Buckley v. Paperboy Ventures, LLC , 277 F.R.D. 20 ( 2011 )

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
(October 12, 2011)
Plaintiff John V. Buckley (“Buckley”) commenced this breach of contract action against
Defendant Paperboy Ventures, LLC (“Paperboy”) on January 27, 2011. After Paperboy failed to
respond to the Complaint or otherwise defend, the Clerk of the Court entered Paperboy’s default.
Presently before the Court is Buckley’s [5] Motion for Entry of Default Judgment, which, upon
consideration of Buckley’s submissions, the relevant authorities, and the record as a whole, shall
be DENIED WITHOUT PREJUDICE.
I. BACKGROUND
Buckley filed his Complaint on January 27, 2011. See Compl., ECF No. [1]. Therein,
Buckley alleges that he and Paperboy, a merchant bank investing in life sciences and technology-
based companies, entered into a series of agreements, including: (1) a spring of 2008 agreement
whereby Paperboy retained Buckley as a management consultant for a period of one year at the
rate of $250 per hour plus expenses; (2) a March 2008 agreement whereby Buckley loaned
Paperboy £50,000, payable in thirty days; (3) a December 2008 agreement whereby Buckley
loaned Paperboy €65,000, payable in thirty days; and (4) a January 2009 agreement whereby
Buckley loaned Paperboy $25,000, payable in thirty days. Id. ¶¶ 4-8. In connection with the first
of these agreements—i.e., the management consultant agreement—Buckley submitted invoices
to Paperboy in the amounts of $52,000, $17,444, and €19,946. Id. ¶ 9.
When Paperboy failed to make payment, Buckley commenced this action. Id. ¶ 10. This
Court has jurisdiction because Buckley is a citizen of “a foreign state” and Paperboy 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). Buckley served the Summons and Complaint on
Paperboy’s registered agent on February 11, 2011. See Aff. of Service, ECF No. [3]. When
Paperboy’s deadline to respond elapsed on March 4, 2011, Buckley asked the Clerk of the Court
to enter Paperboy’s default, which the Clerk of the Court did on March 16, 2011. See Entry of
Default, ECF No. [6]. In the intervening months, Paperboy has not appeared, sought to set aside
the default, or defended in this action.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 55(a) 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). After a default has been entered by the Clerk of the Court, the Court may enter a
default judgment pursuant to Rule 55(b). FED . R. CIV . P. 55(b). Upon entry of default by the
Clerk of the Court, the “defaulting defendant is deemed to admit every well-pleaded allegation in
the complaint.” Int’l Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co.,
239 F. Supp. 2d 26, 30 (D.D.C. 2002) (internal citation omitted). “Although the default
establishes a defendant’s liability, the court is required to make an independent determination of
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the sum to be awarded unless the amount of damages is certain.” Id. (citing Adkins v. Teseo, 180
F. Supp. 2d 15, 17 (D.D.C. 2001)). “[T]he court may rely on detailed affidavits or documentary
evidence to determine the appropriate sum for the default judgment.” Id. (citing United Artists
Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979)). Ultimately, “[t]he determination of
whether default judgment is appropriate is committed to the discretion of the trial court.” Int’l
Painters & Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F. Supp. 2d 56, 57
(D.D.C. 2008) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)).
III. DISCUSSION
Where, as here, there is a complete “absence of any request to set aside the default or
suggestion by the defendant that it has a meritorious defense, it is clear that the standard for
default judgment has been satisfied.” Auxier Drywall, LLC, 531 F. Supp. 2d at 57 (internal
quotation marks omitted). The Clerk of the Court has entered Paperboy’s default, and the factual
allegations in the Complaint are therefore taken as true. See R.W. Armine Drywall Co., Inc., 239
F. Supp. 2d at 30. Here, Buckley’s Complaint alleges sufficient facts to support Paperboy’s
liability.
Nonetheless, because the amount of damages is not certain, the Court must make an
independent determination of the sum to be awarded. Adkins, 180 F. Supp. 2d at 17. Where, as
here, the underlying contractual obligation is denominated in a foreign currency, in whole or in
part, the case law reveals three basic approaches to determining the amount of damages.
Depending on the circumstances, courts may (a) apply the “day of judgment” rule, calculating
damages based on the prevailing exchange rate and the date of judgment, (b) apply the “breach
day” rule, calculating damages based on the prevailing exchange rate at the time of the breach, or
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(c) simply award damages in the foreign currency denominated in the agreement. See generally
Elite Entm’t, Inc. v. Khela Bros. Entm’t Inc., 396 F. Supp. 2d 680, 694 (E.D. Va. 2005)
(identifying the common approaches and citing cases). Which options are available, and
deciding among them, are questions 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);
Ventas, Inc. v. HCP, Inc., 647 F.3d 291, 322 (6th Cir. 2011); Restatement (Third) of Foreign
Relations Law § 823 cmt. a (1987). Because this Court is sitting in diversity, it must ask which
approach is favored by the law of the jurisdiction that governs the agreements between Buckley
and Paperboy. However, this threshold question is left entirely unaddressed by Buckley in his
Motion for Entry of Default Judgment. Instead, citing the United States Court of Appeals for the
District of Columbia Circuit’s decision in Tramontana v. S.A. Empresa de Viacao Area Rio
Grandense, 350 F.2d 468 (D.C. Cir. 1964), cert. denied, 383 U.S. 943 (1966), Buckley presumes
that this Court should apply the “day of judgment” rule and asks the Court to enter judgment in
an amount approximate to $292,378.13, plus costs in the amount of $495.00. But Buckley
provides no choice-of-law analysis such that would allow this Court to discern which
jurisdiction’s (or jurisdictions’) law governs his agreements with Paperboy. Absent an answer to
that threshold question, the Court is unable to determine the amount of damages to be awarded.
Accordingly, the Court shall DENY Buckley’s Motion for Entry of Default Judgment
WITHOUT PREJUDICE.
IV. CONCLUSION
For the reasons set forth above, Buckley’s [5] Motion for Entry of Default Judgment shall
be DENIED WITHOUT PREJUDICE. To the extent Buckley intends to file a renewed motion
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seeking entry of a default judgment, he must provide a sufficient factual and legal basis for this
Court to determine if, and how, the foreign currencies denominated in the parties’ agreements
should be converted to United States dollars, which shall include an appropriate choice-of-law
analysis. If Buckley intends to rely on factual allegations that are not included in the Complaint,
those factual allegations must be supported by a sworn affidavit, declaration, or other competent
evidence. An appropriate Order accompanies this Memorandum Opinion.
Date: October 12, 2011
/s/
COLLEEN KOLLAR-KOTELLY
United States District Judge
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