granted by the Clerk of court as to all Defendants on November 21, 2017; however, the Honorable Joel Schneider granted Defendant Suarez's request for a brief extension of time to respond to the pleadings on November 22, 2017 [Docket Item 9], extending the deadline as to him personally until December 22, 2017. [Id.]

         4. An attorney, Christian J. Jensen, Esq., filed a letter with Judge Schneider on November 21, 2017 requesting an extension for all defendant corporate entities, which was granted, extending the deadline as to the corporate Defendants to December 22, 2017. [Id.] Attorney Jensen was not heard from again and has not entered an appearance.[2] When no response was forthcoming, Plaintiffs' request for entry of default against all Defendants was entered on December 28, 2017. [Docket Item 10.]

         5. Plaintiffs' counsel filed the present motion for default judgment as to all Defendants on May 25, 2018 [Docket Item 12], sending copies of same to Mr. Suarez and to each defendant corporate entity. [Docket Item 12-16.] Defendant Suarez was aware of that motion and opposed it. [Docket Items 13 & 15.] By way of the August 8, 2018 Memorandum Opinion and Order [Docket Item 16], the Court denied Defendant Suarez's letter-applications to set aside default and scheduled a proof hearing on Plaintiffs' default judgment motion for October 23, 2018. The Court also ordered Plaintiffs to file a supplemental submission addressing jurisdiction and venue [id. at ¶ 13], which Plaintiffs timely filed. [Docket Item 17.] The Court further ordered “that any motion by Defendant Alex E. Suarez or any other Defendant for relief from default pursuant to Rule 55(c), Fed. R. Civ. P., shall be filed with the Clerk of Court and served upon Plaintiffs' counsel [by August 22, 2018].” [Docket Item 16 at 9.]

         6. Defendant Suarez mailed a letter to the Clerk of Court dated October 5, 2018 [Docket Item 19], wherein Defendant Suarez acknowledged receipt of the Court's August 8, 2018 Memorandum Opinion and Oder and requested: (1) to make a motion that he be dismissed in his individual capacity; and (2) that the proof hearing be rescheduled. In a Memorandum Opinion and Order dated October 17, 2018 [Docket Item 21], the Court deemed the first portion of Defendant Suarez's October 5th letter as a motion for relief from default pursuant to Rule 55(c) and this Court's August 8th Order. The Court denied this motion on the merits because Defendant Suarez had not shown good cause as to why default against him should be vacated, and instead appeared to be asking the Court to dismiss him from the case simply so that he could gain leverage in settlement negotiations. [Id. at ¶¶ 6-7.] The Court also denied Defendant Suarez's request to adjourn the October 23rd proof hearing because, default having been properly entered against all Defendants, Defendant Suarez did not have a right to appear at the proof hearing. [Id. at ¶ 8.]

         7. The Court convened a proof hearing on October 23, 2018. [Docket Item 22.] At this hearing, J. Parise, M. Parise, and Colleen Huff testified on behalf of Plaintiffs, as discussed in more detail below. Neither Defendant Suarez nor anyone else attended the hearing on behalf of Defendants. Plaintiffs subsequently submitted a supplemental brief [Docket Item 24], addressing several legal issues that arose during the proof hearing. The motion for default judgment is now ripe for disposition.

         8. Standard for Entry of Default Judgment.

         Federal Rule of Civil Procedure 55(b)(2) authorizes courts to enter a default judgment against a properly served defendant who fails to a file a timely responsive pleading. See Fed.R.Civ.P. 55(b)(2); see also Chanel v. Gordashevsky, 558 F.Supp.2d 532, 535 (D.N.J. 2008) (citing Anchorage Assoc. v. Virgin Is. Bd. of Tax Rev., 922 F.2d 168, 177 n.9 (3d Cir. 1990)). A party seeking default judgment is not entitled to relief as a matter of right; the Court may enter default judgment “only if the plaintiff's factual allegations establish the right to the requested relief.” Ramada Worldwide Inc. v. Courtney Hotels USA, LLC, No. 11-896, 2012 WL 924385, at *3 (D.N.J. Mar. 19, 2012) (internal quotations and citation omitted). Thus, before granting default judgment, a court must determine: (1) whether the plaintiff produced sufficient proof of valid service and evidence of jurisdiction, (2) whether the unchallenged facts present a sufficient cause of action, and (3) whether the circumstances otherwise render the entry of default judgment “proper.” Teamsters Health & Welfare Fund of Phila. v. Dubin Paper Co., 2012 WL 3018062, at *2 (D.N.J. July 24, 2012) (internal citations omitted). A court must accept as true every “well-pled” factual allegation of the complaint, but no presumption of truth applies to the plaintiff's legal conclusions or factual assertions concerning damages. Comdyne I. Inc. v. Corbin, 908 F.2d 1149 (3d Cir. 1990); 10 C. Right, A. Miller, & M. Kane, Federal Practice and Procedure (2d ed. 1983), § 2688, at 444.

         9. Subject Matter Jurisdiction.

         This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. Although a breach of contract would normally be a state law cause of action, see generally Kokkonen v. Guardian Life Ins. Co. of ...


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