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Atlantic Capes Fisheries, Inc. v. Graves & Schneider Intl, LLC

United States District Court, D. New Jersey

December 21, 2018

ATLANTIC CAPES FISHERIES, INC., Plaintiff,
v.
GRAVES & SCHNEIDER INTL, LLC and MATTHEW SCHNEIDER Defendants.

          Brian McEwing, Esq. REEVES McEWING LLP Counsel for Plaintiff.

          OPINION

          JEROME B. SIMANDLE, U.S. DISTRICT JUDGE

         I. INTRODUCTION

         This matter comes before the Court by way of a motion for default judgment filed by Plaintiff Atlantic Capes Fisheries, Inc. (hereinafter “Plaintiff”). (See Motion for Default Judgment (hereinafter “Pl.'s Mot.”) [Docket Item 9].) Default having been entered as to both Defendants, Plaintiffs now seek default judgment under Fed.R.Civ.P. 55(b). No. opposition has been filed with regards to Plaintiff's present motion.

         The Court heard oral argument and received testimony and documentary evidence at a Proof Hearing held on December 7, 2018, and supplemental submissions on December 14, 2018. After careful consideration, Plaintiff's Motion for Default Judgment will be granted in part and denied in part without prejudice for the reasons explained below. The following constitute the Court's findings of fact and conclusions of law upon Plaintiff's Motion for Default Judgment, pursuant to Federal Rule of Civil Procedure 52(a).

         II. BACKGROUND

         Plaintiff filed the Complaint herein November 9, 2017, alleging that Defendants Graves & Schneider Intl, LLC and Matthew Schneider (hereinafter, collectively, “Defendants”) are liable for negligence (Count I), breach of contract (Count II), violation of the New Jersey Consumer Fraud Act (Count III), common law fraud (Count IV), breach of fiduciary duty (Count V), and breach of bailment duty (Count VI). (See Complaint [Docket Item 1].) The Complaint seeks monetary damages, including “such other punitive, anticipatory, consequential and compensatory damages, and reasonable attorneys' fees and costs as this Court may deem fit and proper.” (Id. at ¶¶ 61, 64, 69, 73; see also id. at ¶¶ 46, 53.)

         Defendants were each personally served with process on December 8, 2017. (See Summons Returned Executed [Docket Items 5 & 6].) Neither Defendant filed an Answer or otherwise responded to the Complaint within 21 days of service, as required by Rule 12(a), Fed. R. Civ. P., and no Defendant has done so to date.

         Plaintiff filed for Entry of Default against Defendants on February 6, 2018. (See Motion for Entry of Default [Docket Item 7].) The Clerk of Court granted Plaintiff's request for Entry of Default on February 15, 2018. (See Clerk's Entry of Default, Feb. 15, 2018.)

         Plaintiff's present motion was filed thereafter and sought both partial default judgment for a sum certain and the scheduling of a proof hearing with regards to other damages. (See Pl.'s Mot. [Docket Item 9].) Plaintiff served a copy of this motion upon each of the Defendants by mail [Docket Item 9-4, Certification of Service]. A courtesy copy was also sent to an attorney in Bellingham, Washington believed to represent them. [Id.] No. opposition or other response to the motion has been filed.

         On October 24, 2018, the Court ordered Plaintiff to submit supplementary briefing and scheduled a proof hearing. (See Memorandum Opinion and Order [Docket Item 10].) Plaintiff submitted a supplementary brief on November 14, 2018. (See Pl.'s Supp. [Docket Item 11].) On December 6, 2018, Plaintiff informed the Court that it only wishes to proceed with respect to claims for “compensatory and fraud damages.” (Letter [Docket Item 14], 1.) On December 7, 2018, the Court held a Proof Hearing, at which time Plaintiff produced certain documents, which were entered into evidence. Plaintiff further called Thorne Tasker as a witness, and the Court heard his testimony. Following the hearing, the Court granted leave to Plaintiff to file certain affidavits and supplementary briefs by no later than December 14, 2018, including the Affidavit of Ronald E. Graves [Docket Item 17-2], a supplemental brief regarding choice of law [Docket Item 17-1], and a supplemental brief regarding prejudgment interest and punitive damages [Docket Item 17-3]. Further, Plaintiff seeks an award of counsel fees and costs and submits the Affidavit of Brian McEwing, Esq., in support of such an award. [Docket Item 17-4.]

         III. STANDARDS FOR 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., No. 11-7137, 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. Wright, A. Miller, & M. Kane, Federal Practice and Procedure (2d ed. 1983), § 2688, at 444. The Court addresses each element in turn.

         IV. DISCUSSION

         A. Whether Plaintiff Produced Sufficient Proof of Valid Service and Evidence of Jurisdiction

         1. Defendant Graves & Schneider Intl, LLC was properly served and is in default

         The Complaint together with the summons were served upon Defendant Graves & Schneider Intl, LLC on December 8, 2017 at 4220 22nd Ave. W., Suite 200, Seattle, Washington 98199. (See Summons Returned Executed [Docket Item 5].) Defendant Graves & Schneider Intl, LLC has never filed an Answer to Plaintiff's Complaint, and the Clerk of Court accordingly entered default against Defendant Graves & Schneider Intl, LLC on February 15, 2018. Plaintiff's motion for default judgment against Defendant Graves & Schneider Intl, LLC followed, to which Defendant Graves & Schneider Intl, LLC has not filed a response. (See Motion for Default Judgment [Docket Item 9].)

         2. Defendant Matthew Schneider was properly served and is in default

         The Complaint together with the summons were personally served upon Defendant Matthew Schneider on December 8, 2017 at 4220 22nd Ave. W., Suite 200, Seattle, Washington 98199. (See Summons Returned Executed [Docket Item 6].) Defendant Schneider has never filed an answer to Plaintiff's Complaint, and the Clerk of Court accordingly entered default against Defendant Schneider on February 15, 2018. Plaintiff's motion for default judgment against Defendant Schneider followed, to which Defendant Schneider has not filed a response. (See Motion for Default Judgment [Docket Item 9].)

         3. Evidence of Jurisdiction

         This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332, since the parties are of diverse citizenship and the dispute involved a sum exceeding $75, 000.00.

         In this case, Plaintiff has alleged that Defendant Graves & Schneider Intl, LLC “is a limited liability company or similar business organization organized and operating in the State of Washington, ” that Defendant Schneider is a resident of the State of Washington, and that Plaintiff is a New Jersey corporation, (see Complaint [Docket Item 1], ¶¶ 1-4), thereby satisfying the diversity of citizenship requirement. Additionally, Plaintiff is seeking a judgment against Defendants for actual damages the amount of two hundred and ten thousand dollars ($210, 000.00), as well as additional statutory and punitive damages and attorney's fees and costs (see Complaint [Docket Item 1], ¶¶ 23, 46, 51, 53, 60-61, 64, 69, 73), thereby satisfying the amount in controversy requirement.

         Plaintiff also alleges admiralty jurisdiction under 28 U.S.C. § 1333 due to the maritime nexus of this dispute pertaining to the sale and ownership of a commercial fishing permit which attaches to a vessel and enables that vessel and its owner (here, the Plaintiff) to engage in the permitted fishing operation; thus, admiralty jurisdiction also exists.

         B. Findings of Fact

         Plaintiff, Atlantic Cape Fisheries, Inc., of Cape May, New Jersey, is a large commercial fishing company operating a fleet of vessels, packing houses, and distribution centers, principally on the east coast of the United States.

         Defendant Graves & Schneider Intl, LLC (“GSI”) is a limited liability company having two principals, namely, Defendant Matthew Schneider of the State of Washington, and Ronald E. Graves, also of Washington, a witness herein but not a defendant.

         Plaintiff Atlantic Cape Fisheries was desirous of considering the expansion of its business to the west coast waters of the United States. Toward that end, the Plaintiff's president, Daniel Cohen, recently deceased, authorized Captain Thorne Tasker to negotiate with GSI in 2006 for the purpose of finding and obtaining a civil limited license groundfish permit to allow both fishing and on-board processing of certain shellfish off the West Coast.

         In 2006-2007, Defendant GSI was a well-established business in Seattle, Washington serving as a broker for such commercial fishing permits and listing them from time to time on its website, according to Captain Tasker's testimony. Captain Tasker was familiar with Defendant Matthew Schneider, but he generally worked with Ronald Graves in serving the needs of Tasker's own commercial fishing ventures over the years.

         Plaintiff Atlantic Cape Fisheries entered into a contract with GSI entitled “Agreement to Purchase License Limitation Program Permit” [hereafter “Agreement, ” Exhibit 1] on or about October 20, 2006. Under the terms of the agreement, Plaintiff purchased the License Limitation Program Permit for Groundfish, License No. LLG3569 (“LLP Permit”), which is the subject of this lawsuit. The agreed-upon purchase price was $210, 000.00 [Exhibit 1 at ...


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